Shell Acquires 49% Stake in Rerefiner


Shell Acquires 49% Stake in Rerefiner

Shell announced that its Pennzoil-Quaker State Co. purchased a 49% interest in Blue Tide Environmental LLC, which plans to bring a Group II rerefinery onstream in Texas in 2024.

Shell called the acquisition part of its effort to develop a circular economy for lubricants and improve the sustainability of its products. The price was not disclosed.

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“We’re always looking for opportunities for our portfolio,” a Shell spokesperson told Lube Report. “Within the lubricants business, we want to support the development of a circular economy for lubricants and acquiring an interest in Blue Tide is a step in that journey.”

The spokesperson noted that Shell is actively developing options to improve the sustainability of its products across a wide range of solutions, including use of circular and renewable materials. “This includes working actively with high-quality rerefiners globally and exploring options for expanding our supply network to meet growing demand,” the spokesperson said.

According to Lubes’n’Greases Base Stock Data, the Hyundai Oilbank-Shell joint venture has a Group II base oil plant in South Korea with 25,000 b/d production capacity, and the Pearl joint venture gas-to-liquids plant between Shell and Qatar Petroleum in Qatar has 6,000 b/d Group II capacity along with 22,000 b/d of Group III capacity. Shell also has a 7,400 b/d Group I plant in Singapore.

Blue Tide is owned by Tailwater Capital LLC, a private equity firm that invests in energy and environmental infrastructure solutions. In September, Blue Tide announced a final investment decision to add a hydrotreater to its Baytown, Texas, facility as a key step towards the rerefinery. Once the hydrotreater is operational and the facility redesign is completed, the plant will have 5,000 barrels per day of Group II+ base oil nameplate production capacity, the company said, with the option to upgrade production to Group III in a capital efficient manner. “Shell is reviewing options for use of the materials to be produced by Blue Tide’s recycling facility,” the Shell spokesperson said.

“We look forward to working closely with Blue Tide to evaluate opportunities for recycled lubricants as we continue to develop sustainable solutions to complement our existing range of products,” Machteld de Haan, executive vice president for Shell Lubricants, said in a press release.

“We share Shell’s optimism and vision for Blue Tide as the recycled lubricants space evolves and demand for Group II+ base oils continues to grow,” Edward Herring, Tailwater co-founder and Managing Partner Edward Herring said.

Blue Tide’s management team has extensive experienced in the used motor oil recycling and lubricants industries, and its CEO, Mark Bouldin, and its senior vice president for sales and marketing, Steve Lewis, formerly worked at Safety-Kleen.

“Blue Tide brings an experienced management team and proven technology for recycled lubricants,” the Shell spokesperson said. “Their lubricants recycling facility in Baytown, Texas is already well underway, and once completed, both parties are interested in exploring further cooperation for circular lubricants.”

Geeta Agashe, of consulting firm Geeta Agashe & Associates, noted that environmental sustainability, circular economy and carbon neutral footprint are important drivers in the industry today.

“Globally, Shell aims to avoid, reduce, and then offset annual emissions,” Agashe told Lube Report. “To meet the three objectives, Shell is doing many things.” One recent example was the introduction of Pennzoil-branded carbon neutral motor oils in North America, she said, and the investment to acquire the 49% stake in Blue Tide Environmental supports Shell’s objective to participate in a circular economy. Blue Tide’s Group II+ rerefinery “will help Pennzoil make sustainability claims and also compete with products such as Valvoline’s NextGen oils,” Agashe said. “Using Group II+ base stocks instead of Group III can also help in reducing the total formulation costs in motor oils.”

Blue Tide has said the Baytown facility will use licensed catalyst technology from Topsoe, a Denmark-headquartered global developer and supplier of catalysts and hydroprocessing technologies. The facility’s hydrotreater technology design will be by Sequoia.

Located along the Cedar Bayou of the Houston Ship Channel, Blue Tide’s facility will also have additional storage, logistics and processing infrastructure planned on the adjacent undeveloped land owned by Blue Tide, as well as a barge dock that provides access to tanker markets along with access to rail and transload facilities. Blue Tide is also developing a network of used motor oil recycling facilities across North America.