LONDON-As of last month, restrictions on the sale and transfer of base oils in Turkey were lifted, allowing these stocks to be stored and distributed within licensed areas of the country, Selim Sanver, managing partner at Serem Petrol, reported at an industry event here last week.
The Turkish government is backing away from restrictions put in place in January 2014, meant to curb the rampant misuse of base stocks in fuel adulteration. Businesses had been taking advantage of significantly lower import duties, free storage and lack of auditing for base oils, reported Aslinur Gurocak, another speaker at the ICIS World Base Oils & Lubricants Conference. Later this year, import duties for premium base oils will be suspended, she said.
With the restrictions alleviated, Chevron has announced that it will begin to store API Group II base oils in Turkey next month, and in March, Neste will move its Group III base stocks hub back to Turkey from Varna, Bulgaria, according to Sanver. I am quite sure that the easy availability of higher quality base stocks will have an improving effect on the overall quality of finished lubricants in Turkey, he predicted.
Gurocak, whose company, Ekin Kimya, has been tapped to distribute Chevrons premium base oils and process oils in Turkey, believes that demand for premium stocks will also rise because of Turkeys adoption of Euro 5 and coming Euro 6 emissions standards.
Turkeys only base oil plant – the Tupras facility in Izmir – has a capacity of 400,000 metric tons per year of API Group I stock. In 2014, the country sold close to 120,000 tons of base oils and imported nearly 600,000 tons, reported Selcuk Akat, general manager of Adco Petroleum Additives, in his London presentation. While Turkish companies have conducted price studies for refining higher quality stocks, when the price [of crude] is down, the oil companies don’t make investments, he said, so it is unlikely that any Group II or Group III production is on the near horizon.
Finished lube production, according to Sanver, is about 550,000 t/y. While Turkey has 200 licensed blenders on the books, he estimated that only 75 to 80 are actually blending lubricants. The rest, he said, are still making illegal adulterated fuels, though black market volumes have dropped significantly in recent years. Gurocak gave an even gloomier estimate of just 40 active blenders.
Total lubricant demand in Turkey, according to Akat, was 650,000 metric tons per year in 2014, making it the 17th largest lubricant consumer in the world. To meet demand, 84 percent of lubes were blended locally and the remaining 16 percent were imported. Those imports amounted to 100,000 tons last year, mostly of premium lubes from major brands. Akat expects imports to increase.
Forty-one percent of Turkeys lubricant demand in 2014 was industrial, said Akat, with the countrys construction industry bumping hydraulic oils to 45 percent of those industrial products. Process oils accounted for 18 percent, followed by transformer oils (9 percent), metalworking fluids (6 percent), gear oils (5 percent) and other industrial lubricants (17 percent). Marine lubes made up 7 percent of demand, and grease was at 4 percent.
In the same year, automotive lubricants took the largest chunk of demand at 48 percent. Of that, heavy duty motor oils made up 53 percent, passenger car motor oils were 28 percent, gear and transmission lubes were 17 percent, and motorcycle oils were 2 percent, according to Akat.
During 2014, 1.17 million motor vehicles were produced in Turkey, and almost 668,000 rolled out during the second quarter of 2015. The country is 17th in the world in motor vehicle production, the largest commercial vehicle producer in Europe and the second-largest producer of both buses and heavy trucks in the EU, said Akat. Specs for automotive lubricants are mainly led by the countrys 18 original equipment manufacturers, according to Sanver, but theres still a significant market for elderly vehicles with lower lubricant quality demands.
Nearly 20 million registered vehicles travelled Turkish roads last year, a number that has increased over each of the past three years, reported Akat. In 2015, passenger car sales were up by 24 percent over the previous year to 725,596 units, and light commercial vehicles increased by 34 percent to 242,421. Turkish drivers tend to prefer liquefied petroleum gasand diesel, at 41 percent and 31 percent respectively, over gasoline, which accounts for just 28 percent of the parc.
As for market share, Akat says, major players include Petrol Ofisi at 20 percent, Shell at 18 percent, BP at 17 percent and Total at 10 percent. These are followed by Opet Fuchs and ExxonMobil at 9 percent each, Belgin (5 percent), Lukoil (3 percent), Alpet (2 percent), M Oil (1 percent), and others that make up the remaining 6 percent.