Southern China eyes 29% increase in base oils capacity by '12

30 November 2010 10:57  [Source: ICIS news]

By Nancy Shi

SINGAPORE (ICIS)--The southern regions of China is boosting its base oils production capacity to ease its reliance on a more expensive supply coming from the northern part of the country, industry sources said on Tuesday.

Over the next two years, base oils refineries would be built by two privately-owned petrochemical companies in Guangxi province that should raise the southern region’s lubes production capacity by 29% to 1.55m tonnes/year, they said.

Guangxi Qinzhou Taixing Petroleum and Chemical recently kicked off construction of a 150,000 tonne/year plant that should yield white oils and base oils next year, industry sources said.

Guangxi Yuchai Petroleum and Chemical, meanwhile, was building a 200,000 tonne/year unit, which is slated to come on stream in 2012, they said.

Currently, south China can produce up to 1.2m tonnes of base oils but the projected output for the whole of 2010 was just at about 60% of the capacity at 700,000 tonnes, as the region utilise the refineries to produce more diesel and gasoline, according to C1 Energy, a China energy market intelligence service.

The firm is a wholly owned subsidiary of CBI China, in which ICIS is in the process of raising its stake.

C1 Energy pegged south China's base oils consumption this year at 990,000 tonnes, of which 29% or 290,000 tonnes would be procured from the north.

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