[Stones and Stories] Seawater Desalination Project in South Chungcheong Faces Setbacks... Red Alert for Companies in Daesan Complex

[Asia Economy (Naepo) Reporter Jeong Il-woong] A red alert has been raised over the supply of industrial water within the Daesan Petrochemical Complex (hereinafter Daesan Complex) in Daesan, Seosan, Chungnam. Delays in the construction of the seawater desalination facility are expected to disrupt the supply of industrial water within the Daesan Complex.

According to Chungnam Province, Seosan City, and Korea Water Resources Corporation on the 28th, the seawater desalination facility construction bids conducted twice by Korea Water Resources Corporation at the end of last year were all canceled. This was because no companies participated in the bidding due to lack of profitability, stringent regulations, and complicated business procedures.

Korea Water Resources Corporation plans to re-bid for participating companies this year, but considering that the re-bidding period will take at least six months, industry consensus is that it will be virtually impossible to meet the industrial water demand required by companies residing in the Daesan Complex.

The seawater desalination project involves an investment of 230.6 billion KRW to install facilities such as a water purification plant, intake facility, and pipelines by 2021, aiming to utilize seawater, a permanent water resource, as industrial water. The core of the project is to remove salt and dissolved substances from seawater and supply the amount of industrial water needed by the Daesan Complex.

Korea Water Resources Corporation planned to supply about 100,000 tons per day of industrial water to the Daesan Complex through seawater desalination starting in 2023.

However, as the seawater desalination project has encountered setbacks from the bidding stage, revisions to the industrial water supply plan have become inevitable. In fact, Korea Water Resources Corporation is reportedly revising the industrial water supply plan by drawing water from the Daechung Phase 3 wide-area water supply system, scheduled for completion next year, and the Asan industrial water supply to cover shortages, while also requesting companies in the Daesan Complex to reduce their industrial water usage.

The problem is that the damage could be passed on to companies that have expanded their equipment in connection with the seawater desalination project. Currently, LG Chem, Hyundai Oilbank, and Hanwha Total are located in the Daesan Complex, and the daily industrial water supply they have been receiving amounts to 210,000 tons (100,000 tons from Daehoro Lake and 110,000 tons from Daesan Water Center). With recent equipment expansions, it is known that an additional 71,000 tons per day in 2023, 83,000 tons in 2025, and 100,000 tons after 2026 will be needed, making the expansion of industrial water supply essential.

On the other hand, setbacks in the seawater desalination project and the resulting demands to reduce existing water usage are deepening the concerns of companies residing in the Daesan Complex.

In particular, companies face not only artificial shortages in water supply but also natural disasters such as droughts as unexpected challenges. In fact, in 2017, when Daehoro Lake, the main water source for the Daesan Complex, dried up due to drought, the companies experienced significant difficulties, leaving a precedent that increases the burden felt by resident companies.

The demand for the installation of seawater desalination facilities also intensified during the worst drought in 2017. Around that time, companies in the Daesan Complex and Chungnam Province officially requested the government to install seawater desalination facilities to provide industrial water as a permanent water resource unaffected by drought, fearing repeated disruptions in industrial water supply due to natural conditions such as drought.

Meanwhile, the Daesan Complex is the second-largest petrochemical industrial complex in Korea, with the combined annual sales of its five resident companies approaching 41 trillion KRW.

This content was produced with the assistance of AI translation services.