Shell further ups lubricant capacity in Greater China with eighth blending plant
Jun 25, 2015
Shell is set to meet growing lubricant demand in China with the opening of its eighth world-class lubricant blending plant in the country in Tianjin. This complements seven Shell lubricant blending plants already operating in greater China. The new plant can produce 330 million litres of finished product per year and has the potential to expand to 500 million litres. At its full potential capacity, the plant would be Shell's largest lubricant blending plant in China.
Dennis Cheong, Vice President Shell Lubricants Supply Chain, said, "In the last few years, we have made multi-million dollar investments in Shell’s lubricants supply chain in Asia, particularly in China, in both new and existing assets. This plant is our most automated and advanced facility yet. It is strategically located in the Tianjing Nangang Industrial Park to capture demand for transport and industrial lubricants in Northern China. China remains a key growth market for Shell Lubricants. We will continue to invest in upgrading and expanding our existing assets and are committed to building a robust lubricant supply chain here.”
High quality finished lubricants by Shell are produced by blending base oils with advanced chemical additive technology at its network of close to 50 lubricant blending plants around the world. Other than the eight lubricant blending plants in greater China, Shell also has three grease manufacturing plants in the country. In fact, Shell’s largest grease plant globally is also located here in Zhuhai.
The Shell supply chain network in China is further supported by a lubricants dedicated research centre in Shanghai, Shell Shanghai Technology Ltd. This technology centre works closely with local original equipment manufacturers (OEMs) and customers to develop lubricant technology that meets modern specifications. Furthermore, Shell recently inaugurated the Shanghai Commercial Centre, moving its major downstream and trading businesses, including lubricants, to this financial hub. This strategic move brings Shell closer to its customers and partners as well as opens up new market opportunities for the businesses.
The new state-of-the-art lubricant blending plant in Tianjin produces a full range of Shell branded engine oils including Shell Helix passenger car motor oils and Shell Rimula heavy-duty engine oils. The new plant is also fully integrated with Shell’s global gas-to-liquid (GTL) supply chain with access to GTL base oils made at the Pearl GTL plant in Qatar. This enables the plant to produce premium tier products from natural gas, such as Shell Helix Ultra with PurePlus Technology, for Chinese consumers.
This plant also meets the highest industry standards in blending technology with three blending systems, five fully automated, high-speed filling lines and five more filling lines in the pipeline. It also has bulk vehicle loading facilities to cater to customers with bulk supply deals such as fleet owners or general manufacturing businesses.
Shell Global Media Relations: +44 207 934 5550
Shell Lubricants Global: Mary B. Walsh, +32 478402938, firstname.lastname@example.org
Notes to Editors:
Shell lubricant plant in Tianjin, China
- This new plant complements the existing Shell lubricant blending plant in Tianjin, both now poised to capture growing demand particularly in Northern China.
- The project design incorporated lean and agile production principles. The new plant has been designed to be a highly effective lean plant handling a full range of Shell branded lubricants.
- The plant site includes a 4km long jetty pipeline to receive base oil supply.
- Each Shell lubricant plant has several quality checks and assurances in place to ensure highest quality products are being produced for customers. This includes a laboratory on site that performs random checks on samples taken throughout the production process.
- The plant utilisies solar energy and tries to minimise waste water discharge and keep waste air emission as low as possible.
Shell Lubricants in China
- Shell Lubricants has a network of 3 grease manufacturing plants, 8 lubricant blending plants, 1 gas-to-liquid (GTL) base oil storage hub (Hong Kong) and 1 lubricant-dedicated technology centre in greater China.
- Shell has made multi-million dollar investments in its Lubricants supply chain in Asia, particularly in China.
- Greases offer localised lubrication, particularly for bearings and joints, in industrial equipment and vehicles. Shell’s largest grease manufacturing plant globally was opened in January 2013 in Zhuhai, China. The plant produces 30,000 tonnes of Shell Gadus greases per year.
- In November 2013, Shell expanded and upgraded its lubricant blending plant in Zhapu. The facility can now blend up to 400 million litres of finished lubricants per year, double its original capacity.
- Base oil is the key component/ingredient in finished lubricants. Shell operates three Base Oil Manufacturing Plants (BOMPs) in the region in Japan, Singapore and South Korea. The Korean JV plant opened in late 2014. Shell caters to the China market base oil demand from our global network especially, those BOMPs in Asia.
Shell Shanghai Commercial Centre
- On 3 June 2015, Shell opened its China commercial centre in Shanghai today which sees the majority of its downstream businesses move to the country’s commercial hub.
- The businesses now operating from the new centre include lubricants, corporate sourcing, marine products, bitumen, sulphur and chemicals sales.
- Shell’s first training centre for Chinese distributors, Shell Shanghai University, also resides in the centre.
- Shell’s China corporate headquarters remains in Beijing.
Shell Shanghai Technology Centre
- In March 2014, Shell formally opened a new technology centre in Shanghai, China dedicated to research and development into lubricants and oils.
- The centre focuses on lubricant product development and application for China and the wider Asia region covering countries such as India, Indonesia, South Korea, Thailand and Vietnam.
- The research work in this 8,600 sq m, nine storey building covers a wide range of product applications including passenger car motor oils (PCMOs), motorcycle oils (MCOs), heavy duty engine oils (HDEOs), transmission fluids, as well as industrial and speciality oils and greases. It also cover oils for the shipping sector.
Finished lubricant consumption according to Kline & Company
- According to Kline & Company, China is the growth engine for the lubricants sector globally. China already represents about 46% of demand within the Asia Pac region, which is 43% of the total world demand.
- It is currently the second largest market, after the USA, but it is expected to soon become the largest market globally with 1/5 of world demand (2017-2018).
About Shell Lubricants
The term “Shell Lubricants” collectively refers to Shell Group companies engaged in the lubricants business. Shell sells a wide variety of lubricants to meet customer needs across a range of applications. These include consumer motoring, heavy-duty transport, mining, power generation and general engineering. Shell’s portfolio of lubricant brands includes Pennzoil, Quaker State, Shell Helix, Shell Rotella, Shell Tellus and Shell Rimula. We are active across the full lubricant supply chain.
We manufacture base oils in eight plants, blend base oils with additives to make lubricants in over 50 plants, distribute, market and sell lubricants in over 100 countries. We also provide technical and business support to customers. We offer lubricant-related services in addition to our product range.
These include: Shell LubeMatch –the market leading product on-line recommendation tool, Shell LubeAdvisor - helps customers to select the right lubricant through highly trained Shell technical staff as well as online tools, and Shell LubeAnalyst - an early warning system that enables customers to monitor the condition of their equipment and lubricant, helping to save money on maintenance and avoid potential lost business through equipment failure.
Shell’s world-class technology works to deliver value to our customers. Innovation, product application and technical collaboration are at the heart of Shell lubricants. We have leading lubricants research centres in China, Germany, Japan (in a joint venture with Showa Shell), and the USA.
We invest significantly in technology and work closely with our customers to develop innovative lubricants. We have a patent portfolio with 150 + patent series for lubricants, base oils and greases; more than 200 scientists and lubricants engineers dedicated to lubricants research and development. Customer benefits include lower maintenance costs, longer equipment life and reduced energy consumption.
One of the ways we push the boundaries of lubricant technology is by working closely with top motor racing teams such as Scuderia Ferrari.These technical partnerships enable us to expand our knowledge of lubrication science and transfer cutting-edge technology from the racetrack to our commercial products.
Royal Dutch Shell plc
Royal Dutch Shell plc is incorporated in England and Wales, has its headquarters in The Hague and is listed on the London, Amsterdam, and New York stock exchanges. Shell companies have operations in more than 70 countries and territories with businesses including oil and gas exploration and production; production and marketing of liquefied natural gas and gas to liquids; manufacturing, marketing and shipping of oil products and chemicals and renewable energy projects. For further information, visit www.shell.com
The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this presentation “Shell”, “Shell group” and “Royal Dutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to subsidiaries in general or to those who work for them.
These expressions are also used where no useful purpose is served by identifying the particular company or companies. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this presentation refer to companies in which Royal Dutch Shell either directly or indirectly has control. Companies over which Shell has joint control are generally referred to as “joint ventures” and companies over which Shell has significant influence but neither control nor joint control are referred to as “associates”.
The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.
This announcement contains forward looking statements concerning the financial condition, results of operations and businesses of Shell and the Shell Group. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements.
Forward-looking statements include, among other things, statements concerning the potential exposure of Shell and the Shell Group to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward looking statements are identified by their use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "goals", "intend", "may", "objectives", "outlook", "plan", "probably", "project", "risks", "seek", "should", "target", "will" and similar terms and phrases.
There are a number of factors that could affect the future operations of Shell and the Shell Group and could cause those results to differ materially from those expressed in the forward looking statements included in this announcement, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell's products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks;
(h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions;
(l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions.
All forward looking statements contained in this announcement are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward looking statements. Additional factors that may affect future results are contained in Shell's 20-F for the year ended 31 December 2014 (available at www.shell.com/investor and www.sec.gov ).
These factors also should be considered by the reader. Each forward looking statement speaks only as of the date of this announcement, 25 June 2015. Neither Shell nor any of its subsidiaries nor the Shell Group undertake any obligation to publicly update or revise any forward looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward looking statements contained in this announcement.