SEOUL, July 17 (Reuters) - South Korea's Hyundai Oilbank and Lotte Chemical Corp plan to spend 1 trillion won ($894 million) jointly to produce a million tonnes per year each of mixed-xylene and light naphtha from late 2016, Hyundai Oilbank said.
The mixed-xylene and light naphtha supplied by the project will replace about 2 trillion won of imports a year, refiner Hyundai Oilbank said in a statement on Wednesday. Diesel and jet fuel produced during the mixed-xylene production will total about 3 trillion won in exports, it said.
The project's new plant will process about 110,000 barrels per day (bpd) of condensate from the second half of 2016, according to the statement.
Both Hyundai Cosmo, jointly owned by Japan's Cosmo Oil Co and Hyundai Oilbank, and Lotte Chemical will use the mixed-xylene from the joint project. Lotte Chemical will consume the light naphtha for petrochemical production.
Mixed-xylene is a feedstock that is used to make xylene after further processing.
The new plant will be located in the city of Seosan, nearly 100 kilometres southwest of Seoul, where Hyundai Oilbank's 390,000-bpd refinery is located, its spokesman said.
Hyundai Oilbank and Lotte Chemical signed a memorandum of agreement on the project on Wednesday.
$1 = 1118 Korean won Reporting by Meeyoung Cho; Editing by Tom Hogue