PNA Launches Group II Plant

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Panjin Northern Asphalt, a long-time naphthenic base oil producer, has started making highly refined paraffinic base stocks at its plant in northern China. The new facility, located in Liaoning Provinces Panjin city, is expected to produce 400,000 metric tons per year of API Group II oils.

The project cost about CNY1 billion ($160.3 million) and included installation of a wax isomerization and 12 other units. Trial operation started in late October, and by mid-December the paraffinic plant was making 800 tons per day of high viscosity Group II oils, said Yang Wei, a PNA researcher.

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We are still working on some technical limitations. Hopefully we will reach the full capacity as soon as possible, Yang told Lube Report Asia.

According to PNA, feedstock for the paraffinic plant is residue from its parent company, North Huajin Chemical Industries Group, which processes crude oils mainly from Brazil. North Huajin Chemical is also based in Panjin.

Yang said PNA started the project in March 2011 and that it used the Chinese governments own proprietary high-pressure hydrotreating technology for wax isomerization.

A new project that could add 300,000 t/y of naphthenic base stock will start operation as soon as in 2014, but details are still in discussion, Yang added. PNA currently produces about 200,000 t/y of naphthenic base oil at its full capacity.

PNA has been investing heavily to add new units in recent years. In 2009 it spent CNY400 million to add a hydrotreating unit to process 200,000 t/y of naphthenic distillate. In 2011, a CNY300 million project increased the companys capacity to produce heavy traffic asphalt to 900,000 t/y.

Both PNA and North Huajin Chemical belong to Beijing-based China North Industries Group, a state-owned company that has various subsidiaries in the national defense area.

CNDG started to invest in international oil trading in 2001, as subsidiary Zhenhua Oil signed massive purchase contracts with the worlds major oil companies, including Iraq National Oil Co., Brazils Petrobras and ConocoPhillips in the U.S.

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