Shell intends to commence the production of lubricants and motor oil at a plant in the town of Torzhok, Tver region. The plant’s director Inna Lobanova confirmed that production is planned to start at the end of 2010.

The plant will be processing over 180 thousand metric tons of lubricants annually. The Torzhok plant will be among the largest lubricant facilities that Shell operates worldwide and the largest non-state-owned lubricant refinery in Russia.

More than a fifth of Russia’s imports of lubricants come from Shell. Domestic production will contribute to the reduction of added product costs associated with importing.

According to Inna Lobanova, the new plant will market its products under Shell’s brand name. Lubricants for passenger cars will go under the Shell Helix brand, while lubricants for big vehicles will be sold under the Shell Rimula name. Overall, more than 90 different products will be produced at the plant. The plant will also process large special orders of lubricants for particular industrial consumers. The plant may even sell the products abroad to other C.I.S. countries.

With the construction of the new plant Shell’s position on the Russian lubricant market will be strengthened, exceeding the 5-percent total market share. In the years past, the performance of Shell’s lubricants in Russia has always been good. Last year, the product line experienced a 6-percent growth.

Full production capacity at the plant is anticipated to become available within 2 years of the opening date. For now, it is yet unknown who the suppliers of oil to the new facility will be.   

The costs of the project have been estimated at USD 100 million, according to Chris Finlayson, head of Shell’s representative office in Russia.

Shell’s belief is that Russia’s demand for petroleum products will be on the rise in the coming years in spite of the economic downturn. During his address at the ceremony marking the start of the plant’s construction, Mr. Finlayson noted that Shell has high hopes for the economy of Russia.