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March 21, 2017

Volume 7 Issue 3

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Group II Rerefinery Planned for Bangladesh

Lub-rref (Bangladesh) Ltd. will open a 50,000 metric tons per year API Group II rerefinery by March 2019 with the help of American used oil regeneration technology provider Chemical Engineering Partners. The plant will be the country’s largest base oil source and its first to make Group II.

The Bangladeshi rerefiner and lubricants supplier earlier this month contracted CEP to design the rerefinery on a 50,000-square meter site along the Karnaphuli River in the Julda district near Chittagong.

Lub-rref will license CEP’s vacuum distillation and hydrotreating technology at the plant, which will have capacity to convert around 70,000 tons of spent oil into around 50,000 t/y of Group II base oils.

Observers have pegged Bangladesh’s annual finished lubricant demand at around 75,000 to 80,000 tons. Collectively, five suppliers – Mobil, Bangladesh Petroleum, Total, Shell and Castrol – command 63 percent of the market.

Lub-rref expects the new project to help it increase its lubricants market share to 20 percent, Managing Director Mohammed Yousuf told Lube Report Asia. Depending on demand, some output from the rerefinery will go into Lub-rref’s own BNO-branded formulations, he added. The firm will also sell base oils and is actively seeking opportunities in export markets such as India and Brazil.

Yousuf noted that Bangladesh imports around 100,000 tons of base stocks per year, and he claimed that the new rerefinery could reduce imports by up to 50 percent.

The country has no virgin base oil production capacity and only a handful of rerefineries – each with capacity of less than 10,000 t/y of Group I base stocks. The country has an abundance of used oil, observers have noted.

“Around 48,000 tons per year of used oil is available in Bangladesh,” Yousuf said. The volume Lub-rref doesn’t collect domestically will come from nearby East India, as well as Myanmar, Singapore and Malaysia. “Although we have a good network for collecting used oil, we will also leverage the experience of our U.S.-based partners to further streamline the collection process.”

He noted that Lub-rref has a good reputation with the government, giving it in an advantage in a regulatory environment that requires rerefineries to meet rigorous protocol.