S-Oil to operate three CDUs despite decline in cracking margin

S-Oil Corp., South Korea’s major oil refiner said it plans to operate fully all three of its crude distillation units even if its cracking margin is on the decline. S-Oil’s three crude distillation units (CDU) have a total capacity of 580,000 barrels per day (bpd), while its condensate fractionation distillation units have a capacity of 89,000 bpd. “At the moment, cracking margin, which is the difference in the price between bunker C fuel and diesel oil, came down to US$19-20 per barrel, slightly deteriorating from before. But we are going to keep operating CDUs at 100% of capacity. We have no plan to cut production at present,” a company spokesperson said. The company’s cracking margin was approximately US$24 last September and reached US$25.5 by the end of November 2011. Hyundai Oil Bank and GS Caltex have been operating CDUs at a high run rate of about 95%. SK Energy Co., the country’s largest oil refinery, has stopped operations at its 750,000 bpd No. 1 CDU in Incheon complex. (January 16, 2012)