Transformer Oil Rerefinery Launches


Commercial production starts this week at Hydrodecs new transformer oil rerefinery in Canton, Ohio. The 22,000 square foot plant, built at a cost of $16 million to $17 million, has capacity of 8 million gallons per year, according to the company.

Hydrodec on Oct. 8 announced the official opening of the plant, which had its startup on July 22, and received its first feedstock back in February. While it has been in operation in terms of commissioning, there has been nothing in terms of commercial production – that starts this week, John Gunn, chairman of London-based Hydrodec Group plc, told Lube Report on Monday.

In September, Hydrodecs Superfine brand transformer oil from the Canton rerefinery completed independent quality assurance verification. The process uses a proprietary catalyst to remove impurities. The company describes the rerefined product as hydrogenation-refined naphthenic mineral transformer oil. The oil has already been tested by independent laboratories and held to be as good as, if not better than, new oil, Gunn claimed.

He said Hydrodec expects to get its feedstock from three main sources: utilities, waste oil dealers and transformer manufacturers. The company has stated it is also evaluating possible treatment of other specialty oils for recycling, such as hydraulic oils.

U.S. electrical oil sales, including transformer and cable oils, reached 83.3 million gallons in 2006, according to the latest National Petrochemical and Refiners Associations Report on U.S. Lubricating Oil and Wax Sales. The total was up 5.6 percent from 78.8 million gallons in 2005.

The Canton location was appealing from a transportation standpoint. The U.S. is quite a good country for shipping by rail, and we have a rail link into the plant, Gunn said. So we can both take used oil, by either rail or road tanker, and deliver the new oil the same way. The costs of doing that in the U.S. are reasonably attractive – theyre not prohibitive at all. I think our first shipment this week will go down south quite a long ways.

Plant construction took about nine months, according to Gunn. The Canton site had practical advantages in terms of its geographical location. Literally, we chose it because it was within about 500 miles from both Chicago and New York, and all places in between, which covered a great number of utilities that we expect to be either suppliers of used oil, or buyers of SuperFine oil, he explained.

Another advantage of the location was a skilled workforce in the surrounding area. The plant will employ up to 35 people. Canton has a long history of industrial production, and there are plenty of people available who have a good understanding of how a manufacturing or production plant works, he continued.

Hydrodec touts the environmental friendliness of its product and the rerefining technology. This oil is not going to end up as a carbon dioxide emission out of a power station or cement kiln, he emphasized. It is creating – out of what formerly was a one-stop commodity – a permanent resource, as this can be done again and again.

He characterized the rerefining process as completely clean. Our carbon footprint is almost nil, Gunn said.

Rerefining transformer oils can also reduce reliance on imported oil, he added. This is massive import savings, because this is oil that wouldve been brought in from Venezuela or Nigeria – theyre the two places with heavy oil, Gunn said. That no longer will need to be brought in, so the import substitution advantage is there as well.

Hydrodec said it is in the early planning stages of a similar rerefining plant in Laurel, Miss., for a capital investment similar to that for the Canton facility. The Laurel plant would have an estimated production capacity of 120,000 liters (31,700 U.S. gallons) per day.

The company grew out of an eight year industrial research and development program implemented by Australias Commonwealth Scientific Industrial Research Organization and the Australian power industry. Initial research looked into development of advanced refining technology for use with used electrical oils. The program eventually produced a new refining process with application across the petrochemical and oil refining industries.

The technology was patented and in 2001 rolled into a commercial license held by Hydrodec Development Corp., which was formed with global rights to commercialize the technology. Hydrodec Australia Pty Ltd. remains in Young, Australia.

The technology was acquired by Hydrodec because some of the people within Hydrodec were working together with the laboratory to come up with a solution, Gunn recalled. It wasnt specifically designed for transformer oils – its been adapted for that.

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