Brent Lok, Chevrons base oils marketing and new business development manager, commented recently that this project establishes Chevron as a major player in the global base oil market.

This state of the art plant will ultimately have the capability to produce 25,000 barrels per day (1.25 million metric tons) of premium Group II grades that will meet the same standards as existing Chevron units in Richmond, California, United States, and a joint venture refinery in South Korea. With the emphasis on globalized production that will be fully integrated within the Chevron system, Pascagoula will produce the signature Chevron Group II base oils: 100N, 220N and 600N.

In addition to these standard grades, the site will also produce a light viscosity grade 60N that will be used in the production of electrical insulating oils such as transformer oils, among other applications. It is perceived that this market will grow significantly over the next few years.

The production output from Pascagoula will be placed into any number of markets, such as Central and South America, Europe and, of course, the U.S. Pascagoula is strategically positioned in the U.S. Gulf and has access to Chevron-owned shore storage from which seagoing vessels will be able to load base oils for export markets. In addition to in-house storage at Pascagoula, Chevron will also use third party storage around Houston, Texas, where parcels of base stocks can be loaded as partial cargoes on larger liner type vessels serving recognized routes to the south and east.

The history of Chevrons emergence started with the refinery in Richmond, California, which will be retained as one of the three axis sites producing Group II base oils to common Chevron standards, all of which the company says are identical and interchangeable. Production from the refinery at Richmond will now be targeted at Far East markets, providing Chevron with a direct link to the lucrative growth markets in Southeast Asia.

Lok also stressed that the overriding philosophy behind the Pascagoula project was to be able to satisfy customer needs no matter where in the world they were located. Hence, if a multinational user has multiple sites based around the globe, this customer could rely on the same quality of basestocks irrespective of location. This becomes extremely important when approvals for formulations are granted by OEMs. Given this edge, Chevron will be able to accommodate the needs of all its customers wherever they may be based.

This fundamental aim and objective has only been achieved through the exacting standards imposed by Chevron on the base oils being produced in each refinery, an accomplishment that possibly affords Chevron the accolade of being the first major oil company to become a truly global supplier of standard Group II base oils from multiple production sites.

Europe has become an important focus for Chevron Lubricants as an open market making the quantum leap from traditional Group I oils to Group II and III base oils. With very little production of Group II material within Europe, this market relies almost entirely on imported Group II products to fill the void. The growing requirements for 10W and 15W automotive oils make Group II the natural successor in many Group I applications.

This opportunity has not been missed by Chevron, which has assembled a skilled in-house team and carefully selected the right distributors. These steps have produced the building blocks not just for the entry into market, but have also created a huge presence that can only yield benefits in the years to come.

Asked whether Chevron would consider building a plant such as Pascagoula within Europe in the future, Lok commented, Never say never. But he swiftly added that now was perhaps the time for consolidation.