ExxonMobil plans to expand API Group II and II+ EHC production capacity at its Baytown, Texas, base oil plant byearly 2015.
The company said that, subject to funding and regulatory approval, construction on the project is scheduled to begin in late 2013.
The expansion will significantly increase output of EHC Group II and Group II+ base stocks and will employ ExxonMobil proprietary technologies, including MSDW dewaxing catalyst, for improved low-temperature performance, the company stated on Monday. It did not disclose the specific amount of increased capacity.
ExxonMobil will introduce EHC 65, a new Group II base stock designed for blending heavy duty engine oils. The company said Group II+ EHC 45 will have enhanced low temperature properties.
According to the American Fuel & Petrochemical Manufacturers 2012 Lubricating Oil and Wax Capacities Report, ExxonMobils Baytown base oil plant now has 9,800 barrels per day of Group I and 11,700 b/d of Group II capacity.
This project does not have a material impact on Group I production capabilities at Baytown, ExxonMobil spokeswoman Rachael Moore told Lube Report.
One industry source told Lube Report, the installation of an MSDW (hydroisomerisation) unit implies they see value in upgrading their slack wax to Group II base oil.
Another industry source suggested the Baytown expansion likely further reflects the difficulty in selling light-to-mid viscosity Group I base stocks. The demand for bright stock and heavy Group I neutrals is still there, but with excess Group I capacity in Europe and the lack of demand for Group I light-to-mid vis products in North America, it is possible upgrading to Group II/Group II+ was the only way for ExxonMobil to sell these stocks, this source told Lube Report. It also helps fulfill a need internally for ExxonMobil. They have a very robust demand for 6 cSt product internally for their heavy duty business, so this helps supply that demand. I suspect a good portion of whatever their capacity is will be used internally.
This source considered the Group II+ expansion an oddity, pointing out that, with all the new Group III plants being built now and in the future, many industry experts are projecting Group II+ will eventually wither away to nothing.
ExxonMobil is currently the largest U.S. base oil refiner, with total capacity of 47,500 b/d. In addition to Baytown, ExxonMobils other North American base oil plants are in Baton Rouge, La. (14,500 b/d Group I and 1,500 b/d Group II capacity) and Beamont, Texas (10,000 b/d Group I).