Asia was the biggest regional market in 2013, with 39.9 percent of global revenue, followed by North America with 28.8 percent, Frost & Sullivan Chemicals, Materials and Food Research Associate Srinivas Venkatesan said in an interview. As industrial production increases in China, India, Russia, Turkey, Brazil and Southeast Asia, regulations on waste water treatment and disposal are compelling end users to optimize the use of mineral oil-based metalworking fluids, Frost & Sullivan said in a news release. This is expected to increase the adoption of semisynthetic and synthetic metalworking fluids that offer good balance between cost and performance. In turn, the metalworking additives segment is expected to grow rapidly, the research firm concludes because synthetic fluids require a stronger additive package.

Regulations on wastewater treatment will also be a major driver in Europe and North America. Boosting metalworking fluids sales volumes will be the burgeoning Asian automotive industry and niche applications such as medical machining. Venkatesan noted that the replacement of metals with plastics and composites in some applications will to an extent quench the demand for metalworking fluids. Another factor crimping growth in metalworking fluid demand is the development of technologies such as minimum quantity lubrication, high pressure machining and near-net-shape casting, which could replace conventional metalworking processes.

As established manufacturers look to broaden their portfolios, the research firm suggests that mergers and acquisitions of regional vendors possessing specialized capabilities and strong customer bases will gain traction in the global metalworking fluids market.

Tatnefts Taneco Launches Group II/III

Tatneft started commercial production of API Group II and III base oils at its refinery in Nizhnekamsk, Russia, in early December. Production was made possible by the installation of a hydrocracking unit.

We havent seen new base oil production [in Tatarstan] since the 1960s and 1970s. This plant is unmatched by any other base oil capacity in Russia, making it a great competitive advantage for us, Tatneft told LubesnGreases. It allows us to manufacture high quality products that comply with the latest environmental and operational requirements.

The key to the base oil project was construction of the heavy distillate hydrocracking unit, which can process 2.9 million tons per year of vacuum gas oil. Part of the straight-run gasoline and hydrotreated gasoil coming out of the hydrocracker is sent for further processing, including dewaxing, that transforms it into finished base oil. The plant has capacity to produce 90,000 t/y of Group II base oil and 100,000 t/y of Group III base oil used in production of Euro 5 motor oils.

The refinery is operated by Taneco, a subsidiary engaged in operation and construction of the oil majors oil refining and chemical complexes in Nizhnekamsk, Tatarstan. The refinery can process 7 million tons of crude oil annually. The hydrocracker can produce 1.2 million t/y of Euro 5 specification diesel fuel, 500,000 t/y of aviation kerosene, and more than 600,000 t/y of straight-run gasoline and hydrotreated gasoil, part of which is allocated for production of 190,000 t/y of base oils.

Sinopec Expands in Cameroon

Sinopec plans to increase its activities in Cameroon – including production and sale of lubricants – through the creation of a new subsidiary, Sinopec International Petroleum Service Corp. Cameroon. According to Chinas ministry of commerce, the new Doula-based company will have a wide range of business, including asphalt production, lube production and sales, and refining. Currently, Sinopecs major activities in Cameroon are oil and gas exploration and mining.

Sinopec first entered the Cameroon market through its Geneva-based subsidiary Addax, which it bought in 2009. Addax has long operated in major oil and gas-rich African countries, including Nigeria and Gabon. In 2013, Addax Petroleum Cameroon boosted its local oil production capacity to about 1 million tons, nearly doubled from 2011. In that year Sinopec bought Shells local business, Pecten Cameroon, and integrated it into Addax.

Rosneft Fights Economic Woes

Rosneft and heavyweights from several Russian industries have entered lubricant and supply agreements in reaction to the countrys economic crisis. The companies said Russian businesses should buy domestic as a way to cope with the rubles devaluation.

Rosneft reached the agreements with Metalloinvest, Siberian Coal Energy Co., United Heavy Machinery Plants and Federal Grid Co. The company will cooperate with each in the research, development, manufacturing and marketing of lubricants and other petrochemical products used in equipment that they use and supply.

These agreements lay out the basis for Rosnefts strategic cooperation with leading Russian industry groups, said Igor Sechin, Rosnefts president. We are ready to supply them with lubricants and other oil products on attractive financial terms and without interruption. He added that in the challenging economic and political environment in the country, join efforts are key to making domestic industries more competitive.

The Russian economy was already suffering this year from devaluation of the ruble, inflation and low industrial output, and those problems were exacerbated by falling oil prices and international economic sanctions. Some oil companies, particularly Rosneft, have had liquidity problems since Western financing markets were closed to them while their debt payments continued to come due.

Since 2008, Russian refiners have had a stated goal of developing capacity to produce high-quality base stocks, partly to help domestic lubricant producers battle imports, which account for at least 50 percent of the nations finished lube demand. Not much has been done in terms of base oil production. Tatneft opened the only new API Group II or III capacity in December.

Aegean Expands into Germany

Aegean Marine Petroleum Network Inc. launched supply and marketing operations in Germany during January. Based in Hamburg, operations include the supply of marine fuels and lubricants to all German ports and the second largest container terminal in Europe.

To support its German operations, Aegean has assumed the contracts for two double-hull bunkering barges previously under charter to OW Bunker and approximately 20,000 cubic meters of on-shore storage capacity. The company also established a marketing and business development office in Hamburg for the sale and marketing of marine petroleum products throughout the Aegean network and to customers worldwide.

SK Appoints CMO

SK Lubricants has appointed Y. M. Park as chief managing officer of its global business growth office, a newly established organization responsible for finding future growth opportunity such as oil production capacity expansion, lubricants business mergers and acquisitions and bio-based business development.

Hydrodec U.K. Rerefinery Progressing

Transformer oil rerefiner Hydrodec plans to appoint a contractor early in 2015 to develop the front-end engineering design of its planned rerefinery in the United Kingdom. In August, the company announced engineering, licensing and technology collaboration agreements with Chemical Engineering Partners for a planned U.K. rerefinery capable of producing API Group II/II+ base oil, potentially by 2016.

Last February, the company announced that its North American subsidiary signed a U.S. $10 million, seven-year term asset financing facility and increased its working capital line of credit to U.S. $1.5 million. The company said the money will ensure that its North American business is appropriately funded following the rebuild and expansion of the Canton transformer oil rerefinery.

The rebuild and expansion of the Canton transformer oil rerefinery is expected to increase its production capacity to 45 million liters per year of transformer oil, up from 30 million l/y. The company expects production at Canton to ramp up over the second quarter of 2015 while Hydrodec reestablishes its market position.

Dow Divests Angus Chemical

Dow Chemical agreed to sell Angus Chemical to private equity investment firm Golden Gate Capital for U.S. $1.2 billion. Subject to approvals, the transaction is expected to close in the first quarter of 2015.

Angus manufactures and distributes nitroalkanes and their derivatives, which are used as additives and intermediates for products in industries such as metalworking, oil and gas, water treatment and paints and coatings. Primene specialty amines, which can be used in corrosion inhibitors, are not part of the transaction, and will remain with Dow.

The divestiture includes Angus business headquarters and research and development facility in Buffalo Grove, Illinois, United States; manufacturing facilities located in Sterlington, Louisiana, U.S.; and Ibbenbueren, Germany; a packaging facility in Niagara Falls, New York, U.S.; as well as the associated business, inventory, customer contracts, process technology, business know-how and certain intellectual property.

A Dow spokesperson said the sale of Angus Chemical is not expected to impact the Dow Microbial Control business, which provides biocide and antimicrobial technologies. All Dow Microbial Control … products that are supplied today will continue to be supplied in the future to the same high standards, a Dow spokesperson stated.

Prista Expands Grease Plant

Bulgarian lubricants maker Prista Oil has expanded grease production at its plant near the nations capital. The 1.5 million project added 6,000 metric tons to the plants current capacity of 8,000 tons per year, according to the company. The plant is operated by Verila Lubricants, part of Prista Oil Holding EAD.

The plant is located in Verila industrial park near Bulgarias capital of Sofia on a 1.2-hectare plot. The production facility was expanded to 5,500 square meters, while the plants base oil storage capacity is 550 tons. Feedstock is delivered by rail. The plants filling line is semi-automated, while its grease reactors are fully automated.

Prista and Verila-branded finished products are packed in variety of forms, from 400-gram cartridges to 15-kilogram tin pails, 50-kg metal drums and 180-kg open-head drums. We also focus on private label [toll] production, and we are flexible to offer different packaging solutions in certain cases, where such an approach is economically viable, the official noted.

Nynas Opens in Singapore

Nynas announced the opening of a 32,000 cubic meter storage depot in Singapore, part of a plan to grow its naphthenic base oil business in the Asia-Pacific region. With this new logistics hub in Singapore, Nynas now has three hubs around the globe, including Antwerp and Houston, said Simon Day, Nynas vice president for naphthenics.

Nynas Asia-Pacific supply chain now mimics what it has established in Europe and the Americas, the company said. Nynas will now make a wide variety of oil grades available at the Singapore hub, enabling it to supply blends to regional clients faster and produce tailor-made products on site, and to react quickly to sudden, unforeseen demands in the market.

Completed in October, the hub has 18 storage tanks ranging from 250 to 3,500 cubic meters. It expects 24 incoming vessels per year from Houston and Antwerp and 35 outgoing vessels per year – to local depots in Asia, including China (Shanghai, Tianjin), South Korea (Ulsan), Indonesia (Merak), Australia (Sydney) and Japan (Nagoya).

Nynas sells specialty oils for electrical, tire and lubricants applications and has sales offices in China, Korea, Singapore, Indonesia, Japan, India and Australia. Nynas acknowledged that it is difficult to evaluate Asias demand for base stocks, but noted that it believes the changing base oil landscape will increase naphthenics demand globally.

According to the companys third quarter report, Nynas has increased its sales of process oils used in tire manufacturing in the Asia, Middle East and Africa markets, especially in China. It also signed several agreements to supply transformer oils to Japanese original equipment manufacturers.