A fire in S-Oil PX plant in Ulsan (Courtesy of Kyungsang Ilbo)
ULSAN, South Korea — It looks inevitable for S-Oil Corp., the South Korean unit of Saudi Arabian Oil Co., to bear the brunt of a major fire in one of its paraxylene (PX) plants on Monday.
The fire broke out in S-Oil’s PX-producing plant before dawn today. The fire was fully contained a few hours later without any casualties but brought a temporary halt to the operation of the PX-producing plant in Ulsan, southeast of Seoul, S-Oil said.
PX is a raw material for purified terephthalic acid (PTA), which is used to produce polyester, fiber, PET bottles and films.
The plant’s shutdown will cause S-Oil some loss in revenue, considering that the facility was responsible for 7.1%, or 2.5 trillion won ($1.9 billion), of the company’s annual revenue last year, according to the company.
S-Oil runs two PX plants on the same site, of which the fire-hit plant is a smaller one with an annual capacity of 1.05 million tons.
The bigger PX plant will stay up and running, helping minimize production and sales losses, the company said.
S-Oil will determine how long the fire-damaged plant will remain shut after an inspection later.
PX is a transparent liquid with no color and is hazardous to the body. However, no toxic gas leakage outside the plant was detected during the fire, according to the regional fire agency.
S-Oil is Korea’s third-largest oil refiner. It also produces lubricants and petrochemical products like PX, which make up 12% of the company’s entire revenue.
The company is currently building facilities at its main plant in Ulsan to manufacture petrochemical products such as ethylene and polyethylene under the Shaheen project, costing 8 trillion won.
It posted a 58.3% decline in operating profit last year due to lower refining margins amid weak global oil prices. Its total sales also dropped 16% to 35.73 trillion won.
By Sang Hoon Sung
uphoon@hankyung.com
Sookyung Seo edited this article.
