SK Corp, South Korea’s largest refining company, expects to decide early next year whether it will build a $2 billion facility to process more profitable clean fuels.

The new project plan, if implemented, would enable SK to cash in on rising regional demand for cleaner fuels, particularly from the US West Coast, as a result of tougher environmental standards.
“If we build a new RFCC, I think the major export (destination) should be America,” said Jung Heon, vice-president for corporate strategy and planning. SK already exports around 10 per cent of its fuel production to the US, though high shipping costs across the Pacific often limit further spot exports.
SK said recently it was considering building a second fluidised catalytic cracker (FCC) to process about 60,000 barrels of heavy oil per day into more value-added light products. “We’re worried about the spread of bunker fuel oil versus FCC gasoline stock,” Jung said, adding the spread could drop $5 versus Q3.
“That’s another consideration for our operating project,” Jung said. “The overall economics of refineries in the fourth quarter will decrease.” An FCC project could cost some 2 trillion won ($1.94 billion) and would take about 40 months from the planning stage to completion, the company has said.
SK signed a preliminary pact in September to buy smaller domestic rival Inchon Oil Refinery for 3.2 trillion won, in a deal that would boost its refining capacity by a third to 1.12 million barrels per day.