Expanding Light Oil Exports

GS Caltex to build 4th heavy oil cracking facility to produce more light oil products for export

GS Caltex Chairman Hur Dong-soo

GS Caltex will invest 1 trillion won this year to build high-grade oil production facilities to produce such high-grade oil as gasoline, diesel, kerosene and others from low-grade oil residue such as bunker-C oil, the company said recently.
Chairman Hur Dong-soo said the high-grade oil refining facility is an environmentally friendly, green-growth industry because it removes toxic content such as sulfur during the cracking process to produce light oil. He added that although it is expensive to build, it should be seen as a potential growth power.
The second largest oil refiner in Korea said it will build its No. 4 heavy oil cracking facilities at its second oil refinery complex in Yeosu with an annual capacity of 53,000 barrels of light oil by 2013 at a cost of 1.1 trillion won with work scheduled to begin in March.
The projected heavy oil cracking facilities will include a VGO fuel cracking center (FCC), de-sulfurizing facilities for gasoline and a plant to produce alkylation, among others.
The VGO FCC is less costly to build and to produce fuel oils compared to other high-grade oil refining facilities using hydrogen, giving it an economical advantage.
Officials of the oil refinery said when the new facilities are online, its ratio compared to crude oil refining volume will account for 35.3 percent of total crude oil refining capacity of 260,000 barrels per day to rank tops among the four oil refineries in Korea.
The high-grade oil refining facilities at S-Oil and SK Energy take up 25.5 percent and 15.4 percent of Korea's total crude oil refining capacity, respectively. Even if Hyundai Oil completes its second high-grade oil refining facilities and puts it online, its share would come to only 30.8 percent, they said.
GS Caltex completed its third high-grade oil refining facility last year and it has been operating at 100 percent capacity since December 2010. The company has decided to build the No. 4 high-grade oil production facilities with the intention of exporting all of the light oil produced at the new facility with expected earnings of some 400 billion won.
When the new high-grade oil facilities are completed, the share of residue oil will drop to 10 percent. The company plans to readjust the production rate of refined oil in line with changes in crude oil prices to maximize its profits. When the new high-grade oil facilities are completed, it will produce 250,000 barrels of propylene annually, bringing total production of propylene to 450,000 barrels per year, expanding its role in the petrochemical industry.
"GS Caltex's vision is to create a better world, provide for your energy needs and be an energy leader spearheading environmental change. The energy market is poised to change due to diverse and complex variables such as changing demand, increased fluctuation in price, climate change and globalization," the company says on its website.
"In addition to satisfying diverse customer needs though tailored services, a company that provides energy has to adopt a broad and long-term perspective while taking into consideration the future of the global environment and society to deliver the optimal combination of energy and fulfill its mission."
The oil refiner said that by building on its competitive edge, derived through the efficient use of traditional energy sources such as oil and petrochemicals that enabled the rise of modern civilization, GS Caltex will explore new energy to spearhead a green future and foster new growth drivers to become the unparalleled energy leader in the Asia-Pacific region.
"Realizing organizational value to reach its vision, values upheld by GS Caltex are crucial to realizing the corporate vision. The core values driving the oil refiner are customer satisfaction, employee development, maximizing shareholder value and contributing to the advancement of society," the company said.nw