Petronas Group III Plant Delayed


Material shortages and equipment delivery delays have slowed construction work on Petronas new API Group III base oil refinery in Melaka, Malaysia, but the company still hopes to bring the plant online in 2008.

The Petronas Melaka Group III base oil refinery is expected to have capacity to produce 270,000 metric tons per year of API Group III base oils and another 70,000 t/y of Group II.

Over the past few months, the construction contracts have encountered a number of basic building material shortages in addition to delayed deliveries of key mechanical equipment from abroad, Alina Tasha Tamyas,spokeswoman for Petronas Base Oil, told Lube Report. The cumulative effect has been to slow the overall speed of construction a few months.

According to Tamyas, Petronas has taken measures to ensure resolution of the problems and has made efforts to step up the pace of construction to catch up on lost time and have the refinery fully operational within 2008.

Europe is Petronas Base Oils anticipated number one market, followed by Japan. Group III is in short supply in both of those markets. The plant will initially produce two grades of Etro-branded Group II stocks – 4 centiStoke and 6 cSt – primarily for export.

Two other Asian Group III projects are slated to begin production in the next year. GS Caltex plans to produce 160,000 t/y of Group III and 625,000 t/y of Group II in Yeosu, South Korea, by the end of this year. A Pertamina-SK joint venture is constructing a 390,000 t/y Group III plant in Dumai, Indonesia, scheduled to begin production in 2008.

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