SEOUL – To meet Chinas huge and growing demand for lubricants, its domestic oil majors are pumping out nearly 5 million metric tons of base oil a year, while imports add another 1.4 million tons. PetroChina and Sinopec could produce 1.5 million t/y of API Group III by 2015, a Sinopec official said, but research and development on additives is sorely needed.
Zhang Guo Sheng, deputy chief engineer with Sinopecs Economics and Development Research Institute in Beijing, told the ICIS Base Oils & Lubricants Conference here on June 9 that China had no uniform standard for base oil quality until 1980. Speaking Mandarin with simultaneous translation to English, Zhang said that in the 1990s, China began to apply the API classification system by viscosity index, but without clear descriptions of sulfur content or saturates. Finally last year a new standard was adopted, incorporating the API classifications.
Domestic base oil production in 2008, said Zhang, was about 4.7 million tons, with PetroChina contributing 66 percent, Sinopec 28 percent and China National Offshore Oil Corp. (CNOOC) 6 percent. But there is a lot of poor quality base oil in China, said Zhang, who noted that only 14 percent of domestic production was API Group I or higher. Nineteen percent was naphthenic oils, while a hefty 63 percent was paraffinic but did not meet the minimum viscosity index of a Group I oil, and the remaining 4 percent was unclassified.
Imported base oils amounted to 1.36 million tons in 2008, or 23 percent of Chinas total base oil consumption that year. There is a shortage [of base oils]. The import number is going up dramatically, and the trend will continue, said Zhang. Most of the imported base oils are 150 SN, 500 SN and bright stocks. In 2008, Singapore supplied 46 percent of Chinas imported base oil, Korea supplied 26 percent, Japan 15 percent, Russia 8 percent, Taiwan 4 percent, and the United States 1 percent.
Over the past 11 years, Zhang noted, Chinas lubricant consumption has grown at an average annual rate of 4.3 percent.
Although neighboring Japan and South Korea now use low viscosity multigrade engine oils, said Zhang, China is moving more slowly away from monogrades. Monogrades and 15W-40 oils each have close to 35 percent of Chinas motor oil market, while 10W-30 has about 25 percent.
We focus more on temperature and climate, Zhang asserted. A regional temperature map of China provides a clear indication of which oils are most popular. In the very coldest northern and western regions, where temperatures dip to -30 C or even -40 C, 0W and 5W oils have made inroads. And in cold areas, 10W-30 and -40 are used. But in areas south of the Great Wall, and in the south of the country, where 70 percent of all lubricants are consumed, high viscosity oils are most popular.
Four Chinese refineries have capacity to produce Group II oils today, Zhang said. PetroChinas Lanzhou Petrochemical Corp., using IFP technology, has 400,000 t/y of Group II capacity, and its Daqing Refining Corp., using Chevron technology, has 200,000 t/y of Group II capacity. Sinopecs Gaoqiao plant has 300,000 to 400,000 t/y of Group II capacity, also using Chevron technology, and its Jingmen refinery, using Sinopec technology, boasts an additional 200,000 t/y. All can produce Group II, and now were ready to produce 1.5 million tons of Group III by 2015.
But, Zhang cautioned, in China, there is not enough technical demand for Groups II and III base oils. Groups II and III are not yet in full production [at Chinese plants]. We still need to restructure our facilities, he said. Demand for Group I in China is huge, and there is a surplus of II and III. There is no intention to expand any facilities at this time for domestic II and III production.
What is needed, said Zhang, is improved additive systems. We need to do research and development on additives.