Lotte Chemical to spend $123.7 mn to up LPG use for ethylene production

[Photo provided by Lotte Chemical Corp.]

Lotte Chemical Corp. will spend about 140 billion won ($123.7 million) on upgrading ethylene plants in Yeosu and Daesan to increase sourcing of liquefied petroleum gas (LPG) in place of cracked naphtha to reduce cost and carbon emissions, the Korean chemical company said Monday.

Both LPG and naphtha are used in producing ethylene, a base material for petrochemical products such as plastic, rubber, and fiber.

On Tuesday, Lotte Chemical shares gained 0.57 percent to trade at 264,500 won at 11:50 a.m. in Seoul.

Lotte Chemical plans to increase use of LPG to 40 percent by the end of 2022 from current 20 percent, with an aim to expand its use to up to 50 percent.

The latest upgrade is expected to allow the company better respond to price changes in feed materials and also save production cost.

LPG usually costs less than naphtha, about 80 or 90 percent of the price of the petroleum byproduct. LPG price also tends to fall in the summer as the gas is commonly used for generating heat for home heating.

Moreover, less LPG is required than naphtha for producing the same volume of ethylene, helping to reduce carbon emissions. Using LPG for ethylene production reportedly lowers carbon emissions by about 8 percent, according to industry sources.

Lotte Group is fostering the growth of ethylene business under the strategy to expand high-value added products.

The group earlier this month announced it will stop producing expanded polystyrene, better known as Styrofoam, with sales of 87.8 billion won. Instead, it will focus more on producing high-value added products like ethylene and acrylonitrile butadiene styrene, a common thermoplastic used for making pipe and automotive body parts.

Lotte Chemical currently produces 4.5 million tons of ethylene from its plants in Korea and abroad, which is the largest in Korea and seventh largest in the world.

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