Per Klinstam, president of Belgium-based Ergon Europe MEA, said that the companys entrance into the South African and sub-Saharan markets is an important step in Ergons strategy to make its naphthenic oils available across the globe.

According to analysts who spoke to LubesnGreases at the ICIS African Base Oils & Lubricants Conference in Cape Town in early November, Africas naphthenic market has been dominated by Nynas, and the entrance of Ergon will increase competition. However, Orbichems Classen said, Africa is a huge market for naphthenic that will accommodate everybody.

Valentina Serra-Holm, Stockholm, Sweden-based Nynas ABs marketing director for naphthenics, said her company believes strongly in the African market and has been active there for more than 15 years, with direct sales handled from its sales office in Johannesburg, covering the entire African continent. Nynas see a good growth potential for naphthenics in the region, mainly under the drive of the electrical industry, with regard to generation, transmission and distribution of power, she said. We also believe that there is a growing demand in the lubricant industry, especially related to the needs of the mining industry.

George Morvey, industry manager for consultancy Kline & Co.s Energy Practice, said that Ergons entrance into the African naphthenic market makes sense and that the continent offers growth opportunities for Ergons product line, especially in electrical transformer and switchgear applications. As country markets on the continent install new and expand existing power generation infrastructure, this will create the demand pull for Ergons products and services, Morvey said. In addition to supplying product, I would suspect that Ergon will transfer its current experience and technical capabilities in the power generation segment to operators on the continent, which could be a potential barrier to entry for its competitors.

Classen said that logistics are critical to the naphthenic market on the continent, noting that Orbichem is working to establish a business hub in Africa. We already have storage tanks dedicated to naphthenics in Durban, South Africa, he said. We have converted our [API] Group I tanks and dedicated them to naphthenic oil. In the short term, we are going to utilize our existing facilities but as it grows, we have plans to acquire more tanks. He said Orbichem is also looking to find partners in the rest of Africa, including in Nigeria, Ghana, Kenya, and Tanzania.

Total to Revamp Gonfreville Base Oil Plant

Total plans to shut down API Group I production at its base oil plant in Gonfreville, France, to focus on production of higher quality base oils for use in automotive engine oil, according to multiple news reports. Several French news outlets reported that Totals management said in a statement that the program to modernize its specialties offerings would decrease the Gonfreville plants base oil production capacity by about one-half to 260,000 metric tons per year. The plan would also optimize diesel production.

The Gonfreville plant in northern France currently has a capacity of about 9,600 barrels per day of Group I production and 800 b/d of Group III production, according to the LubesnGreases 2014 Guide to Global Base Oil Refining. Total temporarily cut base oil production at Gonfreville in March 2012, citing a weak market and economy.

EU Sets 2030 Emissions Goal

Following agreement by the European Council on the 2030 Climate and Energy Policy package in late October, the European Automobile Manufacturers Association lauded the fact that the framework calls for a comprehensive and technology-neutral approach to transport-related emissions. The Council targeted a 40 percent reduction of greenhouse gas emissions by 2030 based on 1990 levels.

ACEA expressed its appreciation for the fact that policy makers chose to emphasize cost-effectiveness in reaching the target and stressed the need to balance environmental sustainability with competitiveness.

ACEA Secretary General Erik Jonnaert said, Europes cars, vans, trucks and buses currently have the highest environmental standards in the world. Our industry is committed to contributing its fair share toward lowering greenhouse gas emissions, namely through more fuel-efficient technology and continuing its investments into more alternative powertrains.

Apar Builds Plant in U.A.E.

Mumbai-based transformer oil supplier Apar Industries Ltd. said its subsidiary in Singapore, Petroleum Specialities Pte. Ltd., will construct a facility in the United Arab Emirates by the end of 2015. Apar informed the Bombay Stock Exchange that its wholly owned subsidiary is currently building a facility on 30,000 square feet of land in the Hamriyah Free Zone Authority, near Sharjah, U.A.E.

At the new facility, Petroleum Specialities will blend, process and store lubricants and a range of specialty oils for the power, cosmetics, industrial and automotive segments. Apar Industries is Indias largest supplier of transformer oils, accounting for what it says is about 50 percent of the countrys market. It is also the nations fifth-largest supplier of lubricants, including transformer oils, white oils and rubber process oils.

Italian Oil for Chinas Sports Cars

Sinopec has signed a deal with Italian racing lubes supplier Pakelo to serve Chinese sports car owners. Under the agreement, Sinopec will be Pakelos exclusive dealer in China, selling Pakelo synthetic lubes in selected cities, such as Beijing, Guangzhou and Shanghai, that are home to a growing number of exotic and modified sports cars. For example, Porsche said it sold 19,785 sports cars in the first half of 2014, up 8 percent year on year, with Cayman, Boxster and Panamera models in the lead.

Sinopec manufactures and sells Great Wall-branded lubes in China, but it has not yet covered the sports car or racing lubes market. Pakelo is a renowned expert in racing oil technologies, and we hope we can learn from them through the collaboration, said Pi Tianfu, head of brand marketing at Sinopec. He added that if the partnership goes well, Sinopec would like to launch a collaborative racing oil brand exclusively for the Chinese market, targeting car owners who want to experience great quality and fast speed but may have a tight budget.

Belarus Slashes Oil Export Taxes

Belarus cut export taxes by 8 percent for some petrochemical products – including base oils and lubricants – sold outside of the customs union the country shares with Russia and Kazakhstan. The duty reduction lowers the export tax on crude oil from U.S. $345 per ton to $317 per ton. The export duty on light and medium distillates is set to be $209, down from $227. The same rate is applied to benzene, toluene, xylene and fuel oil, as well as base oils and lubricants, a government decree states.

The same rate also applies to such products as paraffin, petroleum coke, and bitumen as well as waste oils. The export duty on liquefied hydrocarbon gases goes down to $126 per ton, from the current $145 per ton. These duties mirror the export tax rates for some oil products imposed in Russia recently.

ACEA Withdraws Elastomer Test

ACEA has agreed to delete the RE4 (NBR) test from the CEC L-39-96 Test Method, the Evaluation of Oil-Elastomer Compatibility. RE4 data will no longer be required for claims against the ACEA 2012 Sequences. RE4 elastomer testing was suspended in February because the manufacturer was unable to produce batches of the elastomer that were in specification.

ExMo Expands Specialty HC Production

ExxonMobil Chemical is increasing production of its high-performance hydrocarbon fluids by about 10 percent through expansion projects at its Singapore and Antwerp, Belgium, facilities. The additional capacity will begin producing by mid-2015 and be complete in 2016.

Hydrocarbon fluids are used as solvents, dispersants and carriers for resource extraction, industrial processing and consumer applications. The expansion projects, which upgrade refining streams into specialty chemical products, are in progress and build on other recently announced large investment projects at the Singapore and Antwerp facilities. The capacity expansion in Antwerp is among other investments totaling more than U.S. $2 billion over the last decade at the facility.