Seoul: HD Hyundai Oilbank Co., the refining arm of the shipbuilding-to-energy conglomerate HD Hyundai, has announced that its joint venture with Shell Plc is set to venture into the burgeoning high-value lubricants sector.

According to Yonhap News Agency, HD Hyundai Shell Base Oil, a joint venture established in 2012 with a 60:40 partnership between HD Hyundai Oilbank and Shell, plans to invest in expanding its current base oil facility in South Korea. This expansion aims to introduce a new production line dedicated to premium lubricants.

The joint venture has set a target to commence operations of this new high-end lubricants line at its Daesan facility, located approximately 80 kilometers southwest of Seoul, by 2027. Shell, a major global player in oil and natural gas trading, will collaborate closely with HD Hyundai Oilbank to ensure the timely start of commercial production.

The lubricant base oil industry is integral to producing engine oils and industrial lubricants, classified into Groups 1 through 3 based on their manufacturing processes and quality. Currently, the Daesan plant produces Group 2 base oil. However, there is an increasing demand for high-performance, eco-friendly Group 3 base oil, recognized for its low sulfur content, high viscosity index, and excellent oxidation stability.

The Daesan facility began its commercial production of Group 2 base oil in 2014. Since then, HD Hyundai Shell Base Oil has expanded its reach globally, exporting to over 50 countries in regions including Asia, Europe, and North America.