Green improvements in oil refining

How are your recent investments driving growth for the company?
Our new base oil refinery has enabled us to expand our production from 15 tonnes per day to 65 tonnes per day. That’s almost three times more. We completed the construction in 2020, which was challenging due to the pandemic and had to be done remotely because the assembly team could not reach Kuwait. Thanks to our increased production capacity, we can now look at bigger markets and expect more frequent demand.
The second part of our business which we have invested in is the machinery on the lube-blending side. This was a gradual investment plan that has enabled us to increase the quantity and quality of the products that we are shipping to countries like Iraq, Saudi Arabia, Egypt, Jordan, Lebanon and Somalia.

How important are technical analyses to ensure the environmentally friendly nature of your operations?
The old refinery used clay to refine oil, which is now prohibited internationally. The new one is not using clay at all. It produces zero waste except for the water coming out of the used oil. Overall, water constitutes about 5% of the recycled oil we use to produce base oil.
We always test the used oil when we receive it, before going to the tanks. Water or sewage might have been added to the tanks containing the oil, and then it was brought here. We do have a lab here, so we test the used oil. We leave the tanks for an hour at least, just for things to stabilise inside, and then we test everything.
We can split, in that refinery, about 70% base oil, 5% wastewater, and about 15-20% residue. 10% is gas oil. KLOC reuses gas oil in its refinery for heaters and boilers. Everything is used, except for the water.

What effect is the increase in feedstock prices having on the business?
There’s a lot of pressure on us in terms of additives and other raw materials for lubes. Prices have gone crazy. Lithium is one of the materials that we use for our grease production, and it jumped from USD 14,000 to USD 90,000 per tonne because of the demand for lithium. In China, there is a demand for batteries because we’ve seen that the globe is now being covered with electric cars. We are still suffering from raw material prices not coming down.
That is why we focus more on the base oil business. There aren’t many additives needed in that process, except, of course, the cleaning and polishing agents that we use in the refinery. Base oils are also B2B, unlike lubricants. There is an increased demand for base oil in steel furnaces in India, for example.

How attractive is it to diversify your product portfolio?
The refining business is not only used for oil refining. I think there’s also a big demand for the distillation of diesel, as well as white spirits. However, the government is not giving much attention to this market. There should be more government support to expand the market globally.