SINGAPORE (ICIS)--South Korean producer S-Oil said on Friday that it has halted production at its No 2 alkylation plant and nearby units at its Onsan refinery in Ulsan following a fatal blast late on 19 May.
The company has temporarily shut its No 2 residue fluid catalytic cracking (RFCC) unit and a paraxylene (PX) unit which are located near the alkylation line following the blast, it said in a statement filed on Korea Exchange.
S-Oil has also temporarily shut its polypropylene (PP) production process linked to the No 2 RFCC unit, the company said in the regulatory filing.
According to ICIS Supply and Demand Database, S-Oil's Onsan refinery has two alkylation units - a 14,000 bbbl/day unit and a 9,000 bbl/day unit; two PX units with a combined 1.7m tonne/year capacity; and the No 2 RFCC unit can produce 705,000 tonnes/year of propylene.
The blast occurred at the refinery's alkylation unit at about 20:50 Seoul time (11:50 GMT) on 19 May, “during the start-up process after maintenance,” S-Oil chief executive Hussain Al-Qahtani said in a televised press conference on Friday, confirming that a person was killed by the blast.
Nine others were injured at the incident, according to Korean news agency Yonhap.
"In the meantime we are exploring distribution [channels] to make sure this does not cause any interruption in domestic supply of fuel products by making full use of inventory and domestic [as well as] overseas network," Al Qahtani said.
Energy giant Saudi Aramco is the largest shareholder of S-Oil, which is the third biggest refiner in South Korea.
The damage at the Onsan site “is under investigation,” S-Oil said in the bourse filing, adding that further announcement will be made when the damage is assessed.
"There is a possibility that the partial operation suspension could be prolonged due to the investigation,” Cho Hyunryul, an analyst at Samsung Securities, said in a note.
So far, there has been no direct impact on the 405,000 tonne/year PP plant at the Onsan site but PP production could be affected due to the shutdown at the No 2 RFCC unit, a source with knowledge of the matter said.
Base oils production at the site has not been affected but there could be logistics or supply chain disruptions as a result of the incident, another source said.
Additional reporting by Samuel Wong, Izham Ahmad, Heng Jun Kai, Helen Lee, Keven Zhang and Julia Tan