Essar Energy and Hydrodec have set up an oil re-refining joint venture, based new based at Essar’s Stanlow refinery complex in Cheshire, UK – the UK’s second largest refinery.
The JV will combine the existing Essar infrastructure and operational capabilities with re-refiner Hydrodec’s re-refining technology and feedstock from its OSS subsidiary.
The operation will initially process transformer oil and subsequently general used oil, with a combined capacity of up to around 130 million litres a year and potential annual revenues of around $150 million, Hydrodec said.
The JV also plans to establish a pilot plant to develop a new Hydrodec lubricants technology, to be deployed by a new general used lubricant re-refining business. The pilot plant will be established in the Stanlow area in the first half of 2014.
Hydrodec intends to establish a transformer oil re-refining business which is capable of processing around 27 million litres of new, branded Superfine transformer oil from used transformer oil.
A two-train processing facility is to be commissioned by end 2014 drawing used oil feedstock from within the UK and imported from other countries such as the US and Continental Europe. In the meantime, the JV partners will consider importing Superfine for sale in the UK which Hydrodec currently manufactures in the US.
Hydrodec then intends to create a lubricant oil re-refining business at Stanlow in partnership with EOUK which is capable of processing up to 100m litres of used lubricant oil into high grade Group II+ and Group III base oil for sale into the UK and continental Europe by 2016.
Essar Oil UK CEO Volker Schultz, , said: “We look forward to jointly developing this innovative project, which will combine Hydrodec’s proprietary technology with Stanlow’s considerable operational and project execution expertise.”
Ian Smale, CEO of Hydrodec, added: “We believe a combination of our oil collection, feedstock delivery and technology with Essar’s refinery operations and process management expertise will prove extremely powerful for the longer term expansion of our business into new markets. It has the potential to make the UK the oil re-refining hub of Europe.”