Shell to Snip Base Oil Output


Shell Deutschland Oil plans to cease base oil production at the smaller of two base oil plants outside Hamburg, Germany, next year as part of a plan to streamline operations at the adjacent facilities.

The company will stop making base oils at a former RWE-DEA plant, acquired as a result of a 2001 merger between German energy company DEA and Shells subsidiary in the country. Shell representatives emphasized yesterday that the company will continue producing base oils at the adjacent facility, commonly referred to as Harburg after the Hamburg suburb where it is located.

The former RWE-DEA plant has capacity to make approximately 2,800 barrels per day of paraffinic base oils, according to industry sources. The Harburg plant reportedly has capacity to make between 5,000 b/d and 6,000 b/d of paraffinics and naphthenics.

Market observers said Shells action is a sign of the times for a market that is becoming increasingly global.

Shell, as are all of the other mega-majors, is looking at its business from a global basis, said Geeta Agashe, director of Petroleum and Energy Practice for Kline and Co. consultants in of Little Falls, N.J. The ultimate result when that happens is rationalization, and we expect to see more and more of this in the future.

Shell spokesman Rainer Winzenried told Lube Report the company is reorganizing operations at the two plants to make them more efficient. Finished lubricant blending will be transferred from the former RWE-DEA plant, which will then be used to make specialty products.

Carolina Garrigou, global base oils and wax marketing manager for Shell Europe, mentioned the action during a presentation last week at the ILMA/ICIS-LOR Base Oils Conference in Orlando, Fla. Garrigou said the loss of capacity at the former RWE-DEA plant will exacerbate Germanys position as a base oil importer. The country is by far Europes biggest finished lubricant producer but ranks just fourth in terms of base oil supply.

– Lisa Tocci contributed to this article.

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