China National Offshore Oil Co. expects to open a base oil plant in Taizhou, China, by the end of this year, and it has already agreed to supply a significant portion of its output to Sinopec.
CNOOC said recently that Sinopec has agreed to purchase 100,000 metric tons per year of highly refined base oils from the plant, beginning in early 2016. The plant is designed to produce 600,000 t/y of API Group II and III stocks.
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Right now it is still hard to tell what the lube products could be, because it largely depends on the quality of the base stocks, a Sinopec manager familiar with the project told Lube Report Asia. She said CNOOC is running pilot production to provide oil samples to see if there is room for improvement.
Ideally, if the quality is good and stable, CNOOC will be supplying Sinopecs blending facilities nationwide, said the manager.
But if the base oil has higher pour point, for example, it probably will not be used in our plants in the north, she added.
The companies said they entered the deal in order to make the best use of complementary resources, present a powerful Chinese brand image and to better compete in the global marketplace.
CNOOC said it will use Chevrons technologies to hydrocrack base stock feeds from heavy sea crude, making paraffinic Group II and III base oils at the facility in Jiangsu province. The construction of the Taizhou facility kicked off in late 2013, and it is expected to begin operating at the end of 2015.
Sinopec and PetroChina are the two largest base oil producers in China and the two largest lubricant suppliers.