South Korean oil refiner GS Caltex is to enter the ethylene/PE market with plans to invest approximately 2 trillion won (€1.5 billion) in an integrated facility in Yeosu.

The plant would produce 700,000 t/y of ethylene from a mixed feed cracker and 500,000 t/y of PE. Design work will start this year with construction scheduled to begin during 2019 and plant start-up by 2022.

GS Caltex said it has decided to invest in ethylene/PE production in order to diversify its current business, which is centered on refining and aromatics. According to market research company IHS, the global PE market accounts for the largest share (100 million t/y) of the 260 million t/y of ethylene produced globally, with world demand growing at 4.2% per year.

The Seoul-headquartered group added that it expects to gain a competitive advantage and create synergies by linking the ethylene/PE complex with its existing production facilities. It also anticipates generating additional operating profit of more than 400 billion won annually by expanding its portfolio to include new petrochemical products.

The company currently operates a crude oil refinery with a capacity of 790,000 barrels per day along with aromatics production of 2.8 million t/y. GS Caltex also runs a PP plant with a capacity of 180,000 t/y.