Gulf Solvents of Saudi Arabia contracted Chemical Engineering Partners to build a 155,000 metric tons per year rerefinery in Hail City to produce API Group II and III base oils.
In a joint press release issued Monday, the companies claimed the rerefinery will be the largest in the Middle East and the first in Saudi Arabia capable of making Group II and III stocks. The companies said they will consider building other plants elsewhere in the country.
CEP President and CEO Joshua Park said a start date has not been determined yet because the company is working on basic engineering and design first. Detailed engineering will still need to be completed.
The plant is going to have a new catalyst and process for Group III production, Park told Lube Report, adding it will be installed alongside the companys existing catalyst and process technology for producing Group II base oil. He said that while many rererefineries operate in Saudi Arabia and in the Middle East, they typically use outmoded, and in some cases banned forms of technology. There arent any rerefineries with advanced technologies such as ours in the region, he said.
Gulf Solvents will contract with third-party used oil collectors for feedstock, he said, which is expected to come largely from sources such as quick lubes in Saudi Arabia and other parts of the Middle East.
Park noted that the plant will be in an industrial zone under development that aims to attract projects that feature technology.
Gulf Solvents is a new venture formed in Saudi Arabia for the purpose of building a rerefinery, he said. It is not related to a United Arab Emirates chemicals distributor that has a similar name.
CEP has licensed its rerefining technology by providing a basic engineering package and optional detailed engineering services for rerefinery projects in several locations, including Lencois Paulista, Brazil; Wichita, Kansas; Hamina, Finland; Columbus, Ohio; Newark, California; Puerto Rico; Wagga Wagga, Australia; and Bekasi, Indonesia.
Industry observers said the challenges to rerefining higher quality base oil in Saudi Arabia and the Middle East include a healthy supply of virgin Group II/III base oil already flowing from plants in the region, finding suitable feedstock sources and consumer habits.
Stephen B. Ames of SBA Consulting, Pepper Pike, Ohio, observed, they will not be able produce Group III unless the waste oil feed is considerably higher quality than the base oils currently used in blending the bulk of Saudi lubricants.
Consultant Geeta S. Agashe, president of Geeta Agashe & Associates LLC, pointed out that the Middle East will be awash with higher quality virgin premium Group II and III from plants such as Shell and Qatar Petroleums Pearl joint venture gas-to-liquids plant in Qatar, Bapcos plant in Bahrain and Takreers plant in Ruwais, U.A.E.
Add Luberef coming on stream next year, and this region will continue to be long for high quality base oils, Agashe said. Granted, most of Shell and Bapco volumes find a home outside the Middle East region, but Takreer is selling within the region via Adnoc. Luberef will most definitely sell in Saudi Arabia as that is their priority and then export whats left overseas.
She noted that oil marketers in the region today face challenges to marketing lower-viscosity oil in the region, given the general public opinion that thicker is better and that dust and climatic conditions dont make the case for semi- or full synthetics.