Hyundai Oilbank's Oil Well on Land

Oil refinery completes 2nd heavy oil cracking facility to lead industry's light oil production

Hyundai Oilbank Co. has become the first oil refinery in Korea to break the 30 percent level of its light oil produced in its heavy oil cracking facilities. The production by the oil refinery with its second heavy oil cracking facilities were put on a test-run starting January 16 before normal operation began in May.
The oil refinery invested 2.6 trillion won in the new high-grade oil production unit taking three years and eight months to complete the construction. The oil refinery's oil upgrading ratio climbed to 308 percent of its total oil production facilities, the highest among oil refineries in Korea.
Steel pipes used in the construction that surround the oil cracking facilities are equal to 920 km twice the length from Seoul to Busan and the cracking facilities weigh 46,500 tons. On daily average, 5,000 workers labored to build the facilities, which refines heavy oil like bunker C and heavy residue oil into light oil such as gasoline, diesel and kerosene, which is why the facilities are called an "oil field" on land.
Oil refineries derive a great portion of their profits from the cracking units as profit margins are high for light oils produced through the cracking units and they are either expanding or have plans to expand their facilities. Hyundai Oilbank has been able to cut short the construction period by shortening machinery installation period and also pulled up the online date from July 1 to the middle of May.
Kim Jung-sok, general manager of the Expansion Project Headquarters, said residue oil like bunker C oil take up 40 percent of the crude oil when refined and the refinery cannot make profit with selling the residue oil as it is cheaper than crude oil. When they are cracked and turned into light oil, the refinery can make 500 billion won in additional profit annually and export 2.5 trillion won worth of light oil per year.
He said they had many problems as the project was a huge undertaking. The facilities had to be built on a land where a hill was removed because the refinery complex had no room for more installations and one of the toughest problems was laying the pipelines because of the terrain ranged from 7 to 30 meters in some places and the pressure level in the pipelines should be the same, which was very difficult due to differences in heights of the terrain. They had to develop a new technology to keep the pipeline pressure the same, the manager said.
When the new heavy oil cracking facilities were put online in May, Hyundai Oilbank's cracked light oil will share up to 30.8 percent of its total oil production, the largest ratio in the oil industry from 17.4 percent now, Gen. Mgr. Kim said, adding that the new facilities would lead Hyundai Oilbank' s future profits in the next 10 years.
In the meantime, Hyundai Oilbank Labor Union declared it will not hold walkouts in 2011 leaving it up to the company to determine salary increase rates for employees this year the union made the announcement in a ceremony on January 12 in the presence of Hyundai Oilbank President Kwon Oh-gap and Union Head Kim Taw-kyung. This is the first time since 1988 when the union left the salary increase up to the company.
Hyundai Oilbank first entered the oil refining market in 1993 when it acquired the nationOs first private oil refining company, Kukdong Oil Refining, established in 1964. Hyundai Oilbank has become a market contender by successfully attracting the $500 million investment from IPIC of the United Arab Emirates in 1999.
The company directed considerable effort towards vertical conglomeration within the oil industry, and has become Korea's leading oil refining company by acquiring the nationOs highest percentage of advanced oil refining facilities (30%) and expanding business transparency and public trust.
The oil refinery has strived to proactively respond to changes in the energy environment amid the growing instability of the international oil market. It has placed great emphasis on management innovation and ethical management so as to enhance business transparency and public trust.
The company employs cutting-edge facilities including an ultra-low sulfur diesel and clean fuel plant, in line with the principle of ensuring environmental protection by minimizing pollutant emissions. This will also secure the necessary product quality competitiveness following the opening of the petroleum market Moreover, various environmental protection activities such as the 3R(reduce, reuse, and recycle) Campaign, the fry stock project, the installation of underground water monitoring systems, and numerous voluntary agreements are taking place at the production sites.nw