Aster to explore new Singapore facility turning used motor oil into high-grade products
It could establish the city-state as an Asian hub for sustainable lubricants
[SINGAPORE] Aster Chemicals and Energy is looking into building a Singapore facility that converts used motor oil into high-grade base oils, the local refinery and petrochemicals player told The Business Times.
Aster on Friday (Apr 24) inked an agreement on the potential development with Puraglobe Germany, a specialist in making base oil from recycled raw materials, also known as re-refined base oil (RRBO).
Base oil is a key raw material for lubricants used in the transport and industrial sectors.
The RRBO facility in Singapore will be the first of its kind outside Germany for Puraglobe, and could establish the city-state as an Asian hub for sustainable lubricants.
Aster and Puraglobe will conduct joint feasibility studies to evaluate “technology integration, feedstock supply, site configuration and the full economics of bringing this capability to market”, said Aster’s deputy chief executive Andre Khor.
The two companies have been in talks since February 2025, said Dr Alois Virag, CEO of Puraglobe. In February this year, he visited Aster’s chemicals and energy complex on Pulau Bukom, which the latter bought from Shell last year.
The studies will be hosted at this complex, and the RRBO facility will tap Puraglobe’s proprietary technologies – HyLube and HyRes – to convert the waste oil into base oil of groups II, III or III+.
These grades of base oil have lower sulphur content and perform better under high temperatures for automotive applications than group I base oil.
Noting that there is only group I base oil on Pulau Bukom currently, Khor said the collaboration “will be an exciting opportunity for us to work together with a distinguished leader”.
Puraglobe first deployed these technologies commercially in 2004, and now works with major lubricant manufacturers. One of its partners is Shell, which in 2022 entered a 12-year agreement to source sustainable RRBO from Puraglobe.
Base oil is usually refined from crude oil, and in turn used to make lubricants for car and jet engines, wind turbines and many other industrial applications.
Singapore-based producers of base oil include Aster and ExxonMobil, which in December unveiled a new facility on Jurong Island to tap heavy residues from crude oil as a raw material.
“Underutilised” resource
The ongoing Middle East war has limited the supply of crude oil shipped into Asia, threatening regional refineries’ production of base oil. This could, however, raise demand for base oil produced from used motor oil and other sustainable alternatives.
Used motor oil is “underutilised and largely wasted across Asia”, both companies said in a press release on Friday. Khor noted that in South-east Asia, only around 10 per cent of such oil is collected and recycled whereas in Europe, that proportion is up to 60 per cent.
“What’s super exciting is (that there’s zero waste and this RRBO has 80 per cent fewer) emissions than virgin oil. So it’s zero-waste, more sustainable and, done properly, the feedstock cost can actually be even more competitive,” he added.
Aster intends to source motor oil from its networks in Indonesia and across its recently acquired Esso stations.
Said Khor: “We’ll... set up a contractual framework to start collecting and piece all this together to see what the right size of investment and footprint we want to deploy is.
“But for perspective, this is not a US$10 million or US$20 million investment. This is a few-hundred-million-dollar investment.”
Aster has been on a deal spree in Singapore. The company – a joint venture between Indonesia’s Chandra Asri and commodities giant Glencore – previously told BT that it had set aside US$2 billion for investments in Singapore.
Besides the Bukom refinery, Aster has purchased the Jurong Island assets of Shell and Chevron Phillips Singapore Chemicals. Last year, Chandra Asri inked a deal to buy ExxonMobil’s Esso-branded petrol kiosks in Singapore, reportedly for US$1 billion.
Aster is also looking into the production of sustainable aviation fuel in Singapore. It has an upcoming plant on Pulau Bukom with startup Aether Fuels, and is assessing the development of another on Jurong Island with asset manager Keppel.
With additional reporting by Mindy Tan
