Colas Enters Base Oil Business


Colas Group announced Friday that it has closed on its acquisition of Societe de la Raffinerie de Dunkerque, a French bitumen and base oil plant with capacity to make 6,600 barrels per day of base stocks.

Colas said the transaction calls for it to supply some base stocks to the former owners but that it will also sell some of that material on the open market.

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Colas is also very well aware of the importance of the baseoils for the plant, and Colas is taking the necessary steps to be present on the base oils and paraffin waxes markets, said Delphine Lombard, the companys director of public relations.

Colas, a road construction company based in Boulogne-Billancourt, France, said it is interested primarily in the output of bitumen, one of the main ingredients in asphalt. The plant makes 300,000 metric tons of bitumen per year, almost one quarter of the volume that Colas consumes each year in France.

This project is perfectly in line with Colas strategy to ensure industrial integration and to secure part of its bitumen supply for France, the company said in a written statement.

The Dunkerque plant had been a joint venture between ExxonMobil, Total and BP, which owned stakes of 50 percent, 40 percent and 10 percent, respectively. BP sold its shares to ExxonMobil to prepare for Colas acquisition. Last weeks statement did not indicate the sales price, but BusinessWeek had previously reported it to be $26 million.

Colas said it has supply agreements calling for the former owners to buy some of the plants output, including some of the base stocks. At the same time, Colas is working to establish its own customer base to buy volumes not covered by those agreements. The transaction also includes a separate processing agreement whereby Total will provide some feedstock and purchase output that includes some base oils. The processing agreement lasts until the end of 2012 and covers 40 percent of the plants production. Total had a similar arrangement with the joint venture.

The transaction includes an agreement for ExxonMobil to provide technical assistance for three years.

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