Hanwha Total completes 40,000-ton LNG tank

Hanwha Total said on Wednesday that it completed a 40,000-ton LNG tank at its Daesan Plant in Seosan City, South Chungcheong Province. The tank measures 63 meters long and 30 meters high. The tank, which is larger than the Jangchung Gymnasium in Seoul with a diameter of 46 meters, has been completed after work that lasted for over two years. The project cost 40 billion won (34 million dollars). The tank will be used to store propane gas called "C3LPG," which is used for cooking and heating at home and restaurants.

Through the C3LPG tank, Hanwha Total expects it will diversify fuels and thus strengthen its cost competitiveness. Most petrochemical companies in Korea use naphtha as main fuel while producing basic materials through a naphtha cracking center (NCC), but they sometimes use mix of naphtha and LPG as fuel. Since demand for LPG is relatively low during summer months, they can cut costs by increasing the portion of LPG in the fuel.

LPG is seeing its price competitiveness increase due to development of shale gas in the U.S. and other reasons. Currently, development of LPG has slowed down a bit due to the prolonged trend of low international oil price, but the industry predicts that once oil prices take upward trajectory, there is a high chance that cheap LPG will be released in the market en masse. With the recent completion of a project to expand the Panama Canal, favorable transportation environment to ship LPG into Asia has also been created.

Hanwha Total completed a tank with the same size as the new one in 2010 to store C4LPG (butane gas), which is used as automobile fuel. Since LPG tankers generally carry C3LPG and C4LPG together, the company expects that it will be able to cut logistics costs by importing them together than when only importing C4LPG. “By preemptively introducing diversification of fuels, which the global petrochemical industry is paying attention, we will step up efforts to further strengthen our cost competitiveness.”

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