Oil and gas major BP has revealed its plans to invest RMB1.5bn ($230m) in a new lubricants blending plant in China to address the country’s fast growing demand for lubricants.

The new lubricants plant, which will come up in the Binhai New Area, Tianjin, will be the third such plant in China for BP. It will be the single largest blending plant investment made by the company globally.

Slated to begin operation before the end of 2021, the new lubricants plant will have a production capacity of 200,000 tons per year.

It will be located in the Tianjin Economic-Technological Development Area (TEDA) and will produce premium lubricant products for customers across north China.

BP Downstream CEO Tufan Erginbilgic said: “Premium lubricants are a growth business for BP and ensuring that we can meet demand in a country growing as quickly as China is essential to our success.

“This third lubricants blending plant demonstrates our commitment to strengthening our competitiveness and building a sustainable lubricants supply chain in China.”

The new plant is expected to act as a strategic production hub for the lubricants business of BP and Castrol in China. Apart from that, it is also anticipated to complement the two lubricants blending plants of BP that have been operating in the country.

BP Lubricants China and North Asia supply chain director William Sun said: “Strategically located in TEDA, this new plant will leverage Tianjin’s competitive advantage as transportation hub, helping us ensure a stable supply of raw materials and smooth distribution of products.”

To be built on an area of over 150,000m2, the plant will be designed to produce premium lubricants and greases for automobiles, industrial, marine, and aviation customers.

It will also produce special lubricants and additives, with specific focus on synthetic products which provide higher engine protection and performance than conventional oils.

BP-Castrol established its first lubricants blending plant in 1998 in Shenzhen, Guangdong and seven years later, came up with a second plant in Taicang, Jiangsu.

Castrol, which is an industrial and automotive lubricant brand, was acquired by BP for $4.7bn in 2000.