Rerefineries Planned in North Africa

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Two rerefineries are projected to start operation in Egypt and Algeria in 2018, each producing API Group II base oil, according to industry sources. Hitech Oils and Greases owns the project in Egypt, and Rebex Oil Group owns the one in Algeria.

Since I believe that Africa is the future and that there is a huge potential for growth in the African continent, we are starting Relubes, the Group II plant in Egypt, so that by the time the demand in high-performance lubes increases, we will be ready to supply and cater for this demand, said Rami Al-Kinanny, general manager of Hitech Oils and Greases and promoter of Relubes.

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The plant in Egypt will be in Ain Sokhna, a town on the western shore of the Red Seas Gulf of Suez.

We will start construction of this plant by the end of 2017. The plant should be ready by the end of 2018, said Al-Kinanny, who added that the new refinery will have a capacity of 3,000 tons per month and occupies an area of 11,000 square meters. He noted that the rerefinery could eventually supply Group II base oil to the Common Market for Eastern and Southern Africa, a free trade area with 20 member states. Production capacity can be increased at a later stage if demand across the COMESA markets grows at a faster rate than anticipated, he added.

According to Al-Kinanny, the company anticipates using either hydrotreating or solvent extraction at its rerefinery, finalizing that choice in June 2018. It is a very difficult market, as used oil is used for burning as fuel by cement, steel and brick companies, he pointed out.

The Rebex rerefinery will be located in Algiers province, on the Mediterranean coast.

Although Rebex Group President Ahmed El Djarouf confirmed the company is licensing catalyst technology from a provider, he declined to answer questions about it. He said the plant will use hydrofinishing and perhaps hydrotreating.

Karim Ben Hassine, a lube specialist in North Africa, said the Rebex group refinery will produce around 30,000 metric tons per year. He said Rebex Oil Group started collecting used oils and now has a large stock to use as feedstock for production of Group II. Hassine said Rebex could cater to North African countries such as Tunisia and Morocco and some countries in East Africa.

He added that the viability of the new Rebex and Relube rerefineries will depend on price and availability, and the companies will need to persuade local producers to use African rerefined base stock rather than spend money on imports.

Mehrdad Vajedi, CEO of Global Oil FZE, noted that waste oil collection will be a big challenge, especially in Egypt. If this challenge is taken care of, the idea is great for a country with more than 440,000 [tons per year] of lube consumption, said Vajedi. Furthermore, he believes Relube will be able to sell its base stocks locally and not have to market them in COMESA.

Please also remember there are many international blenders there who lack access to quality base oil, so I believe there will be enough room in the local market. All the volume will end up inside Egypt, with less chance for COMESA export in the medium term, Vajedi added. The targeted amount of rerefined base oil production will be a key factor, he said.

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Africa    Base Stocks    Conventional Base Stocks    Region    Rerefined