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SK Group mulls selling Incheon plant of SK Energy

All Headlines 09:58 December 27, 2010

SEOUL, Dec. 27 (Yonhap) -- SK Group, South Korea's third-largest conglomerate, is considering selling a plant of its flagship refiner SK Energy Co. due to continued losses, industry sources said Monday.

The plant, formerly known as Incheon Oil Refinery Co., was merged by SK Energy in January 2008. SK Energy bought the bankrupt oil refinery at the end of 2005 for 3 trillion won (US$2.6 billion).

The sources said the group is in talks with some big South Korean companies that own refining affiliates to sell the plant in Incheon, a city 40 kilometers west of Seoul.

However, SK Group said that "nothing has yet to be determined."

The sources also said the group's recent moves show that it is considering selling the plant.

SK Energy, South Korea's top refiner, delayed its investment plan to spend 1.5 trillion won on the expansion of its heavy oil plant in Incheon to convert heavy oil into transportation fuel until 2016.

SK Energy plans to spin off its petroleum and chemical operations next year. Under the plan, SK Energy will have three wholly owned units, including SK Lubricants Co., which was set up in September last year.

The sources predicted that the sale of the money-losing plant in Incheon will ease the financial burden on the planned petroleum unit.


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