SK, Sinopec to Cooperate

SK Group, third largest conglomerate in the country, announced that it signed a memorandum of understanding with Asia’s largest oil refining and petrochemical enterprise, China Petrochemical Corporation, also known as Sinopec Group.

Key areas of cooperation are petrochemical refinery construction, technology sharing and joint venture establishment overseas, according to the press release on Tuesday. The actual MOU was signed last Friday in Beijing by SK Chairman Chey Tae-won and Wang Tianpu, president and executive director of Sinopec Group.

The Chinese state-owned corporation is not to be confused with its eponymously-named subsidiary Sinopec Limited.

“With this strategic MOU, both companies’ strengths and assets can be used together to create new business opportunities,” said Chey at the Friday ceremony.

SK spokesman said that the chaebol has been working towards different models of cooperation, especially with China, the Middle East and Central and South America and that this announcement should be interpreted as an integral part of this ongoing multi-part project.

SK subsidiary SK Energy and Sinopec Limited are already constructing an ethylene production facility in Wuhan, capital of Hubei Province, central China. The project was then the largest Korea investment in its westerly neighbor. This project, also stressed at the ceremony, is due for completion by the end of next year, with the factory scheduled to produce petrochemicals like 800,000 tons of ethylene, 280,000 tons of monoethylene glycol, 300,000 tons of linear low density polyethylene and high density polyethylene each and finally 400,000 tons of poly propylene.

The document also sees other cooperation possibility outside the petrochemical industry as well, though nothing has been revealed so far.

Past efforts include 2004’s factory in Shanghai that has been producing 60,000 tons of solvent a year, using SK’s latest environmentally-friendly technology, the press release said.

SK Group’s October CEO seminar had focused on different methods of corporate cooperation, such as package deal or partnerships. Different subsidiaries are going to bid for projects in the former method, while under Chey’s leadership, further joint ventures with foreign enterprises could be announced in the future.

“SK Group’s construction of LNG liquefaction facility in Peru is the epitome of a package deal. Joint-construction of a lubricant factory with Spains (oil and gas company) Repsol as well as the current effort with Sinopec are examples of ‘partnering’,” said SK Group’s head spokesman. “From this day forth, based on principle of independence for the subsidiaries, we intend to expand our global operations.”

(koreatimes.co.kr)