The change took effect January 1, 2014, as a result of a 2012 reform to EU Regulation 978/2012, a law determining which countries qualify for no tariffs or reduced tariffs on goods imported to the EU. The European Commission made the change in an effort to focus trade benefits on the neediest nations.

Malaysian base oils had enjoyed preferential access to the EU market in the form of reduced import duties. But the EU ended such treatment for goods from 20 countries and territories now classified by the World Bank as high income and upper-middle income.

Malaysia is an upper-middle income country according to the World Bank classification, which means it does not qualify any more for the EUs so-called Generalised Scheme of Preferences under the reformed scheme in place since the beginning of 2014, explained Helene Banner, press officer for EU trade policy.

Despite the new expense, Petronas expects to continue having a strong presence in the EU, claiming its base oils are among the most competitively-priced products available. Petronas base oils plant in Melaka, Malaysia, produces 340,000 metric tons per year of mostly API Group III base oils, with a large portion of output slated for export to Europe.

Some analysts believe that the EU has altered its policies toward certain developing countries to encourage their governments to speed up the ratification of free trade agreements with the EU. FTA negotiations between the EU and Malaysia began at the end of 2010, and an agreement could be signed as early as 2015.

Petronas is the only Asian nation producing Group II or III base oils that lost preferential status at the start of the year. A Group II/III plant is being built in Kazakhstan, which also lost preferential status. China and Indonesia are Group II and III-producing nations that retained preferential status because the World Bank classifies them as lower-middle income nations.

India Sets Fuel Economy Targets

India recently announced a new schedule of mandates to raise the fuel efficiency of passenger cars over the next eight years. Observers say the rules will compel automakers to invest in new technologies and should help spur use of higher quality lubricants.

The new regulation requires average fuel economy for passenger vehicles to reach 18.2 kilometers per liter by the 2016/2017 fiscal year and 22 km/l by 2021/2022. The current average is 16 km/l. Officials said the mandate will reduce fuel demand in India and lower vehicular emissions of carbon dioxide. Passenger vehicles in India generate an average of 142 grams of CO₂ per km today, but it is estimated that the fuel economy standards will reduce that rate to 130 g/km by 2021-22.

Manufacturers that fail to comply face stiff penalties. Under the 2001 Energy Conservation Act, India already imposes an initial fine of 10 lakh rupees (1 million rupees or U.S. $16,433) plus 10,000 rupees a day against car makers that fail to meet carbon emission norms based on average emissions of total passenger vehicle sales. The same fines will apply for the fuel efficiency mandates.

Scotland May Get Blending Plant

Northern Oils has proposed a lubricants blending plant in Moray, on a harbor in northeast Scotland. The distributor claims it would be the countrys first such facility.

Located at Buckie Harbour, the blending plant would process about 2,000 metric tons per month, according to the application. Moray is a local government council area in northeastern Scotland.

Northern Oils said in a background information document that if the plant is built, it will result in the creation of at least 15 new jobs, including some apprentice type positions, which should allow young people from the local community to obtain a good and recognized training within the international lube oil industry. In addition, four existing employees would need to relocate from Northern Oils head office at Linmill to the new blending plant.

According to its website, Northern Oils has supplies lubricants throughout the United Kingdom for a variety of market sectors, including marine (commercial and leisure), offshore, renewables, industrial, forestry, food processing and automotive.

Northern Oils said a small tanker ship would deliver base oil to the new blending plant, bringing in about 1,500 tons per shipment with three shipments during each two-month period. The company indicated it would initially charter the necessary tanker during the initial stages of operation, with the intention of eventually purchasing at least one such vessel and basing it at Buckie Harbour.

Six tanks at the site would hold the base oil until it was ready for blending into finished lubricants and later distribution to purchasers. The packaged lubricants would be loaded onto trucks for delivery to clients throughout the U.K., the company said.

Lukoil Accuses Former Distributor of Fraud

Lukoil claims that it is being openly defrauded by a former Chinese distributor falsely claiming that it is still an authorized dealer in China. In a February press release, Lukoils lubricants arm, LLK International, accused Xiamen Sinolook Oil Co. Ltd. of continuing to market 4-liter canisters presented as LLKs Luxe 10W-40 branded engine oil even though LLK dissolved their relationship.

Xiamen Sinolook Oil Co. is not our contracted distributor in China, and we are not supplying this company with our products, LLK said. We are not responsible for any repercussions that might arise as result of dealing with this company.

An LLK spokesman said that LLK designated Xiamen Sinolook as a distributor for a number of months last year but that LLK ended the relationship in October after the Chinese company failed to meet certain requirements.

A director at Shenzhen-based Xiamen Sinolook told Lube Report Asia that the company is Lukoils only authorized dealer in China. LLK said Suifenhe Wanfengyuan Economic and Trade has been its only distributor in China since October.

ECHA Updates C&L Inventory

The European Chemicals Agency released an update to the Classification and Labeling Inventory to help improve the information shown on the summary C&L page. The highlights are:

Impurity flags for notified substances where a notifier has indicated that an impurity or an additive present in the substance impacts the notified classification.

Additional CAS numbers (e.g. for differently hydrated forms of the same substance) which were notified in addition to the one reported under the general information section are published in the column “Additional Notified Information.”

Publicly available IUPAC names as well as the notified physical state/form of the substance for all (aggregated) notifications are now also reported under the “Additional Notified Information” column.

Information on affected organs/specific effects and route of exposure as reported by notifiers are now also displayed in the classification and labelling columns.

Download and export of up to 9999 search results for a substance of interest.

With this release, ECHA aims to enhance the user-friendliness and readability of the database and works toward the goal of making the C&L Inventory a central source of information on harmonized and self-classified substances on the EU market.

Houghton Acquires Steel Mill Business

Houghton International Inc. has completed its acquisition of Henkels North American steel mill business. Key product lines included in the transaction are rolling oils, pickle oils, wet temper fluids and steel mill specific cleaners. In addition, Houghton has gained resources in sales, technology and business development.

Gazprom Base Oil, Lubes Grow

Russian oil major Gazprom Neft posted a 10 percent increase in combined base oil and lubricant production in 2013 compared to the previous year and invested $55 million in its lube manufacturing. In 2013 we produced 492,200 tons of lubricants [and base oil], a record output volume for the company, and we plan to achieve the same result this year, Alexandar Trukhan, general director of Gazprom Neft Lubricantssaid. Of this total volume, around 200,000 tons are high quality lubricants that comply with the latest specifications.

With its increased premium segment volume, the company is trying to compete with imported finished lubes. We are confident that our high quality finished lubes are a good replacement for the existing imported products, Trukhan said.

In 2014, the company expects to achieve the same or a little lower output because of its two-year maintenance cycle, he noted. However, concerning the premium products, in 2014 we estimate a 10 percent volume increase, compared to 2013.

Last year; the oil major spent around 2 billion rubles (U.S. $55 million) to develop its lubricant production. We finished all work at our lubricant production complex in Omsk. The second phase of the finished lubricants production project is done, and now we have a fully automated blending facility there, Trukhan noted. The complex in Omsk includes a 70,000 ton per year lubricant blending plant and a 240,000 t/y API Group I base oil plant.

Chevron Adds African Distributor

Chevron Products Co. announced that its affiliate Chevron South Africa (Pty) Ltd. has selected petroleum distribution company Umongo Petroleum Additives, based in Umhlanga Ridge, South Africa, to be an authorized distributor of Chevron premium base oils in South Africa and Sub-Sahara Africa. Chevrons growing API Group II presence in the region will give the regions marketers of premium lubricants formulating flexibility to optimize performance for both current and tightening API and ACEA specifications.

Umongo was chosen because they offer prospective customers a full range of services, including local storage, logistics and technical support. Umongo began as an additives distributor and later added Group I and Group III base oils to their product offering. In less than ten years, they grew to be one of the largest independent distributor of additives and base oils in the region. In addition to being ISO 9001 certified, Umongo is a Level 2 Broad Based Black Economic Empowerment company in South Africa.

MOGoil to Distribute PAOs in Russia

Chevron Phillips Chemicals International N.V. has named MOGoil GmbH an official distributor for high and low viscosity Synfluid polyalphaolefins in Russia. Used primarily in automotive and industrial lubricants, Synfluid PAOs offer improved fuel economy because of their low temperature viscosities, volatility and low friction characteristics. PAO demand is expected to continue to grow as automotive manufacturers look for solutions that meet the increasingly stringent emissions regulations.

We are pleased to be able to provide quality products throughout Russia through this new agreement with MOGoil, said Peter Hellemans, Petrochemicals Manager for Chevron Phillips Chemicals Europe/Africa/Middle East region. MOGoil has been a distributor for Chevron Phillips Chemical in Germany, Switzerland and Austria for more than 5 years.

Nyco Opens Latin American Office

Nyco announced it has opened a representative office in Panama City, Panama, that the will represent the companys main businesses: aeronautics, defense, industry and automotive. The office will work on increasing Nycos visibility in Latin America, developing contacts with prospects and local institutions, improving customer support and coordinating the existing network of agents and distributors.

Rerefinery Opening in Uzbekistan

The Uzbek-Bulgarian joint venture Uz-Prista Recycling announced that its motor oil rerefinery will begin operation in June. Construction has been completed at the $15 million plant, which has a capacity of processing 43,000 tons per year of used motor oil and producing 30,000 t/y of base oil.

Bulgarian Prista Oil Holding EAD and Uzoilproduct established two joint ventures for collecting and recycling used lubricants in 2012. The Uz-Ecoprotect joint venture was created to collect, store and transport used industrial oils. Uzoilproduct controls 49 percent of the joint venture and Prista Recycling 51 percent.

The second joint venture, Uz-Prista Recycling, will focus on recycling used oils and producing base oils and has the same equity division. Both facilities are located in the Angren industrial zone in the Tashkent region.

ExMo Chem Launches High-Vis PAO Plant

ExxonMobil Chemical opened its new metallocene polyalphaolefin synthetic lubricant base stock plant at its Baytown, Texas, complex, boosting the companys global PAO capacity by 50,000 metric tons per year. Were not disclosing the investment for the plant, and it is integrated into the [Baytown] complex and its workforce, ExxonMobil Chemical spokeswoman Margaret Ross said in an interview.

The Baytown synthetic base stocks plant project at its peak employed more than 700 construction-related workers, the company said in a news release.

SpectraSyn Elite mPAO base stocks use a proprietary metallocene catalyst process, and offer higher viscosity index, improved shear stability and enhanced low-temperature properties, ExxonMobil Chemical claims.

At ExxonMobil Chemical, we believe that innovative lubricants start with using high-performing synthetic base stocks, said Russ Green, ExxonMobil Chemical global synthetics vice president, in the news release. Thats why we have invested in new technology and production capacity at our Baytown chemical complex to support the expected long-term global growth of synthetic automotive and industrial lubricants.

According to the companys website, its mPAO base stock is particularly well suited for industrial oils requiring high stability under severe operating conditions. It can also be used in combination with lower-viscosity fluids (PAO, mineral oils) to formulate a wide range of industrial and automotive lubricants and greases.

ExxonMobil Chemical has total PAO capacity of 144,500 tons per year at plants in Beaumont, Texas, and Gravenchon, France.

Total Signs U.A.E. Distribution Agreements

Total Marketing Middle East has signed three agreements with AW Rostamani Trading for distributing its Elf brand. The first agreement aims to expand the scope of distribution of Elf lubricants in Dubai and Northern Emirates for both commercial and retail segment. The second extends Elf lubricants supply to Arabian Automobiles Nissan, Renault and Infinity Sharjah Service centers as well as Northern Emirates authorized service centers. The third agreement covers the launch of Elf Rapid Oil Change Centre in Arabian Automobiles Umm Al Quwain branch.