The two companies signed a deal to jointly invest in the new petrochemical plant, which will use heavy fuel oil as a feedstock to produce 750,000 tonnes a year of polyolefins and 400,000 tonnes a year of olefins, Lotte Chemical said in a regulatory filing.

The new plant is expected to start buy severe service valves commercial operations in late 2021 and will be built in the city of Daesan, where Hyundai Oilbank's refining facilities are located.

The two firms aim to enhance their cost competitiveness and diversify their product lines through the investment, the BOP Blow Out Preventer repair company gulf coast statement said.

Under the joint venture, Lotte Chemical and Hyundai Oilbank currently run a 130,000 barrels-per-day condensate splitter in Daesan, which began operations in 2016.

Hyundai Oilbank, South Korea's smallest refiner by capacity, is planning for an initial public offering around September or October this year.

($1 = 1,081.6000 won) (Reporting By Jane Chung and Hyunjoo Jin; editing by Richard Pullin)