Vertex Energy, Inc. announced a significant expansion of its Mobile, Alabama refinery that will add 6,000 barrels per day of conventional Group III base oils. The new capacity will be generated from the refinery’s existing hydrocracker and a newly‑procured high‑pressure lubricants hydrotreating unit, allowing the company to tap its crude‑derived hydrocracked vacuum gas oil stream for the production of 4 cSt, 6 cSt and 8 cSt oils. By coupling this conventional output with its current re‑refined base‑oil program, Vertex aims to give U.S. lubricant manufacturers a reliable domestic source of high‑quality Group III oils and to cement its position as the leading Group III producer in North America. The project reflects Vertex’s broader strategy of leveraging its integrated used‑motor‑oil (UMO) collection network and existing fuel‑production assets to diversify revenue streams and improve margin stability.
Vertex Energy Expands Group III Production
The expansion will convert the refinery’s crude‑derived hydrocracked vacuum gas oil stream into three conventional Group III base‑oil grades—4 cSt, 6 cSt and 8 cSt. Preliminary design work is complete, and the high‑pressure lubricants hydrotreating unit has already been procured, positioning the project for a 2029 startup. CEO Mark Smith emphasized that the investment “reflects a major milestone in our continued focus on improved profitability and margin stabilization,” noting that the existing hydrocracker provides “a compelling pathway to supply the conventional Group III market and support customers seeking reliable domestic supply.” In addition to the new conventional oils, Vertex will continue producing transportation fuels and its existing 4 cSt and 6 cSt re‑refined Group III base oils, maintaining a diversified product slate that serves both fuel and lubricant markets.
Mobile Refinery Infrastructure Enables New Capability
The Mobile facility’s current hydrocracker and associated processing equipment form the backbone of the expansion, eliminating the need for a stand‑alone plant and reducing capital intensity. By integrating the newly acquired hydrotreating unit with the hydrocracked vacuum gas oil stream, Vertex can add the 6,000 bpd capacity while preserving its established fuel‑production schedule. The refinery’s integrated UMO collection network across the southern United States supplies the feedstock for both re‑refining operations and the new conventional output, ensuring a steady, domestically sourced raw material base. This infrastructure synergy supports Vertex’s goal of delivering consistent product quality for high‑performance automotive and industrial lubricant applications.
Timeline and Expected Market Position
Production of the conventional Group III base oils is slated to begin in 2029. Once online, the combined conventional and re‑refined capacity is expected to make Vertex the leading Group III base‑oil producer in North America. The announcement did not disclose detailed capital spending, financing arrangements, or downstream off‑take agreements. Information on regulatory permitting status and specific supply contracts with lubricant manufacturers was also not provided, leaving some uncertainty around the path to market.
Key Takeaways
- Vertex will add 6,000 bpd of conventional Group III base oil capacity at its Mobile, Alabama refinery, targeting 4 cSt, 6 cSt and 8 cSt products.
- Production is planned to start in 2029, using an existing hydrocracker and a newly procured high‑pressure lubricants hydrotreating unit.
- Combined with its current re‑refined output, Vertex expects to become the leading Group III base oil producer in North America.
EnergyInsyte's Take
The expansion gives U.S. lubricant makers a new domestic source of conventional Group III oils, potentially reducing reliance on imports. Executives should monitor the 2029 startup timeline, any permitting milestones, and whether Vertex secures off‑take agreements that could affect regional supply dynamics.
Source: Businesswire
