Pertamina closes DAO plant on weak demand

11 June 2008 05:59  [Source: ICIS news]

SINGAPORE (ICIS news)--Indonesian oil and gas major Pertamina has closed its deasphalted oil (DAO) line at the Cilacap refinery due to low profits, said a company source on Wednesday.

The unit was producing 500-700 tonnes/month of DAO, one of the four forms of slack wax. The source said that the line would be switched to produce light machine oil (LMO), as there was a growing demand for it in the market.

This would double the company’s total LMO capacity to approximately 1,200-1,600 tonnes/year.

In addition to DAO and LMO, the plant also produces spindle oil (SPO).

Prices of slack wax were heard stable-to-firm at $800-900/tonne (€520-585/tonne) FOB (free on board) Asia on Wednesday, according to global chemical market intelligence service ICISpricing.

Slack wax, a feedstock for paraffin wax, is solvent-refined to remove the excess oil and produce fully-refined paraffin wax with around 0.5% oil content, and semi-refined grades of 0.5-1.5%.

Major slack wax producers include Pertamina, Sinopec and PetroChina.

($1 = €0.65)

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By: Heng Hui
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