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| SK Energy's vacuum residue desulfurization (VRDS) facility in Ulsan / Courtesy of SK Energy |
Company completes trial run of desulfurization facility
By Baek Byung-yeul
SK Energy has completed test operations of its vacuum residue desulfurization (VRDS) facility in Ulsan, 43 days after the company finished construction of the plant that produces low-sulfur fuel oil, the country's leading oil refinery and gas station operator said Sunday.
SK Energy invested 1 trillion won ($825 million) in building the VRDS facility, which transforms heavy fuel oil into light- and low-sulfur fuel for ships, in its complex in the southeastern port city.
The company has been working on raising its output of cleaner shipping fuel to meet the International Maritime Organization's (IMO) new regulations, which requires all ships to mandatorily use fuel oil with a sulfur content of no more than 0.5 percent, down from the previous 3.5 percent.
With the new regulations going into effect in January, the demand for low-sulfur oil is expected to soar. The newly-built facility has a capacity of 40,000 barrels a day.
According to data from the International Energy Agency (IEA), demand for low-sulfur fuel oil will increase to 1 million barrels a day this year, from 100,000 in 2019. SK Energy expects an additional annual profit of between 200 billion won and 300 billion won from the new plant.
The company said it took 27 months and 14 days to complete construction and test operations. The test period was originally expected to last three months, but SK Energy concluded testing March 14. It claimed the reduced period was thanks to its superior technological competitiveness.
"The VRDS facility runs at very high pressure and heat, so we were scheduled to get some help from overseas professionals for the test operations. But we had to do all the procedures without their help as they couldn't come to Korea due to the coronavirus outbreak," an official who took part in the tests said.
Occupying 82,644 square meters of land, the VRDS unit has used a total of 24 kilometers of pipes. While constructing and conducting operational tests of the facility, the company suffered no accidents or pipe breaks.
"SK Energy has operated the country's first oil refinery and petroleum refinery and has gained knowhow and technological capability for about 60 years. Based on our experience, we could complete the construction in the shortest period and finish test operations despite the complexity and challenges," Moon Sang-pil, a senior executive who leads the company's process innovation office, said.
SK Energy CEO Cho Kyong-mok said the completion of the test phase demonstrated the company's technological prowess, adding the facility will become the company's edge to overcome business challenges surrounding the refining industry.
"The successful test operation of the VRDS facility is the fruit of our technological capabilities and the facility will be SK Energy's competitive edge to break though the hard circumstances we are facing now," he said.
"SK Energy will continue to innovate environmental-friendly business models including the VRDS facility in order to take the lead in developing economic and social value," Cho added.
