Hyundai Oilbank Invests 2 Tln Won for Expansion

Oil refinery to build oil cracking tower to increase light oil production

Hyundai Oilbank will invest 2 trillion won to build a heavy oil cracking facility to expand its production of light oil products such as gasoline and diesel from heavy residual oil like bunker-C oil through the facility.
The oil refinery's light oil production ratio comes to only 17.4 percent of its total oil production, the lowest among the oil refineries in the country, but the refinery is projected to be the largest among four existing oil refiners with its ratio climbing to 30.8 percent when the second refining tower is completed in 2011.
The Daesan Petrochemical Industrial Complex, where the oil refinery is located, is the busiest place in South Chungcheong Province with large trucks roaring around the to transport earth and equipment to and from the worksite in a corner of the industrial complex where Hyundai Oilbank is located.
An official of the construction project said everyone who works for the oil refinery is fully aware that the company's survival depends on the project. "Investments should be made despite the adverse economic conditions if the company is to turn around and be profitable again," said the official
He went on to note that the company sustained a loss of 152.2 billion won during the third quarter, caused mainly by the won's steep depreciation against the dollar. But, he added, the company's low ratio of light oil production can also be blamed for the loss.
The cracking facility squeezes light oil from low residual oil such as bunker-C oil. The sale of light oil products such as gasoline, diesel and kerosene bring such a huge profit to oil refiners that the facility is called the "Oil well on the ground." Another official said when the new facility is completed in 2011, the refinery's capacity to produce light oil will be almost doubled to 120,000 barrels from the current 68,000 barrels, which will hike the price of bunker-C oil to $30 per barrel and will help the refinery to recover its investment in about four years.
The entire company is united in its effort to build the cracking tower as early as possible to enable the refinery to regain its competitive edge and, if possible, well ahead of the completion date. The schedule of the project has the work on ground to be finished by November, next year, but they want to move it up to September.
Another official said workers at the refinery complex organized a team to check the work progress even during holidays, deciding that the winter season is the best time to cut short the completion period.
A fork crane operator said there are not many places where you can work during the winter anywhere in the country, adding that he can's feel cold when he is so busy making money.
Hyundai Oilbank is making a great contribution to the economy in the region where its refinery is located through the cracking center construction project.
Recently, the company held an interview session for job applicants to hire 83 interns for its oil refining sector, in addition to the 200 already hired this year thus far.
Personnel Department Manager Min Young-man said the number of newly hired this year is the largest in 14 years and is about 10 times the annual average as the company usually added 20 employees every year for the oil production sector of the refinery.
Senior Managing Director Kim Jung-sok said the oil refining company is having a hard time in recent months due to the financial crisis, but they project that the situation will improve by 2013 when the heavy oil cracking tower is completed. The company should make daring investments during rough times to clinch chances to surge ahead of rivals, he added.
The company named Daelim Industry and Hyundai Construction to build the oil cracking tower. Daelim will build the heavy oil cracking facility for 852.8 billion won, while Hyundai will take care of building the desulfurization facility for 828.7 billion won. nw

President & CEO Seo Young-tae of Hyundai Oilbank.