Taiwan’s CPC-Shell to shut Kaohsiung base oil plant in September

16 June 2014 04:43 Source:ICIS News

SINGAPORE (ICIS)--Taiwan’s CPC-Shell Lubricants will permanently shut its 250,000 tonne/year base oils plant at Kaohsiung in September, a company source said.

The base oil plant derives feedstock from CPC’s 200,000 bbl/day refinery at the site that will seize operation eventually, the source said, without providing details.

Residents of Kaohsiung have been demanding the closure of the plants on environmental grounds.

The base oil plant is a joint venture between CPC (49%) and Anglo-Dutch energy major Shell (51%).

Shell did not reply to an e-mailed query regarding the plant’s closure at the time of writing.

CPC-Shell’s base oils plant at the site has two production lines that can produce Group I 70P, SN150, SN250, SN500, BS150.

The smaller production line with a 120,000 tonne/year capacity has been shut since June last year because of poor margins, while the bigger 130,000 tonne/year line is currently in operation – producing SN500 and BS150, the source said.

The full shutdown of the base oil plant will further tighten the supply of BS150 in Asia. Regional supply has declined as Integrated Refinery Petrochemical Complex (IRPC), a major Thai producer, cut its base oils output on 9 June, when its production site in Rayong was hit by a fire, Chinese importers said.

The expected production loss from CPC-Shell and IRPC are expected to drive up regional BS150 prices in the near term, an industry source said.

CPC-Shell Lubricants is capable of producing mainly Group I P70, SN150, SN250 and BS150 base oils.

By Whitney Shi