Why? Growing domestic consumption, Alexey Strelchenko, Lukoil Lubricants Co. commercial director, told the ICIS Middle Eastern Base Oils & Lubricants Conference in Dubai. Russias passenger car fleet is growing fast, and lubricant production needs to keep up.

As recently as 2006, said Strelchenko, the 24 million passenger cars then in Russia were either Russian brands (15 million) or imported foreign brands (9 million). Today, there are 39.4 million cars on the roads, and 19 million are Russian brands, 14.4 million are imported foreign brands – and fully 6 million are foreign brands produced in Russia.

Strelchenko predicted that by 2017, Russias passenger car fleet will top 51 million. More than half will be foreign brands, and of these, the lions share will be produced in Russia.

This translates into strong demand for higher grade lubricants and is driving imports of API Group II and III base oils. Both Shell and Fuchs are producing finished lubricants in Russia.

But Russian base oil producers arent standing still. Lukoil, which currently claims 44 percent of Russias base oil market, anticipates meeting domestic demand for high-end base oil. By 2017, said Strelchenko, Luk-oil will increase Group III capacity in Volgograd from todays 55,000 t/y to 265,000 t/y. And the company will add 353,000 t/y of new Group II capacity in Perm by 2021. Lukoils total capacity will rise just slightly, he noted. The new Group II/III capacity will be offset by reducing Group I capacity from todays 1.185 million t/y to just 657,000 t/y.

Happy Holidays!

Dick and all our colleagues at LubesnGreases join me in wishing you a joyful holiday season and a peaceful and prosperous New Year!

Nancy J. DeMarco

nancy@LNGpublishing.com

p.s. Weve moved. Mid-November found our growing business at 7389 Lee Highway, Suite 300, Falls Church, VA 22042 U.S.A. Our phones and fax are unchanged. Our bright new space atop a modern office building doubles our square footage and gives us room for more expansion.