Hyundai Oilbank Co., and Shell officially launched a base oil lubricant joint venture Wednesday in a bid to help both companies expand their market presence in Asia.

The new Hyundai and Shell Base Oil. Co., is expected to begin commercial production in the second half of 2014, with daily input to reach around 20,000 barrels.

Hyundai Oilbank, one of South Korea’s leading refiners, owns a 60 percent stake in the company while Shell, a global oil and gas company controls the remaining 40 percent.

“A production facility for base oil will be built at Hyundai’s existing Daesan plant with the base oil to be shipped to other Asian countries using Shell’s extensive sales networks,” a press release said.

China is currently the largest consumer of base oil products, which are mixed with various additives to make lubricants for cars, ships and other industrial machinery.

Daesan is located some 110 kilometers southwest of Seoul, with the base oil plant to be built on a 33,000 square-meter site.

The construction of the project is subject to a final investment decision that is expected in the third quarter of this year.

Hyundai Oilbank said the joint venture marked the start of the company’s growth into a full-fledged energy company. 

(Yonhap News)