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AFX News Limited: Shell China to build new lubricants blending plant to meet growing demand

06.22.07, 2:49 AM ET 
 
SINGAPORE (XFN-ASIA) – Royal Dutch Shell PLC subsidiary, Shell (China) Ltd, said it will build a lubricants blending plant in Zhuhai, Guangdong Province, which be the oil giant’s sixth such plant in China.

The plant, to be one of the three biggest lubricants blending plants for Shell worldwide, is expected to start operations in 2009 with an initial capacity of 200 mln liters annually, which will later increase to 400 mln.

No financial details were given.

David Pirret, executive vice president of Shell’s lubricants arm, said China is the fastest growing lubricant market in the world and is the firm’s second largest market outside of the US.

‘It is expected to grow 6 pct year-on-year until 2010,’ Pirret said at a media briefing.

‘By investing now in new world-scale production capacity, we are well positioned to meet the future needs of lubricant customers in this thriving region,’ he said.

Apart from the new plant in Zhuhai, Shell will also double the production capacity at its Tsing Yi lubricants blending plant in Hong Kong to 120 mln liters a year, and raise the capacity at its Tianjin and Zhapu plants in China by 20 pct within this year.

Over the next 12-18 months, Shell will also expand the production capacity of its grease manufacturing plants in Thailand, the Philippines and Singapore.

Shell said it currently has a 10 pct market share of Asia’s lubricant market of about 12 mln tonnes.

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