Base oils are the key component of finished lubricants, making up on average of 60-80% of the end product. There are five technical grades of base oil based on the composition of saturates, sulphur and viscosity group I, II, III, IV and V.
The joint venture between Shell and Hyundai (60% Hyundai Oil bank, 40% Shell) currently only manufactures base oils. It is located at the existing HDO refinery in Daesan, South Korea.
HYUNDAI and SHELL Base Oil Co., Ltd. is the name of the joint venture company formed by Shell and Hyundai Oilbank, on the 25th of September 2014 inaugurated a new base oil manufacturing plant in Daesan, South Korea. The plant has the capacity to produce approximately 13,000 barrels per day or 650 kilotonnes of API Group II base oils per year.
Mark Gainsborough, Executive Vice President for Shell Lubricants, said: “As the demand for higher quality lubricants is on the rise in Asia, the region is shifting away from Group I base oils towards increased use of Group II and Group III base oils. This plant contributes significant Group II base oil supply to Shell’s supply chain in the region, helping us grow our premium lubricants business in Asia, especially in China and Northeast Asia.”
The plant was built to capture the growing demand for Group II base oils in Asia. Construction was completed in a record 20 months, close to 2 months ahead of schedule and successful commercial production of base oils began in July 2014.
This is the fourth base oil production plant for Shell in the region, after Pulau Bukom in Singapore, Kaosiung in Taiwan and Yokkaichi in Japan (a joint venture). Shell base oil production plants in Asia work alongside Shell’s network of 19 blending plants in the region, to deliver high quality Shell finished lubricants. Shell has blending plants in China, Singapore, Thailand, Malaysia, the Philippines, Vietnam, South Korea, Pakistan and India. Shell is also currently building two new blending plants in Asia, one in China and one in Indonesia.
Adapted from Shell press release of 25th September 2014