Shell, Hyundai Oilbank to build new base oil unit in South Korea

15 January 2013 01:59  [Source: ICIS news]

SINGAPORE (ICIS)--Shell and South Korea’s Hyundai Oilbank are planning to build a new base oil plant at Daesan to help meet increasing lubricants demand in the region, the energy major said on Tuesday.

The plant is expected to be fully operational in the second half of next year, and will produce 650,000 tonnes/year of API Group II base oils, Shell said in a statement.

“This plant is being built in response to an expected growth in high quality lubricant demand in the East, driven by new vehicle ownership and production, construction and industrial activity – especially in the power generation and oil and gas production sectors,” the company said.

Base oils are the key component of lubricants, making up on average 60-80% of the end product, according to Shell.

The commissioning, start-up and operation phases of the plant, to be built at Hyundai Oilbank’s refinery in Daesan, will be managed by a joint venture between the two companies; Hyundai and Shell Base Oil Co (HSB), the company said.

Hyundai Oilbank will hold a 60% stake in the joint venture, while Shell will own the remaining 40%.

The new Desan unit will be Shell’s fourth base oils manufacturing plant in the region, which works alongside 19 lubricant blending plants, it said.

Shell previously said that it plans to build two more blending plants in China and Indonesia, the company added.

Financial details of the project were not disclosed.

By: Nurluqman Suratman

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