Greek petroleum refiner Motor Oil Hellasannounced a 30 million euro investment to establish a joint venture blending plant in Algeria that will have capacity to produce 55,000 metric tons per year of lubricating oils and 5,000 t/y of greases.
The new plant is in partnership with the National Company for the Marketing and Distribution of Petroleum Products, Naftal Spa, a subsidiary of Algerian national oil company Sonatrach. Motor Oil Hellas subsidiary Lubricants and Petroleum Corp. holds a 49 percent stake in the joint venture while Naftal holds the remaining 51 percent, according to an LPC press release. Facility construction will take an estimated 24 months.
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Patrick Swan, principal consultant at Aswan Consulting in South Africa, noted that the biggest problem in the African lube market is quality. If LPC is able to produce the right quality at the right price, it would be a good investment in the North African lubricant market.
It will be excellent if they come and invest in the production of quality products, but they need to educate the end user of the importance of quality lubricant. African people are not ready to pay higher price for quality lubricants, Swan added.
Rami Al-Kinanny, general manager for Hitech Oils and Greases in Egypt, said the investment will have a positive impact on the lubricant market in North Africa, though he acknowledged that the Algerian market is tough. He added, however, that as long as LPC has the backing of the Algerian government, it will be able to make headway in the market.
In August 2016, Naftal launched a call for expressions of interest for investment in lubricant manufacturing. Companies shortlisted for the partnership included Lotos Oil (of Poland), Eldon’s SA (Greece), Hyrax Oil Sdn Bhd (Malaysia), Prista Oil (Bulgaria) and Emirates National Oil Company (United Arab Emirates). However, LPC, a traditional partner of Naftal was selected as a joint partner for this investment in 2019.
LPC runs a rerefinery with 800 barrels per day production capacity in Aspropyrgos, Greece, and Motor Oil Hellas operates an API Group I base oil plant with 4,300 b/d production capacity in Agii Theodori, Greece, according to LubesnGreases Guide to Global Base Oil Refining.