BY JOE BEETON • FEBRUARY 25, 2015
Hydrodec Group recently selected a site in Eastham, U.K. and began front-end engineering and design for its 75 million liters per year API Group II/II+ rerefinery, which will become its European headquarters upon completion in 2016.
The new site is adjacent to the QE2 Dock at Eastham, which Hydrodec selected for its proximity to sea terminals and truck-accessible motorway. The site is also close to the home of Nustar, which has been a Hydrodec customer and shared storage facilities with it for many years.
“The site is a discrete parcel of land zoned for industrial use in a strong petrochemical hub,” CEO Ian Smale told Lube Report. “It appears ideal, with both dock facilities and an existing tank farm adjacent to the plot which will create both supply chain and infrastructure efficiencies.”
In its first phase, the London-based transformer oil rerefiner will license Chemical Engineering Partners’ wiped-film evaporation and hydrogenation technology to produce Group II/II+ quality base oils.
Hydrodec expects to develop and pretest a business model during the 18 months expected for construction and commissioning. Although Smale noted that the FEED process will provide more insight into the total cost, it estimates having to invest around U.S. $45 million for the first phase.
In a subsequent phase of the Eastham plant’s development, Hydrodec will install an additional 75 million l/y production unit to double its capacity, and add a separate plant with capacity to produce 15 million l/y of rerefined transformer oil.
Eventually, Hydrodec plans to produce Group III rerefined base oil at the Eastham location using its proprietary technology, which it says will also help enhance base oil yields.
The Eastham rerefinery will be Hydrodec’s only in the U.K. for now, taking the place of Hydrodec’s previously announced joint venture with Essar Oil U.K. for a Group II+/Group III rerefinery in Stanlow, U.K.
When asked about potential oversupply of Group II/III base oils in Europe, Smale told Lube Report that Hydrodec believes that the U.K. is a short market, and that Hydrodec’s output will be competitive enough to displace imports based on both quality and price.
Hydrodec pointed out on a website devoted to the Eastham site, qe2docks.com, that it will reintroduce base oil production to the WirralPeninsula after Essar Energy shut its 5,060 b/d Group I plant in Stanlow in mid-2013. The new rerefinery will have around 40 new employees.
Hydrodec operates transformer oil rerefineries in Canton, Ohio, and in Young, Australia.
Smale told Lube Report that the company has been making progress on its Canton, Ohio, rerefinery after a December 2013 fire. Last November, Hydrodec settled on a $20 million claim with its insurance company.
“Module one of the new reactor is in place, with the second and third modules being delivered over the next two weeks,” Smale noted. “Construction on facilities and outside battery limits is underway and making good progress. The new plant, configuration and specification are really exciting, and we believe will produce the highest quality transformer oil available in the United States, as well as qualify for a verifiable carbon offset credit.”
Last month, Hydrodec posted its 2014 annual earnings figures, which were up 35 percent from the previous year.