SK Boosting Capacity at Ulsan


The worlds biggest Group III base oil producer intends to grow a bit bigger this spring. SK Corp. plans to increase capacity of a plant in Ulsan, South Korea, by 2,100 barrels per day during a maintenance turnaround scheduled to begin in April.

The expansion to one of two plants at Ulsan will boost overall capacity to 19,700 b/d. Officials said about three-fourths of the expansion will be Group III barrels, the rest Group II. The general manager of SKs Base Oils Business Team said the plant was built to accommodate an expansion of this sort.

Normally this kind of capacity increase is SKs typical production strategy, Y.S. Yoon told Lube Report. We prefer to have room to expand when we design and build a plant, and then we expand when we have enough demand. This is a good time [to expand] since our supply is desperately short.

The plant undergoing the expansion is the newer of two within SKs giant oil refinery at Ulsan. The new plant opened just 20 months ago and increased the companys total capacity to 17,200 b/d. Of that amount, 14,000 b/d is Group III, and 3,000 b/d is Group II.

South Korean rival S-Oil Corp. is the next-largest Group III producer, with 9,000 b/d of Group III capacity at its 24,500-b/d plant in nearby Onsan.

SK has marketed its oils around the world, finding particularly strong demand along the Pacific Rim and in the United States. The additional volume will undoubtedly be welcomed by the market, as supplies around the world are exceptionally tight.

The new plant had originally been due to shut down for maintenance in June, but the company moved up the schedule when operational issues caused a drop in yields.

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