By Kim Hyun-cheol
Staff Reporter
GS Caltex, the second-largest South Korean refiner, announced Saturday that it will invest 2.94 trillion won ($2.82 billion) in its third upgrade unit to be built by 2010.
The project, the biggest ever in the local petroleum-chemical industry, will make it the country's No.1 refinery with a heavy oil upgrading unit (HOU) capable of producing 113,000 barrel-per-day, GS Caltex said.
Construction of the unit, twice as big as its second unit completed last year, will begin next month in its plant in Yeosu, South Jeolla Province.
The new HOU, when completed, will enable the refinery to turn 266,000 barrels of heavy oil into more expensive jet fuel and gas oil per day, ahead of 162,000 barrels a day by SK Energy, the current market leader.
The facility is also expected to add 900 billion won to yearly profits, as well as create many new jobs, the company said.
The new refinery is part of an ambitious long-term investment project by GS Caltex, which aims to shake up the business.
Armed with a war chest totaling over 5 trillion won, future plans include new facilities, marketing, chemical research and development, and facility maintenance.
"Our aggressive investment will maximize the company's profitability, and also offer momentum for the country's economic growth," Hur Dong-soo, CEO of GS Caltex, said at Saturday's ceremony for the refinery's 41st anniversary.
GS Caltex is a joint venture between GS Holdings and Chevron a U.S. major oil firm.