Shell Deutschland, a subsidiary of Royal Dutch Shell, has made a final investment decision (FID) to repurpose its German oil refinery in Wesseling to produce Group III base oils.

As part of the initiative, the company will convert the hydrocracker of the Wesseling site located within the Energy and Chemicals Park Rheinland into a base oil production facility. The project will be funded by Shell’s chemicals and products division.

The Energy and Chemicals Park Rheinland built near Cologne is made up of two sites, Wesseling and Godorf.

According to Shell, processing of crude oil will cease at the Wesseling site by next year. However, it will be continued at the Godorf site and the supply of fuel for the German market are expected to stay stable and secure, said the company.

Currently, the Energy and Chemicals Park Rheinland can process more than 17 million tonnes of crude oil annually. Of this, the Wesseling site has been processing 7.5 million tonnes.

The new base oil production unit is anticipated to commence operations in the latter half of this decade. Estimated to have a production capacity of approximately 300,000 tonnes per year, the facility is poised to meet about 9% of the present demand in the European Union (EU) and 40% of Germany’s requirements for base oils.

Group III base oils are essential components in the production of high-quality lubricants like engine and transmission oils.

Characterised by a very high viscosity index, Group III base oils are produced using hydrocracking technology. The market for premium engine and transmission oils, as well as e-fluids and cooling fluids derived from these base oils, is expected to experience growth, said the company.

Shell downstream and renewables director Huibert Vigeveno said: “The repurposing of this European refinery is a significant step towards serving our growing lubricant customer base with premium base oils. This investment is part of Shell’s drive to create more value with less emissions.”

The company believes that significant electrification of the base oil plant, coupled with the shutting down of crude oil processing for fuels at the Wesseling site, is projected to reduce its scope 1 and 2 carbon emissions by approximately 620,000 tonnes annually.

Shell’s goal is to achieve net-zero emissions as an energy business by 2050.