Thanks to significant new capacity on the U.S. Gulf Coast, the countrys refiners in 2015 decanted their greatest volumes of base oils since 2006. Domestic base oil production reached 65.6 million barrels for the year, according to data released last month by the federal Energy Information Administration.
The 2015 total included 56 million barrels of paraffinic base oils and 9.6 million of naphthenic base oils.
This was only the sixth time since 1981 – the earliest year for which the government has data – that U.S. base oils have cleared the 65 million-barrel mark. It also represented an 8 percent surge over 2014, when the total was 60.7 million barrels.
Readers can credit the entire lift to the paraffinic side of the market, where production was 10 percent higher than in 2014, according to the EIA.
On the naphthenic side of the business, by contrast, production remained virtually unchanged. Pale oil refiners supplied a total of 9.6 million barrels in 2015, and 9.7 million in 2014.
A closer look shows that PADD 3 – the petroleum allocation for defense district that includes Texas, Louisiana, Arkansas and Mississippi – set a blistering pace that left others gasping to keep up. PADD 3 is home to Chevrons Pascagoula, Miss., base oil plant, which enjoyed its first full year of operation in 2015. Capable of making 25,000 barrels a day of API Group base oil, the plant opened in mid-2014.
Also located in PADD 3 is ExxonMobils massive refinery in Baytown, Texas, which was fresh off its own Group II quality and capacity upgrade in early 2015. After more than a year of coyness, the company reported last week in its latest financial and operating review that Baytowns capacity had grown by 6,000 barrels a day, bringing its total to 28,000 b/d.
With all that new capacity in place, PADD 3s base oil production rose to 51.1 million in 2015, including both paraffinic and naphthenic streams. Thats 5.4 million barrels more than in 2014. Since the total increase seen nationwide was 4.9 million barrels, PADD 3s gains came at the expense of other districts.
Among the other trends visible from the EIA data, which was released on Feb. 29:
- Refiners in PADD 3 contributed 78 percent of U.S. base oil in 2015. Ten years before, PADD 3 was making only about 70 percent of the national total.
- With only a few exceptions, production was higher every month in 2015 versus the same month a year earlier. The lowest ebbs came in February and September 2015, which is when refiners traditionally schedule their turnarounds and maintenance work.
- Production of wax, a byproduct of solvent base oil refining, fell a precipitous 32 percent last year: U.S. wax output slipped below 1.8 million barrels, versus 2.6 million barrels in 2014 and 3.0 million in 2013.
The EIA does not collect data on production of rerefined base oils so those volumes are not included in the figures above. The U.S. has seven plants that can make a combined 15,000 b/d of paraffinic base oils, of which about 90 percent is Group II quality.