Lube-Tech PUBLISHED BY LUBE: THE EUROPEAN LUBRICANTS INDUSTRY MAGAZINE
Grassroots 165,000 MTA Re-refinery Internal Rate of Return at Various Feed & Base Oil Prices
References: 1. L.M. Magnabosco, M. Falconer & K. Padmanabhan, "The Mohawk/CEP Process", Proceedings of Sixth International Conference on Used Oil, Recovery and Reuse Re-refining Rebirth. Association of Petroleum Re-refiners, San Francisco, California, May 28-31, 1991.
2. L.M. Magnabosco, "Progress in Mohawk/CEP Technology: Reduction in Catalyst Deactivation", Seventh International Conference on Used Oil, Recovery and Reuse. Association of Petroleum Re-refiners, Chicago, Illinois, September 27- October 1, 1992.
3. L. M. Magnabosco, "High Quality Lube Base Stock from Waste Lube Oil Streams via the Mohawk-CEP Process", Presented at the First International Oil, Gas and Petrochemical Congress. Isfahan, Iran, September, 1993.
Again, as with the capital cost vs capacity, the rate of return is much greater for a bigger plant. The return for a 165,000 metric ton per year (MTA) plant at $422 (USD) feed and $1,265 (USD) base oil is about 90% while it is about 45% for the 40,000 MTA plant for the same used oil and the base oil prices. The labour cost is one of the major factors in the operating costs. However, the labour cost does not increase for a higher capacity plant since it takes the same number of people to operate a plant whether it is a 40,000 MTA or 165,000 MTA plant. This is unique for a small re-refinery as compared to larger virgin oil plants. That’s the main reason why the rate of return for a higher capacity plant is greater. Therefore, it is recommended to maximise the capacity of the plant as long as the volume of the feedstock collection allows. However, whether it is a 40,000 MTA or 165,000 MTA plant, the rate of return for a CEP technology re-refinery is very attractive in today’s market. Other factors in the operating cost include utilities such as electricity, natural gas, cooling water, hydrogen and catalysts.
In conclusion, the lube base oil derived from drain oil is a very important resource that should not be wasted by being burned as fuel. Using the best technology available such as CEP’s re- refining process, it can be regenerated into the quality that is equal to or better than virgin base oil refined from crude oil. With process advancements made by CEP, the re-refining process is not only a very efficient and reliable way to recover one of the most important natural resources, but also provides a very attractive business opportunity.
4. L.M. Magnabosco and W.A. Rondeau, "Improved Process for the Production of Base Stock Oils from Used Oil", European Patent EP0574272, (1993).
Joshua H. Park(a) and Louis M. Magnabosco(b)
a) Chemical Engineering Partners (CEP), 2415 Campus Drive, Suite 225, Irvine, CA 92612
b) MAGNA Associates, 22365 El Toro Road, Suite 277, Lake Forest, CA 92630
LINK
www.ceptechnology.com
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LUBE MAGAZINE No.111 OCTOBER 2012
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