South Korea confirms S-Oil to invest $7.5 bln in refining, petrochemical units

Sun Mar 2, 2014 9:15pm EST

* S-Oil to spend $4.7 bln through 2017 -energy ministry

* Investing in heavy oil upgrading, petchem units

* S-Oil in Feb bought land from state-run KNOC for investment

SEOUL, March 3 (Reuters) - South Korea's S-Oil Corp will invest 8 trillion won ($7.49 billion) to build heavy oil upgrading and petrochemical production units, the energy ministry said on Monday.

S-Oil plans to spend 5 trillion won through to 2017 to build heavy oil upgrading and petrochemical units, and then 3 trillion won later to build additional petrochemical units, the ministry said.

Last month, South Korea's third-largest refiner won a tender to buy land in Ulsan from state-run Korea National Oil Corp for the facilities.

Sources told Reuters on Friday S-Oil was expanding its heavy oil upgrading unit to raise gasoline production by nearly 50 percent to up to 218,000 barrels per day.

The sources said S-Oil would build a 45,000 bpd atmospheric residue desulphurization unit and an up to 70,000-bpd residue fluid catalytic cracker (RFCC), although Monday's ministry statement did not elaborate.

An S-Oil spokesman declined to comment on its investment plans.

S-Oil's largest shareholder is Aramco Overseas Co B.V., a unit of Saudi Arabian Oil Company, with a 35 percent stake. ($1 = 1067.5000 Korean won) (Reporting by Meeyoung Cho; Editing by Ed Davies)