The company said its growing Group II base oil presence in South America will give finished lubricant producers more formulating flexibility in meeting tightening specifications for better fuel economy and reduced tailpipe emissions. The Rio de Janeiro location will enable Chevron to cover all volumes required by South American marketers.

This new supply hub highlights Chevrons commitment to providing reliable supply of premium base oil to lubricant producers in Brazil and other South America markets as they transition to new formulations and grow to meet the increasing lubricants demand in South America, Cary Knuth, general manager, base oils, Chevron Lubricants, said in the news release.

We have tankage there, and the ability to distribute product, Knuth told Lube Report. For us, this gives us a great opportunity to get into the Brazilian market on a direct basis.

The Rio de Janeiro hub can be supplied with Group II base oil from Chevrons new 25,000 barrels per day plant in Pascagoula, Miss., along with its existing 20,700 b/d plant in Richmond, Calif., and 23,000 b/d joint venture facility with GS Caltex in Yeosu, South Korea.

According to Kline and Co.s study, Global Lubricants Industry: Market Analysis and Assessment, South America accounted for 7 percent of the worlds 38.7 million tons lubricant demand in 2012. South Americas lubricants demand will grow annually from 2012 to 2017 by 2.4 percent, the consultancy projected, with growth driven primarily by exports to Asia and domestic consumption.