Calumet Lubricants Co. says it will adjust operations at its Shreveport, La., base oil refinery, eliminating production of naphthenics while adding capacity for paraffinics, including Group II stocks.
The Indianapolis, Ind., company plans to make up for some of the lost naphthenic capacity by increasing production at its Princeton, La., plant. Observers predicted that the net effect on the naphthenic market will be negligible but that lube blenders may benefit to the extent that the additional paraffinic barrels are in the Group II category.
It would appear that any little bit of Group II would be applauded, said Charles E. Kalmbach, marketing vice presidentat base stocks and fuels marketer Nova Oil Inc., of Malvern, Pa.
Operations at Shreveport just resumed last March, a year after Calumet bought the refinery from Pennzoil-Quaker State Co. At the time of the purchase, Calumet officials said they planned to have the refinery produce naphthenic stocks only. By the time the plant opened, they changed the mix to 4,000 barrels per day each of paraffinic and naphthenic, the same proportion that Pennzoil-Quaker State had maintained. The change in plans was attributed to process issues encountered as Calumet geared up to begin operations.
This week, the company said it decided to switch to purely paraffinic production to take advantage of in-house feedstock supply.
We have a good source of paraffinic feedstock from our Cotton Valley [La.] solvent refinery, Oils General Sales Manager John J. Banach said. Shreveport will use that feedstock to produce approximately 7,000 b/d of paraffinic base oils. Banach said some of the production would be Group II, buthe did not specifyhow much. He also said that some would be transported to Calumets wax plant in Rouseville, Pa., to be used as feedstock, but again not how much.
Calumet plans to make the operational changes at Shreveport by the end of the year. The company also plans to increasecapacity at its Princeton plant, which makes only naphthenics, from 7,000 b/d to 9,000 b/d.
Other U.S. naphthenic producers would like to think that an overall supply reduction would snug up the market and boost margins. But sources said they dont really expect that to happen.
It didnt happen with the other cases where we saw supply reduced, said Jack Ebberly, director of special products sales and marketing for San Joaquin Refining Co., of Bakersfield, Calif. He was referring to the shuttering of naphthenic refiner Golden Bear Oil Specialties in2001 and disruptions at several other refineries during the past year. I dont think its going to affect the naphthenic market at all.