Speaking during the ICIS Middle Eastern Base Oils and Lubricants Conference in Dubai last October, Dr. Ahmad Zareh, senior technologist at Infineum, told delegates the upgrade offers opportunities as well as challenges The Middle East has a fragmented regulatory environment, although the GCC has tried to unify rules through bodies like the Gulf Standards Organization (GSO).

The organization mandates specifications for the GCC states – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. Countries such as the UAE and Saudi Arabia also have their own domestic regulatory bodies, and some countries do not adhere to GSO at all, according to Zareh. A number of significant markets in the region do not follow GSO, like Iran, Iraq, Lebanon, Jordan and Yemen.

Monogrades vs. Multigrades

Monogrades have dominated the Middle East heavy-duty lubricants market, but in 2007 GSO specified API CH-4 as the minimum performance level for heavy-duty oils in the GCC. The Gulfs largest lubricant market, Saudi Arabia, has yet to completely comply but is expected to make CH-4 mandatory in 2017.

How effective Saudi Arabia and other GCC countries will be in enforcing the specification is yet to be tested. At best, field enforcement of lubricant use has been spotty in the GCC. But bodies like ESMA (Emirates Authority for Standardization and Metrology) in the UAE and SASO (Saudi Standards, Metrology and Quality Organization) in Saudi Arabia are expected to take a more rigorous approach to monitoring market quality. For some years, the Gulf has been a source of substandard base oils used mostly for exports, but there are domestic quality issues as well.

Although monogrades account for the bulk of the heavy duty market, SAE 15W-40 also accounts for more than 30 percent share by volume in Saudi Arabia. Zareh told delegates that share is likely to be similar throughout the Gulf. API CF is more than 50 percent of the market, but CH-4 has quickly established a significant share while CI-4s share remains a small but growing niche.

Zareh said that following the introduction of CH-4 as the mandatory minimum quality in Saudi Arabia, most users of monogrades will migrate to SAE 15W-40, and CH-4 will replace most of the CF volume. The original key performance criteria for CF oils were control of piston deposits, wear and bearing corrosion. In contrast, CH-4 oils were introduced in 1998 for use in high-speed four-stroke diesel engines that met 1998 exhaust emission limits, using fuel with sulfur content of up to 0.5 percent.

CH-4 oils offer additional performance benefits, particularly in terms of high-temperature thermal stability, soot handling and oil oxidation, Zareh stated. The big difference is in terms of performance attributes; thus, making it a major upgrade in terms of improved oxidation resistance, soot handling, cylinder wear and valvetrain wear.

Zareh cited two attributes as the most important: the ability to disperse soot and the control of oil oxidation. Poor oxidation resistance can lead to the formation of deposits in the engine. When the benefits of the CH-4 upgrade are widely felt, Infineum expects to see further growth in the API CI-4 segment.

In many Middle Eastern markets, climate conditions and the lack of consumer awareness have perpetuated the use of monogrades. Inevitably, that situation has to change as many heavy-duty OEMs no longer approve monogrades – a fact stemming from the need to meet emission and fuel economy demands in Europe and the United States.

Cost is also a growing concern because API CH-4 engine tests conducted by oil and additive companies are generally run in multigrades. Most of the data generated in these tests does not apply to monogrades. Developing monogrades, therefore, requires additional testing and expenditure.

Key CH-4 engine tests like the Mack T8-E, Mack T-9, Cummins M-11, Caterpillar 1K and 1P, and the engine oil aeration test all exclude read across to monogrades. Only the roller follower wear test and Sequence IIIF permit read across. Out of eight engine tests for API CH-4, six cannot read across. So if you are going to market monograde oil, you will need bespoke development and specific engine tests.

Higher Quality Base Stocks

Several factors are edging the global market to better quality base stocks. In North America, for example, engine oils must maintain their oxidation performance over longer drain intervals. In Europe, there is an increasing use of biodiesel, which has implications for engine cleanliness and oxidation. Engines are also being downsized, but power densities are increasing, and OEMs like Mercedes Benz are introducing even more stringent oxidation tests.

If that is not enough, environmental concerns are also impacting the type of base stocks used. There are emission drivers that require the use of catalysts that are going to be affected by sulfur. Also, maximizing fuel economy demands lower viscosity grades, which necessitates the use of higher quality base stocks – generally those with higher saturates, lower sulfur, higher viscosity index and lower volatility – typically API Group II, Group III or Group IV.

Group II base stocks have gained popularity in recent years on the back of heavy investment in Asia Pacific. Shell and Hyundai recently invested in a 650,000-ton project, and Europe, the Middle East and Africa are steadily moving to Group II base oils.

Zareh said, Chevron is already marketing group II in Europe, ExxonMobil will produce Group II in Europe in 2018, and Saudi Arabia will be a source of Group II base oils when Luberefs Yanbu plant commences production sometime in late 2017. The ascendancy of Group II comes at the expense of Group I, and around 2 million tons of Group I capacity has been removed from the market.

Numerous base stock options are available when it comes to switching to CH-4 in the Middle East. These oils can be formulated with Group I, II, III or any combination, depending on viscosity grade. The most likely scenario is Group I or Group II or a combination of Group I and Group III, Zareh related. However, the key is the blended properties of the base oil, irrespective of what base stock groups are used.

Key properties impacting oil performances are saturates level, sulfur content, viscosity index and volatility. It follows that Group II and III base stocks have better properties compared to Group I, but the amount of sulfur in Group I base stocks varies considerably depending on crude source and manufacturing process.

Understanding base oil properties is fundamental to formulation. Saturates are a measure of single carbon/hydrogen bonds in base stocks, and their bond strength makes for better oxidation stability. Similarly, viscosity plays an important role in wear protection. If your oil maintains its viscosity, it better protects the engine against wear, said Zareh.

Volatility impacts oil consumption and runs counter to emission restrictions. Similarly, impurities like sulfur oxides and nitrogen oxides can lead to the formation of strong acids, causing wear, corrosion and sludge.

Striking the right balance among saturates, viscosity index, volatility and sulfur levels is clearly important. In Zarehs view, using Group II base stocks provides a better combination of favorable saturates and sulfur content than using a combination of Group I and up to 30 percent Group III base stocks. He cited this combination because API and ACEA Base Oil Interchange (BOI) Guidelines allow adding 30 percent and 10 percent Group III base stocks, respectively, to an existing Group I formulation with limited or no additional engine testing.

API BOI rules allow up to 30% Group III with limited engine testing. ACEA BOI rules allow up to 10% Group III with no additional engine testing.

Adding higher levels of Group III may require most or all of the engine tests needed for the CH-4
performance category to be run. This is an expensive proposition considering that some engine tests cost well in excess of U.S. $100,000 and current ACEA rules permit only 10 percent additional Group III base stock.

Group II base stocks perform better than Group I in the Sequence IIIG engine test, which is a key test in a number of API specifications, demonstrating they can better control viscosity increase due to oil oxidation. The situation is similar for cam and lifter wear when benchmarked against Group I.

Group II performs a lot better in terms of wear, and it goes back to higher VI and less viscosity variation. Zareh stated that under more demanding tests such as the Daimler Oxidation Test, a key test for Daimler oil formulations, Group II base stocks performed better than Group I base stocks for a given additive technology.

Finally, it might be tempting to think the upgrade to API CH-4 will vanquish monogrades in the Middle East. However, in the short-term at least, that seems to be wishful thinking. Still, there is no denying the significance of the upgrade. If not a game changer, it will nevertheless spur the use of multigrades because monogrades will increasingly require bespoke development and all the expense associated with it.

With the Gulf fast becoming a prominent source of Group II and III base oils, there is every reason to believe that CH-4 will add flexibility to the market and greater understanding by consumers of the benefits of multigrades and the potential impact on their wallets.