Belarus reported a dramatic increase in first quarter exports of base oils and lubricants, leading observers to question the accuracy of the data. Belaruss National Statistical Committee reported first-quarter exports of almost 600,000 metric tons of base oils and lubricants, and almost 1.4 million tons of solvents. This raised speculation among leading analysts that such numbers are a scheme to skirt export duties owed to its economic partner, Russia.

It is impossible for Belarus to export such high volumes of lubricants when the country itself only produces 200,000 to 250,000 tons of base oil and lubricants, stated Oleg Tsvetkov, head of the oil department at the All-Russian Research Institute of Oil Refining.

Many Russian news outlets have reported that Belarus increasingly makes false registrations for petrochemical exports such as gasoline, diesel fuel and bitumen, calling them lubricants, thinners and solvents to avoid Russian export duties.

In the first quarter of 2012 Belarus reportedly exported 1.39 million tons of thinners and solvents valued at 900 million, up from 116,000 tons produced in the same period last year. Additionally, base oil and lubricants exports in the first quarter amounted to 593,000 tons (valued at 298 million) up from 165,000 tons produced in the first quarter of 2011.

It is nonsense, said Tamara Kandelaki, general director of Moscow consulting firm InfoTek. They dont produce that much, and Russian refineries dont export that much feedstock to Belarus. She added that the only big base oil and lubricants producer in the country is the Novoplotosk refinery, which produces 200,000 to 250,000 tons of lubes annually. InfoTek also noted that Russia only exported 921,000 tons to base stocks in all of 2012.

The Russian Federation should investigate the extreme growth of thinners, solvents and lubricants exports, so that Belarus doesnt avoid paying export duties, Alexandar Surikov, Russian ambassador to Minsk, said recently during a press briefing.

EU Drops Duty on Chinese Furfural

The European Council repealed an anti-dumping duty on furfuraldehyde from China, saying in recent years that industry in the European Union had fully recovered while prices rose on imports of the solvent used in base oil production.

The significant price increase in 2010 and 2011 has dramatically reduced the margin of dumping from the [Peoples Republic of China], said the European Commission, which conducted the latest review of the anti-dumping duty and recommended dropping the duty. The EU imposed the anti-dumping duty on furfural imports from China in January 1995. The duty was extended twice, in 1999 and 2005.

The European Unions current furfural industry consists of two companies, Lenzing AG of Austria and Tanin Sevnica kemicna industrija of Slovenia. Both requested another review in January 2010. In May 2011, the EU Council extended the measures for five years, renewing the duty rate at 352 per metric ton.

According to the European Commissions report, most market indicators showed the duty aided furfural production, sales volume and sales value by the EUs furfural industry from 2008 to the review investigation period (July 1, 2010 to June 30, 2011). However, given the substantial increase in prices on the Union market, the Union industry is now achieving profits far in excess of the target profit, set at the original investigation as being 5 percent, to ensure its development, the commission noted, adding that it found no evidence of a parallel increase in costs.

Record Year for Grease Output

The worlds lubricating grease manufacturers created nearly 2.4 billion pounds of product during 2011, a record-high volume, according to data released by the National Lubricating Grease Institute. The years total output of 2.38 billion pounds, as reported by 162 grease manufacturers worldwide, was 1 percent higher than 2010’s yield of 2.36 billion pounds, the NLGI Grease Production Survey Report shows. 2011s global production also comfortably surpassed the 2.30 billion pounds reported in 2007, the prior peak year.

Unsurprisingly, lithium based greases continue to dominate the market. Including both regular and complex types, lithium accounted for 1.8 billion pounds of the total global production, 75 percent of the year’s volume. The next-most popular grease types were calcium-thickened (10 percent), polyurea (5 percent), and aluminum greases (4 percent). Clay, sodium and other thickeners accounted for the rest.

NLGIs survey provides an annual accounting of lubricating grease production worldwide. The survey, a voluntary submission of annual grease manufacturing results, collected production data from 162 grease companies that operate 186 grease plants around the world. Participants included 37 grease makers based in North America, 42 in Europe, 31 in China, 17 in Japan and 14 in India and the subcontinent.

China was the largest grease producer in 2011 and reported making 837 million pounds – 36 percent of the global total. The next-largest reporting areas were North America, with 487 million pounds, and Europe, which made 411 million pounds. India and the subcontinent recorded grease production of 191 million pounds, and Japan rounded out the top five producers with 169 million pounds.

Repsol Continues Expansion Plans

Spains Repsol YPF changed its name to Repsol S.A. after Argentinas nationalization of YPF, and indicated a base oil expansion project at its Carta-gena refinery will continue as planned. In June 2010, SK Lubricants of Seoul, South Korea, announced plans to partner with Repsol to build a 13,000 b/d Group II and III base oil plant at Cartagena. It is scheduled to begin production in 2014. Operational expansion projects at the Cartagena and Bilbao refineries in Spain are expected to raise Repsols refining margin by about 2.5 per barrel by 2016.

Repsol said it has taken legal action inside and outside Argentina to recover damage caused to the company by the countrys nationalization of YPF on April 16. The refiner said it intends to take the matter to the International Centre for Settlement of Investment Disputes.

Rusoil Plant Sold in Russia

Neftgazsbyt acquired a 51.9 percent stake in the Mendeleev-Rusoil fuel refinery and lubricants plant from Slavneft for an undisclosed amount. The sale was motivated to improve the companys operational structure and by the necessity to focus investment resources on upgrading Yaro-slavnefteorgsintez, our key refinery, the oil major Slavneft said in a press release. Slavneft is a 50-50 joint venture between Gazpromneft and TNK-BP. In 2010 the Rusoil refinery was valued at U.S. $15 million, according to a Deloitte and Touche CIS audit report.

Based in Konstantinovsky, Yaro-slavskaya oblast, the Mendeleev-Rusoil refinery produces fuels, motor, transmission, transformer and industrial oils as well as greases, coolants and additives. Feedstock for the finished lubes is supplied by Slavnefts Yaro-slavnefteorgsintez 250,000 metric ton per year API Group I base oil refinery.

In accordance with the contract, Moscow-based Neftgazsbyt signed a deal with the local Yaroslavl oblast government to modernize and utilize the refinerys capacities and to continue the companys social and environmental programs, Slavneft said. Russias Federal Antimonopoly Service approved the acquisition on April 5.

Bahrain Group I Plant Opened in June

KB Petrochemical Industries opened a 50,000-metric-ton-per-year plant in Bahrains South Alba Industrial Area. Some of the product will go to applications such as knitting oils, transformer oils and antistatic oil, said Managing Director Jahangir Hossain Patwary. A significant portion will go to non-lubricant uses such as inks and paints.

KB was created in 2011 as a joint venture equally owned by Chairman Kanaan Naser Al Naser, of Kuwait, Vice Chairman Shaikh Hammed, of Bahrain, and Patwary. It is a subsidiary of Diamond Industries, a Kuwait-based provider of construction, logistics, engineering and procurement services for the oil industry.

Patwary said KBs plant cost 12.3 million and receives feedstock from Bapcos refinery at Sitra, Bahrain. The refinery is also home to Bapcos base oil joint venture with Neste Oil, a 400,000 t/y Group III plant that opened last year.

Patwary said KB plans to use some of its base oils to produce its own lubricants and other products, while selling the rest to other manufacturers. The company already markets lubricants in India.

Custom Metalcraft Opens in Europe & Australia

Custom Metalcraft Inc. announced the opening of a European sales office in Almelo, The Netherlands. The office will provide the companys European clients local access to a sales representative.

Custom Metalcraft has also entered into an exclusive agreement with Australian company, Buschutz Engineering Pty. Ltd. to manufacture the companys range of IBCs and Grease Bins. Buschutz will market these products in Australia, New Zealand, Indonesia, East Timor and Papua New Guinea as BEST-Vessel.

Custom Metalcrafts TranStore intermediate bulk container is a liquid handling tank with a patented one-piece top and draining bottom. The company says the tank meets or exceeds all requirements for Intermediate Bulk Containers, per title 49 CFR of the Hazardous Material Guide, as well as supplement 2 of the Australian Dangerous Goods code, and amendment 30 of the International Maritime Dangerous Goods code for transport by sea.