Pakistans lubricant market is vibrant and lucrative despite a glut of counterfeit and smuggled lubricants and industries hobbled by power shortages. These were the conclusions drawn by yasin H. Risvi, Karachi-based vice president of Total Oil Pakistan and chairman of the Lubricants Business Society of Pakistan, during an October presentation at the ICIS Middle Eastern Base Oils & Lubricants Conference in Dubai.

Pakistan has the opportunity to become Asias trade, energy and transport corridor, said Risvi, with its strategic location linking the energy-rich Middle East, land-locked energy-rich Central Asia, and booming China, India and East Asia. The lubricant market has lots of potential to grow, particularly the fast-growing market for motorcycle oils, he said.

National Refinery Ltd. is Pakistans only domestic base oil refiner, with capacity to produce 200,000 metric tons per year of solvent-refined API Group I base oil.

There are 60-plus blending plants in Pakistan, of which 31 are reclaimed oil blenders. The country has 21 legally sanctioned used oil reclamation plants with combined production of 70,000 t/y, Risvi said. But most used oil is sold to illegal plants that have primitive methods of reclamation. These illegal operations supply reclaimed oil for counterfeit lubricants, he said.

Pakistan consumes about 248,000 t/y of base oil, including locally produced virgin oil (138,000 tons), legally reclaimed base oil (70,000 t), imported Group II and III (20,000 t), and illegally reclaimed oil (estimated at 20,000 t).

The countrys finished lubricant demand reached 319,000 tons in 2011, Risvi estimated. This demand was met by the multinational majors Total, Shell and Caltex (together accounting for 32 percent), Pakistan State Oil (11 percent), other national and international brands, including Mobil, Castrol and ZIC (14 percent), miscellaneous local and regional brands (17 percent), reclaimed oil (22 percent) and smuggled oil (4 percent).

The passenger car and motorcycle engine oil markets, estimated to be 90,000 tons in 2011, are strong and growing fast. The market is currently dominated by API SG/SL, but will move gradually to SM and SN.

The heavy-duty engine oil market, totaling 134,000 tons in 2011, had declined from 2007 to 2010 because of a slowing economy and floods. Risvi predicted that the commercial automotive lubricant market will stay stagnant through 2015, although the construction sector will come back slowly. The heavy-duty market will remain dominated by CD/CF/CF-4 oils, while demand for CH-4 will gradually shift to CI-4.

On the industrial lubricant side, the lubricant market for the energy sector will continue to grow due to increasing demand for power, said Risvi. However, demand for many general industrial lubricants is flat or declining because many industries, including textiles, fertilizer and cement, are crippled by power and gas shortages.

Pertamina Targets Europe, Africa

Pertamina, Indonesias national oil company, announced that it will begin exporting lubricants to Switzerland and South Africa. The company also recently outlined plans to spin off its lubricant business unit as a subsidiary. The company is partnering with Lugano, Switzerland-based Indonaldini Group to develop marketing plans for packaged lubricants in Europe, with Switzerland as the first target. The initial 32,000-liter export of Pertaminas products will be automotive lubricants – Fastron Series, Prima XP and Mesran brands – in two containers sent through Genoa, Italy. Fastron lubricants are made from API Group III base oil. The SK-Pertamina joint venture Group III base oil plant in Dumai, Indonesia, has capacity of 360,000 t//y.

In South Africa, Pertamina will work with National Plasterer Group to introduce lubricant products in Cape Town and western South Africa. For the initial phase, Pertamina will ship a 12,000-liter container of products, including Fastron synthetic products, Mesran and Meditran SX 15W-40-based diesel lubricants.

Gazprom Lube Sales Rise

Russian lube marketer Gazprom Neft-SM sold 8,000 tons of its premium G-Family finished lubricants during the first 10 months of 2012, a 150 percent increase over the similar period in 2011. Expanded distribution channels and an increased assortment of products are directly related to the increase sales, according to Ivan yakovlev, head of Gazprom Neft-SM strategic marketing and development department.

In 2012 we started direct distribution of our premium brand, G-Energy, at numerous auto service stations. At the moment this synthetic motor oil is offered at 1,200 service stations in Russia and abroad, he said. The companys lube arm sold 1,500 tons of its premium lubes in October, of which 1,300 tons were distributed in Russia and 200 tons in Italy and other European nations.

The company made significant strides in 2012 to become a supplier for several Russian and international automakers, including the General Motors plant in Kaliningrad and Mercedes Benz Trucks in Naberezhnye Chelny.

Rafinerija Nafte Brod Upgrades Refinery

Rafinerija Nafte Brod, Bosnia and Herzegovinas only fuel refinery, has selected technology from Honey-wells UOP and ExxonMobil Research and Engineering (EMRE) to improve the quality of refined feedstocks and fuels. The project, due to be completed in 2016, will also upgrade base oils produced at a nearby plant.

The new technology will allow Rafinerija Nafte Brod to improve its product quality and environmental performance. The refiner will combine Honeywell UOP Unicracking hydroprocessing solutions with EMREs distillate and lubricant dewaxing technologies to produce ultra-clean jet and diesel fuels and high-quality feedstocks for lubricating base oils.

The project will upgrade more than 45,000 barrels per day of kerosene, diesel and vacuum gas oil feedstock into high-quality diesel and jet fuels. It will also produce high-quality base oil feedstocks that will be used to produce Group II and III base oils at Rafinerija ulja Modrica, which like the Brod refinery is owned by Russias Zarubezhneft and located in the Doboj region of Republika Srpska.

Vivo Buys More Shell Ops

Vitol and Helios Investment Partners have acquired the majority of Shells shareholding in their businesses in Namibia and Botswana. The businesses include 34 Shell branded retail stations and 42 other retail stations in Namibia, and 12 Shell Select stores in Botswana. The Namibia and Botswana operations are now part of Vivo Energy, joining Shell subsidiaries in 10 other countries that were previously transferred.

On completion of the transaction, Vivo Energy operates more than 1,300 retail stations across Africa under the Shell brand and will have access to around 1.2 million cubic meters of storage. Shell and Vivo Lubricants will have lubricants blending capacity at plants in seven countries, producing Shell branded lubricants, with the opportunity to market across Africa.

Vitol and Helios each own 40 percent of Vivo Energy, with Shell holding the remaining 20 percent.

Omanoil Picks Auto-os in Bahrain

Oman Oil Marketing Co. (Omanoil) has chosen Auto-os as the exclusive dealer of Omanoil-branded lubricants in Bahrain. Besides Bahrain, Omanoil lubricants are available in eight other markets: Kuwait, Qatar, yemen, Bangladesh, Ethiopia, Djibouti, Somalia and Afghanistan.

Emerald Picks Eukem SAS

Emerald Polymer Additives, a division of Emerald Performance Materials, has appointed Eukem SAS as its European sales agent for Good-Rite 3114, a tri-functional hindered phenolic primary antioxidant used in processing polyolefins and other polymers for long-term stabilization. Eukem SAS, headquartered in Paris, provides business development and sales support to customers in the plastics and coatings markets across Europe.

Partnering with Eukem in the European market furthers our strategy to expand our global sales and support network, said john Zuppo, general manager of lubricant and plastic antioxidant product lines for Emerald Polymer Additives.