Southern Oil Refining has started a used oil rerefinery that it relocated from Young to Wagga Wagga, New South Wales. Part of the facility is a joint venture with Hydrodec that includes a hydrotreater, and SOR says the experience of operating it will help prepare the company to enter the API Group II and III base oil market.
SOR has two Australian rerefineries that convert used engine oils to Group I base stock. The Wagga Wagga plant has capacity to make 20 million liters per year (approximately 18,000 metric tons per year), and its plant in Gladstone, Queensland, is three times as big.
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The end game for us is to get the experience to scale up and build first a larger hydrotreater at our Gladstone plant to make Group III+ sort of material, SOR Managing Director Tim Rose said. We have an interest in developing our lubes into higher groupings.
The hydrotreater at the Wagga Wagga plant was built through a joint venture with United Kingdom-based Hydrodec, which rerefines used electrical transformer oil. SOR wanted to move the Young plant for logistical reasons, and the companies worked out there were gains to be made from reduced overheads if SOR managed Hydrodecs facilities on a toll basis. In addition to base oils, SOR and Hydrodec are prepared to use the hydrotreaters spare capacity to produce fuel from feedstock derived from plant matter such as algae or woodchips.
We have an opportunity together to develop the fuels market here, said Rose.
As for base oils, Rose said SOR is close to meeting the Group II standard but will need to reach Group III standards to satisfy market demands. The Australian market is demanding Group II and in the future will want more Group III.