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Base Oil Report

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For those keeping score, API Group II and III base oil capacity in the United States is now substantially higher than Group I capacity. Group II/III capacity in the United States as of Jan. 1 totaled 102,800 barrels per day, versus 81,500 b/d of Group I capacity, according to a March 19 report from the National Petrochemical & Refiners Association.

At the beginning of 2006, Group II/III was in front only by a nose. Group II/III capacity then totaled 84,600 b/d, just ahead of the 80,000 b/d of Group I capacity.

The biggest Group II addition was the opening last March of Motivas 15,000 b/d train at Port Arthur, Texas. Another chunk stems from Chevrons Richmond, Calif., Group II/III base oil plant, which has been restated as 20,000 b/d. A Chevron official confirmed that the plant, through a combination of actual hardware changes and catalyst improvements, has boosted its capacity more than 33 percent over several years.

After our recent shutdown, however, said Brent Lok, Chevron base oil marketing and business development manager, we added up all the tie-ins and debottleneckings, and decided to go to our real name-plate capacity for this years report.

This last tie-in delivered gains that are measurable in thousands of barrels, and as a result of the additional capacities weve achieved, were able to target Europe and Asia-Pacific with our Group II barrels, he added.

NPRAs report also showed smaller increases at ExxonMobils plant in Baton Rouge, La.; at Marathon in Catlettsburg, Ky.; at San Joaquin Refining in Bakersfield, Calif.; and at Valeros Three Rivers, Texas, facility. Together, these added 1,700 b/d to the national total.

Looking at upcoming changes, Calumet Lubricants indicated it will expand Group I capacity this year to 4,800 b/d at its Shreveport, La. plant – up from 3,900 b/d currently – and Group II capacity there will double to 7,000 b/d, from 3,500 b/d now. The expansions are scheduled for completion in the third quarter this year, with production ramping up during the fourth quarter.

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