At the moment Russia is the worlds fifth biggest finished lubricants producer after the United States, China, India and Japan. Russian company Shell Neft manages the Anglo-Dutch oil majors operations in the country.

The 180,000 tons per year blending plant in Torzhok, one of Shells biggest blending plants worldwide, could significantly boost finished lubes production in Russia. Steady growth of the country’s lubes market is one reason why Shell invested U.S. $97 million in the complex, the company said, citing other reasons such as a positive economic climate, accessible water and land resources, a ready pool of technically educated people and the proximity of Moscow and St. Petersburg, Russias two largest cities.

Around 150 employees will be engaged to service the plants state-of-the-art logistics and manufacturing processes, which produces premium passenger and commercial vehicles engine oils, as well as high quality industrial oils, or around 100 different types of lubricants.

The company has already started to make deals for factory fill with the local car manufacturers. Last year it signed a contract with Sollers, one of the biggest Russian automotive companies that, among the other world brands such as Mazda, manages the production of the Korean car brand SsangYong in the country. Under the deal, Shell will supply lubes for factory fill of SsangYong models made in the country. In 2011 Shell held a 20 percent share of finished lubricants imports in Russia, and its sales in the country last year soared 15 percent, compared to 2010.

To achieve its goal in taking a bigger portion of the Russian market, Shell said that its complex is equipped for a bulk supply to big industrial consumers. It will save them time and cut costs on transportation and storage [of the lubes], the company said. The plants management is also pushing hard to establish export of its finished products in the neighboring countries very soon; notably in Ukraine, a key European lubricants market, where the company has existing business operations.

Shells Russian competitors, such as Lukoil or Gazprom Neft wont miss the opportunity to respond with aggressive marketing. The former is number one industrial oils supplier in the country and from recently gets ready for big expansion abroad, the latter announced heavy investments in its base oils and lubricants production.

Lukoil, Russias biggest lubricants producer, is committed to expanding into the European Union as well as the markets of Southeast Asia and China, Maxim Donde, LLK-Internationals general director, told the Itar-Tass news agency. One of our companys biggest successes is its penetration in the global marine oils market, he said at the working meeting held in Torzhok during the Shell plants opening ceremony. At the moment LLK holds a 3 percent share of the global marine oils market.

LLK is Lukoils lubricants arm, and the company today holds almost 33 percent of Russias finished lubricants market and sells to more than 30 countries around the globe. In 2011 Lukoil produced 1.2 million tons of base oil and finished lubricants.

At the same meeting, oil major Gazprom Neft pledged to invest $580 million to boost its base oils and lubricants production in the next five years. In the last few years we invested around 4.5 billion rubles [$145 million] for development of lubricants production,” Alexandr Truhan, the companys general director told the meeting, according to Itar-Tass.

The main share of the investments will go toward developing premium lubes. Gazprom is also committed to invest in additives production as well, Truhan said. At the moment Russia is the only lubricants market in Europe that have seen steady growth in the recent years and Gazprom Neft plans further to develop this segment.

The finished lubricants market in Russia in 2011 amounted to 1.8 million tons, according to Kline and Co. consultancy.