Kazakhs to Join Group III Club

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A planned 200,000 metric ton per year base oil plant in Shymkent will begin producing API Groups II and III base oils in 2014, a Kazakh executive revealed.

The project is a partnership between Kazakh lubricant blender Hill Corp. and the state energy giant KazMunayGas, Rahimzhan Nupbayev, Hills executive director, told Lube Report. We already signed a written statement with KazMunayGas and its subsidiary PetroKazakhstan, for supplying feed stock for the plant from the nearby refinery, he said Monday during a phone interview from Kazakhstan.

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PetroKazakhstan is a joint venture between KazMunayGas and Chinese oil major PetroChina. The Shymkent fuel refinery, site of the new base oil plant, is operated by KazMunayGas.

The new base oil plant will receive around 500,000 tons per year of feed stock from the refinery, to be processed into 200,000 t/y of Group II and Group III base oils, Nupbayev said. At the moment we are preparing the plants technical documentation, and the deadline when the plant is going online is 2014, he said.Theplantwill use Chevron Lummus technology and willbe the first base oil production in Kazakhstan.

Globally the demand for higher quality base oils is very high, Nupbayev continued. Half of the base oils produced at Shymkent will be used at Hills blending facility for production of engine, industrial and transmission lubes. Now we are importing base oils, but having our own base oil production would significantly decrease the high prices for our finished products.

Hill Corp. (Hill is an acronym for High Industrial Lubricants and Liquids) is the only blender in the country. As reported in the Feb. 9 Lube Report, its blending plant in Shymkent was opened last June and is producing 24,000 t/y of finished products. Its total capacity is 70,000 t/y, and it cost more than $20 million.

Kazakhstan is the largest oil producer and crude exporter in Central Asia and holds around 3 percent of the worlds recoverable oil reserves, according to the CIAs 2010 World Factbook. There are three fuel refineries in the country, all operated by KazMunayGas.