A view of a solvent de-asphalting (SDA) unit at the Daesan plant in Seosan. (Photos: Hyundai Oil Bank)

Hyundai Oil Bank President Moon Jong-bak

Hyundai Oilbank will be first Korean refiner to see its heavy oil upgrade portion top 40 percent. Heavy oil upgrade is a process of refining the cheaper residual oil again to produce value-added petroleum products, including gasoline and diesel. Industry experts have shared the view that Hyundai Oil Bank President Moon Jong-bak’s efforts to focus on upgrade for endless efficiency has finally paid off.

Hyundai Oilbank’s project to add a solvent de-asphalting (SDA) unit at the Daesan plant in Seosan was completed, the company said on Aug. 12. The SDA project was part of a heavy oil upgrade and expansion project that started last year at a cost of 800 billion won.

The refinery poured 240 billion won into the construction of the SDA unit, designed to extract asphaltene from residual oil. The SDA unit is capable of extracting de-asphalted oil (DAO) of 80,000 barrels daily by mixing residual oil with such solvents as propane, butane and pentane. DAO, being produced by the SDA unit, will be used to produce such value-added petroleum products as gasoline, diesel, and aircraft oil.

The refinery is putting the finishing touches on the heavy oil upgrade and expansion project by mobilizing the annual cumulating manpower of 200,000 people. If the project is completed by the middle of next month, it will raise from 560,000 barrels to 650,000 barrels its daily refinery capacity, including that of its joint venture company Hyundai Chemical.

The efficiency-high heavy oil upgrade capacity will rise from 165,000 barrels to 210,00 barrels on a daily basis, so its heavy oil upgrade efficiency ratio will jump to 40.6 percent, the first Korean refinery to top 40 percent among Korean refineries. The International Maritime Organization’s (IMO) introducing of stringent rules to curb ship oils containing sulfur will become a boon to Hyunai Oilbank.

The IMO has decided to lower the sulfur content of ship fuels from current 3.5 percent to 0.5 percent effective 2020. The global demand on high-sulfur Bunker C-oil stood at 3.56 million barrels daily.

Chances are high that Korean refineries will suffer a setback if the global demand on high-sulfur Bunker C-oil decline in the wake of the IMO’s restriction. But Hyundai Oilbank will be an exception. The Korean refiner’s portion of high-sulfur Bunker C-oil stands at a meager 2 percent, and the dedication of the SDA unit will be able to produce Bunker C-oil with more values.

Hyundai Oilbank’s heavy oil upgrade and expansion project will have an effect of improving refinery margins by 140 billion won annually. DAO, being produced by the SDA unit, will be made available not only at heavy oil upgrade facilities, but also at production of lube base oil, a raw material of lubricants, and raw materials of plastic and other petrochemical products, a Hyundai Oilbank official said. The heavy oil upgrade and expansion facilities are to be put into commercial operation starting upcoming September, he added.