ExxonMobil Still Bullish on Group II


ExxonMobil Still Bullish on Group II
A view of ExxonMobil's refinery in Singapore. © Photo courtesy of ExxonMobil

JERSEY CITY, New Jersey – API Group II base oils will continue to be used in many applications for years to come, despite the move towards vehicle electrification, Laura Pottorf, ExxonMobil’s global marketing manager for base stocks and waxes, asserted in early December in an interview on the sidelines of the ICIS Pan American Base Oils & Lubricants here.

Pottorf also confirmed the company’s Group II expansion in Singapore was on track to come on stream in 2025.

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In an interview on the sidelines of the 16th ICIS Pan American Base Oils and Lubricants conference, Pottorf confirmed that the company’s Group II expansion in Singapore was on track to come on stream in 2025. The new train in Jurong will have capacity to produce 20,000 barrels per day (973,000 metric tons per year) of Group II base stocks, resulting in the world’s largest base oil plant.

ExxonMobil plans to make the additional base oil production in Singapore available to all finished lubricant blenders, not just to the company’s own integrated lubricant operations. “The Asia Pacific region is growing the most, so part of the reason we have that project there is because it will help us provide the base oil supply needed for that growing region,” Pottorf explained.

“We are really excited about that project because it complements the project we did in Rotterdam,” she added. “We will also start to introduce the Group II EHC 340 Max, which is our extra heavy-viscosity base stock, so we will have an even broader range of coverage across a wider suite of applications.” ExxonMobil completed a hydrocracker expansion at its Rotterdam plant in the Netherlands at the end of 2018.

But despite speculation that the Group II segment will become oversupplied – particularly given the advance of vehicle electrification and an expected decrease in lubricant demand for automotive applications – the company sees good opportunities in other segments besides the automotive industry.

“Our Group II base stocks are very versatile, and they can cover a wide range of applications – that includes the passenger vehicle segment, but also the commercial segment, which we anticipate will be growing, as well as the industrial segment,” she said. “While electrification is definitely a trend, we are also going to have a need for Group II base stocks to meet efficiency gains in conventional engines.”

Another trend that the company sees playing an important role in lubricant demand is the growing population and an increase in the number of people moving into the middle class, generating heightened demand for passenger vehicles. “Some of them will be EVs and some will be conventional engines,” Pottorf said. “We are going to need base stocks that have coverage for the existing fleet, but also for the additional efficiency gains that will be coming with that fleet, as well as base stocks that go into different kinds of engines like those of electric vehicles.”

While there some predictions project that Group I base oils will disappear from the market at some point, ExxonMobil sees even greater potential in these base stocks. Pottorf did not want to speculate on any particular plant closures, following several that took place in that segment in recent years, but she did observe that those plants that are well-integrated, have the ability to run a broader range of feedstocks and are uplifting their co-products will potentially have a better chance to stay competitive as the industry moves through the transition.

Some experts compare ExxonMobil’s new EHC 340 Max to a Group I bright stock, but Pottorf underscored that they are different products and that the new base stock will help fill out the full range of products the company offers. “The way we would describe the EHC 340 Max is that it is an extra heavy viscosity base stock versus a Group I bright stock,” she explained “It has better low temperature performance, it’s got a high [viscosity index], as well as a high flash point, and that can be very important for high temperature applications. In some applications, it may be a material that you can substitute for the current Group I bright stock.” Some of the primary applications for the new product are in automotive and industrial gear oil, but there are others as well. Although it will be produced in Singapore, it will be marketed globally.

Some reports said that ExxonMobil was evaluating the possibility of building capacity to make Group III base stocks, but Pottorf said that the company evaluates lots of different types of investments. She added that any company considering investing in Group III production needs to have access to the right types of feeds, examine how that investment fits into the company’s existing footprint and be able to meet the right processing requirements. ExxonMobil offers a Group II+ cut that meets many of the characteristics of a Group III base oil and can therefore be used in certain applications of the passenger vehicle segment where Group III would otherwise be required. That illustrates the versatility of the company’s Group II slate, Pottorf noted.

ExxonMobil continues to invest in greenhouse gas emission reduction plans and hopes to exceed its 2025 reduction target announced in December 2020. In terms of sustainability within the realm of base oils and lubricants, Pottorf said the company is bringing additional higher-quality Group II supplies to the market in Rotterdam and Singapore, and those will  help to enable the efficiency gains that are needed in a range of different applications.

ExxonMobil also announced last year that it had reached a joint development agreement with BioAccelergy and is investigating the possibility of producing a biobased base stock at scale and cost-effectively, using feedstocks that do not compete with food or water supplies.

Pottorf explained that the company is working closely with its customers to understand what their needs might be, and what kinds of base oil qualities they expect moving forward, so that the company can factor those into its plans. “It is going to be interesting over the next few years to see what is going to come forward in terms of technology,” she said. “Consumer preferences are going to play a role and government policy will have an impact here as well. Those things all have to come together to find the solutions that will meet the demands and the needs that we have as a society.”