One turnaround down, two to go for the U.S. base oil market. ChevronTexacos 15,000-barrel-per-day refinery in Richmond, Calif., began starting up yesterday and was expected to resume full operations by the end of this week. The company said it completed the month-long maintenance shutdown on schedule and without any glitches.
Now base oil purchasers are crossing their fingers, hoping that things go just as smoothly for Motiva and ExxonMobil. Market observers said one of two base oil trains at Motivas 22,000-b/d Port Arthur, Texas, plant is being shut down as part of a maintenance event affecting multiple units at the refinery complex. Motiva has not disclosed how long the base oil train will be down.
ExxonMobil has said it plans to close its 16,000-b/d Baton Rouge, La., plant for maintenance during the first quarter. The company has not stated publicly when the shutdown will begin or how long it will last, but some observers said this week that the event is due to start soon.
All three suppliers said ahead of time that they were building inventories in order to maintain deliveries during their shutdowns. Still, some buyers have expressed trepidation after a series of supply disruptions hampered the market in 2003. North American base oil plants underwent at least six shutdowns last year and two plants suffered major disruptions coming out of shutdowns.
The shutdown at Baton Rouge does bring the promise of good news for purchasers of Group II stocks. ExxonMobil says it is doing work during the closure that will allow it to upgrade the automatic transmission fluid base oil produced there from Group I to Group II. The company said it will consider upgrading other cuts from the plant later.
Paraffinic base oil prices were unchanged this week. The price for crude oil on the New York Mercantile Exchange closed yesterday at $35.15 per barrel, up $1.19 from a week earlier.
Historic U.S. posted base oil prices and WTI and Brent crude spot prices are available for purchase in Excel format.