South Korea’s SK Lubricants Co Ltd said it has started commercial operations at a 330 million Euro ($413 million) lubricant base oil joint venture in Spain with Repsol.

The plant has a capacity to produce 13,300 barrel-per-day (bpd) of lubricants base oil, according to SK Lubricants, which is owned by SK Innovation Co Ltd.

“With the production line in Spain, SK Lubricants has become the world’s third-largest lubricant oil producer behind ExxonMobil and Shell, with an expanded daily output of 70,800 barrels,” SK Innovation said in a press release. “The joint investment in Spain is helping SK Lubricants drive up globalisation of its key product.”

The Spanish facility was the result of a joint partnership between SK Lubricants – a sister firm of SK Innovation – and Spain-based Repsol.

SK Lubricants holds a 70 per cent stake in the joint venture with an investment of 470 billion won ($439 million), and is responsible for providing the technology for lubricant production, along with a global marketing network. Repsol, which owns the remaining 30 per cent, supplies the materials and infrastructure for production.

Besides the production line in Spain, SK Lubricants runs a lubricant oil plant in Korea and in Indonesia.

On the group level, SK Innovation is pushing its moneymaking lubricants oil business to offset the declining profit in SK’s refinery business led by affiliate SK Energy. South Korean oil refiners, including SK Energy, have recently been struggling to overcome worsening profit margins paired with global oversupply. SK Innovation posted an operating loss of 50.3 billion won in the second quarter.