Eastern Petrochemical Company to Divert Ethylene Glycol to Japan

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Researched by Industrial Info Resources East Asia (Kofu-shi, Japan)--As a result of the March 11 earthquake, operations at the Kashima, Ibaraki, facility belonging to Mitsubishi Chemical Holdings Corporation (TYO:4188) (MCHC) (Tokyo) were completely stopped. The plant itself sustained little to no damage. However, the plant's cooling system suffered extensive damage as a result of the tsunami. Ethylene Unit 1 was originally scheduled for a turnaround beginning on May 14, however MCHC plans to leave the unit offline due to an inoperable cooling system. Unit 1 is not expected to resume operations until June 27. Unit 2, however, will resume operations on May 20, assuming that the cooling system is fully repaired.

The Ichihara, Chiba, facility belonging to Maruzen Company Limited (TSE:5982) (Tokyo) has also been offline since March 11, having sustained damage from the same fire that destroyed a significant portion of the Ichihara refinery belonging to Cosmo Oil Company Limited (TYO:5007) (Tokyo). Maruzen's Ichihara facility began its restart on Friday, April 15.

Both Maruzen's Ichihara facility and MCHC's Kashima facility have substantial ethylene capacities, producing 525,000 tons per year (t/yr) and 828,000 t/yr, respectively. These facilities also produce a significant amount of ethylene glycol (EG), a primary component in polyethylene terephthalate (PET), or polyester, synthesis. "PET" is typically used when referring to packaging, while "polyester" is used in the textile industry. Between the two facilities, Japan lost 70%, or approximately 350,000 t/yr, of domestic EG production following March 11's earthquake.

Saudi Petrochemical Development Company (SPDC) (Tokyo), a consortium led by MCHC, established Eastern Petrochemical Company (Sharq) with Saudi Basic Industries Corporation (SABIC) at Al Jubail Industrial City, Saudi Arabia in 1981. Sharq, with an EG capacity of approximately 2.05 million t/yr, is one of the largest producers of EG in the world. In a typical year, Sharq exports only a few thousand tons of EG to Japan. Due to shortages, Sharq is redirecting larger shipments of EG to Japan that were originally meant for China as an emergency measure to support customers.

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