The FINANCIAL -- South Korean oil refiner Hyundai Oilbank said Tuesday that it signed a deal with Shell Eastern Petroleum Pte., an affiliate of Royal Dutch Shell PLC, to form a joint venture company to build a base-oil plant with a capacity of 20,000 barrels a day.

According to London Stock Exchange , Hyundai Oilbank will take a 60% stake in the joint venture, and Shell Eastern Petroleum will take the remaining 40%, Hyundai Oilbank said in a statement. The joint venture will officially be formed in March, it said.

Construction of the plant, to be located in South Korea, will begin in October, and commercial production is slated to start in 2014, Hyundai Oilbank said.

It didn't provide the planned investment amounts.

The plant will have a daily production capacity of 13,000 barrels of base oil for lubricants and 7,000 barrels of fuel oil, with most of the output to be sold to Asian markets, especially China, Hyundai Oilbank said in the statement.

Hyundai Oilbank will operate the plant.

The plant is expected to generate at least KRW700 billion ($625 million) in annual revenue starting in 2015, it said.

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