Petro-Canada announced last week that it will debottleneck its base oil plant in Mississauga, Ontario, next year. The company did not reveal details of the project, but outside sources said it plans to increase the plants capacity for Group II-plus and Group III oils by 4,000 barrels per day.
Lubricant blenders said the project is good news because demand-supply balances for Group II-plus and Group III oils are tight.
However many barrels they can add, Im sure the market will welcome it, said one base oil buyer, who asked not to be identified.
The Mississauga plant consists of two trains, one of which makes Group II oils, the other devoted to Group II-plus and Group III. Total capacity currently is 12,500 b/d, according to the National Petrochemical and Refiners Associations 2005 Lubricating Oil and Wax Capacities report.
In December of 2004, the company said it wanted to debottleneck the plant and would study its options this year. On Thursday it unveiled a $3.4 billion capital improvement and exploration budget for 2006, and the announcement included a brief reference to expansion of the base oil plant.
Officials could not be reached for comment this week, but market sources said Petro-Canada has been quietly discussing the project in recent weeks.Sources said the company indicated that capacity of the Group II-plus/Group III train will increase by approximately 4,000 b/d, though the project may be completed in more than one stage. Petro-Canada wants to bring the first additional volume online in June, the sources said.
The Mississauga plant is easily the largest of Canadas four base oil plants, accounting for more than half of the nations 24,000-b/d capacity.