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Avista Becomes First Re-Refiner in the World to Produce Group III Oil Commercially

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BY LISA TOCCI • DECEMBER 7, 2016

Used oil rerefiner Avista Oil is making API Group III base oil at its plant in Peachtree City, Georgia, steadily ratcheting it up to about a quarter of its total base oil capacity now and laying plans to double that in 2017.

This makes it the first rerefiner in the world to produce Group III commercially, as well as the sole U.S. producer of Group III on an ongoing basis, according to Lubes’n’Greases magazine’s “Guide to Global Base Oil Refining.”

Juan Fritschy, CEO of Avista Oil Refining and Trading USA, on Friday told Lube Report that the plant near Atlanta is punctuating production of its Group II and II+ stocks with regular batches of Group III.

Speaking on the sidelines of the ICIS Pan American Base Oils and Lubricants Conference in Jersey City, New Jersey, Fritschy said that Group III volumes now account for roughly one-quarter of the facility’s production. Peachtree City produces around 80,000 metric tons per year of base oil, he added.

According to Fritschy, a handful of U.S. buyers have snapped up all of its Group III barrels. So although Avista recently began posting U.S. base oil prices for its Group II and II+, the company isn’t ready to post this new material “because we essentially are sold out of the entire supply.” That ready acceptance, though, has encouraged Avista to further boost the Group III share of its output.

To achieve Group III quality without changing the plant’s overall capacity, which is 1,700 barrels per day, Avista Oil staff spent two years adjusting all the steps of its used oil collection and rerefining process. “Our first milestone was to have the capacity to produce Group II+ without yield loss and without extra operational cost,” Fritschy said. “This milestone was achieved in the second quarter of this year, and we can now produce up to 100 percent of our production [as Group II+] if we think this is the best economical decision. “Our second milestone,” he continued, “was to obtain 10 percent of our production (about 8,000 tons) as Group III quality.” That happened in the third quarter of this year.

“We are now working on gradually increasing Group III production,” he said. “Depending on market conditions and on what our customers require, our next milestone is to convert 50 percent of our production to Group III quality. We expect this achieve this milestone in 2017. Our ultimate goal is to have a cost effective and flexible process that adapts to the demand for different qualities of base oil.”

Asked if Avista is indeed the sole U.S. Group III producer, Fritschy demurred and said others may be quietly moving in that direction. “We heard that at least one refiner may be considering putting its already able equipment into Group III production, but we are not sure for certain.”

Technically speaking, up until now the United States had no capacity dedicated to making Group III, Stephen B. Ames of SBA Consulting (http://directory.lubesngreases.com/search/?mode=simple&query=sba+consulting&submit=Search%20) indicated in a presentation to last week’s ICIS Pan American Base Oils conference. Petro-Canada, with 4,000 daily Group III barrels in Mississauga, Canada, was North America’s only native producer.

Meanwhile, U.S. rerefined base oil capacity surged over the past decade, and by Ames’s count there are 10 paraffinic base oil rerefineries now operating in North America, with a combined 890,000 tons per year of overwhelmingly Group II capacity. Together they hold almost 8 percent of the continent’s paraffinic base oil capacity and 10 percent of the Group II, he pointed out.
Avista may be first out of the gate, but is not the only rerefiner with Group III ambitions. Wayne, Pennsylvania-headquartered Puraglobe, which operates a 2,000 barrel a day rerefinery with twin units in Troeglitz, Germany, is installing a UOP-Honeywell process to upgrade half of its output there to Group III. Deliveries are planned for spring 2017.

Puraglobe also is steering a scheme to make Group III in Tampa, Florida, in partnership with rerefiner NexLube Tampa. Originally slated to make 1,300 b/d of Group II base oils, that plant’s final construction phase was stymied by financial woes until Puraglobe stepped in as an investor.

In September, Puraglobe said it would use UOP HyLube technology to make somewhere between 1,040 and 1,170 b/d of Group III at the Tampa rerefinery, which now is targeted for completion by the end of 2018.

On Dec. 5, Chemical Engineering Partners and Gulf Solvents announced signing of a contract to build a 155,000 metric tons per year rerefinery in Hail City, Saudi Arabia, to produce Group II/II+ and III base oils (see related story in this week’s Lube Report). In addition to base oils, Avista’s Peachtree City plant produces fuel and flux for bitumen and asphalt. Avista opened it in 2013, after first assembling a large used oil collection network to feed it. Avista Oil in 2011 had acquired a 50 percent stake in Universal Environmental Services, the facility’s originator, and subsequently increased it to 100 percent.

Parent company Avista Oil AG, based in Uetze, Germany, operates two Group I rerefineries in Europe: in Kalundborg, Denmark, with 800 b/d of base oil capacity, and Dollbergen, Germany, with 2,300 b/d.

Avista Eyes Another NA Rerefinery

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By George Gill

Avista Oil Group plans to partner with a used oil collector to build a second rerefinery in North America, in addition to one under construction in Georgia by its Universal Environmental Services subsidiary.

“We are talking to potential partners,” Universal Environmental Services CEO Juan Fritschy told Lube Report. “These are collectors who have enough volume or enough critical mass in used oil for us to grow them.”

Uetze, Germany-based Avista owns 86 percent of UES, which is constructing a base oil rerefinery in Peachtree City, Ga., that is expected to process 30 million gallons of waste oil per year. The rerefinery is projected to have nearly 1,300 barrels per day of total API Group I and II rerefined base oil production capacity, Fritschy said. Mechanical completion is expected to be completed by December 2012, and the plant is expected to be fully operational by the second quarter of 2013.

He emphasized the second rerefinery would not be close to the Peachtree City location. “We are not going to compete with ourselves,” he said. “It needs to be 500 miles away from Peachtree City at least.”

Logistics were a big part of Peachtree City’s appeal, according to Fritschy. Other factors included having a rail spur on the site, and ready access by highway to ports in Savannah, Ga., and Mobile, Ala.

Fritschy explained that when Avista studied the U.S. market in 2009 and 2010, it was looking for many different potential targets. Fritschy noted that the Avista Group does not build a rerefinery if the collection of used oil is not guaranteed and under control.

“The main criteria was that they have to have at least enough collection – maybe not as big as what we need for a rerefinery – but enough collection that will give us enough time, while we’re building a rerefinery, to get to the volume we need for it,” he said.

In 2011, Avista initially acquired a 50 percent stake in UES, enabling it to grow its used oil collection business and plan the base oil rerefinery in Peachtree City. Later that year, UES also acquired the McPherson Oil Cos.’ used oil collection business.

Avista has two rerefineries in Europe. Mineralol-Raffinerie Dollbergen GmbH in Dollbergen, Germany, has 3,300 b/d of Group I capacity, and Dansk Olie Genbrug A/S in Kahlundborg, Denmark, has 800 b/d of Group I capacity.

Re-refiner Avista Oil Acquires Majority Holding in Dutch Refining Re-refinery

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AVISTA OIL AG, one of the leading European used oil recycling enterprises, or “upcycling” (defined as using every aspect of waste as value) enterprises, has increased its holding in the Dutch North Refining and Trading N.V., Delfzijl re-refinery from 42% to a majority holding. Following the takeover of the shares of the co-shareholder Dusseldorp Holding Inzameling en Recycling B.V., in May of this year, the group took over another 33% from the Dutch van Gansewinkel Groep. As of August 20, 2012, AVISTA OIL holds a majority holding of about 75% in the Dutch re-refining market leader.

“This is a great investment for us, and we are convinced that it will continue to be a great one in the future for all the parties involved“, Bernd Merle, the CEO of AVISTA OIL AG stated. “Our majority holding in North Refinery is another milestone within our international growth strategy and will strengthen not only our strong organic growth but also our market position in Europe.”

North Refinery has vast facilities for accepting used oils for the production of lube distillates, the precursor of the AVISTA OIL Kernsolvat® base oil, and for their recycling to flux oils. Oil-water composites from shipping are accepted and recycled. The annual capacity of North Refinery for the processing of products containing oil into new raw materials and energy components is approximately 200,000 tons.

“AVISTA OIL expects an increase in quality and capacity with North Refinery in the next few years, due to investments. The Delfzijl site of North Refinery offers optimum opportunities for expanding the production of base oils“, Merle says.

With North Refinery, AVISTA OIL now has another logistically convenient North Sea location, thus connecting the oil upcycling refineries of Dansk Olie Genbrug in Denmark and the Dollbergen mineral oil refinery, Germany, which are already part of the Group, to form an efficient logistic upcycling triangle, which also provides for the further improvement of the connection to the American AVISTA OIL upcycling refinery in Peachtree City, Georgia.

With this acquisition, AVISTA OIL was successful in significantly increasing its influence and control in the North Refinery company.

“With the inclusion of North Refinery in AVISTA OIL we can achieve a considerable benefit for our customers and suppliers by enlarging our portfolio, apart from acquiring growth potentials. Thanks to the excellent location of North Refinery by the North Sea, the logistics of the whole group will be optimized, which will enable us to react more flexibly to the requests of our customers and suppliers”, Marc Verfürth, Head of Logistics, says.

Johannes Bos, the managing director of North Refinery, expects continuous growth through AVISTA OIL’s expansion of its holding: “I expect a growth for the company due to the synergies which have now become realisable. With North Refinery we now not only have an easily accessible site but also a large processing capacity within the industry, which is sustainably improved by the market and production experience of AVISTA OIL. The already pursued path towards compliance will be continued without any restrictions, so that, together with AVISTA OIL, we will be best positioned for the future.”

AVISTA OIL, founded in 1951, has experienced continuous profitable growth, and serves its customers along the entire value chain: from collection and services in relation to used oil to upcycling and to the international marketing and distribution of high-quality lubricants and coupled products. With its environment-friendly AVIeco cycle concept AVISTA OIL offers comprehensive solutions for the resource-sparing supply and disposal of lubricants. Under the umbrella of AVISTA OIL AG, a range of subsidiaries and associate companies are bundled which cover the whole range of functions from collection & logistics, recycling and the production of lubricants, as well as international distribution. AVISTA OIL has a workforce of approximately 550 employees at four refinery sites and further sites in Europe and the US.

The North Refinery, which was founded in 2001, processes an annual of 200,000 tons of oil containing products into new raw materials and energy components. North Refinery is active in the European market with a team of 55 employees.

Universal Environmental Services Closes Financing for the Construction of a Used Oil Re-refinery in Peachtree City, Georgia

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Peachtree City, GA – Universal Environmental Services, LLC (“UES”) believes in a brighter energy future for the used oil industry and the region. UES has signed definitive documentation and closed on a financing commitment of up to $52 million for the engineering, construction and commissioning of a used oil re-refinery in Peachtree City, GA. Together with the capital from its recently announced joint venture with AVISTA OIL AG (“AVISTA”), the financing will be sufficient to complete the company’s planned state-of-the-art re-refinery with an input capacity of 30 Million gallons by the first quarter of 2013. UES will service its customers with the highest possible quality products, while preserving natural resources and the environment.

UES and its project partner, Mineralöl-Raffinerie Dollbergen GmbH (“MRD”), member of the AVISTA OIL Group, have completed basic engineering and will finalize detailed engineering by October 2011. Site preparation will begin immediately, with construction to begin in early November 2011. The company has been granted local permits and licenses for the construction on the premises of its 10 acre Peachtree City facility.

MRD maintains an engineering department that is experienced in the design of industrial facilities for the environmental sector. The same group of engineers that engineered, built, and commissioned the MRD and DOG (Dansk Olie Genbrug A/S – AVISTA’s state of the art used oil re-refinery in Denmark) re-refineries will be in charge of the Peachtree City project. The new re-refinery will include, among other supplementary facilities, MRD’s patented Enhanced Selective Refining technology to produce high-quality base oils. The quality of these base oils are superior to the quality of base oils produced out of crude oils in many properties, including Viscosity Index, PAH, and Noack Volatility.

“We are extremely pleased to have the financing behind us so that we can get to the important work of building our re-refinery and servicing our used oil customers,” said CEO Juan Fritschy. “We are confident that our partners at AVISTA, MRD, and all subcontractors involved will help us successfully engineer and deploy a state-of-the-art re-refinery right here in Georgia. In the meantime, our customers can continue to expect the highest quality of service and attention from our expert staff. As a reliable partner, we will service our customers until the re-refinery is built, and offer them convenient alternative solutions once the expanded facility is operational”. Mr. Fritschy continued: “Our aim is to preserve the environment and a valuable resource -base oil-, from being otherwise lost to “energy recovery”. This project will also create new jobs in the Peachtree City community. The time has come to think green, and that’s what UES is doing. We will keep the public updated on this project that’s both exciting and valuable to our region and our country.”

About Universal Environmental Services
Headquartered in Peachtree City, GA, Universal Environmental Services is the southeastern United States’ leading collector and processor of used oil from car dealerships, service stations and other industrial customers. With a fleet of 65 trucks, 4 processing plants and 7 satellite facilities, a storage capacity of 1.6M gallons of used oil and a 2.2M gallon tank at the port of Savannah, UES has the capability to collect and process used lubricants all the way from northern Florida to Ohio.

Contact details:
Mr. Juan Fritschy, CEO
411 Dividend Drive
Peachtree City, GA 30269
Direct: (770) 357 0183
E-mail: jfritschy@universalenviro.com

About AVISTA OIL Group
The AVISTA OIL Group is Europe’s leading Used Oil Recycling Company. With a successful closed loop business, Avista is the owner of a patented leading-edge re-refining technology, and operates two used oil re-refineries in Europe: Dansk Olie Genbrug A/S (“DOG”) located in Kalundborg, Denmark, and MRD that is located in Dollbergen, Germany. AVISTA brings in more than 60 years of operational experience to UES, with a value chain of collecting and re-refining used oils and oily liquids, and producing high-quality base oils and lubricants. Compared to producing base oils out of virgin oil, re-refining used oils with AVISTA’s technology produces 30% less CO2 emissions. Just recently, AVISTA introduced its green lubricant line, “AVIeco”, to serve environmentally conscious users. The product launch of “AVIeco” in neighboring countries is also planned.

Contact details:
Mr. Bernd Merle, CEO & Chairman of the Board
Bahnhofstr. 82
31311 Uetze-Dollbergen, Germany
Direct: +49 (5177) 85600
E-mail: bernd.merle@avista-oil.com