Cleanaway, one of two rerefiners of base oil in Australia, has received state government approval to upgrade its Hunter Valley plant in order to produce Group II base oil and keep the facility alive.
The plant - in Rutherford, about two hours north of Sydney - presently produces only Group I base stocks by rerefining used mineral oils. This plant was commissioned about a decade ago.
The upgrade includes installation of an oil polishing system that will further refine Group I oils to higher specification Group II. It also involves replacing a steam burner with a multi-fuel burner and construction of six additional welded steel storage tanks with a combined capacity of 2,140 metric tons.
Cleanaway declined to discuss its timeline for construction of other aspects of the project.
Representatives of the state planning authority, which approved the development application earlier this year, said this month that Cleanaway has not yet satisfied conditions that must be met before it may begin construction but that they did expect construction to begin soon.
The upgrade application - which Cleanaway submitted under its former name, Transpacific Refiners or TPR - said that the facility might close without the project.
Due to changes in the oil market, in particular the current and forecast suppressed oil price, and the availability of cheap products from large-scale offshore refineries in Asia, TPR has identified this project as necessary to maintain the viability of the Rutherford operation. Doing nothing in this instance would potentially see TPR Rutherford unable to compete and potentially terminate operations.
Australian regulations on vehicle emissions demand higher-performance engine oils that are generally formulated from higher grades of base oil, including Group II.
Since 2011, there has been no local production of virgin base oils in Australia. Southern Oil and its associated company, Northern Oil, produce rerefined Group I base oil at their Wagga Wagga, New South Wales, and Yarwun, Queensland, facilities.
Cleanaways development application says the plan is designed to allow the rerefinery to make a wider range of base oil grades. It doesnt seek an increase in production from the facility. The project description says the company expects to process about 32,400 tons per year of process oil into about 18,000 t/y of Group I base oil and 12,600 t/y of Group II base oil. This is less than the 39,000 t/y of throughput capacity for which the facility was originally licensed.