Citgo has initiated plans to cease production at its Lake Charles, La., lubricants and waxes refinery during the second and third quarters of this year, and is looking into selling the facility, a Citgo Lake Charles spokeswoman told Lube Report yesterday.
The decision is in response to continuing, downward trend market conditions for its products and an effort to remain industry competitive, said A. Shawn Trahan, Citgo Lake Charles government and public affairs manager. This decision will better align Citgo base oil production with the needs of the finished lubricants marketplace. In addition, the company is seeking potential buyers for the facility to better align Citgos base oil production capacity with the needs of the finished lubricants marketplace.
On April 2, Citgo informed customers via letters that it planned to reduce production at the Lake Charles refinery – which has 9,500 barrels per day of API Group I base oil capacity and about 2,000 b/d of wax capacity – to concentrate on its finished lubricants business. The letters advised that any purchase orders for base oil, process oil or wax placed with Citgo would be subject to review by sales management prior to acceptance.
Trahan said the company has carefully reviewed its current customer commitments and is taking all necessary steps to fulfill its contractual obligations.
According to Trahan, the lubes and waxes plant has about 195 employees. Citgo is committed to a thorough review of its plans and programs with the goal of providing those affected with as many options and opportunities as possible, she said.
The Lake Charles complex encompasses 2,000 acres and includes both the refinery and Lake Charles lubricant and waxes plant. Together, the two facilities employ more than 1,200 full-time workers.
Closing the Lake Charles plant will reduce U.S. Group I capacity by 12 percent.