The addition of Harburg to the Nynas supply network is an important step forward in Nynas growth strategy, Gert Wendroth, president and CEO of Nynas AB, said in a news release.

Industry consultant Geeta S. Agashe, president of Geeta Agashe & Associates LLC, noted that a lot of Group I base oil capacity in Europe has been shut down. There are several blenders I know of who are struggling to find solutions, especially in their industrial applications, Agashe told Lube Report. Nynas has been stepping up to the plate offering naphthenics as an alternative. Similarly, as Group II [base oils] have started making in-roads into Europe, Nynas naphthenic molecules could be used as a blend component to enhance solubility.

The increased naphthenic production should help bolster Nynas presence and growth plans in the Americas as well as Asia, she said.

Last but not the least, I think it will truly help them in selling to the customer that they can offer complete supply reliability as they now have two refineries in two different locations producing their complete product slate – a global slate, Agashe said. All in all, I think this was a good move on Nynas part and will help them strengthen their footprint. The naphthenic market was pretty balanced, but their space is increasing from a demand perspective due to them presenting naphthenics as an alternative to Group I and as a blending stock in Group II formulations. This plant will help satisfy some of this demand.

The company said a distillation unit in the northern part of the refinery is being converted and upgraded to start up again in spring 2016.

Stephen B. Ames of SBA Consulting, Pepper Pike, Ohio, explained that Shell originally operated both a 145,000 tons per year naphthenic plant and a separate 185,000 t/y Group I plant at the Harburg site, along with three hydrotreaters for making white oils.

When Nynas leased the operation from Shell in Jan 2014, they operated only the naphthenic plant but had made plans with Shell to convert the Group I plant for additional naphthenic production, Ames told Lube Report. Shell closed the remaining fuels refinery and converted the operation to a fuels terminal. In shutting the fuels plant, including the catalytic reformer used for making gasoline, Shell eliminated the only source of hydrogen for the hydrotreaters. Nynas thus contracted with Linde A.G. to build and operate a hydrogen plant on site. That has now been completed and the Group I plant repurposed.

In a January 2014 announcement, Nynas said it would increase volumes of all products in its current range of naphthenic specialty oils, and that the new capacity at Harburg would help its delivery performance and quickly meet growing demand from its customers around the world. The company has opened sales offices and distribution terminals in fast-growing markets such as China, South Korea, India, Russia and several countries in Latin America.

In Sept. 2013, the European Commission approved the takeover of the Harburg facilities as a first step to integrate the former Shell base oil plant with some 90 employees into Nynas in January 2014. With the acquisitions completion, another 157 employees transferred from Shell to Nynas.

At the time of the original agreement in 2011, Nynas announced that it would likely rebuild the Harburg site into a 330,000 t/y specialty oils refinery. The company also mentioned at that time that it was most interested in the plants naphthenic output, and that the deal would allow it to close its competition gap with top pale oil supplier Ergon. Ergons Vicksburg, Miss., plant has 22,000 b/d of naphthenic capacity.

Neste Oil and Petroleos de Venezuela S.A. (PdVSA) are co-owners of Nynas. In addition to its 7,600 b/d naphthenic plant in Nynashamn, Sweden, Nynas has a long-term marketing agreement to sell naphthenic base oils produced at the Refineria Isla refinery operated by PdVSA in Emmastad, Curacao. That plant has 3,700 b/d of naphthenic capacity and 5,000 b/d of paraffinic Group I capacity.