November 1, 2017 / 7:42 AM / a year ago

UPDATE 1-S.Korea's SK Innovation to build new desulfurisation unit by 2020

* New unit expected to cost around $900 mln

* Will help produce cleaner shipping fuels (Adds detail, background)

SEOUL, Nov 1 (Reuters) - The owner of top South Korean oil refiner SK Energy said on Wednesday that it would spend about 1 trillion won ($897.8 million) to build a new desulfurisation unit by 2020, part of a push to churn out cleaner shipping fuels.

Under the plan, a 40,000 barrels per day (bpd) Vacuum Residue Desulfurisation (VRDS) will be added to an 840,000-bpd refinery in the southeastern city of Ulsan, South Korea’s SK Innovation said in a stock exchange filing.

The move comes as tougher international regulations on sulphur emissions are due to take effect from 2020, the company said in a separate statement.

The firm added that the unit would also help in producing high value-added products including diesel and naphtha by processing cheaper residual fuel oil.

SK Energy has a total refining capacity of 1.115 million bpd - a combined 840,000 bpd at five crude distillation units (CDUs) in Ulsan and 275,000 bpd at two CDUs in the western city of Incheon. ($1 = 1,113.8300 won) (Reporting by Jane Chung; Editing by Joseph Radford)

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