SK Innovation, Korea’s top refiner, said Tuesday it has clinched a deal with China’s Yanchang Petroleum Corp. to export its catalyst technology used to break down naphtha.

First developed by SK and the Korea Research Institute of Chemical Technology in 2008, the Advanced Catalytic Olefins process allows refiners to produce ethylene, propylene and other olefins from naphtha, a petrol derivative.

The technology has been much touted by engineers as it requires temperatures of 700 degrees Celsius less than the previous method, thus cutting costs by up to 30 percent and energy needs by 20 percent, while creating less carbon emissions.

Using the technology, Yanchang, a state-run refiner based in Shanxi Province, plans to set up a plant in central China to churn out 200,000 tons of ethylene and propylene annually.

Olefin is a hydrocarbon compound widely used to produce polymers for plastics. Ethylene and propylene are the two most important olefins, which experts call the “backbone of the petrochemicals market.”

SK notes that the agreement was coordinated by Kellogg Brown & Root Inc., a U.S. engineering, construction and services company which formed a strategic alliance with SK for the ACO process. Under the deal, KBR will take charge of engineering of the Chinese facility.

By Shin Hyon-hee (heeshin@heraldcorp.com)