Handi Inks Plan for China’s Largest Base Oil Plant

Private Chinese base oil refiner Hainan Handi Sunshine Petrochemical Co. signed a deal with the Bank of China and Yangpu, Hainan province government agencies last week to advance its plan to increase its capacity by more than 1.5 million metric tons of API Group II/III feedstocks at what will be Chinas largest base oil plant.

Handi Sunshine (HDS) announced plans three years ago to build an additional refinery at the site of its 300,000 t/y Group II plant located on the Yangpu Peninsula of the island province of Hainan within two years. Although disputes from local residents halted progress, HDS resumed plans last August to complete the plant by late 2017.

In a statement regarding its signing ceremony with banks and government last week, HDS said that the expansion will add 1.5 million t/y of Group II and Group III base stocks - although it did not specify how much of the production slate will be of each type. Hainan-based HDS will also make 150,000 t/y of pharmaceutical and food grade white oils. HDS did not specify when construction is now expected to be completed nor how far along it currently is.

The plant will be one of Chinas few sources of Group III base stocks - and one of its largest, flying in the face of predictions that global oversupply of Group III will continue in coming years.

HDS has told Lube Report Asia in the past that output from the upgraded refinery will be exported to Southeast Asia, Europe and the United States, among other markets.

Founded in 2006, HDS refines paraffinic crude oils from the Middle East. Aside from base stocks, it also supplies industrial grade white oils, highly refined white oils to the food and cosmetics industries, electrical transformer oils, process oils and naphtha. It began supplying finished lubricants under a subsidiary, Handi Lubricant, in the fourth quarter of 2015.