On Jan. 18, a fire broke out during the cleaning of an oil tank at the refinery. On Jan. 22, a second fire ravished the No. 2 propane dewaxing and No. 2 n-methyl-2-pyrrolidone (NMP) extractionequipment at its base oils plant there.

The base oil unit has been running at partial capacity since, and the incident subsequently choked the companys finished lubricants supply for three days.

We were able to restart production of our finished lubricant products from the 25th of January as we had base oil stocked at our Wakayama plant and we are able to obtain supplies from other companies, a company spokesman said. So currently, supply of finished lubricants is not affected.

The company declined to provide further details but said the finished products affected were automotive lubricants and that some of its clients were original equipment manufacturers. Base oils produced at the Wakayama refinery are mostly exported to Asian markets.

It will take us some time to find out the financial impact of the fire on the companys lubricant segment, said the spokesman. It has been upwards of two decades since the refining industry built a Group I base oil plant or made significant investment in Group I capacity. The one exception is a project currently underway at Luberefs Group I plant in Yanbual Bahr, Saudi Arabia, to expand capacity to produce bright stock, which is Group I, while also upgrading to Group II.

Therefore, it’d be unusual to see a large investment go back into the Group I unit, an industry observer told Lube Report Asia. Joe Rousmaniere, business development manager at base oil marketer Chemlube International in Harrison, New York, said that’s especially true in this case, since the incident damaged the dewaxing unit – the heart of the lube oil plant.

Caitlin Jacobs and Lisa Tocci contributed to this report.