---

South Korean bunker supplier and oil refiner Hyundai Oilbank Co. Ltd. has agreed a new term contract with ExxonMobil Corp. to supply 220,000 metric tonnes of fuel oil this year, Dow Jones reports.

As part of the deal, Hyundai will supply the US oil major with four 55,000-tonne straight-run fuel oil cargoes from its 275,000 barrels-per-day (bpd) refinery in Daesan to Singapore.

ExxonMobil has reportedly purchased the first fuel oil parcel at a premium of over $15 per tonne to the Singapore mean on a free-on-board (FOB) basis.

Price discussions for the remaining three fuel oil cargoes are expected to take place a month before the delivery date, according to market sources.

Last year, Hyundai Oilbank announced plans to carry out a major grassroots expansion of its bunker-producing refinery in Daesan.

The expansion project would allow for conversion of high-sulphur fuel oil to higher value refining products while also upgrading the refinery to meet future fuel specifications in Korea.

US-based The Shaw Group Inc. announced that its Energy & Chemicals Group had been selected by Hyundai Oilbank to lead a consortium that will provide professional services and procurement of critical equipment for the expansion project.

South Korea currently has five refineries with a total refining capacity of approximately 2.55 million barrels per day. The size of the country's bunker market is estimated to be in the region of 14 million metric tonnes per year with Busan taking around 8 million tonnes.