SINGAPORE (Reuters) - South Korea’s Hyundai Oilbank is looking to expand its crude supply sources to include Canada for the first time, a company official said on Wednesday.
“We have strong interest (in Canadian crude) and we have already tested it,” said Chang Ji-hak, senior executive vice president of the company’s global business division.
He said that the crude was of good quality and would be suitable for refining by Hyundai Oilbank.
New oil flowing to Asia from North America will help keep prices down, said Chang, adding that broad demand for oil products and petrochemicals would stay firm as long as markets stay around $56 a barrel. Benchmark Brent crude stood at about $58 on Wednesday.
He did not specify which Canadian crude the company had tested. But he said that production from the Trans Mountain pipeline, operated by Kinder Morgan Canada Ltd, was expected to almost triple in 2019 from 300,000 barrels per day (bpd) this year, with some 200,000 to 300,000 bpd potentially going to Asia.
Most of the company’s crude will continue to come from the Middle East, Chang said. About 30 percent of Hyundai Oilbank’s crude is currently shipped by non-Middle Eastern suppliers and it has no intention of raising that volume in the short-term.
“Outside of the Middle Eastern grades, the crude is sometimes too light, sometimes too heavy. So there are some limitations,” he said.
Hyundai Oilbank operates a 390,000 bpd refinery and it also jointly owns a 130,000 bpd condensate splitter with Lotte Chemical. Including the splitter, Hyundai Oilbank has a refining capacity of about 520,000 bpd.
Reporting by Seng Li Peng; Additional reporting Florence Tan in Singapore and Jane Chung in Seoul