Nynas to take over Harburg base oil plant in Germany from Shell – 30% production capacity increase of specialty oils

12 December 2011 – STOCKHOLM – Nynas, one of the global technical leaders in specialty oils, announced today that the company has entered into an agreement with Shell to take over full control and responsibility for the Harburg base oil manufacturing plant and some associated refining facilities of the Harburg refinery in Hamburg, Germany.

The agreement is subject to European Commission regulatory clearances and other customary closing conditions.

The new production plant will be a core site for Nynas with an annual production of specialty oils by up to 330,000 tons. This represents a thirty percent increase in the company’s production of specialty oils. With the strategic take-over of the Harburg production facilities Nynas will grow with approximately 220 staff members over the next three years.

“This is an important step forward in Nynas’ strategy to grow. It will allow us to quickly meet the growing demand from our customers globally,” says Staffan Lennström, president of Nynas. “The Harburg refinery will continue to produce as today but will over the next 24 months be converted into a stand-alone specialty oil refinery. A new hydrogen unit and an extensive conversion programme will transform the premises into a world class stand-alone Naphthenic Specialty Products refinery”.

“This agreement will bring increased volumes of all products in our current specialty oils portfolio as well as new interesting products such as medical white oils,” says Per Dahlstedt, Vice President Naphthenics at Nynas.

The take-over is based on a 25-year lease agreement for the Harburg base oil manufacturing plant and some associated refining facilities. The take-over by Nynas comprises two phases.

In phase 1, after European Commission clearance, implementation and completion, the long-term lease agreement will come into effect. At this stage Nynas will take over operation of the base oil unit and associated refining facilities, i.e. bitumen assets, tank farms and jetties on the southern part. Approximately 90 people will be employed by Nynas from the start of phase 1.

In preparation for phase 2, a hydrogen production unit will be built and operated, by a third party supplier. Nynas will modify units for further speciality oils production on the northern part in cooperation with Shell.

In phase 2, around mid-2014, Nynas will start to operate the modified and now self-sustained and enhanced specialty oils refinery on the southern and northern part. At this stage, it is expected that approximately another 130 people will be employed by Nynas.

Nynas will not take over any customers, sales or marketing assets from Shell with this agreement.

Nynas is a global technical leader and developer of premium specialty oils. The company is well positioned to grow with the market, strengthen its current business lines and explore future opportunities for sustainable use of oil. During recent years, Nynas has opened sales offices and distribution terminals in fast growing markets such as China, South Korea, India, Russia and several countries in Latin America.

Today, Nynas is a leading partner in areas such as transformer oils for the world’s electrical networks. The company is also taking advantage of the rapidly increasing demand for environmentally sound oils for tyre production. In Western Europe, Nynas is one of the leading suppliers of bitumen for asphalt production.