Demand growth for both additives and finished lubricants is expected to be modest through 2019. Kline predicts a compound annual growth rate of 1.2 percent for lubricants during that period, and 1.6 percent for additives, Energy Practice Director Milind Phadke noted.

It is a recent phenomenon for additive demand growth to outpace lubricants. From Klines historical perspective, we see that [before the recession], lubricant additives closely tracked finished lubricants demand, as would be expected, Phadke said. Both went down in the aftermath of the recession in 2010, but after that, additives showed growth of 1.8 percent [per year], which is higher than finished lube demand.

The increased consumption of additives is likely driven by demand for higher quality finished lubricants, he noted. Higher quality lubricants require higher additive treat rates.

In the automotive lubricants segment – which accounts for about 60 percent of total additive use – the big additive categories are dispersants, detergents and viscosity index improvers, which combine to account for two-thirds of additive use for all automotive lubricants. With the industrys increased attention on fuel economy, compatibility with emission control technologies, extended drain intervals and reduced viscosity, the PCMO market will see growth in friction modifiers and antioxidants, which will take larger shares of the market, along with viscosity index improvers.

The same three components – dispersants, detergents and VI improvers – took the largest slices of the pie for the HDMO segment in 2014. However, modern lubricants must be compatible with ultra-low-sulfur diesel and emissions control technologies. As a result, Kline predicts that consumption of antioxidants and corrosion inhibitors will increase in this segment, with a 2.5 percent higher growth rate than that of overall lubricant demand from 2014 to 2019.

Formulation changes in industrial segments are driven by increased operating severity and extended service intervals, along with an uptick in the use of biolubricants and a significant increase in API Group II and III base stocks. Formulators will look to additive companies for help surmounting the challenges resulting from these developments, Phadke concluded.

Lubrita Expands in Netherlands

Lubrita International has opened a new office and increased its operations in Rotterdam, Netherlands. The companys lubricants plant has a large storage capacity for base oils and storage tanks for finished products and additives. The factory has a production capacity of over 130,000 tons of finished lubricants per year.

Solutions Seen for Bright Stock Users

The looming shortfall of bright stock can be managed by using alternatives along with addition of new capacity, said Ernie Henderson of K&E Petroleum Consulting at an industry meeting in Houston, Texas, United States.

The Asia-Pacific region accounts for about one-half of all bright stock demand, which is in line with the regions appetite for lubricants in general. Developing regions, especially China, have maintained this demand because of old equipment and technology that require monograde oils.

While 20 percent of bright stock demand outside North America is still in the automotive sector, that is demand that were eventually going to lose, Henderson said. The change will be driven by a shift from monograde to multigrade engine oils, reducing demand by about 10,000 barrels per day. This shift alone will help address a significant portion of the expected bright stock shortage, he pointed out.

About 70 percent of Group I refineries produce bright stock, and the top ten producers account for 60 percent of global capacity. Currently, Asia-Pacific and Europe have the largest production capacity. The healthy market balance in North America – a slight excess of supply over demand – has allowed bright stock to maintain the highest U.S. market value in the base oil market, Henderson stated.

Its not all bad news for bright stock, and more capacity is coming online despite Group I reductions. Ergon will introduce a new Group I bright stock next year. Saudi Arabian refiner Luberef will more than double its bright stock capacity from 84,000 to 175,000 metric tons by 2016. Theyre leveraging existing facilities to increase the availability of a high-value product in the marketplace, in this case bright stock, Henderson reported.

Gulf Petrochem Launches U.A.E. Terminal

Gulf Petrochem Group inaugurated its new storage terminal in the United Arab Emirates. The terminal in Hamriyah, Sharjah, will have 203,888 cubic meters total capacity with 37 tanks ranging from 1,700 to 11,200 cubic meters each. The new terminal will be able to house all classes of petroleum products, including base oil. It can also connect to other key terminals in the vicinity, the company said. It is also connected to both inner and outer harbors of Hamriyah port.

Our storage terminal business has become an integral and significant business unit for the group, Gulf Petrochem Board Member BM Bansal said at the inauguration ceremony. Complimented by our existing storage facilities in in Fujairah, U.A.E., and Pipavav, India, the new terminal will continue to enable us to service our customers within strategically located storage and trading hubs globally.

Neste Appoints Distributor

Multisol has been appointed by Neste as its distributor of premium grade Group III base oils in Central and Northern Europe as well as Russia and former CIS countries. The agreement commenced November 1.

Graham Eden, Multisols commercial director, said in a news release, The relationship between Multisol and Neste spans 20 years with Multisol already supplying and distributing Neste premium grade Group III base oils in Western and Southern Europe. Multisol is part of Brenntag, a global distributor of fuel and lubricant additives, base oils and specialty chemicals.

OIO Group Buys Cremer

Malaysian oleochemicals company IOI Group has agreed to purchase Germanys Cremer Oleo GmbH for 89.4 million. The acquisition, expected to be completed by the first quarter of 2016, involves two oleochemical factories in Germany with total processing capacity of about 39,200 metric tons per year.

One plant is in Witten and produces oleochemical specialty products for the lubricant industry, such as glycerol tricaprylate-caprate, a multipurpose base oil, and oleyl erucate additives for cutting and lubricating oils, along with products for pharmaceutical, food and other industries. The second plant is in Wittenberge and distills and fractionates fatty acids, esters and medium-chain triglycerides.

In addition to the transfer of technology into its Malaysian oleochemical plants, the purchase will allow IOI to mitigate the increased import tariff on Malaysian oleochemical products into the European Union, [allowing it to] establish new production sites in the center of the European Union and take advantage of close proximity to key markets in Western Europe and emerging ones in Eastern Europe, the company said in a statement.

IOI Group has two oleochemicals manufacturing facilities in Penang and Johor, Malaysia, with a total capacity of 720,000 t/y. The purchase will enable the groups oleochemicals division to expand into a new product range to serve the higher-margin but difficult-to-penetrate pharmaceutical, cosmetic, food and performance chemicals markets worldwide, it added.

Bureau Veritas Launches South Africa Lab

Bureau Veritas has launched a new testing facility in Middelburg, Mpumalanga, South Africa. The laboratory will provide lubricant and oil analysis services, assisting maintenance managers in both the industrial and heavy-duty equipment markets to predict failures and prevent catastrophic maintenance events.

The opening of the Middelburg laboratory confirms our commitment to support client needs for lubricant and oil analysis services in South Africa, said Erick Naidoo, managing director for oil and petrochemicals in South Africa. With our more than 55 years of experience, our clients will benefit from the expertise in OCM testing, data interpretation and advisory services.

Oil analysis identifies trends in wear and contamination, and monitors changes in the physical properties of lubricants and hydraulic oils. Laboratory data analysts can then pinpoint equipment problems in their earliest stages and make recommendations that can improve machine reliability, reduce maintenance and repair costs and extend equipment life.

BRB, Tiarco Partner

BRB International B.V. and Tiarco Chemical entered a commercial and technical partnership to collaborate on the development and supply of lubricant additives. Tiarco will offer BRB additive packages in North and Latin America, and BRB will offer Tiarco products.

The collaboration goes beyond product distribution, Tiarco Global Sales Manager Jim Hunt explained. Were also joining commercial and technical resources, he said. We develop a lot of products, and they will have access to those and to our development resources. The companies also have joint projects for product development.

Ergon, Apar Join Forces

Ergon International Inc. and Petroleum Specialties Pte Ltd., a subsidiary of Apar Industries, have reached a distribution agreement to market cobranded naphthenic insulating oils for the Turkish transformers market. These products will be manufactured by Ergon Refining Inc., the largest producer of specialty naphthenic oils in the world. Petroleum Specialties will distribute inhibited and uninhibited products throughout Turkey.

Larkin Joins SIP Board

SIP, a U.K.-based marketer of speciality oils and fluids, announced that Kerry Larkin will join the main board as Commercial Director. Larkin has been in the oils and lubricants industry for 20 years, previously working for White Sea & Baltic and Fuchs Lubricants. She joined SIP in 2001 and is currently Director of Marketing and Development responsible for nondrilling product groups.

Lukoil Aims High in Europe

Russias Lukoil has built a significant presence in several European lubricant markets and is now working to build up its business in several Central European countries, an official said during an industry event in November. We are tasked to expand the presence of Lukoil oils in the European market, Yaroslav Litvintsev, executive director of the companys Europe operations, told RPIs Lubricants Russia conference. The focus is on Germany, Italy, Austria, Scandinavia and the markets of Eastern Europe.

Lukoil owns three
European lubricant manufacturing sites in Vienna, Austria; Ploiesti, Romania; and Hamina, Finland. Litvintsev noted that the company has its highest European lubricant sales volumes in the countries where it owns blending plants. In 2014, Lukoil held 22 percent of Finlands market, 20 percent of Austrias market and 18 percent of Romanias market.