Hyundai Oilbank yesterday said it and Shell Petroleum Co. Ltd. plan to form a joint venture to build and operate a 13,000 barrels per day base oil plant in Daesan, South Korea, with production expected to begin in 2014.
According to Shell, the proposed base oil plant’s initial design capacity is 650,000 metric tons per year, which is about 13,000 b/d. It is conditional upon a successful completion of a front end engineering and design study, that starts with the signature of this joint venture agreement, a Shell spokesperson told Lube Report yesterday. The first step is to successfully complete the study, and then make a final investment decision on the project. It is too early to go into specifics on the investment costs or base oil grades.
According to crude oil refiner Hyundai Oilbanks Korean-language announcement, plant construction is expected to start in October this year at its refining complex in Daesan. Hyundai Oilbank would have a 60 percent share and Shell a 40 percent share in the joint venture. Most of the base oil output would be exported to China and other Asian countries, the announcement suggests.
Daesan is along the western side of the Korean peninsula in South Chungcheong Province, southwest of Seoul.
Based in Seoul, Hyundai Oilbank also has overseas offices in Singapore. Hyundai Oilbank is an affiliate of Hyundai Heavy Industries.
According to its web site, Hyundai Oilbank first entered the oil refining market in 1993 when it acquired South Korea’s first private oil refining company, Kukdong Oil Refining, established in 1964.