Adnoc has signed a deal with Penthol to sell high-specification base oil from its refinery in Ruwais, opening a new market for the product in the US.
The deal is for an unspecified amount of Group III base oil of which Adnoc is targeting production of 500,000 tonnes a year, together with 100,000 tonnes of Group II base oil. The products meet US and European environmental specifications for oil that is further refined into lubricant.
“Tighter emissions regulations are driving the use of high-performance lubricants in transportation,” said the Adnoc director Abdulla Al Dhaheri. “This is in turn driving up the demand for Group III.”
Demand globally for base oil is projected to grow by 14 per cent a year through 2020, more than 10 times crude’s growth rate, according to Transparency Market Research.
Adnoc’s refining division doubled capacity at Ruwais last year and added new products but a fire at the residual fluid catalytic cracking unit in January cut petrol and other light product output until next year at least.
amcauley@thenational.ae
Follow The National's Business section on Twitter