Shenhua, Naco Form Research Center JV


China Shenhua and Shanghai Naco Synthetics last week commemorated the opening of a joint venture research center designed to develop coal-to-liquids and gas-to-liquids lubricants technology.

Shenhua is a large state-owned coal supplier that also has CTL and GTL operations. Naco is a smaller, private supplier of poly alpha olefins and other synthetic base stocks. The center will work to develop finished lubricant formulations with using CTL and GTL base oils, along with poly alpha olefins and alkyl naphthalene base oils. Shenhuas 4 million metric tons per year CTL facility will supply materials for the research, Naco founder Wu Yuedi told Lube Report.

The center is a perfect combination of state-backed funds and Nacos technologies. Its a long-term cooperation, aiming to provide new synthetic lube solutions, Wu said.

Another goal, he added, is to reduce Chinas dependence on foreign technologies. For example, Shenhua and its rivals, such as Shanxi province-based Luan Group, use Chevrons dewaxing technology to produce API Group III+ base oils.

So, developing Chinese dewaxing technology is also our job, Wu said.

Shenhua and Luan are both pushing hard to produce Group III+ oils. Sinopec claimed to be the first Chinese company to make oils of that grade, doing so at its mineral oil refinery in Maoming in December. But Wu said Shenhua and Luan are catching up as both are currently constructing plants scheduled to open in the next two years that would make Group III+. Naco has a joint venture partnership with Lu’an.

Wu said Nacos participation will enable the research center to work with both Shenhua and Luan, as well as others.

The JV is mainly a manufacturing facility, while the center will be all about technologies, which could help the JV deliver something innovative, Wu said.The center will be able to work with other companies who want to seek better synthetics solutions. Licensing deals are also possible, Wu said. He cited Nacos partnership with Luan in a Shanxi province facility that produces coal-based PAOs.

Shenhua also plans to become a major investor in Naco. The companies declined to publicly discuss details, but the investment plan is currently being reviewed by the Chinese authorities.

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