AVISTA OIL Refining and Trading, USA

Avista Eyes Another NA Re-Refinery

By George Gill – September 26, 2012

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.