Shell Revamps Lube Supply Chain


While Shell plans to close a blending plant in Illinois and two U.S. distribution centers, it also unveiled a new blend center at its Houston lubricants plant and will expand blending capacity in West Virginia.

On Friday, Shell informed employees of new plans to expand the capacity of its lubricants blending plant in Congo, West Virginia, a Shell spokesperson told Lube Report yesterday. For competitive reasons, the company doesnt disclose blending plant volume or financial details.

Yesterday Shell announced the expansion and upgrading of its blending plant in Houston. Two years in the making, the new blend center at the existing plant means it is now the largest blending and liquid handling facility in Shells network and will deliver 50 percent more volume of finished lubricants, the company said, adding that it features new systems and technology such as fully automated blenders.

We have further unlocked our Houston plant capability in order to respond to increasing market demands for premium lubricants products, said Lisa Davis, president of Shell Commercial Fuels and Lubricants in the Americas.

The company also confirmed a U.S. first, that it has blended gas-to-liquids base oil at the Houston lubricants plant and shipped the resulting finished lubricants to customers. The first commercial shipment of GTL base stocks left Shell and Qatar Petroleums Pearl GTL plant in October 2011, bound for Houston.

These expansion plans came on the heels of news Friday he company would close its Wood River blending plant in Roxana, Ill., and regional distribution centers in OFallon, Mo., and Leetsdale, Pa. Shell expects to close the Wood River packaging operation and the two regional distribution centers in the fourth quarter of 2012, and the remaining Wood River blending plant operations by the end of 2013.

These actions will not affect our ability to provide customers with the delivery service they expect, the company asserted. Given investments we are making to other parts of our supply chain, we can manage volumes through other facilities in and outside of our network.

Factors in the closings included facility size, site ownership and location. As the leading U.S. lubricants company, Shell Lubricants must ensure its supply chain assets are appropriately equipped, sized and located to support our customers and long-term growth, Shell stated. For these reasons, on Feb. 22 we shared with employees our plans to close the Wood River Blending Plant, given that we do not own this site and it needs major upgrades. With this news, we will also close our St. Louis and Leetsdale Regional Distribution Centers, as they are no longer optimally located to support our business.

A Shell spokesperson confirmed the Wood River blending plant blends finished packaged and bulk lubricants, including branded motor oils. A full product slate of passenger car motor oils, heavy duty engine oils and industrial lubricants were handled through the [regional distribution centers], the spokesperson said.

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