Saudi Total Lubricants Co., orSatlub, a joint venture of Total and Al Zahid Group, on Friday signed a memorandum of understanding with developer Emaar, The Economic City (Emaar.E.C.), to lease land in King Abdullah Economic Citys industrial zone on which to build Totals first lubricant blending plant in Saudi Arabia.
According to Dubai-based Emaar.E.C.s announcement, the state-of-the-art plant will be commissioned in two years, and will use fully automated technologies. The initial production capacity of the plant will be 35,000 metric tons per year of finished products, with potential for capacity expansion. Satlub will manufacture and market the entire range of lubricants and specialty products for the automotive, industrial and marine sectors within the kingdom, and for future exports under the Total brand.
The announcement did not specify where the base oils for the lubricants would come from. According to LubesnGreases Europe-Middle East-Africa, Saudi Arabian Oil operates two API Group I base oil refineries in Saudi Arabia, including a 260,000 metric tons per yearplant in Jeddah and a 280,000 mt/yfacility in Yanbual Bahr, Saudi Arabia.Total itself has capacity to produce 475,000 mt/y of Group I and 40,000 mt/y of Group III stocks in Gonfreville, France. High quality gas-to-liquids base stocks areprojected in Saudi Arabia’s neighbor, Qatar, around 2011.
Jaques Souplet, Totals regional director for theMiddle East and Central Asia, and Abdulraouf Mannaa, managing director and CEO of Emaar.E.C., signed the agreement.
This MOU is a strategic move for Satlub in Saudi Arabia as it is the largest lubricant market in the Arabian Peninsula, and Satlub is committed to establish a strong and long-term presence in this market, said Totals Souplet. King Abdullah Economic City will be a unique and strategic location for Satlub for a manufacturing facility, which will help export the products to Africa and other Middle East countries.
Emaar.E.C.s Mannaa said the memorandum of understanding will pave the way for new regional growth opportunities for the company [Satlub] in the lubricant business.
According to Emaar.E.C., KAEC is the single largest private sector-led project in the region and is located on the coast of the Red Sea. The project has six components: the sea port, industrial zone, central business district (including the financial district), resort district, educational zone and residential communities. The industrial zone is designed to provide total infrastructure support to research centers and to small, medium and large industries.