S-Oil Expands, Begins Making Group III


S-Oil Corp. has begun producing Group III base oils at its Onsan, Korea, refinery after completing an expansion that more than doubled its capacity to 22,500 barrels per day.

The company said it undertook the upgrade and expansion because it expects rising motor oil standards to spur increased demand for Group III stocks. A representative added that the projects attractiveness was enhanced by its relatively low price tag.

It was pretty much done just by changing the catalyst, said Clarke David, president of the Montgomery, Texas, David Consulting Group and U.S. agent for S-Oil. This facility was originally designed to permit future modification, so this project really didnt require a very big investment.

Part of a 525,000 b/d oil refinery complex, S-Oils base oil refinery was the first in Korea, built in 1981. Before the upgrade and expansion, it had capacity of 12,000 b/d – mostly Group II and Group II-plus but also smaller amounts of bright stock. In late October, the company started the month-long process of installing ExxonMobils wax isomerization catalyst MSDW-2 and hydrofinishing catalyst MaxSat.

The new capacity includes 6,000 b/d of Group III stocks, although the facility will no longer produce Group II-plus. Officials say they wont know exact product specifications until processes are fine-tuned later this month, but they say at least some of the Group III products will have viscosity indices ranging from 120 to 130.

David said S-Oil expects future motor oil upgrades to force blenders to use larger amounts of Group III base oils and that the company is trying to get ahead of the curve a little.

The company said it has encountered early interest in its Group III products in Japan, the United States and Europe and that it will try to market to all three regions, as well as domestically.

Theyll sell it wherever they can, but they dont expect there will be a shortage of demand, David said.

Based in Seoul, S-Oil is a publicly owned company whose majority stake holderis Saudi Aramco. S-Oil is Korea’s third-largest refiner, after SK Corp. and LG-Caltex. It adopted the name S-Oil Corp. in March 2000, after acquiring the refining assets of SsangYong Corp.

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