Invest KOREA

South Korea's refiner Hyundai Oilbank will advance into the lubricant base oil market in partnership with global refiner Shell Petroleum. Hyundai Oilbank announced on Tuesday that it has signed a contract with Shell in Singapore to establish a jont venture called Hyundai Shell Base, and construct a lubricant base oil plant that can process up to 20,000 barrels of base oil per day in Daesan, Seosan City, southern Chungcheong Province. The construction is expected to complete by 2014.

Hyundai Oilbank and Shell will be responsible for 60% and 40% of investment, respectively, and Hyundai owns the management right.

Now, there is a growing demand for lubricant base oil in emerging Asian economies, such as China and India. However, current supply is not enough to meet the increasing demand.

Most of the base oil products produced from the plant will be supplied to Shell's lubricant manufacturing facility and also be exported to China.

Hyundai Oil Bank expects to raise 700 billion KRW in sales and 80 billion KRW in operating profit in the base oil sector alone in 2015.

Gwon O-gap, CEO of Hyundai Oilbank, said, "We have made relentless efforts to reform existing oil refinery industrial structure and generate stable profit," adding that "Our entry into the lubricant base oil market will lay foundation for making Hyundai Oilbank develop into a comprehensive energy company."     

Source Text                              

Source: Yonhap News (Feb. 7, 2012)

** This is the translation of a Korean article.