UPDATE 1-S.Korea's GS Caltex to invest $2.82 bln in facility

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SEOUL, May 16 (Reuters) - GS Caltex, a joint venture between GS Holdings Corp (078930.KS) and Chevron Corp (CVX.N), has downgraded its planned investment for an upgrading unit in South Korea due to come on stream in 2010.

GS Holdings said in a filing with the Korea Exchange on Friday that GS Caltex plans to invest 2.94 trillion won ($2.82 billion) for the refiner's hydrocracker, which refines heavy fuel oil into more expensive lighter products.

GS Caltex will invest the planned amount between 2008 to 2010, the filing added.

GS Caltex had initially said it would invest up to $3.19 billion in the upgrade unit to be built by 2010. [ID:nSEO0334965]

Industry sources said the new unit will have a capacity of around 70,000 to 75,000 barrels per day (bpd), but a company spokesman declined to comment. He also declined to comment on why the investment had been scaled down.

GS Caltex currently operates a 90,000 bpd residue fluid catalytic cracker (RFCC) and 55,000 bpd hydrocracker at its Yeosu plant, south of Seoul, which has the capacity to refine 680,000 barrels of crude per day.

GS Caltex is the country's second-largest refiner.

Analysts say refiners investing in units to upgrade fuel oil will be able to capitalise on stronger margins and growing demand for transport fuels such as gasoline and jet fuel. (For details of South Korean refiners' upgrading plans, see [ID:nASIAREFIN]). ($1=1042.5 Won) (Reporting by Angela Moon and Lee Jin-joo; Editing by Jonathan Hopfner)