SEOUL: South Korea’s third-largest refiner S-Oil Corp said on Monday it expects major maintenance shutdowns in Asia and the closures of aging facilities to help regional refining margins remain firm in the second quarter.
S-Oil returned to the black in the first quarter, reporting a 238.1 billion Korean won ($221.8 million) profit, from a 244 billion won loss in the previous quarter and a 46.9 billion won profit a year ago.
Falling oil prices had triggered strong demand for oil products, while refining margins hit a six-year high, the company said in a statement.
“1.6-million barrels per day of major maintenance shutdowns in the region and facility closures are expected to cause decreasing supply, which will exceed falls in seasonal demand and help refining margins remain strong,” it said in a statement.
S-Oil whose main shareholder is Saudi Aramco, the Kingdom’s state oil giant, in January reported its first annual operating loss since 1982, but forcast an improvement in its refining business in 2015 as cheap oil prices boosted demand growth.
S-Oil ran its 669,000 bpd crude distillation units (CDUs) in Ulsan, about 380 km (236 miles) southeast of Seoul, at 94.9 percent of capacity during the first quarter to meet robust demand after its condensate fractionation unit (CFU) was shut last month for maintenance.
The refiner which imports almost all of its crude from Saudi Arabia, said it plans to shut its No.2 and No.3 CDUs, No.2 residue hydro desulfurisation (RHDS) unit and hydrocracking (HYC) unit in the second half of this year. It did not give further details.
Industry sources said in January that S-Oil plans to shut two crude units, two secondary units and a condensate splitter for planned maintenance between February and November.
