Taiwans CPC-Shell Lubricants is evaluating whether it will restart its shuttered API Group I low-viscosity base oil production train in Kaohsiung, Taiwan.

The 120,000 metric tons per year Group I low-vis production line, which manufactures SN150, was shut down last June for a routine turnaround of the companys base oil production facilities and has not been restarted, a source familiar with the matter told Lube Report.

The plant also includes a 130,000 tons per year high-viscosity SN500 and bright stock line at the same location.

The producer restarted its high-vis train in July 2013 after completing the maintenance program, but the low-vis line remained shut down due to economic reasons.

It does not make sense to produce low-vis base oil because production costs are high, and base oil prices remain low, particularly for low-vis grades, the source said.

If market conditions improve in the near future, however, CPC-Shell will restart the train.
Rumors pointed to the possibility that CPC-Shell would be closing the line permanently, ahead of the scheduled decommissioning of the entire CPC Corp.s Kaohsiung refinery in 2015.

The CPC refinery, which has the capacity to process 270,000 barrels per day of crude oil, will be mothballed in 2015 to fulfill a promise made to local residents about 20 years ago.

The company promised to close the refinery due to growing concerns about the environmental impact of its operations, but obtained the consent to build a new ethylene plant at the site.

There have also been several accidents at the refinery in recent years, including a number of fires and explosions, which have offered further justification for a permanent closure of the facilities.

The CPC decommissioning process started in 2010, when the company idled a 25,000-barrel per day residual fluid catalytic cracker, according to local media reports.

CPC plans to replace production at Kaohsiung by expanding its Talin refinery. The Talin refinery currently has a crude refining capacity of 300,000 barrels per day, and the expansion would add four plants by the end of 2015, including a 150,000-barrel per day crude distillation unit.

CPC plans to move the base oils plant in Kaohsiung closer to the Talin refinery, but the actual site has not been selected yet, the company source said.

The relocation will be taking place in two phases, with the first one focusing on the relocation of the Group I facilities by 2017, and the second on an expansion of the companys base oils capacity by adding a new Group II plant.