Snapshot Captures Base Oil Supply

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Despite the pain of several closures, the world saw a net gain of 35,000 barrels per day of base oil manufacturing capacity over the past year. Global capacity is now just shy of 1.1 million b/d, according to the new 2015 Guide to Global Base Oil Refining from LubesnGreases magazine.

ExxonMobil led the charge for growth, adding 7,000 barrels a day of API Group II capacity in Baytown, Texas, and another 6,000 in Jurong, Singapore, the magazines editors estimate. Including affiliates, it now controls more than 13 percent of global base oil capacity.

Since last years edition, other significant builds were completed in China, where the total grew by 10 percent to reach 153,000 b/d; in Korea, where partners Hyundai OilBank and Shell opened a 13,000 b/d Group II plant; and Spain, which added 12,900 b/d of Group II and III capacity at SK-Repsols joint venture plant last fall.

Offsetting those gains somewhat, some Group I capacity was trimmed from this years Guide. Colas completely shut down its base oil plant in Dunkerque, France, this spring, for example, while Total closed 50 percent of its Group I capacity in Gonfreville, France, and will upgrade the rest to higher-value stocks. Meanwhile, Shells Group I site in Pernis, Netherlands, remains on the watch list, and will begin phasing out production this fall and exit base oil entirely next year.

Our Guide is a snapshot of the global base oil industry, showing the total capacity on May 1 each year, explained Michele Persaud, the LubesnGreases senior editor who directed the research effort. This year we put the total on that date at 1,097,000 daily barrels.

Published each June, the Guide is a colorful 32-by-22-inch poster, with a map that pinpoints the worlds population of base oil refineries and rerefineries larger than 800 b/d. It lists their owners and locations, and tabulates each ones capacity by paraffinic or naphthenic type; paraffinics are further broken down by API Group (I, II or III).

The completely updated Guide was produced in cooperation with Pathmaster Marketing Ltd. in Woking, U.K., with additional data gathered from individual companies and other industry experts.

Our writers and editors gather information all year for this project, and check and re-check the numbers, Persaud said. In rare cases where companies wont disclose this data – such as ExxonMobil, which had major expansions in Baytown and Singapore but hasnt revealed their revamped capacities – we dig into published company reports and presentations and tap other expert sources to reach an estimate of the new capacity.

Here are some other insights that can be gleaned from this years exclusive Guide:

  • Naphthenic base oil supply remained unchanged over the past year, at 91,000 b/d worldwide. The United States is the leading producer of these stocks, with over half of that capacity, followed by China with 26 percent and Western Europe with 11 percent.
  • Group I accounts now for just 45 percent of the global scene, versus the 66 percent share it enjoyed when the 2005 Guide was published. More than one-third of capacity is API Group II, almost 12 percent is Group III, and a little over 8 percent is naphthenic.
  • The race to add capacity is not slackening: This years Guide shows 13 key projects due online this year and next, totaling 85,000 b/d. One of the first out of the gate will be Adnocs new 12,700 b/d Group II/III plant in the United Arab Emirates, due this fall. By far the largest is Hainan Handis 24,600 b/d Group III plant that is slated to open next year in Hainan, China – it will more than double Chinas native supply of that grade.

Four of the upcoming projects center on naphthenic base oils, starting with a facility in Harburg, Germany, that now makes Group I paraffinic base oil. Nynas bought the plant from Shell and is converting all its output. That will boost Western Europes supply by 3,800 b/d of pale oil next year, but also taking a slice out of its Group I pie. Chinese producers are investing in naphthenics too, and will append 8,500 b/d to the global tally.

The completedly updated 2015 Guide to Global Base Oil Refining was mailed with the June issue of LubesnGreases to the magazines print and digital subscribers in North America, and to paid subscribers elsewhere around the world. To order a copy online, click here.

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