Chinese refiner Shandong Qinghe Chemical Technology Co. Ltd. is testing its newly completed 600,000 metric tons per year API Group III base oil plant in Zibo city, Shandong province.
The ¥917 million (U.S. $131.2 million) facility, built using units from multiple Chinese suppliers, uses Sinopec’s dewaxing catalyst to treat Qinghe’s hydrocracked residual fuel oil. In a statement, the company said it aims to replace imported Group III oils in the China market.
Few Chinese refiners can produce Group III oils for the open market. Sinopec produces a small amount of Group III oils in its facility in Maoming, Guangdong province, but these oils are mainly for internal supply.
China relies heavily on imported Group III base oils. In 2019, two South Korean companies – SK Lubricants and GS Caltex – were among the major Group III oil suppliers in China, according to Zibo-based consulting firm Oilchem.
According to Qinghe, only a fraction of the plant’s output will be available to lube blenders. The company plans to use most of the base oil, especially 4 and 6 centiStoke cuts, to produce 520,000 t/y of industrial white oils. Some of the industrial white oils will be further treated to produce 100,000 t/y of food-grade white oils, according to the company.
China relies on imports for high quality food-grade white oils. However, a handful of Chinese local suppliers emerged in recent years. One is Henan Beijia, whose food-grade white oils were registered under H1 by United States-based NSF International. Henan Beijia now is a supplier for China’s major pork manufacturer WH Group, which owns Smithfield Foods.
Qinghe is a subsidiary of Shandong Jincheng Petrochemical, a refiner whose major products include gas, diesel and liquid propane gas.