1. SK’s Lube Base Oil Production
- Successful Completion of 2nd LBO Project
Sook-Hyung (Sam) Kwon
Vice President & Project Director

2. Overview of SK Corporation
Establishment
October 1962
Asset
14.9 Billion US$ (2004)
Employees
4950 Persons
Sales
17.4 Billion US$ (2004)
Business Areas
Oil Exploration & Production
Petroleum Refining
Chemicals
Gas, Coal, Lubricants
Technology Business
New Business ( Online / Offline )
SK Corp’s highly integrated Ulsan Complex is one of the largest
single-site refinery in the world, having refining capacity of 840,000 bpsd.

3. History of SK’s Lube Base Oil Production
#1 LBO Plant
1995: Commissioned #1 LBO Plant, Hydroprocessing-based, Conventional MLDW included SK UCO Lube Process Technology
1997: Revamped to ISODEWAXING/Hydrofinishing Unit with ICR 408/407, Better Yield and Quality
2003: Applied New ISODEWAXING Catalyst of ICR 422, Better Yield and Quality

4. History of SK’s Lube Base Oil Production
#2 LBO Plant
2004: Commissioned #2 LBO Plant, Hydroprocessing-based, included SK UCO Lube Technology
2004: Increased Throughput by 20%
2005~6: Planned to Revamp

5. Application of Two LBO Plants
LPG
Fuels HCK
Naphtha
VGO
Kerosene
Diesel
Vac. Distill AR
Vac. Distill
70D
UCO
#1 CDW
100D
150D
Yubase
3,4,6,8
Vac. Distill
70D
#2 CDW
100D
150D
250D
#2 LBO Plant

6. Overview of 2nd LBO Project
Project Period
August, 2002~ June, 2004(23 months)
Mechanical Completion : May 20, 2004
100% Operation : June 29,2004
Capital Investment
US$ 120 Million Vac. Distillation Unit
Catalytic Dewaxing Unit Utilities and Offsite & Tankage
Fast-Track Schedule
Quality and Safety
Cost Saving
Project Target

7. 2nd LBO Project Fast Track Schedule
Involvement of Experienced Process Engineers from Planning to Start-up
Speedy Decision Making based on SK’s Accumulated Technology and Experience
Early Freezing of Process & Basic Engineering
Early Purchasing of Long-Delivery Equipment
Utilization of 3D Model Design
Optimization of Precom. & Commissioning Activities
Dramatic Savings of Document Approval Period

8. 2nd LBO Project Quality and Safety
Reflected Experienced Data and Procedure of 1st LBO Project in Design, Procurement, Construction, and Start-up Operation
Audited Major Engineering Design Results by 3rd Party
Crosschecked Design Quality between CDW Licensor and Basic Engineering Co.
Dispatched Resident Experts to Manufacturing Shop of Major Equipment Vendors
Strengthened Safety Mind and Behavior through Periodic Safety Committee
Double Checked High Pressure Welding Qualities

9. 2nd LBO Project Cost Saving
Minimized Spare Parts and Bump Factor by 3D Model Design and SK’s Experience
Minimized Trial and Errors from #1 LBO Experience
Optimized Design by Removing Unnecessary Items
Optimized Precom. & Commissioning Activities
Purchased Major Equipment Economically

10. Start-up Performance Description Planned Actual Throughput, B/D 7,000
Reactor Temperature, Deg. C
Isodewaxing
Hydrofinishing
350
232
360
Lube Product Yield, %
Base
+2.0
Product Quality
- Viscosity Index
Base +1
Any Bottlenecked Items
Towers - Heaters and H-exchangers - Rotating Machine - Utilities
None

11. Summary of 2nd LBO Project
Description
Planned
Actual
Fast-Track Schedule
EPC Schedule, months
Commissioning and Start-up, months 26 3
21.7
1.3
Quality and Safety
Number of Accidents Consecutive No Accidents Recorded, MH -
None
2,950,000
Cost
Cost Saving, % of TIC 5 22
Capacity, B/D *
7,000
8,400
Product Yield and Quality
Base
Better
* Feed rate was increased within one month after start-up.

12. Success through Partnership with CLG
Design Review
CLG reviewed all important design documents related to the IDW unit.
CLG assisted conformity check of equipment and plant.
Catalyst Selection
SK and CLG did joint testing for catalyst selection .
Start-up Assistance
CLG supported technical services for start-up.

13. Future Partnership with CLG
SK challenges CLG to improve lube quality/yield further by developing next-generation ISODEWAXING and ISOFINISHING catalysts.
SK/CLG’s driving forces to improve lube qualities are now extending to the Hydrocracking catalysts.
SK/CLG collaborate on validation of new technology and ideas in Hydroprocessing chain related to lube base oil production.