Base Oils on the Brink


API Group I base oils now are less than 60 percent of global base oil manufacturing capacity – and by year’s end they’ll sink to a 55 percent share, shows Lubes’n’Greases‘ new 2011 Guide to Global Base Oil Refining.

Thanks to refinery upgrades and new construction, plus closures of older plants, the world’s total capacity for making base oil hardly budged from a year ago, the newly published Guide indicates. But upheavals can be clearly seen in plant ownership, geographic distribution and quality.

The Guide, a colorful 33-by-22-inch poster, was fully updated for 2011. It lists the owners, locations and capacities for 157 mineral base oil refineries and rerefineries as of May 1, and features a map pinpointing the home country of each plant. It was mailed last week with the June issue to all print-edition subscribers of Lubes’n’Greases magazine.

In all, the 2011 Guide shows total worldwide mineral base oil capacity of 950,310 barrels per day. Of this, 57 percent is API Group I, 27 percent Group II, 6 percent Group III, and 9.3 percent is naphthenics.

Geographically, Central & Eastern Europe showed the greatest decline in total capacity, while China outstripped other regions in growth in the past year. By type, the biggest winner since last year’s edition was Group II base oil, which saw overall capacity grow 10 percent to 260,000 b/d, mostly due to projects completed by CNOOC in China and GS-Caltex in Korea.

Naphthenic oils saw a 4 percent gain, to reach 88,000 daily barrels worldwide. Most of this nudge came from a 3,000 b/d expansion at Ergon Refining in Vicksburg, Miss., already the world’s largest pale oil facility.

The Guide is also useful for tracking ownership changes for the facilities, such as the sale of Valero’s Paulsboro, N.J., 11,000 b/d Group I refinery to PBF Holding, and Essar’s acquisition of Shell’s Stanlow, U.K., plant (5,000 b/d, Group I).

The fates of several others are still in the air, however. Australia’s only base oil refinery, a 3,300 b/d site owned by Caltex, is slated to close by the end of this year, for example. Shell’s Harburg, Germany, refinery (3,300 b/d of Group I plus 3,000 b/d of pale oil) is seeking a buyer, and the company says it too will be shuttered if not sold.

Rerefiners have a strong presence in the 2011 Guide, too. Only those who use hydrotreating or solvent refining processes and with greater than 800 b/d of capacity are listed. The Guide lists 17 such plants today, with another four being built from China to Norway to the United States.

A helpful feature of the Guide is a section showing planned construction projects, which promise to add 130,000 daily barrels of capacity at 16 plants by the end of 2015. This onrushing tide is entirely Group II and III quality, and nearly half of it will flow from new or expanding plants in the Middle East, turning the region into a base oil powerhouse.

The largest such project is the Pearl gas-to-liquids project in Qatar. Built by Shell and Qatar Petroleum in Ras Laffan City, this project recently began making waxy GTL feedstock and is expected to begin base oil production shortly. When complete in 2012, Pearl will have two Group III base oil trains, each 14,400 b/d.

Next-largest project shown is Chevron’s 25,000 b/d Group II plant in Pascagoula, Miss., coming in 2013. Many other companies have floated proposals for upgrades, expansions or new plants, but the Guide includes only projects that have a green light from their owners, with defined locations and capacities.

“This may be the most-requested project we work on all year, as a service to our readers,” says Nancy DeMarco, publisher of Lubes’n’Greases magazine. “You’ll see data from our Guide referenced widely in forecasts and presentations by industry experts, because it’s such an authoritative overview of the key players and trends. Many companies order extra copies, and use them to educate their investors, employees and even regulators about the fundamental structure of this business.”

The 2011 Guide to Global Base Oil Refining is the first of three base stock annuals from LNG Publishing Co., all of them created in close cooperation with Pathmaster Marketing Ltd. in Woking, U.K.

In July, the regional Base Stock Guide for Europe, the Middle East and Africa will be sent to print subscribers of Lubes’n’Greases Europe-Middle East-Africa. And the 2011 Nonconventional Base Stock Guide will be published in September.

Additional copies of the 2011 Guide are available in print only. To visit our web site for ordering information, click here.

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