Kazakh Base Oil Plant Advances


South Koreas Hyundai Engineering Co. was awarded a contract to develop a 200,000 tons per year API Group II and III base oil plant in Kazakhstan, according to a Kazakh official with knowledge of the matter.

It is certain the Koreans will build the base oil plant in Shymkent, Rahimzhan Nupbayev, an ex-director of HILL Corporation, told Lube Report Monday during a telephone call from Kazakhstan. HILL Corp., which is the country’s only lube producer, ordered the tender for developing the base oil plant in Shymkent, southern Kazakhstan.

Nupbayev declined to provide more information, saying he is not authorized to speak with reporters regarding HILLs activities.

The construction of the $895 million base oil plant is expected to start at the end of 2012 or beginning of 2013, according to Hammat Magmanov, HILLs chief technologist.

I cannot give more details as the project is in its early phase of realization, Bahodir Saydullayev, the plants technical director, told Lube Report.

The project is a partnership between HILL Corp. and the state energy giant KazMunayGas.

In June, 2011, Nupbayev reported there was an agreement in place KazMunayGas and its subsidiary PetroKazakhstan to supply feed stock to the plant. 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 feedstock to be processed into 200,000 t/y of Group II and Group III base oils, Nupbayev said at the time. The plant will use Chevron Lummus technology and will be the first base oil production in Kazakhstan.

HILL (High Industrial Lubricants and Liquids) Corp. is the only blender in the country. 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 costs 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.

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