The Manali Refinery of the Chennai Petroleum Corporation Limited (CPCL) has begun work to establish a plant to produce base stocks for Group II and Group III lubricants.

The lube oil base stock (LOBS) unit is coming up at a cost of ₹1,600 crore. On completion, it will be able to supply the base for Indian Oil Corporation Ltd.’s lube plant at Manali, CPCL Managing Director H. Shankar told The Hindu.

CPCL is the only refinery in the country that produces fuels, LOBS, and paraffin wax. “We supply base oil for Group I lubes, which are used in automobiles and other machinery. Group II and III lubes are specialised variants and can be used in high performance engines and automatic transmission fluids. They can withstand higher temperatures and have higher viscosity. The premium Group II and III LOBS also have reduced sulphur content, meaning they are cleaner than other lubes,” he said.

While the demand for Group I lubes oil base is expected to continue, there is a growing demand for Group II/III base oils in the country. “We import a large quantity of the Group II LOBS and the demand is expected to grow further. In such a situation, CPCL is setting up this project to produce LOBS. We will help reduce the country’s dependence on imports,” Mr. Shankar added.

The project also aims to revamp the existing Once- Through Hydrocracker Unit to increase the capacity and install a new Catalytic Dewaxing Unit with a design capacity of 270000 tonnes per annum.

The new units will process Vacuum Gas Oil-derived Unconverted Oil streams from the refinery to produce high-value lube base stocks. On implementation of the project, CPCL will be able to produce about 2,42,000 tonnes per annum of Group II and III LOBS.

The project also aligns with the company’s broader strategy of value addition, product diversification and enhancement of refinery margins through production of speciality petroleum products. The unit is coming up on a 7,000 sq. mt. piece of land inside the Manali refinery complex and no additional land will be required for it. A green belt will also be developed around it.