General Petroleum expands UAE base oil storage facility

UAE-based lubricant producer General Petroleum plans to finish building the second phase of its UAE base oil storage terminal by the end of May, according to a source close to the firm.

The construction started in March and will consist of 12 storage tanks, each with a 2,200t capacity. The producer aims to start operations at the second phase in June. Construction for a third phase is also scheduled to begin in June 2025, which will add four storage tanks of 6,000t capacity each.

The first phase of the storage terminal started operations in March 2020. That storage terminal consisted of eight storage tanks, each with a 1,550t capacity.

The facility, located in the Hamriyah free zone in Sharjah, is expected to have a combined 62,800t base oil storage capacity after the phase three expansion is complete. The terminal is connected by two pipelines to the jetty.

General Petroleum operates a 150,000 t/yr lubricant plant opposite the storage terminal, and exports more than a third of its production to overseas markets, the same source added. The company had highlighted North Africa, Asia-Pacific, and the Americas as key markets for growth. The blender also has a 25,000 t/yr production facility in Tanzania and a 35,000 t/yr facility in Uganda.

The UAE is a major lubricant blending and trading hub in the region because of its strategic location and logistics infrastructure. The Mideast Gulf is also largely self-sufficient on base oil supply and is typically a net exporter of the lubricant feedstock, especially for Group I and Group III supplies. Regional base oil supply is set to rise in the years ahead with planned expansions.

Africa is a growing market for base oils, propelled by its gross domestic product and population growth. Rising mobility needs and vehicle ownership is also expected to boost demand in the years ahead. Africa predominantly produces Group I base oils but remains structurally short on supply. Overseas supplies, including those from the Mideast Gulf, make up a sizeable portion of the region's imports.

By Chng Li Li