Seoul (Platts)--26Oct2010/305 am EDT/705 GMT

      
SK Energy, South Korea's top oil refiner and chemicals producer, said
Tuesday it has signed a preliminary accord with the country's top steelmaker
Posco to produce chemical products, like plastics, using byproducts from the
petrochemical and steelmaking businesses.
     Under the memorandum of understanding signed by the chief executives of
the two companies, they will conduct a feasibility study on ways to produce
and commercialize high-end chemical products utilizing coal tar from heavy
aromatics' byproducts.
     SK Energy said it is seeking to produce basic chemical products in the
first stage and engineering plastics in the second stage. 
     "It would allow SK Energy to make chemical products at lower costs," a
company official said. "The deal would provide a new business model for
chemical makers and steel producers," he said, adding SK Energy and Posco
would discuss further on the project. There is no fixed time frame for the
project.
     In July last year, SK Energy and Posco signed an agreement on jointly
creating technology to make synthetic natural gas and manufacture coal-based
oil through a coal-to-liquids process. For its part, SK Energy is spending Won
550 billion ($492 million) until 2013 to produce 200,000 mt of coal-based
industrial chemicals, and an additional Won 1.8 trillion from 2014 to 2018 to
produce 6 million barrels of artificial crude oil from coal.
--Charles Lee, newsdesk@platts.com

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