Asia gained 5,200 barrels per day of new Group II and Group III capacity so far this year. That appears to be just the tip of the iceberg, however. A dozen other projects are scheduled to add 20 times that much capacity by 2011.

The 2006 Guide is a colorful wall chart listing 151 mineral oil base oil plants with total capacity of about 927,000 b/d. Ninety percent of that total is paraffinic oil, including 609,000 b/d of Group I and 227,000 b/d of Group II and Group III. Naphthenic plants have a combined worldwide capacity of 91,200 b/d.

There was little to no change the past year in capacities for South America, Central and Eastern Europe, Africa and the Middle East. North Americas capacity increased 10 percent to 254,800 b/d, thanks mostly to construction of a 15,000-b/d production train at Motivas plant in Port Arthur, Texas, and a 3,100-b/d expansion at Petro-Canadas Mississauga, Ontario, plant.

The opposite trend is underway in Western Europe. BP closed its 10,300-b/d plant in Coryton, U.K., Shell shuttered its 5,060-b/d plant in Hamburg, Germany, and Cepsa shut down a 2,800-b/d facility in Huelva, Spain. The regions capacity dropped 11 percent to 140,460 b/d.

The combination of those closings reduced Western Europes surplus by approximately half, according to Pathmaster Marketing Ltd., a Woking, U.K., consulting firm that gathered most of the data in the chart. For years the region has had a bigger surplus of base oils than any other region. That kept Western Europe a buyers market, provided exports that helped meet demand in Central and Eastern Europe, Africa, the Middle East and Asia, and posed an arbitrage threat that helped hold down prices in North America.

Pathmaster Chief Executive R. David Whitby said Western Europe should remain a net exporter for the foreseeable future, but he added that losing so much of its cushion leaves it in a tenuous position in the event of supply problems.

Even with several [more] closures of older and smaller base oil manufacturing plants, the region is unlikely to become a net importer for some years to come, Whitby said. But [its surplus] is not as big as it used to be, and supply may get tight when the market has serious disruptions.

Indeed, the market had a taste of what can happen as a series of problems struck over the past several months. Labor strikes hamstrung Totals plant in Gonfreville, France, while fires curtailed output at ExxonMobils Port Jerome, France, plant and Nynas naphthenic plant in Nynashamn, Sweden. Three plants – Agips in Livorno, Italy, Shells in Petit Couronne, France, and Kuwait Petroleums in Europoort, Netherlands – shut down temporarily for scheduled maintenance. Some speculated the combination of these events temporarily made the region a net importer earlier this year, and blenders found themselves in the unfamiliar position of having to scramble for base oil supply.

Asia has been a net importer but received a boost from two projects this spring. SK Corp. increased capacity of its Ulsan, South Korea, plant by 2,700 b/d in April, and Bharat Petroleum opened a 3,500-b/d plant in Mumbai the following month. (The latter project is not included on the chart because it opened after the chart went to press.)

Refiners have announced plans to build a slew of additional projects across Asia and the Pacific Rim. They include two each in India and Taiwan, and one each in Malaysia, Indonesia, China, South Korea and Bahrain. Plus three gas-to-liquids base oil plants are slated to open in Qatar by 2011.

Some of this capacity is expected to be needed within these regions, where lubricant demand is growing steadily. But many agree it is hard to imagine needing near that much base oil in the foreseeable future.

The 2006 Guide to Global Base Oil Refining was mailed with the June issue of LubesnGreases to all subscribers to the magazines print edition. For information about ordering additional copies, click here.