Petro-Canada said this week that the Group II train of its Mississauga, Ontario, base oil plant is not expected to resume production until early March. That would represent a two-month shutdown for that portion of the facility, which makes approximately 6,250 barrels per day.
A Jan. 7 fire that closed the plants White Oils Unit apparently has forced Petro-Canada to impose allocations on some products, and observers say it has already affected the North American base oil market.
I think [other Group II] suppliers are getting calls from Petro-Canada and customers of Petro-Canada who are looking for barrels to make up for the shortfall, said one source, who asked not to be identified.
The accident has slowed progress that the industry was making in its recovery from Hurricane Rita, which caused four plants along the U.S. Gulf of Mexico Coast to close for a month or more. ExxonMobil stated yesterday that its plant in Beaumont, Texas – the last of the four to reopen – has finally resumed production. The rest of the industry has worked to replenish supply chains, but the continents second largest plant – the Excel Paralubes facility in Westlake, La. – is scheduled to shut down for a maintenance turnaround in March. It has capacity to make 21,900 b/d of Group II oils.
Petro-Canadas Jan. 7 fire occurred during routine maintenance in a fractionation section of the plant, according to a Monday letter that the company distributed to customers. The letter, which Lube Report obtained, added that the company is repairing damage to electrical systems, instruments, pumps, heat exchangers and piping, and expects to resume production in early March. The company hopes to have supply largely restored by the end of March.
The plant has capacity of 12,500 b/d. One of its two production trains makes Group II-plus and Group III oils and was not affected by the accident. It accounts for half of the plants capacity.
In its letter Petro-Canada said it has been striving to buy barrels from other suppliers and, despite low inventories industrywide, has secured enough to make up approximately half of its shortfall. As a result, it raised previously imposed allocations on some products, including 5W-30 and 10W-30 passenger car motor oils and 15W-40 heavy duty engine oils.