S-OIL and Sumitomo Chemical sign technology license agreements for polypropylene (PP) and propylene oxide (PO)

S-OIL Corporation announced the signing of technology license agreements for polypropylene (PP) and propylene oxide (PO) with Sumitomo Chemical Co., Ltd. Under the agreements, S-OIL can manufacture and sell the products through construction of 405 KTA PP plant and 300 KTA PO plant.

S-OIL operates a refinery complex with 669 kBPD (kilo barrel per day) of crude processing capacity in Ulsan, Korea and mainly produces fuel, lube base oil and petrochemical products. In September, 2015, S-OIL has made the final investment decision on Residue Upgrading Complex and Olefin Downstream Complex Project of constructing 76 kBPD high-severity RFCC plant that upgrades low value residue oil to high value gasoline and propylene, and 405 KTA PP plant and 300 KTA PO plant that convert the propylene to the downstream products with target completion in the 1st half of 2018.

S-OIL official said that “Construction of the PP and PO plants with the most advanced and reliable technologies will be the cornerstone for S-OIL’s long-term strategy to grow into an integrated refining and petrochemical company. We also entered into catalysts supply agreements and a technology service agreement with Sumitomo Chemical that form a concrete foundation for comprehensive collaboration between the two companies.”

PP and PO are used for raw materials to produce synthetic resins, insulation materials, etc. and their demand is growing steadily across the world. Particularly for PO, Korea has depended on significant volume imported from other countries due to limited domestic supply by a sole manufacturer. “S-OIL’s entry into PO business will foster a sound competition environment in domestic PO market in Korea, contribute national economy by improving trade balance from import position to well-balanced one, and further promote downstream investments with S-OIL’s ample supply of PO as feedstock,” an industry source said.

Sumitomo Chemical’s PP production technology has a proven track record of successful operations at various locations in the world, such as its Chiba Works in Japan and licensee companies overseas including its affiliates in Singapore, offering high quality products while maintaining stable plant operation over a period of time. As far as PO is concerned, Sumitomo Chemical's production technology is based on a PO-only process where PO alone is manufactured without accompanying coproducts by recycling cumene. The cumene method, which was commercialized by Sumitomo Chemical for the first time in the world, has a distinct advantage of achieving a high PO yield by the combined use of its proprietary high-performance epoxidation catalyst as well as ensuring superior stability in plant operation. The technology has successfully been in operation on a commercial scale at Sumitomo Chemical’s Chiba Works and an affiliate in Saudi Arabia.