ELCO shifts lubes blending after fire hits UAE plant

20 August 2007 12:03  [Source: ICIS news]

By Shibu Itty Kuttickal

SINGAPORE (ICIS news)--Major United Arab Emirates (UAE) lubricants blender and trader Emirates National Lube Oil Co (ELCO) said on Monday it will restart operations at its mothballed plant due to a massive fire that gutted its main blending plant and warehouse facility.

"Our contingency plans had been in place… we are confident of restarting operations within a week on a second site that we have in Port Khalid," ELCO group general manager Simon Philips told ICIS news on Monday.

An oil major in Dubai said the low-end finished lubricants market could be hit by the Friday night blaze as ELCO had been a major supplier in this segment.

"We may see supplies in this segment being hit and this could put some upward pressure on the base oils market in the region," said a senior official with the oil major.

Philips said that the blending plant had suffered considerable damage in the fire, but said the actual damages were still being estimated.

However, according to a report in Dubai's Khaleej Times, the company had incurred losses to the tune of more than UAE dirhams (Dh) 300m ($82 million), quoting a senior ELCO official.

Officials of the Sharjah Civil Defence and police were quoted as saying that the total estimate of the damage caused by the fire would only be known once the investigations are over.

The fire erupted at around 11.20pm on Friday, causing heavy damage to ELCO's facilities and nine port berths at Port Khalid in Sharjah emirate. Three ELCO employees had suffered minor injuries and had been discharged from hospital after treatment, but there were no serious casualties due to Friday being a weekend day in the UAE. .

The port has since restarted operations, according to reports.

Philips said oil majors in the region had offered ELCO their toll blending plants in Jebel Ali in Dubai emirate and such offers were being considered.

"We may consider blending operations in Jebel Ali. We will also soon start rebuilding our state-of-the-art blending plant in Port Khalid," he added.

By: Shibu Itty Kuttickal
+65 6780 4359

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