A growing number of businesses and institutions are finding a pragmatic way to address both of these concerns – on-site power generation with gas engines. The increasing popularity of this approach has also led to the tapping of different types of gas, and a variety of alternatives to natural gas now exist, including biogas from various sources, landfill gas and syngas.

These alternatives offer flexibility to users and money-making opportunity to generators. They also create problems, though, because some of the alternatives contain contaminants that can damage engines and foul their lubricants. Many operators cope by employing oil analysis and shortening oil change intervals. Lubricant marketers formulate different oils for different gases.

Europe: Gas Engine Central

There are no reliable public domain data for sales of gas engines as trade statistics are not discretely logged. Also engine manufacturers are understandably nervous about sharing data because recent acquisitions have concentrated manufacturing capacity, prompting a 2011 monopolies investigation in the European Union. The Strategy Works, a London-based strategic marketing consulting firm, analyzed the market for gas engines used in power generation – and the oils that lubricate them – by conducting in-depth interviews with 25 engine manufacturers, engine operating and maintenance companies and lubricant and additive suppliers.

Based on those interviews and desk research, TSW estimates that global sales of large gas engines – those capable of generating more than 500 kilowatts – exceed 6,000 megawatts per year. Of that amount, 64 percent is in Europe, the Middle East and Africa. Europe is also the epicenter for production of gas engines. GE says that 90 percent of the gas engines that it sells worldwide are manufactured in Austria by subsidiary Jenbacher. U.S.-based Caterpillar relocated its gas engines center to the Mannheim, Germany, manufacturing facilities of subsidiary MWM, and another large U.S. manufacturer, Cummins, has 42 percent of its gas engine sales in Europe, the Middle East and Africa.

Europe is most important to us as there are more gas engines there than in other places, especially in Eastern European countries like the Czech Republic, Bulgaria or Estonia, but also in Italy and in Germany, said Frank Merbitz, chief applications consultant at Addinol, a lubricant marketer based in Leipzig, Germany. Nowadays Europe accounts for a large share of our total turnover of gas engine oil, and its growing still.

Sources interviewed for this article agreed that use of gas engine oils will probably continue to rise. Shell Lubricants Global Marketing Manager Richard Holdsworth said there is a move toward independent backup power and a real shift from heavy fuel to gas. He predicted that liquefied natural gas will be tapped as an alternative to heavy fuel in many parts of the world.

Maxim Donde, general director of LLK-International, the lubricants arm of Russian energy giant Lukoil, says the global outlook for gas engine oils is rosy. The dynamics of sales is positive, he said. Market volume of these oils around the world is growing at about 5 percent per year, which is associated with an increase in the number of working gas engines.

TSW estimates that total installed capacity of gas engines in EMEA is 40 gigawatts and is growing at around 8 percent per year. Based on average oil consumption figures, this equates to over 2.5 million metric tons per year of gas engine oil used in these regions, making their lubricant market worth around 600 million. Gas engines run continuously at full power, require frequent servicing and use considerable volumes of engine oil.

The main application for gas engines in Europe, the Middle East and Africa has traditionally been and continues to be power generation, whereas in North America it is for pipeline applications such as gas transmission and compression. In fact, GE produces its Waukesha range of gas engines in the United States, primarily for gas compression, while its European-built Jenbacher range is for power generation. The increasing availability in the U.S. of low-cost shale gas produced by fracking could change the market dynamics there, but energy generation will remain the dominant driver within Europe, the Middle East and Africa.

Gas engines are ideal for converting gas into valuable heat and energy, especially for suppliers wanting to harvest biogas from sources such as landfills, farm crops or sewer plants. The engines can be sited near the source of the feedstock and sized to match the level of gas production. (Sixty-eight percent of engines are in the range of 500 kilowatts to 3.5 MW.)

Power generation is rarely the business of the enterprises where engines are installed. Therefore the work is farmed out to specialist operation and maintenance providers since plants can be required to operate at full power around the clock. Many companies that sell generating equipment also seek to secure the operating and maintenance contracts. Any loss of output is lost revenue, so choosing and buying the right gas engine oil is a critical decision operator.

Gaining Approval

Oil formulators must go through lengthy processes to get product approvals for an oil, a key step for marketing purposes. Each OEM has its own specific approval process that you need to satisfy, so there are a lot of coordination and careful planning that have to go into running the field test and putting the data packages together and then making the presentations to the OEMs, said Alan Beckman, original equipment manufacturer liaison for natural gas engine oils at Chevron Oronite.

The process starts with the gas engine manufacturers specifying the lubricating oil performance parameters required by their engines. Some go further and also provide a list of approved oils, allowing the end user – typically the operating and maintenance company – to select a product suited for their type of application and gas. OEMs strive to provide a wide choice of approved oil brands, so the lists are generally comprehensive, and most OEMs strongly avoid recommending any one brand.

Some OEMs, like Cummins, also have their own brand of oil. We have a marketing agreement with Valvoline, said Andrew Stone, director of energy solutions at Cummins. If you had a maintenance agreement with Cummins we do have a preference for Valvoline but you have the option to use other specified oils dependent on availability, application etc.

The one exception is Guascor, an Alava, Spain-based subsidiary of Dresser Rand, which recommends only its own brand of gas engine oil. We incentivize the use of our oil, which has been tested and designed for our engines and the specific applications that were in, said Jose Maria Bilbao, sales director for power environmental solutions at Guascor. During the warranty period, we will not warrant the engine unless our oil is used.

Once outside the OEMs warranty period – which typically last 12 months – operating and maintenance companies are free to choose the gas engine oil that they use, but they usually wont switch oils until they have run trials to prove that the new oil is better for them in their fleet. These trials are conducted over many months and are often funded by oil manufacturers.

As part of the product development process, ExxonMobil will sponsor field tests to obtain OEM approvals and provide lubricant proof of performance, including oil supply, power cylinder assembly installation, borescopic inspections and in-service oil analysis, said Kathleen Tellier, a product research and technology specialist for commercial, marine & gas engine oils with ExxonMobil Lubricants and Specialties.

Chevron Technical Manager Paul Nadin-Salter added, Everything in this business is about trials.

Arevon Energy operates and maintains gas power generation plants at 35 mature landfills in the U.K. with a total output of 64 MW. Arevon Asset Manager Mark Woolams explained how the trial procedure works from an end users perspective. If the trial oil is less expensive than the one that has been used, then the first stage is a like-for-like trial, without altering oil change intervals. If results are satisfactory the operator will adopt the new product but run additional tests to see what benefits can be achieved by increasing oil change intervals. Initial trials can take six months to a year, he said, with the oil company usually underwriting the commercial risks and providing the test oil either free or at a reduced cost. This allows operating companies to benefit from effectively being the trial resource for oil companies.

The conclusion is that the operating and maintenance companies will only switch oil suppliers if the oil is first trialled on engines in its fleet and it reduces operating costs.

Alternative Gases

Traditionally most gas engines ran on natural gas, but alternatives are gaining in popularity. Some of them also bring challenges for gas engines and gas engine oils. Natural gas is almost entirely methane and is a clean-burning fuel that produces carbon dioxide and water vapour. Most of the alternatives used today are some type of biogas.

These are produced from organic matter and can either be manufactured from waste or from crops grown especially for that purpose. Waste-to-energy sources include household, commercial and industrial waste as well as vegetable waste from crops, and animal waste such as carcasses and manure. The four main sources of feedstock are: agriculture, public authority waste collection, sewage treatment and the food and drink industry.

The content of biogases can vary substantially depending on the feedstock from which they are produced, the production process and the degree of gas cleaning in the gas plant. However, most contain pollutants that can harm engines, degrade the lubricating oils and add pollutants to the exhaust. The two most common pollutants are hydrogen sulphide, which causes acids, and siloxanes, which form abrasive substances that cause engine wear.

Germany is a particularly important market for biogas, with demand growing rapidly because of government incentives designed to accelerate investment in renewable energy. German production of biogas grew 20 percent in 2011, according to Eurobserver magazine.

Our largest [gas engine oil] market would be Germany, which is the biggest market in biogas, followed by the United Kingdom, said Sharanie Patterson, category portfolio manager for power generation, natural gas engine oils at Petro-Canada. Germany has large potential, with some 7,000 gas engines right now running on biogas.

The consensus is that landfill gas is declining in the U.K., where no new sites are permitted. (U.K. waste disposal is now moving to anaerobic digestion.) In contrast, volumes of landfill gas are increasing in the rest of the world, creating an opportunity for the U.K. to export its expertise to other markets.

The whole drive away from dumping in landfills, moving to recycling and making use of these materials means that there will be no great prospects for landfill in the U.K., said Julian Packer, director at operating company Cogenco. Stone added, [E]lsewhere, landfill is booming.

Whether from landfills, sewer plants or other sources, the trend toward biogas is creating challenges for engine oil marketers. Formulators are addressing these through their choice of base stocks and additives.