Hyundai Oilbank, a South Korean petroleum and refinery company, will invest 2.7 trillion won ($2.4 billion) through 2021 to build a heavy feed petrochemical complex in South Chungcheong Province in a bid to diversify its business portfolio, the company said Monday.

The company has forayed into olefin and polyolefin production via its affiliate Hyundai Chemical in May.

The heavy feed petrochemical complex will have the capacity to produce 750,000 tons of polyethylene and 400,000 tons of polypropylene and be located at Hyundai Oilbank’s factory in South Chungcheong Province, the company said.

The new facility that mainly uses intermediate oil has significantly improved production cost compared to the previous naphtha cracking center by using minimal naphtha along with 60 percent more deasphalted oil, by-product gas and liquefied petroleum gas.

Hyundai Chemical plans to raise the ratio of deasphalted oil to 80 percent in the near future.

Deasphalted oil is about 20 percent more affordable than naphtha, which Hyundai Oilbank and three other refineries have the technology to produce, the company highlighted.

On active expansion into new businesses, non-oil refining business made up 30 percent of Hyundai Oilbank’s operating profit in 2017 compared to less than 10 percent in 2015, the company said.

“The ratio of businesses besides oil refining is expected to increase to over 45 percent in 2022 once the heavy feed petrochemical complex starts operation,” the company said. 

By Kim Bo-gyung (lisakim425@heraldcorp.com)