Shell has announced the closure of its oil refinery in Wesseling, Germany, by 2025, with plans to convert the site into a facility for producing lubricant feedstock.

The move aligns with the company's strategy to reduce its carbon emissions and transition towards a net-zero emissions energy business by 2050.

The Wesseling site's hydrocracker unit will be repurposed to produce Group III base oils, which are primarily used in engines.

Crude oil processing at the Wesseling site, part of Shell's Energy and Chemicals Park Rheinland near Cologne, will cease in 2025.

The new lubricant feedstock facility in Wesseling is due to commence operations in the second half of this decade.

Shell expects the new production unit to have an annual capacity of approximately 300,000 tonnes a year, meeting around 9% of current EU demand and 40% of Germany's demand for base oils.

Shell downstream and renewables director Huibert Vigeveno said: “The repurposing of this European refinery is a significant step towards serving our growing lubricant customer base with premium base oils. This investment is part of Shell’s drive to create more value with less emissions.”

The company is also in the process of selling its refining and petrochemicals site in Singapore, reported Reuters.

The Shell Energy and Chemicals Park Rheinland, encompassing both the Wesseling and Godorf sites, currently processes more than 17 million tonnes (mt) of crude oil annually, with the Wesseling site contributing 7.5mt.

Operations will continue at the Godorf refinery.

Since 2020, Shell has divested five refineries, closed one, and converted another into a terminal in an effort to adapt its operations to a lower-carbon future.