Imperial Oil will discontinue production of API Group I base oils, waxes and finished lubricants at its refinery in Strathcona, Canada, by early 2018, an industry source confirmed last week.
This would be the latest in a long line of Group I plants to have closed the past two decades as base oil demand in North America and Europe shifts to Group II and III stocks, as well as synthetics. Consultancy Kline & Co. predicted recently that global Group I demand will decrease at a compound annual rate of almost 2 percent through 2021. Imperial did not respond to requests for comment.
Currently, the Calgary, Alberta-based company is in negotiations with Unifor, Canadas largest private sector union, which represents people employed at the refinery. There are roughly 450 employees working at the facility at this time. The union declined to discuss plans for the base oil and blending plants, citing the sensitive nature of the negotiations.
Located on the outskirts of Edmonton, in Canadas Alberta province, the base oil plant has capacity to make 2,400 barrels per day of Group I base oils. The refinery is western Canadas only lubricant base oil and wax producer. It is also the only facility that produces Group I oils in the country.
After production at the Strathcona facility ends, the country will be left with only three base oil sources: Safety-Kleens Breslau, Ontario, rerefinery with a capacity of 2,500 b/d of Group II; rerefiner Terrapure Environmental with a capacity of 400 b/d of Group II in North Vancouver; and PetroCanadas facility in Mississauga, Ontario, which has a capacity of 11, 600 b/d of Group II and 4,000 b/d of Group III.
Imperial took similar action in 2013 when the company decided to close lubricant blending and packaging operations at its Sarnia, Ontario, facility. In that case, blending and packaging operation were transitioned to Imperials Edmonton, Ontario, site and ExxonMobil facilities across the United States. Fifty-eight workers were reassigned to other locations as a result.
Built in 1976 on the site of Imperials original 1940s refinery, the Strathcona facility produces petroleum products, including gasoline, aviation fuels, diesel, butane, propane, heavy fuel oil and waxes.
Imperial Oil is majority owned by ExxonMobil and is the second largest integrated oil company in Canada.