Does the global lubricants industry really need 1.12 million barrels a day – 57.3 million metric tons per year – of mineral base oil manufacturing capacity? Thats debatable, but it hasnt stopped refiners from elbowing their way to that new peak, according to the 2018 Guide to Global Base Oil Refining.
Published earlier this month by LubesnGreases, the freshly updated guide marks a 1 percent gain in overall capacity since last year. In that short time, the world experienced a flurry of facility openings, upgrades, debottleneckings and ownership changes, and a rare closure.
On the plus side of the ledger, the guide counted four projects that came on stream in China, numerous expansions in Russia and the Middle East, and over a dozen more that are marching towards completion in China, Europe, North America and elsewhere.
On the minus side was the shuttering of Imperial Oils plant in Strathcona, Canada, which erased 2,400 b/d of API Group I base oil capacity from the map and left that country with just one virgin producer. (Thats Petro-Canada, which can make 15,600 b/d of Group II and III in Mississauga, Ontario.)
As a result of the ongoing industry restructuring, just 40 percent of current global capacity is Group I quality, while Group II and III together share 50 percent and the remaining 10 percent is naphthenic. Ten years ago, when the world had closer to 0.9 million b/d of capacity, the allotment was greatly different: Group I dominated 65 percent of all capacity while Group II had 21 percent, Group III a scant 5 percent and naphthenics 9 percent.
The geographic distribution of base oil capacity also has tilted in favor of emerging markets over the past decade. The updated guide shows Asia-Pacific commanding 42 percent of the global supply, while North America holds 25 percent and the combined countries of Europe have 19 percent. In the guides 2008 edition, these regions held 31, 28 and 30 percent, respectively.
Still, with 259,000 b/d, or 23 percent of global volumes, the United States is by far the country leader in base oil refining capacity. Second-largest is China, with almost 180,000 b/d, a 16 percent share. In both countries, Group II represents the lions share of whats made.
Some regions, the 2018 guide makes clear, are lagging in the global race to build and upgrade their plants, and actually shed capacity in recent years.
South America is shown as having less than 38,000 b/d of base oil capacity now, versus 39,000 b/d in 2008; so even as the global pie has grown, its share has withered to just 3 percent. Lack of investment has left South American producers holding mostly Group I and naphthenic barrels, with scant Group II and zero Group III capacity.
A similar story of under-investment has unfolded in Africa, which had 10 plants operating in 2008 but only six now – none of them approaching world-scale, the 2018 guide shows.
By contrast, the Middle East has been a big winner in the capacity share sweepstakes, with 111,500 b/d of capacity now versus 68,000 back in 2008, a 64 percent increase. Significantly, almost all of this ramp-up has been Group II and Group III quality and is targeted for export markets. The regions most recent success, coming after nearly two years of delay, was the commissioning earlier this year of Luberefs 14,200 b/d Group II plant in Yanbual Bahr, Saudi Arabia.
The 2018 Guide to Global Base Oil Refining is a colorful 40-by-27 inch wall chart displaying the locations and ownership of more than 160 mineral base oil refineries and rerefineries around the world, as of early May. Listed plants are color-coded by region and keyed to a locator map that makes it easy to see where capacity is concentrated or lacking. Published every June, the Guide shows each plants ability to make API Group I, II, III and naphthenic base stock. All capacities are shown in barrels per day.
The new edition also highlights the many changes taking place in ownership of these assets, points out Michele Persaud, the publications editor. These changes include:
- The sale of Shell Argentinas Buenos Aires facility (1,500 b/d of Group I) to Raizen.
- The acquisition of a controlling stake in Hindustan Petroleum Corp. by Oil and Natural Gas Corp., a fellow Indian-government-controlled enterprise. Hindustan is Indias largest base oil refiner, with a 9,600 b/d Group I/II/III plant located in Haldia.
- The pending sale of ExxonMobils 15,600 b/d Group I plant in Augusta, Italy, to Algerian national oil company Sonatrach.
Another highly useful feature is a list of new construction that is moving towards completion, she added. The guide shows 15 base oil refining and rerefining projects that are in the works and promise to slosh another 82,000 b/d into this crowded arena between now and 2001.
The next big slug of capacity will come not in Asia but in Rotterdam, Netherlands, Persaud observed, where ExxonMobils massive new Group II facility is expected to begin commissioning before year end. While the global energy giant has declined to put a figure on this upcoming capacity, LubesnGreases estimates it will have 20,000 b/d.
Along with the annual Global Guide to Base Oil Refining, LubesnGreases each September publishes the Nonconventional Base Stocks Guide that maps out the locations, owners and capacities of facilities making the seven most popular types of synthetic base stocks. A third guide focuses on conventional and synthetic base stock production throughout the Europe-Middle East-Africa region.
Copies of the 2018 Guide to Global Base Oil Refining were mailed this month to all LubesnGreases print subscribers along with their June edition; copies were also mailed to digital subscribers.
Additionally, in response to many reader requests, we are also making the data set for the 2018 Global Guide available for the first time as an Excel spreadsheet, announced Howard Briskin, publisher of LubesnGreases. This will be invaluable for those who want to analyze the information on a global basis, whether by ownership, by region or by base oil type.
To order the Global Guide as a print copy or digital PDF, or in Excel format, visit http://www.lubesngreases.com/base-stocks-guides/