$2.3 billion expansion planned by No. 4 refiner

Hyundai Oilbank Co., Korea’s fourth-biggest oil refiner, will spend 2.1 trillion won ($2.3 billion) to expand output of higher-priced, cleaner-burning fuels.
Hyundai Oilbank will build an additional 52,000 barrel-a-day desulfurizing and residual fluid catalytic cracking unit, or RFCC, the company said yesterday. The project will be completed by 2011 near its Daesan plant southwest of Seoul.
The company wants to increase its ability to turn less-expensive varieties of crude oil into fuels that meet U.S. and European emission standards. The plan puts Hyundai Oilbank in competition with SK Corp., Korea’s largest refiner for overseas sales.
“They are doing the right thing by producing more high-end products as demand is forecast to grow from not only China, but North America and Europe,” said Cha Hong-sun, an analyst at Seoul Securities Co.
The company wants the project to strengthen its global competitiveness and cut foreign exchange costs through the purchase of relatively cheaper crude with high-sulfur content and bunker C oil, which is less in demand, for use in refining, Hyundai Oilbank said.
The expansion will increase Hyundai Oilbank’s high-end refining capacity to 116,000 barrels a day when completed, boosting the company’s ratio of cleaner fuels output to about 30 percent of total refining capacity.