The Royal Dutch/Shell Group last month closed its base oil plant in Geelong, Australia, leaving the continent with just one domestic base oil producer.
Shells is one of three Australian plants to close in the past two years, turning the country from a net exporter to a net importer of base oils. Caltex operates the sole remaining plant, in Kurnell, outside of Sydney.
Still, at least one market observer said the latest closure probably will not affect the market much.
Shell was keeping most of its output in house for its own brands, so it wasnt much of a supplier to the open market, Hilditch Pty. Ltd. Co-director Michael Hilditch told Lube Report yesterday. Hilditch is a base oil and chemical trader based in Melbourne. It sounds like they are going to import now to continue meeting their own needs, so we really dont see this having much of an impact.
Shell said the Geelong plant was making approximately 2,000 barrels per day of Group I oils, but that it was not cost efficient.
This was a pretty small plant, and it wasnt technologically advanced or large enough to compete with the market, Shell spokesman Susan Shannon said from London. The refinery complex to which the base oil plant belonged will continue to operate, she added. The company will also continue making finished lubricants at its blending plant in Brisbane.
Australia had four base oil plants until 2002, when BP closed its plant in Kwinana, in Western Australia. ExxonMobil closed its Adelaide plant at Port Stanvac last year. Caltexs plant in Kurnell has capacity to produce 3,000 b/d.