A new player is scheduled this year to join the ranks of South Korean base oil suppliers. An API Group II plant being built by Hyundai Oilbank and Shell is due to be finished in the second half of 2014, and could come onstream in September.
The plant will be located at Hyundai Oilbanks refinery in Daesan, South Chungcheong Province, South Korea. It is designed for capacity to make 650,000 metric tons of base oil per year.
We cant yet predict the exact date commercial product will enter the market, but it will be shortly after mechanical completion of the plant, Hyundai Oilbank spokesman Soo-Hee Kim told Lube Report Asia last week, stating that construction is scheduled to be completed during the second half of the year. Sources familiar with Hyundais operations said that the base oil unit is likely to start up in September.
Hyundai Oilbank holds a 60 percent stake in the facility and Shell will own the remaining 40 percent. The plant will make several viscosity grades of Group II, including 60 neutral, 150 neutral and 500 neutral.
The plant is being built to address the growing demand of high quality lubricants in the region, which is driven by an expanding automobile use and thriving construction and industrial activity, especially in countries such as China and India.
Hyundai Oilbank said that most of the output from the new plant will be exported through Shells distribution network to other Asian countries – mainly China. Some will also be used as feedstock at the companys finished lubricants manufacturing plants.
The new unit in Daesan will be Shells fourth base oil plant in Asia, as the producer also operates plants in Singapore, Taiwan and Japan.