Up to 1.6 trillion won ($1.5 billion) is about to go down the drain for SK, and the company is not going to stand for it.
SK Incheon Petrochem, which was spun off from SK Energy last May, is considering taking legal action against the Seo-gu Office of Incheon City to rescue its faltering 1.6 trillion won investment project, SK Innovation, said the holding company of SK Group’s energy businesses.
“The company will take all types of measures, including legal action, to put the investment project back on track,’’ Jung Young-joon from SK Innovation said on Tuesday, echoing a company statement.
The investment project, aimed at expanding the firm’s paraxylene production to target the Chinese market, is currently in jeopardy, as the Seo-gu Office announced on Monday that it would officially send a notice to halt the construction by mid-January.
The office said the decision was based on findings that SK Incheon Petrochem had not properly attained the license for the project.
SK Innovation, however, refuted the claim, saying that the company attained the license in a legitimate manner back in 2006.
As of Jan. 7, SK Incheon Petrochem had spent 1.4 trillion won on the project and about 90 percent of PX plant construction has been completed.
“Timing is the most important thing for new investments. The losses will snowball if the construction is delayed for more than a month,’’ Jung said.
The PX plant construction project was supposed to be completed in the second half of this year.
Together with administrative hurdles, the project has faced strong objections from citizens living in Seo-gu, where the expanded PX plant will be located.
“The company will continue to talk to community members who are worried about air pollution caused by having a petrochemical plant nearby,’’ Jung said.
By Seo Jee-yeon (
jyseo@heraldcorp.com)
