PAO Shortage Squeezes Mobil 1


The continued shutdown of the ExxonMobil Chemical polyalphaolefin (PAO) plant in Beaumont, Texas, has forced ExxonMobil Lubricants and Specialties to institute a sales allocation on a variety of Mobil 1 synthetic lubricants, effective Oct. 1.

On Sept. 15, ExxonMobil Lubricants and Specialties was notified by our primary polyalphaolefin supplier, ExxonMobil Chemical, that Hurricane Ike had caused significant disruption to production capabilities at their Beaumont, Texas, plant, and to the ability of their suppliers to make deliveries of critical raw materials and services to the site, the company told customers in a letter obtained by Lube Report. As a result, ExxonMobil Chemical implemented an allocation on sales of PAO base stocks to customers including ExxonMobil itself. This allocation is expected to last several months, the letter stated.

According to LubesnGreases magazine, the Beaumont facility is one of the worlds largest PAO plants, with capacity to make 82,000 metric tons per year.

ExxonMobil spokesman Kevin Allexon confirmed yesterday that the PAO plant remains shut down due to the hurricane damage. We have folks working on the repairs, were making good progress, but theres no timetable for how much longer it will be, Allexon told Lube Report.

According to the advisory letter, customer liftings are restricted to 100 percent of prior purchases on products such as Mobil 1 SAE 0W-40, 5W-40 and 15W-50 engine oils; on Delvac Synthetic ATF; Mobil 1 High Mileage 10W-30 and 10W-40; and Extended Performance 5W-20, 10W-30 and 15W-50 motor oils. Also at 100 percent allocation is Mobil 1 ESP 5W-30.

There is a 65 percent allocation on the brands SAE 10W-30, and the allocations drop even further for Mobil 1 0W-20, 0W-30 and 5W-20 oils, to 25 percent. Truck and SUV 5W-30 is also at 25 percent allocation. The tightest allocations are those in force for Mobil 1 5W-30 (20 percent) and EP 5W-30 (15 percent).

In the letter, ExxonMobil explains that a product on 100 percent allocation means a customer can continue to purchase it at the customers average 2008 purchase levels. Volumes for the allocation are based on a customer’s average monthly purchases from January to August 2008.

A Midwestern distributor that buys several truckloads of Mobil 1 synthetics a year said it had seen a lengthy delay in receiving shipments. We placed orders back in late July and August, and we were told if we were lucky, we might see it in December, the source told Lube Report. Its affecting our customers. The good thing forus iswe do have other alternative brands.Somebody who’s just a Mobilguy can run into problemswhen theydon’t have any synthetic alternatives.

A Southern distributor said the PAO shortage in the market in general is impacting more than just Mobil 1. With PAOs in general, that supply was messed up before Ike – all that did was further mess it up,this sourcesaid. The PAO shortage is not just confined to Mobil 1, its confined also to any kind of industrial oil thats made with PAOs.

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