HYUNDAI AND SHELL BASE OIL COMPANY LTD BEGINS PRODUCTION AT BASE OIL MANUFACTURING PLANT IN SOUTH KOREA

HYUNDAI and SHELL Base Oil Co., Ltd. a joint venture company formed by Shell and Hyundai Oilbank, today inaugurated a new base oil manufacturing plant in Daesan, South Korea. The plant has the capacity to produce approximately 13,000 barrels per day or 650 kilotonnes of API Group II base oils per year.

Mark Gainsborough, Executive Vice President for Shell Lubricants, said: “As the demand for higher quality lubricants is on the rise in Asia, the region is shifting away from Group I base oils towards increased use of Group II and Group III base oils. This plant contributes significant Group II base oil supply to Shell’s supply chain in the region, helping us grow our premium lubricants business in Asia, especially in China and Northeast Asia.”

The plant was built to capture the growing demand for Group II base oils in Asia. Construction was completed in a record 20 months, close to 2 months ahead of schedule and successful commercial production of base oils began in July 2014.

This is the fourth base oil production plant for Shell in the region, after Pulau Bukom in Singapore, Kaohsiung in Taiwan and Yokkaichi in Japan (a joint venture). Shell base oil production plants in Asia work alongside Shell’s network of 19 blending plants in the region, to deliver high quality Shell finished lubricants. Shell has blending plants in China, Singapore, Thailand, Malaysia, the Philippines, Vietnam, South Korea, Pakistan and India. Shell is also currently building two new blending plants in Asia, one in China and one in Indonesia.

ENQUIRIES
Mallika Desai, +6597292377, [email protected]
Photos of the plant and the opening ceremony are available on request.

NOTES TO EDITOR
 Base oils are the key component of finished lubricants, making up on average of 60-80% of the end product. There are five technical grades of base oil based on the composition of saturates, sulphur and viscosity group I, II, III, IV and V.
 The joint venture (60% Hyundai Oil bank, 40% Shell) currently only manufactures base oils. It is located at the existing HDO refinery in Daesan, South Korea. Like crude oil, base-oils are also traded on the open market. Commercial agreements are in place, with Shell taking some of the base oil and using it to create high quality finished lubricants at its blending plants around the region.
 Demand for base oil is projected to grow significantly in the world over the next decades and especially in the Asia Pacific region. The Asia Pacific region is driving global growth in lubricants demand. By 2020 it is estimated the region will represent more than 50% of all demand.
 Overall finished lubricants demand is also projected to grow by 10% per annum in China and other Asian countries. The growth is predominantly in higher quality lubricants requiring Group II and Group III base oils for blending.
 When completed this will be the ninth base oil manufacturing plant for Shell globally. Three of Shell’s current base oil manufacturing plants are in Asia: Pulau Bukom in Singapore; Kaohsiung in Taiwan and Yokkaichi in Japan (a joint venture).
 Shell has a global network of 50 lubricant blending plants, where base oils are blended with additives to make finished lubricants.
 Shell produces finished lubricants for transport (passenger cars, heavy duty vehicles, ships and planes) as well as industry (including power, mining and manufacturing).

ABOUT SHELL LUBRICANTS
The term “Shell Lubricants” collectively refers to Shell Group companies engaged in the lubricants business. Shell sells a wide variety of lubricants to meet customer needs across a range of applications. These include consumer motoring, heavy-duty transport, mining, power generation and general engineering. Shell’s portfolio of lubricant brands includes Pennzoil, Quaker State, Shell Helix, Shell Rotella, Shell Tellus and Shell Rimula. We are active across the full lubricant supply chain. We manufacture base oils in eight plants, blend base oils with additives to make lubricants in over 50 plants, distribute, market and sell lubricants in over 100 countries.

We also provide technical and business support to customers. We offer lubricant-related services in addition to our product range. These include: Shell LubeMatch –the market leading product on-line recommendation tool, Shell LubeAdvisor – helps customers to select the right lubricant through highly trained Shell technical staff as well as online tools, and Shell LubeAnalyst – an early warning system that enables customers to monitor the condition of their equipment and lubricant, helping to save money on maintenance and avoid potential lost business through equipment failure.

Shell’s world-class technology works to deliver value to our customers. Innovation, product application and technical collaboration are at the heart of Shell lubricants. We have lubricants research centres in China, Germany, Japan (in a joint venture with Showa Shell), and the USA. We invest significantly in technology and work closely with our customers to develop innovative lubricants. We have a patent portfolio with 150 + patent series for lubricants, base oils and greases; more than 200 scientists and lubricants engineers dedicated to lubricants research and development.

Customer benefits include lower maintenance costs, longer equipment life and reduced energy consumption. One of the ways we push the boundaries of lubricant technology is by working closely with top motor racing teams such as Scuderia Ferrari. These technical partnerships enable us to expand our knowledge of lubrication science and transfer cutting-edge technology from the racetrack to our commercial products.

CAUTIONARY NOTE
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