“One of the bigger opportunities is this focus on alternative gases, or alternative fuels – be it ‘green’ hydrogen or other types of gaseous fuels, they’ll provide different combustion environments for the engine oils,” Tsui said. “So certainly there’ll be a need for different types of engine oil or customized or tailored engine oil for specific applications.”

The webinar was based on Kline’s study “Natural Gas Engine Oils: Global Market Analysis and Opportunities.” The study looks at demand for natural gas engine oils in select markets in non-transport applications, with 2021 as the base year. That includes such markets as oil and gas, power plant, pipeline, agriculture, and commercial and residential, while excluding buses and trucks, ships and cars.

The top natural gas engine oil supplier in the countries covered in the study is ExxonMobil, followed by Shell, Chevron, Phillips 66, Citgo and Petro-Canada, according to Kline.

“OEM recommendations play a huge role in how these lubricant marketers stack up,” Tsui said. This is due to maintenance contracts during warranty periods, he said, which call for servicing using OEM-recommended fluids.

North America accounted for more than half the estimated 500,000 tons of global natural gas engine oil demand in 2021, followed by Asia Pacific and Europe. The United States alone accounted for nearly half of last year’s global natural gas engine oil demand, the company found.

Asia-Pacific, especially China, has a lot more room to grow for natural gas engine oil, he said, as the country consumes surprisingly little natural gas engine oil for its installed power capacity.

“In China, they actually use a lot of converted diesel engines and convert diesel engines to natural gas use for power generation,” he said. But they continue to use heavy-duty motor oil instead of natural gas engine oil.

“These are opportunities for lubricant marketers to show them why using a heavy-duty motor oil in an NGEO application isn’t really the proper, best way to get the most” out of their natural gas engines, he said.

Group II base oil accounted for more than 75% of the demand for base oil in natural gas engine oils in 2021. “Demand for Group III and above category base oils is significantly low compared to other base oil categories,” Tsui said. “Group III and above base oils are comparatively more expensive than the other base oils and thus have not been able to penetrate the market.”

Group II has largely replaced the use of Group in natural gas engine oils. “Pricewise it has been fairly comparable to Group I because of diminishing supplies,” he said. “There are some markets where Group I is quite readily available, so marketers still use it in some NGEO formulations.” Use of Group III or higher-grade base oils, like polyalphaolefins or esters, is small but growing, he noted.

Global natural gas consumption generally grew until 2020. Since then it was greatly affected by the pandemic and more recently by the Russia-Ukraine war, Tsui said. In addition, many countries have implemented government policies to transition away from all fossil fuels, including natural gas. “However, we do expect to see natural gas consumption recover and continue to grow, but growth rates will be slower than previous projections,” he said.