SK to build 40,000 bpd desulfurization unit at Ulsan refinery

SK Innovation, South Korea’s largest oil refiner, announced an investment of KRW1 trillion (USD897 million) in a desulfurization unit at its Ulsan refinery, as part of its plan to invest KRW3 trillion (USD2.7 billion) through the end of the year to diversify its product portfolio.

“SK Energy, the subsidiary of SK Innovation, held a board of directors meeting on October 31 and decided to invest KRW1 trillion in SK’s Ulsan complex,” the company said.

The decision aligns with an International Maritime Organization (IMO) mandate setting the global limit for sulphur in fuel oil used on board ships at 0.50% m/m (mass by mass) from January 2020.

“We will be able to respond more flexibly to the market dynamics of low-sulphur fuel for ships,” the company said, “which is expected to experience an increase in price due to a shortage of supply.”

The 40,000 barrel-per-day (bpd) vacuum residue desulfurisation unit will be able to produce high value-added products, including low-sulphur diesel fuel and naphtha, by processing residual fuel oil.

SK Energy has a total refining capacity of 1.115 million bpd, from a combined 840,000 bpd at five crude distillation units (CDUs) in Ulsan and 275,000 bpd at two CDUs in Incheon.