Synthetic Base Stocks

POAs are produced by a fairly small number of manufacturers, with global capacity at around 730,000 metric tons per year. The largest producers include ExxonMobil, which has capacity of 301 000 t/y, Ineos Oligomers with 355,000 t/y and Chevron Phillips Chemical with 43,000 t/y.

Growth is occurring in regions such as China where independent refiners and joint ventures have begun developing PAO facilities. China National Offshore Oil Corp. in partnership with Shell, licensed Neste technology to build a PAO plant in Huizhou City. That site also added capacity for linear alpha olefin production and will expand capacity further by 2028.

China accounts for development of mostly high‑viscosity PAOs used in gear oils and industrial lubricants. PetroChina’s Lanzhou facility is reported to be the first low‑viscosity PAO plant in the country, producing products with performance metrics comparable to imported grades in terms of viscosity index, pour point, flash point and low‑temperature dynamic viscosity. Despite that development PAO remains a small segment of global base stock production at less than 1% according to industry sources.

PAO base oils maintain advantages under low temperature and high shear conditions where mineral oils may not deliver equivalent film strength or cold‑start protection in automotive applications. The molecular consistency of PAO gives it uniform behavior that aids in performance predictability. The fluids do not require dewaxing during manufacture since their structure resists wax crystallization. Earlier low-viscosity PAOs exhibited moderate viscosity index values but modern grades made with metallocene catalysts offer improved oxidative performance and pour point resistance.

Cost remains a limiting factor. PAOs are more expensive than Group III and much more costly than mineral oil grades. Adoption depends on whether formulators receive price premiums for performance or emissions reduction benefits. PAO production is more complex and feedstock competition exists since linear alpha olefins are also used in detergent manufacturing. This limits global capacity growth and confines production to firms with olefin polymerization expertise.

Despite price pressure, synthetic demand remains in applications such as wind turbine gear oils hydraulic fluids industrial compressors and specialty automotive lubricants. PAO fluid use in these sectors continues to support long term viability for this product class while maintaining a niche position. Growth prospects are tied to industrial expansion regulatory demands for high-performance and energy-efficiency trends globally.

Group V Synthetic Base Stocks

Other types of synthetic base stocks are classified as Group V and include synthetic esters, polyalkylene glycols, polyisobutenes and silicones.

The synthetic base oil market is niche. Demand for ester base stocks is growing in sectors where biodegradability or nonflammable characteristics are prioritized. In 2019 esters accounted for more than two‑thirds of base stocks used for biobased lubricants. Volume remains small but grows mostly in environmentally regulated sectors. Ester technology is evolving to address previous limitations such as hydrolytic instability through molecular design that enhances stability and performance.

Emerging ester chemistries offer new functional benefits. VBASE Oil Company has developed secondary polyol ester base oils that retain biodegradability while improving deposit control friction reduction and thermal stability. These products span ISO viscosity grades 32 to 460 and provide hydrolytic resistance superior to traditional esters due to their ester and ether bond architecture and branched backbone. Other fluid innovations include estolides produced by Biosynthetic Technologies derived from castor and soy that deliver oxidative and wear performance comparable to petroleum base oils.

PAGs continue to be used mainly in industrial applications where their polarity and lubricity excel in extreme environments. Dow Chemical’s Ucon fluids are widely used in compressors and refrigeration systems. Dow operates multiple PAG plants including Tarragona Spain Freeport Texas South Charleston West Virginia and a joint venture in Malaysia. Combined output reaches nearly 246,000 tons annually. PAG demand persists in industrial markets especially in India China Europe and North America where compressor warranties or low temperature operations drive performance requirements.

Cost and compatibility remain challenges. Esters typically cost more than Group III or PAO base oils. PAGs are incompatible with many seal materials and cannot be blended easily with mineral or other synthetic oils which limits application flexibility. Ester hydrolysis may cause acid formation seal corrosion sludge or varnish if not formulated correctly.

Applications where synthetic base stocks dominate include aerospace gear oils metalworking fluids environmentally acceptable lubricants and electric vehicle coolant fluids. Ester technology supports lubricant formulation in sectors pursuing thermal and environmental performance. PAGs offer performance in conditions unsuitable for mineral oils such as low temperature compressors and food machinery scenarios. Together these fluids support equipment reliability regulatory compliance and reduced environmental impact while filling gaps that mineral and PAO fluids cannot address.

Growth for Group V synthetic base stocks is expected to continue where performance requirements intersect with regulatory or sustainability mandates. Capacity expansion by specialist ester producers and continued PAG investment by major industrial suppliers will shape the future of these products. Despite limited volume compared with other base stocks, Group V synthetics provide essential functional value in niche but expanding markets.

Synthetic Esters

Polyalkylene Glycols (PAGs)

Polyisobutenes (PIBs)

Phosphate Esters

Silicone Base Oils