Although it has long been a lubricant-consuming giant, China prior to 2010 was outclassed when it came to base oil refining. The countrys base oil capacity, estimated by PetroChina officials to be less than 4 million metric tons a year, had been at a virtual standstill for a decade. Much of its output was low-grade API Group I and naphthenic base oils that were unfit for making the advanced automotive engine oils that consumers increasingly demanded.
What a difference four years makes. Chinas national and independent refiners have pumped up their base oil muscle by 66 percent since 2010, with particular emphasis on building Group II supplies. The country now boasts a 13 percent share of global capacity, says new research from Lubes’n’Greases magazine.
Worldwide, nameplate capacity for manufacturing mineral base oils reached 1.06 million barrels a day in mid-May, according to the magazines 2014 Guide to Global Base Oil Refining. Thats roughly 55 million metric tons a year. Of this, Chinas portion is 139,000 b/d (almost 7 million t/y).
The 2014 Guide shows that Group II base oil, at 68,550 b/d, is close to half of Chinas present-day capacity. As well, China made almost no Group III as recently as 2012; it now has the refining power to make 7,000 b/d of it (which is more than North America has).
Chinas suppliers have become more diverse, too, the 2014 Guide shows. PetroChina and Sinopec, the governments principal petroleum entities, remain dominant but have been joined by newcomers such as Guangxi Behai Petrochemical, with 4,000 b/d of Group II capacity; Panjin Northern Asphalt (8,000 b/d of Group II); and Shandong Quisheng Industries (6,000 b/d, Group II).
PetroChina and Sinopec operate a combined 18 base oil refineries, and have invested heavily in them. PetroChinas Group II capacity is now around 23,800 b/d, while Sinopecs approaches 17,000 b/d.
The 2014 Guide to Global Base Oil Refining is a bright, 33-by-22 inch poster that was mailed along with the June issue to print subscribers to LubesnGreases magazine. The magazine mailed a copy to its digital subscribers in the United States and Canada as well.
This is the 10th edition of LubesnGreases Global Guide, and it identifies 168 base oil refineries and rerefineries worldwide, listing their owners, locations and capacities in barrels per day. A color-coded map pinpoints each refinerys location.
When the first edition was published 10 years ago, Group I accounted for two-thirds of the worlds supply. Today, its just 47 percent of the supply, having shrunk to 502,000 b/d worldwide.
Meanwhile, Group II capacity surged 20 percent over the past year alone, to 349,000 b/d, and Group III capacity climbed about 3.5 percent to reach 117,000 b/d. Naphthenic capacity held steady, at just under 91,000 b/d.
Many insights can be discerned from the 2014 guide, such as:
* S-Oils refinery in Onsan, S. Korea, at 41,000 b/d, is now the worlds largest base oil refinery. Second-largest is Motiva in Port Arthur, Texas, (40,300 b/d) and third is SK Lubricants in Ulsan, S. Korea (40,000 b/d);
* Overall, Asia Pacific holds 40 percent of total global base oil capacity;
*The United States is the world-beater in making Group II, with 45 percent of the global capacity. It also holds 53 percent of the worlds naphthenics capacity, but posts a blank when it comes to manufacturing Group III;
* For Group III capacity, South Korea is the front-runner, with 49,000 daily barrels.
Industry players are continually redrawing the map, reminded Nancy DeMarco, publisher of LubesnGreases. Our 2014 Guide lists more than a dozen upcoming projects that are due to come on stream between now and the end of 2015, and many of these will be in Asia Pacific, she observed. Among these are expansions at existing plants, such as ExxonMobils refinery in Singapore and Pertaminas in Dumai, Indonesia. We also list new-builds that are aiming for a share of this business, such as Hyundai Oil Bank and Shells joint venture in South Korea, Sinopecs project in Yanshan, China, and Hainan Handis new facility in Hainan, China.
The 10th edition of the Guide to Global Base Oil Refining was created by LubesnGreases Senior Editor Michele Persaud, in close cooperation with R. David Whitby of Pathmaster Marketing Ltd. in the U.K.
Additional copies of the guide may be purchased online at www.BaseStockGuides.com