Shell-Hyundai Oil joint venture to break ground on base oil plant

Shell Petroleum Company Limited and Hyundai Oilbank (HDO) will hold a formal ground breaking ceremony at its joint venture base oil plant in Daesan, South Korea, on January 22, after the two companies confirmed their intention to construct a new base oil manufacturing plant (BOMP). The plant will significantly increase lubricant supply across the region, including China.
The joint venture, Hyundai and Shell Base Oil Co., Ltd. (HSB), will manage the commissioning, start-up and operation of the plant. The joint venture (60% HDO, 40% Shell) will concentrate on manufacturing base oils. Like crude oil, base oils are also traded on the open market. Commercial agreements have been put 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.
Expected to be fully operational by the second half of 2014, the plant will produce 650,000 tons of API Group II base oils a year.
Located at HDO’s refinery in Daesan, this location is close to key lubricants markets and has strong infrastructure. This will be Shell’s fourth BOMP in the region, which works alongside 19 lubricant blending plants. Shell recently announced its intention to build two more blending plants in China and Indonesia.
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.