SK Energy to add 60,000 b/d RFCC unit at Ulsan

Prompted by rivals at home and abroad, South Korean refiner SK Energy Co. may increase gasoline exports next year after a 60,000 b/d residual fluid catalytic cracker starts operations.

Eric Watkins
Senior Correspondent

LOS ANGELES, Aug. 15 -- Prompted by rivals at home and abroad, South Korean refiner SK Energy Co. may increase gasoline exports next year after a 60,000 b/d residual fluid catalytic cracker starts operations.

The RFCC unit is being built at SK Incheon Oil Co.'s 817,000 b/d refinery in Ulsan. The plant will be capable of producing an additional 30,000 b/d of gasoline containing less than 0.001% sulfur.

Analysts say the unit will be capable of turning fuel oil into gasoline for potential sales to California, which has the most stringent emission standards in the US and where demand for cleaner-burning fuels is generally on the rise.

Victor Shum, a senior partner at industry consultant Purvin & Gertz Inc. in Singapore, said the ability to produce high-quality ultralow-sulfur gasoline will give SK an edge over rivals as competition intensifies. In particular, he noted that California alone burns as much gasoline in one day as the whole of Japan or China.

SK Energy is said to be competing with rivals, including Reliance Petroleum Ltd. and Saudi Aramco, to build plants that can process heavy crude into high-priced, less-polluting gasoline and diesel.

In July, Japan's Cosmo Oil and Idemitsu Kosan were said to be taking steps to increase or start exports of products such as gasoline, diesel fuel, and kerosine to the US—California in particular (OGJ Online, July 18, 2007).

Contact Eric Watkins at hippalus@yahoo.com.

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