Spanish oil producer, Repsol, is set to build a new Group III base oil plant backed by South Korea's SK Lubricants.
The agreement between the two producers will see SKL take a 70% stake in the new operation which will be sited next to Repsol's existing Cartagena refinery, as well as using spare output from the companies Tarragona and Cartagena hydrocrackers.
With an annual capacity of 630,000 tonnes, the new site will produce Group III lubricants which meet the latest Euro IV compliant engines, mainly supplying the European market to reduce the need for non-Euro imports.
The project will cost around €250m ($338m) and strengthens the already dynamic relationship between the two organisations developed in the LNG and exploration sectors. SKL is one of the world's leading producers of the high performance Group III oils and is Korea's largest oil refiner.