GS Caltex retakes No. 1 in upgrading

GS Caltex became the nation’s largest processor of heavy oil as its fourth upgrading plant began commercial operations Sunday.

Korea’s second-largest oil refinery said its fourth fluid catalytic cracking unit will produce high-value products such as gasoline and diesel by degrading from Bunker C oil and other heavy oils. GS Caltex spent 1.3 trillion won ($1.2 billion) over two years to build the plant in Yeosu, South Jeolla.

As the plant can produce 53,000 barrels per day, GS Caltex’s overall heavy oil processing capacity is now 268,000 barrels per day, making it largest heavy oil upgrader ahead of SK Energy, S-Oil and Hyundai Oilbank.

The plant can also produce 250,000 tons per year of propylene for petrochemicals, lifting the refiner’s total propylene capacity to 450,000 tons per year, the company said.

GS Caltex, a joint venture of GS Holdings and U.S. oil company Chevron, has pushed to set up high quality heavy oil upgrading facilities since 2004, investing a total of 5 trillion.

GS Caltex first claimed the title of No. 1 in May 2011 with completion of its third heavy oil processing plant, but just four months later Hyundai Oilbank took the top position.

The new heavy oil upgrading plant boosted GS Caltex’s heavy oil processing capacity to 34.6 percent of its total capacity from 27.7 percent. That beat Hyundai Oilbank by 0.2 percent.

“Our Yeosu plant is an important step toward become a world class oil producer,” the company said. “We will seek to export our products and increase our ability to adjust to changes in demand in global oil market.”

According to Korea Petroleum Association, exports of petroleum products were valued at $56.2 billion last year, more than any other sector including semiconductors, machinery and automobiles.

Petroleum products accounted for more than 10 percent of the value of all exports, according to the association’s data.

By Joo Kyung-don [kjoo@joongang.co.kr]