Samsung Total to use more LPG after cracker turnaround

10 March 2011 03:09  [Source: ICIS news]

SINGAPORE (ICIS)--South Korea's Samsung Total Petrochemicals plans to use more liquefied petroleum gas (LPG) from June onwards after a regular turnaround at its cracker in Daesan, a source close to the company said on Thursday.

Samsung Total plans to raise the LPG usage to 20-30% from the current 5%, he added.

"The consideration is the pipeline, as we can enjoy the big spread," said the source, referring to the price difference between naphtha and LPG.

LPG has become increasingly more attractive as a feedstock amid a surplus in propane, market sources said.

Moreover, LPG prices at $907.42/tonne (€653.34/tonne) had an edge over naphtha, which rebounded to above the $1,000/tonne mark, tracking higher global crude futures amid the Libyan crisis and damage to crude pipelines and storage tanks in the North African country.

On Thursday morning, Asian naphtha prices were valued at $1,016-1,019/tonne CFR Japan versus $993.50-995.50/tonne CFR Japan on Wednesday’s close, ICIS data showed.

Multi-feed cracker operators will consider using LPG as feedstock when LPG prices are around 90-95% of naphtha values.

Meanwhile, because of the upcoming maintenance, Samsung Total shunned the spot market for second-half April naphtha supplies, sources said.

The cracker would be taken off line from the end of April to early June, according to an earlier ICIS report.

During the turnaround, which also involves debottlenecking, the ethylene nameplate capacity will be increased to more than 900,000 tonnes/year from the existing 850,000 tonnes/year.

Samsung Total will also take its derivative polyethylene (PE) and polypropylene (PP) plants at the same site off line for maintenance in May, according to an earlier ICIS report.

($1 = €0.72)

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By: Felicia Loo

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