Petronas says it will defer base oil plant upgrade in Melaka

Petronas Penapisan (Melaka) Sdn Bhd, a wholly-owned subsidiary of Petronas, said it will defer the proposed retrofitting project at its lube base oil plant in Malacca, which would have boosted the plant’s base oil production capacity by 15%.
Petronas said the decision took into account the current uncertain market outlook for base oil, as well as project costs.
“All projects in Petronas undergoes a strict stage-gating process in which the final investment decision where costs, market outlook and all related factors that impact project economics and execution are diligently considered,” the company said.
The plant, which began commercial operations in 2008, produces approximately 270,000 tons per year of mostly Group III base oil.
Petronas gave no new timetable for carrying out the upgrade. Recently, two mega-GTL base oil projects have been announced in the U.S. Gulf Coast, which would benefit from cheaper natural gas feedstock.