Kazakh Lube Producer Stumbles


One of Kazakhstans two lubricant producers saw its output fall by 60 percent in 2015, according to the administration of the South Kazakhstan region, a decline blamed on troubles in its oil-dependent economy.

Hill Corp. made just 8,900 metric tons of finished lubricants at its blending plant in Shymkent last year, down from 22,500 tons in 2014. The plant, which opened in 2010, has capacity to produce 70,000 t/y. The nations lubricant demand is reportedly down because the economy has been hurt by the crash in crude oil prices.

In 2015 the company produced 8,900 tons of finished lubricants and made revenue of 7 billion Kazakh tenge [U.S. $ 21 million], the administration said in a Feb. 20 news release. The press release added that construction should soon begin on an API Group III base oil plant that Hill plans to build with funding support from the state and private investors. It said the plant, which will also be located in Shymkent, should open in 2018.

In order to implement this project, the regions economy should receive an investment of 235 billion tenge, the administration said, adding that the base oil plant will use wax isomerization and hydro-treatment technology from Chevron Lummus.

The scheduled start of the base oil refinery has been pushed back multiple times since 2011.

Kazakhstan imports most of its lubricants. Hills $20 million blending plant uses blending technology developed by the United States-based equipment maker FMC Technology and was designed to allow an expansion to 100,000 t/y. The facility is operated by 300 employees and produces a wide range of automotive and industrial lubricants.

With its economy suffering because of the decrease in oil revenues, Kazakhstan has devalued by about 50 percent since August. The recession in Russia and the economic slowdown in China, Kazakhstans largest trading partners, make the situation worse, and many analysts forecast its economy to contract in 2016.

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