Chennai Petroleum Corp. Ltd. says it is to spend U.S.$168.5 million on an API Group II/III lube oil base stock unit at its Manali refinery in Chennai. The new unit’s foundation stone was laid on Oct. 12, and once completed would add to India’s domestic production capacity as the country seeks to reduce dependence on imported base oils.
The additional capacity would enter a market in which lubricant manufacturers are balancing demand for higher-performance base oils against import costs, regional availability and competition among established suppliers. Its eventual effect on India’s imports will depend on the grades produced, commercial operating rates and the competitiveness of domestic material against imported stocks.
The project involves modifications to the refinery’s existing hydrocracker and the installation of a new catalytic dewaxing unit. Annual capacity is 256,000 metric tons and will take 31 months to complete.
The investment follows the expansion of Group III production at Indian Oil Corporation’s Haldia refinery in West Bengal, where a 270,000-tons-a-year catalytic isodewaxing unit was commissioned in 2024. The facility produces 4 cSt, 6 cSt and 8 cSt Group III base stocks. Indian Oil has said the Haldia expansion would reduce India’s dependence on imported lube base stocks by about 8%.
CPCL’s project is also expected to support Indian Oil’s planned Servo integrated lubricant complex at Amullavoyal, Chennai. The relationship between the facilities could provide a domestic supply route for premium base stocks, although the volumes allocated to the complex and the supply arrangements have yet to be confirmed.