Post by
AndreasG on Apr 15, 2021 12:32pm
Re-Defining the Re-Refining Business
" Gen III (GIII-CN, not covered) is building the next used motor oil (UMO) re-refinement business where it hopes to capitalize on a supply shortage and growing demand of premium Group III/II+ base oils in North America.
With an abundant supply of low value feedstock, Gen III, and its patent ReGenTMprocess that recycles used oil into feedstock for synthetic-grade motor oil (Group III base oil) is positioned to disrupt a well-established refining market.
Subject to project financing, the Company is building a modular facility on a brownfield site in Alberta with processing capacity of 2,800 b/d. Earlier in 2021, the Company announced the first draft of a definitive agreement with a super-major (SM) for the offtake of all of its Group III base oil production from a proposed 5,600 b/d re-refining facility in the US Gulf Coast.
This was promptly followed by an announcement on March 29 that it has engaged Koch Project Solutions, LLC (KPS) to provide project execution management services for its USGC facility.
We believe the combination of these events serve as a major milestone for Gen III as it further supports the validation of its ReGenTMprocess and puts the Company on a path to reach a positive final investment decision in 2021.
Additionally, finalizing an agreement with the offtaker will provide the opportunity to leverage the SM’s extensive motor oil and lubricant business, with the potential to become the in-house brand of high-quality Group III base oils for the entity.In addition, the process of collecting and re-refining UMO reduces greenhouse gas emissions when compared to burning used oil in industrialuses.
In doing so, Gen III’s ReGenTMtechnology has environmental benefits with broad stakeholder appeal(Good for business and good for the environment; a win-win, in our view ). "