Sept. 24 (Bloomberg) -- South Korean refiners may reduce gasoil exports by 3 percent next month because of refinery maintenance at S-Oil Corp., officials at the companies said.

The refiners, including SK Energy Co., GS Caltex Corp. and Hyundai Oilbank Co., will export at most 8.7 million barrels in October, the officials said. The refiners planned to ship 9 million barrels this month.

S-Oil is shutting 43 percent of its 580,000 barrels-a-day refining capacity in October. It will close the 250,000 barrels- a-day No. 2 crude distillation unit at its Onsan refinery from Oct. 8 to Oct. 29 for maintenance, P.G. Kim, a company spokesman, said by telephone from Seoul on Sept. 21.

Asian benchmark gasoil with 0.5 percent sulfur was at a record $92.85 a barrel on Sept. 18 in Singapore, Asia's largest trading center, according to Bloomberg data. Prices rose on increased demand from Vietnam, India and Indonesia for gasoil with 0.25 percent to 0.35 percent sulfur.

Traders are shipping gasoil with sulfur below 0.005 percent, or 50 parts per million, to Europe and the Mediterranean region, where prices rose because refinery maintenance pared supplies.

South Korea is also exporting gasoil with sulfur of 47 parts per million to Chile, where a bilateral trade agreement waives import taxes on the fuel. Chile started importing more gasoil, or diesel, to meet a shortfall of fuel for power generation after Argentina cut natural gas supply this year.

GS Caltex, Hyundai

GS Caltex and Hyundai Oilbank will export more gasoil in October, the company officials said. SK Energy is likely to keep exports steady at 4 million barrels.

GS Caltex began full production at a 55,000 barrels-a-day hydrocracker this month, boosting its gasoil production. The refiner exports gasoil with 0.005 percent and 0.05 percent sulfur.

The hydrocracker unit processes heavy oil products into cleaner-burning fuel including gasoline and gasoil. Heavy oil is the product that is left after light products such as gasoline, kerosene and gasoil are distilled from crude oil.

Hyundai Oilbank Co. will export two cargoes in October, of which one would have been sold this month but was delayed due to minor faults encountered when the No. 2 crude distillation unit was shut for maintenance between Aug. 24 and Sept. 20.

The refiner will export a cargo with 0.25 percent sulfur to Vietnam and a 0.5 percent sulfur shipment to Singapore.

SK Energy produces several sulfur grades, ranging from 0.5 percent to as low as 0.001 percent. S-Oil mainly exports 0.005 percent and 0.05 percent sulfur grades.

Gasoil Exports by Company
--------------------------------------------------------------
Company                No. of cargoes      In million barrels
                     September   October       October
--------------------------------------------------------------
SK Energy Co.         13           13             4
SK Incheon Oil Co.     2            2             0.6
S-Oil Corp.            9           6-7          1.8-2.1
GS-Caltex Corp.       4-5           5             1.5
Hyundai Oilbank Co.    1            2             0.6
--------------------------------------------------------------
Total                29-30        28-29         8.4-8.7
--------------------------------------------------------------

To contact the reporter on this story: Sophie Tan in Singapore at sophietan@bloomberg.net.

Last Updated: September 23, 2007 18:28 EDT