The new blending plant has planned capacity of 70,000 tons per year and will be finished by the end of 2012, boosting the annual capacity to 120,000 tons of finished automobile and industrial lubricants, according to the company. New storage capacity for both crude and finished products and packaging lines are expected to come online later next year.

The plant will increase the production of SibiMotor brand standard engine oils for domestic automobiles and Gazprom Neft-brand industrial lubes. Production of premium-class G-Energy motor oil, now made in Italy, will be partially carried out there as well, the company said. In 2009 Gazprom Neft-SM acquired Chevrons blending plant based in Bari, Italy.

The new upcoming plant in Omsk is part of Gazprom Nefts strategy aimed at increasing sales of finished and premium products in Eastern Russia and Kazakhstan, stated Anatoly Cherner, deputy general director. He added that the company is aggressively looking to penetrate the markets in Central Asia and the Middle East.

According to Gazprom Neft-SMs marketing department estimates, the company sold 43,000 tons of finished lubricants in Russia in 2009, accounting for 8 percent of the countrys finished lube sales. Gazprom Neft-SM holds 39 percent of the base oil and finished oil lubes market in Kazakhstan, Anton Kiselev, senior specialist at companys strategic marketing department told Lube Report last week. Kiselev noted that over the last couple years the company has tried to increase its sales in Russia as well as in Belarus, Ukraine and Western Europe.

Russias biggest lube marketer is LukOil, which sold 148,000 tons of finished lube products domestically in 2009 and held a 29 percent market share. The other leading marketers are TNK, with 15 percent of Russias lube market (77,000 tons); Shell, 11 percent (59,000 tons); and Mobil, 10 percent (49,000 tons).