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October 20, 2015

Volume 7 Issue 4

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CPC-Shell Won't Rebuild Plants

CPC and Shell Lubricants decided not to relocate base oil and lubricant blending operations that were closed in Kaohsiung, Taiwan, a source close to their joint venture told Lube Report Asia.

The base oil plant was decommissioned earlier this year as part of the permanent shutdown of CPC’s overall Kaohsiung refinery, which is scheduled to be completed by the end of this year. The closing has been scheduled for several years – a commitment by CPC to defer to concerns about the refinery’s environmental impact.

CPC-Shell Lubricants officials had spoken of plans to build a replacement base oil plant and blending plant near another CPC refinery, in Dalin. Apparently, the companies had scrapped that plan by the time the base oil plant stopped operating in 2014, although the decision was not publicly announced.

“CPC Shell closed the base oil and lube blending plants late last year and was not planning to build new ones,” said the source, who asked not to be identified. “[For CPC-Shell] there will be no facilities nor production here in Taiwan anymore.”

The base oil plant had capacity to make 280,000 metric tons per year of API Group I base stocks. In 2013 sources suggested the plant that was planned near Dalin would produce Group I and Group II oils. But the base oil market now has an oversupply of Group II and III stocks.