Base oils production will restart at the rebuilt 100,000 t/yr Kalundborg refinery this week or next week, for the first time since a fire three years ago.
The plant will be run by Avista Green, a new joint venture between Germany's Avista Oil and UK-based lube collection firm Slicker Recycling. Both companies will secure used-oil feedstock for Kalundborg from various sites in Europe, such as vehicle repair shops and industrial companies.
The unit will produce mostly Group I+ SN 150 as well as some SN 100. Product specifications are likely to be similar to base oils that Avista Oil produces at its 120,000 t/yr Group I plant in Dolbergen, Germany. The yield of Kalundborg will be 60-70pc of throughput.
The plant is more than double the size of the 42,000 t/yr re-refining unit at the site that was demolished in early 2018.
Base oil supplies from Kalundborg will target the Nordic and UK markets, as well as more distant export outlets. The Dolbergen plant will focus on supplying buyers in mainland Europe. Avista Oil also operates a Group II and Group III re-refinery in the US.
The unit's start up comes as base oils demand is gradually reviving in Europe. Demand had slumped between March and May as region-wide lockdowns to tackle the Covid-19 outbreak slashed economic activity. Group I base oil margins have remained at unusually weak levels even as fundamentals have improved.
Avista Green said re-refined base oils, which had been priced at a discount to virgin base oils, have more recently moved closer to parity.
Avista expects the value of re-refined base oils to rise further as environmentally-conscious buyers seek to incorporate more in their products.
