Construction of Polands first premium base oil plant has come to a halt – the result of bankruptcy, triggered by the financing needed to pay for the project.
Rafineria Nafty Glimar S.A. entered bankrupty Jan. 19, Marketing Specialist Boguslaw Borek told Lube Report Friday. The company, which consists mainly of a refinery in the southern Polish city of Gorlice, was bought the week before the bankruptcy declaration by state-owned Lotos Group S.A., Polands second-largest refiner.
As a result, Borek said, work has stopped on construction of a hydroprocessing complexthat wouldenable the Gorlice refinery to make 1,150 barrels per day of Group II or Group III base oils, along with dearomatised kerosene and naphtha. When it first announced the project in early 2004, Glimar said it was scheduled to be finished by early this year. Lotos is expected toresume construction eventually.
The new owner of Glimar will, most likely, continue the construction of the hydrocomplex plant,Borek said. But first, they will negotiate with bankers to reduce Glimars debt. Under those circumstances the plant will not go on stream before the end of 2005. Borek added that most of the debt was the result of money borrowed to pay for the hydroprocessing complex.
Production of Group II base oils in Poland would still be a fairly new phenomenon for the region. Group II production has been mostly restricted to North America, although new capacity has opened recently in China. Europe and other regions have generally opted for Group III to meet their premium base oil needs.