Viscolube, Baosteel Plan Rerefinery

Italian rerefiner Viscolube agreed to develop a waste oil rerefinery in cooperation with Chinese steelmaker Baosteel. Construction of the facility, which would have capacity of 40,000 metric tons per year, hinges on Baosteel relocating its Shanghai steel factory.

The companies have signed a memorandum of understanding, Viscolube Director of Technology Fabio Dalla Giovanna told Lube Report Asia. First they need to find a new location for their plant, and they are looking now. Baosteel wants to rebuild its plant outside Shanghai.

Dalla Giovanna discussed the project Wednesday during a presentation to the ICIS Asian Base Oils & Lubricants Conference in Singapore. He said Viscolube and Baosteel plan to cooperate on technical and managerial aspects of the plant.

Baosteel, one of the worlds largest steelmakers, already operates a plant that purifies and regenerates waste oils. The plant is managed by one of the companys units, Baosteel Wasteoil Processing Co., and its feedstock consists of waste oil from the Shanghai steel factory supplemented by oils collected from other sources.

Viscolube operates two rerefineries in Italy but has also licensed its technology for a dozen plants operated by other companies - mostly in Europe but also in Indonesia, Pakistan and the United States. Viscolube hopes to find business in China and sees the Baosteel plant as a chance to demonstrate its technology and abilities to that market.

Viscolube is interested in taking part in the international growth of regeneration of used oils, and specifically it is interested in the Chinese market… both to develop new plants and for revamping [and upgrading] existing ones, he said.

China has a waste oil recycling industry, and Dalla Giovanna cited estimates that it handles 3 million t/y of material consisting of 2.3 million t/y of used lubes mixed with 700,000 t/y of water and other contaminants. The 2.3 million t/y of waste oil would amount to more than one quarter of the nations annual lubricant demand. But Dalla Giovanna estimated that 76 percent of collected oil is not collected and processed according to Chinese regulations. Industry sources agree that technology used by the nations oil recyclers is less sophisticated than that prevalent in Western countries and the quality of oil it yields lower.

The Chinese used oil market has a complex structure, leading to a minority portion [being] legal and traceable and a majority portion [being] still illegal and not fully compliant with regulations, Dalla Giovanna said.