China: Lubrication Grade Oils Adnoc Signs Long Term Contract for Sale of Base Oil
Under the terms of the contract, Adnoc will sell its high-quality base oil, AD base to Xiamen Sinolook Oil Co. in China. The demand for base oils across China increased by 6.4 % last year and is expected to grow by more than 6 % this year.
Abu Dhabi/UAE – The Abu Dhabi National Oil Company (Adnoc) has recently announced that it has concluded a significant long-term sales agreement with the Xiamen Sinolook Oil Co., of China, for its high-quality base oil, AD base.
In line with Adnoc’s strategy to maximise value from its downstream refining and petrochemical operations, Adnoc Refining, an Adnoc subsidiary, produces up to 500,000 metric tonnes per year of Group III base oil, at its Ruwais refining and petrochemicals complex. Group III base oils are typically used to manufacture top-tier, high-performance engine oils. The company also produces around 100,000 metric tonnes per year of Group II base oil.
Ahmad Bin Thalith, Acting Senior Vice President of Refined Products Sales, in Adnoc’s Marketing, Supply and Trading Directorate, said: “The signing of this important sales agreement, with a major base oil consumer and distributor in a large and growing market, marks another significant milestone for AD base. This agreement once again underlines Adnoc’s commitment to delivering the highest-quality products and service, while achieving the best commercial value through innovative and competitive marketing strategies, expansion of our client base and penetration of new markets.”
Established in 2011, Xiamen Sinolook Oil Co. is one of China’s biggest importers and distributors of base oils, with a 5 per cent share of the 7.17 million tonnes per annum market. In 2018, demand for base oils across China increased by 6.4 per cent and is forecast to grow by more than 6 per cent in 2019.
Qingchun Lin, General Manager, Xiamen Sinolook Oil Co. Ltd., said: “We have been importing Group III base oils produced by Adnoc since 2016, and we have more than 300 end-user customers throughout China. We have great confidence in the quality and reliability of Adnoc’s base oil products and believe that AD base can help meet the growing demand of the Chinese market for high-quality Group III base oils.”
The signing of this agreement follows the signings in 2017 and 2018 of agreements with Penthol C.V. and Chemlube for the supply of AD base into the United States of America and Europe.