TotalEnergies has opened a lubricant blending plant on Algeria’s Mediterranean coast to cater to the growing market in that country.
The plant, located in Bethioua, in the province of Oran, and has capacity to make 40,000 metric tons per year in a single shift. A spokesperson for the French energy giant said the facility could accommodate an expansion to 100,000 t/y. It also includes a laboratory for analyzing lubricant samples. The price tag for the project was not disclosed.
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TotalEnergies already sells lubricants in Algeria, a former French colony, by importing from other locations, but the company believes producing in country will improve the business.
“It will also help us to offer a more agile logistics solution and will be an opportunity to build a sub-contractor network to accompany [customers] in their development,” Julia Boue, the spokesperson, said, adding that customer services will also improve when offered locally.
The plant is located in Arzew, an industrial zone of Bethioua and Algeria’s main port for oil and natural gas shipments. National oil company Sonatrach operates an Arzew fuel refinery that will supply base oil for the blending plant.
TotalEnergies pegged Algeria’s lubricant demand at 146,000 t/y, citing estimates by IHS Markit, and said it considers the market attractive because of the country’s economic development trends. Over the past several decades the economy has been slowly shifting from agriculture and light manufacturing to heavier industry, including petroleum and petrochemical processing and steel production.
Economic growth has steadily slowed in recent years, though. According to World Bank calculations, gross domestic product increased 3.8% in 2014, but the rate of increase declined in each of the next five years, falling to 1% in 2019. In 2020, the first year of the COVID-19 pandemic, Algeria’s GDP fell 5.5%.
“TotalEnergies built this facility to accompany the industrial development of Algeria,” Boue said. “Our targets are the industrial, automotive, and marine segments.”
The company has a chain of oil change centers for light- and heavy-duty vehicles as well as two-wheelers and believes this provides a synergistic sales channel. The company said the blending plant will make lubricants mostly for sale in Algeria but that it will also study export opportunities.