Hyundai Oilbank Corp., South Korea's fourth-largest refiner by capacity, said Tuesday it began work on adding an upgrading facility at its plant near Daesan to produce lighter fuels.

The No. 2 heavy oil unit, or HOU, being built as part of the expansion of its fuel-upgrading facilities, is expected to begin commercial production in the first half of 2011, the company said in a statement.

After completion, which is expected to cost KRW2.1 trillion ($1.58 billion), the refinery's daily capacity will rise to 120,000 barrels from 68,000 barrels currently.

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