Shell Lubes, Made in Russia


Russias first foreign-owned lubricants plant will open by the end of 2011, Shell confirmed to Lube Report last week.

The Hague, Netherlands-based company started the Russian lubricants blending project in August 2009, stating it was a $100 million investment. Originally scheduled to be fully operational by the end of 2010, the plants opening has been pushed back a year to December 2011 due to construction delays, developmental issues and material supply delays, the company said. The plants construction is planned to finish by the end of 2011. The opening date will be determined very soon, Vera Surzhenko, a spokeswoman for Shell in Russia, told Lube Report.

The plant, located in Torzhok, Tver region, will be one of the largest in the Shell network worldwide. It will be fully operational by the end of the year, William Kozik, general director of Shell Neft, the oil majors Russian subsidiary, told the Russian news agencies last week. We will be the very first international oil company in Russia to operate a large-scale lubricants manufacturing center in the country.

The plants full capacity is 180,000 tons per year, but output will depend on actual market demands, Kozik said. The Torzhok production will be sold primarily to the domestic market.

Shell currently holds a 20 percent share of the countrys finished lubricants imports market. The plant will help us to expand the market, and to contribute in modernization of Russias passenger and commercial vehicle fleets, Kozik said, adding that the Russian automobile fleet is in great need of high-quality lubricants.

Shell is also confident about expanding cooperation with more local automakers. According to Shell, so far it has established contracts with only three OEMs in Russia – Kia, Hyundai and Shkoda. All of them have car assembly plants in Russia.

The city of Torzhok is located near the main transportation routes that connect Moscow and St. Petersburg, Russias two biggest cities, and it is approximately equidistant from them.

Royal Dutch Shell has had upstream operations in Russia since 1994. It is one of the biggest buyers of the countrys crude oil. 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.

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