The Hague, Netherlands-based company started the Russian lubricants blending project last year, stating it was a $100 million investment. The 180,000 tons per year plant located in Torzhok, Tver region was originally scheduled to be fully operational by the end of 2010 or early next year, the company said. It will be one of the largest in the Shell network worldwide.

Revising the length of construction period for major facilities is a common industry practice, Vera Surzhenko, spokeswomen at Shell in Moscow, told Lube Report Monday.

She cited several different reasons why the company postponed the plants opening. After the start of construction, some amendments were introduced to the project design to optimize the project, Surzhenko said.

The company also experienced developmental issues and material supply delays. An international management company was hired to support areas of planning and scheduling and material supplies which will help us to speed up the construction process, she said.

As of today, building of the manufacturing complex has been erected, a pumping station and a boiler house completed and filling equipment for finished products installed, Surzhenko said. Installation of blending and other essential equipment and utility systems is underway. Four railway tracks have been built to connect the plant and a railway overpass is nearing completion.

The company emphasized that key contracts are in place for operation of the storage facilities by a third-party logistics company and for delivery of base oils. A pilot order of 300 tons of base oils was successfully delivered from an intermediate warehouse in Finland to the construction site in order to test equipment and flushing the plants pipelines, Struzhenko noted.

The blending plant construction started in August 2009, and it is Shells first plant in Russia. The rescheduled opening wont impact the current finished lubricants supply in the country, the company said, adding that the plant will employ 150 workers. The first phase of the recruitment campaign started in September [2010] with a focus on skilled engineering personnel.

The city of Torzhok is located near the main transportation routes that connect Moscow and St. Petersburg, and it is approximately equidistant from the two major cities. The region is known for its qualified technical personnel.

Royal Dutch Shell, Europes largest oil producer, has upstream operations in Russia since 1994. It has a 27.5 percent share in Sahallin-2, Russias biggest Far East oil and gas production and exploration project which started liquefied natural gas production last year.

Shell and Gazprom, which is the major share holder in Sahallin-2, signed an accord for global strategic cooperation last week in Moscow. It will allow Russias major energy giant to take part in Shells oil and gas production and exploration projects in third countries, while the two companies will look at new joint projects in western Siberia and eastern Russia, Gazprom said in a statement last week.