President Kang Dal-ho of Hyundai Oilbank. (Photo: Hyundai Oilbank)

Hyundai Oilbank posted a record Q2 operating profit of 154.4 billion won, up 53.2 percent on quarter, the oil refinery said on July 25. The results were attributed to sales worth 5.319,6 trillion won, up 3.5 percent on quarter.

 The results are considered outstanding in view of the fact that other refineries in the country suffered a decline in demand for oil products due to an economic slump caused by the U.S.-China trade problems.

 The oil refiner’s oil refining sector led the superb operating record in the second quarter, with profit from the sector at 107.5 billion won in the quarter thanks to its high-quality oil refining capacity, naptha, or low-grade oil cracking facilities, taking up to 40 percent of the total oil refining capacity, the highest in the country.

South Korean refiners’ ability to process some of the heaviest density crude grades continues to shine with Hyundai Oilbank’s latest plan to expand and further upgrade some of its cracking facilities, painting a rosy picture for Mexico’s Maya crude exports to Asia’s fourth biggest energy consumer.

Hyundai Oilbank, Korea’s smallest refiner by capacity, said recently that it would purchase more heavy and sour crude grades, especially Mexican Maya, as soon as its newly improved and expanded facilities become operational.

Hyundai Oilbank kick started work on Aug. 10 to expand its crude distillation units and heavy oil upgraders, such as fluid catalytic crackers and hydrocracking unit, according to a company official.

“When the works are completed by mid-September, our CDU capacity will increase to 650,000 b/d, from 560,000 b/d currently,” the official told S&P Global Platts.

“The capacity of our heavy oil upgraders will also climb to 211,000 b/d, from 164,500 b/d currently,” he said.

The company currently runs two CDUs with 120,000 b/d and 310,000 b/d capacities at the Daesan complex, south of Seoul.

It also operates heavy oil upgraders, such as an 86,000 b/d RFCC, a 42,000 b/d HCR and a 36,500 b/d delayed coking unit.

The HCR capacity will grow to 50,000 b/d, and the DCU capacity will increase to 50,000 b/d, while the RFCC capacity will rise to 111,000 b/d, according to the official.

In addition, Hyundai Oilbank just completed mechanical construction of solvent de-asphalting unit, or SDA, which is scheduled to begin commercial operations in mid-September, the official said.

Hyundai said recently it will invest 260 billion won to beef up its petrochemicals production.

Hyundai Oilbank said its affiliate Hyundai Chemical Co. will chip in 100 billion won to expand its production of mixed xylene, a core material for BTX (benzene, toluene and xylenes) production.

The investment will increase the company’s mixed xylene output to 1.4 million tons from 1.2 million tons per year.

Hyundai Oilbank added its subsidiary Hyundai Cosmo Petrochemical Co. will inject 160 billion won to increase its paraxylene output to 1.36 million tons from 1.28 million tons per year.

The expansion process is expected to be completed by June 2020, it added. “These petrochemicals capacity expansions will increase our operating profit by 86 billion won,” the company said in a statement.

“Once our Heavy Feed Petrochemical Complex starts operating in 2022, we believe petrochemicals will account for half of the company’s operating profit from the current 25 percent level.”

Hyundai Oilbank posted operating profit of 100.8 billion won in the first quarter of the year, down 64.3 percent from a year ago, while its sales rose 7.6 percent on-year to 5.14 trillion won.