South Korea’s S-Oil shuts Onsan petrochemical units after 19 May blast

Nurluqman Suratman


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


ICIS Premium news service

The subscription platform provides access to our full range of breaking news and analysis

Contact us now to find out more

Speak with ICIS

Now, more than ever, dynamic insights are key to navigating complex, volatile commodity markets. Access to expert insights on the latest industry developments and tracking market changes are vital in making sustainable business decisions.

Want to learn about how we can work together to bring you actionable insight and support your business decisions?

Need Help?

Need Help?