A Bahrainian petroleum products supplier earlier this year opened an oil rerefinery with capacity to produce 36,000 metric tons per year of base oils. The company, Agas International, says it wants to take advantage of a dearth of oil recycling facilities in the area.
There is a lot of used lubricating oil being generated in surrounding countries, Prem Kumar, Agas vice president of finance, told Lube Report yesterday. But there are not enough rerefineries to handle all of (the oil). We see an opportunity to process it here rather than exporting it elsewhere.
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The refinery, which opened in January, is located iin Sitra, Bahrain and cost U.S. $9 million. It uses film filters to make solvent neutral 300 API Group I oils.
Kumar said Agas is still developing supplier and customer bases and does not expect to reach full operating capacity for several more months. Even so, it is already exporting base oils to users as far flung as Spain, China and Taiwan, and to others in neighboring countries.
In Western countries, the main alternative to rerefining used lubricants is to burn them as heating oil. Kumar said that alternative is not practical in the region around the Middle East Gulf.
The cost of gas oil for heating here is so much less than the price of the used lubricants, he said. Middle Eastern countries do have collection programs, but used oils that are not rerefined in the area generally end up sold and exported to other regions.
Based in Bahrain, Agas operates a fuel oil production plant in the country, along with a metal cutting gas plant.