The American energy giant said it has signed a long-term contract to rent the terminal from Stolthaven, a terminal owner and operator and unit of London shipping and logistics company Stolt-Nielsen.

The base oil plant at ExxonMobil’s Rotterdam refinery was and remains the first large Group II plant in the European Union, with capacity of 1 million metric tons per year. Officials did not say that all of the base oil offered in Dagenham will come from Rotterdam, but suggested that much of it will.

“Coupled with our Rotterdam refinery, the new Dagenham distribution center will cover the majority of our customers’ lubricant manufacturing needs in the U.K.,” said Nick Harris, ExxonMobil Basestocks EAME sales manager and project manager for the new terminal. “The facility will enable a more direct supply chain, reduced lead time and simplified customs clearance for imported molecules, ultimately reducing complexity across the entire import process for lubricant formulators.”

The Fawley base oil plant has capacity of 407,000 t/y and is the only virgin base oil plant in the country.

Until its invasion of Ukraine, the United Kingdom imported substantial amounts of base oil from Russia, but that supply chain was halted by sanctions that the U.K and the EU imposed against Russia.

Being just 15 miles outside of London, the Dagenham terminal is close to Exxon’s customers.

“The Dagenham location allows us to provide the full group II offer to our customers in the U.K., providing more market coverage than other companies,” a member of the Exxon team told Lube Report. “By ensuring that the new supply center is close to customers, we are boosting supply security and flexibility, optimizing end-to-end supply costs, supporting customers’ growth ambitions and reducing complexity across the entire import process for lubricant formulators.”

(This article is updated from Sept. 10)