South Korean oil refiner Hyundai Oilbank has agreed to sell a controlling stake in its oil storage business, Hyundai Oil Terminal, to a Korean financial firm, J & Private Equity.

Hyundai Oilbank, the smallest of South Korea’s oil refiners, was the first oil company to operate a commercial oil storage business. Its Daesan oil refinery has a crude oil refining capacity of 690,000 barrels per day. Hyundai Oilbank is part of Hyundai Heavy Industries Group. Saudi Aramco owns a 17% stake in Hyundai Oilbank.

In 2012, the company established a base oil joint venture company with Shell Petroleum Co. Ltd., known as HYUNDAI and SHELL Base Oil Co., Ltd. The JV has been producing Group II 150 Neutral and 500 Neutral base oils in Daesan since 2014. In 2018, the JV boosted its capacity to 1 million tons per annum.

Hyundai Oilbank said it will invest the proceeds from the sale to expand its hydrogen and new energy businesses. The company plans to produce and sell 100,000 tons per year of blue hydrogen by 2025.

In April, Hyundai Oilbank signed a letter of intent with Air Products and Chemicals to use its technology to produce hydrogen from its crude oil by-products and natural gas.

Hyundai Oilbank wants to reduce its revenue from its oil refining business from the current 80% to 45% by 2030.

The oil storage terminal, which has been operating since December 2013, was built at a cost of KRW100 billion (USD86 million). The financial details of the transaction were not revealed. However, the current value of the oil storage facilities has been estimated at KRW200 billion (USD173 million). A 90% equity stake would place the transaction at around KRW180 billion (USD156 million).

The oil storage terminal has 35 tanks with a total storage capacity of 280,000 kilolitres of crude oil and refined oil products.