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Lukoil Ups Bright Stock Output

With an eye to maintaining a key role in Russias rapidly changing 2.6-million-metric-ton lubricants market, Russian oil giant Lukoil said it is investing $270 million to upgrade its base oil refining processes, and has already begun two initiatives to produce bright stocks at its Perm and Volgograd refineries.

The Perm facility produced 600 metric tons of bright stock at the start of the year, and now plans to produce up to 2,000 tons per month, Lukoil lubricants company LLK-Inernationals General Director Maxim Donde told the 12th ICIS World Base Oils Conference in February. At Volgograd, a new vacuum column is to be commissioned in the third quarter, after which the company will be able to upgrade its Group I base oil quality, and begin industrial trials of bright stock production. If successful, Volgograd could make 1,500 to 2,000 b/d of bright stock.

Also at the Volgograd plant, the Moscow-based company will increase API Group III production from the current 24,000 tons per year to 50,000 t/y by 2010, under a licensing agreement with Chevron Lummus Global, Donde said. Lukoil is also conducting base oil interchange programs in cooperation with Afton Chemical on passenger car motor oils and heavy-duty oils blended with Lukoils Group I and III stocks.

Overall, Russia produced 2.6 million tons of lubricants in 2006, and imported another 238,000 tons. With six blending plants, Lukoil produces 1.2 million tons of finished lubes per year, fully 45 percent of the countrys production, Donde said.

Base Oil from Pascagoula?

Chevron plans to build a world class API Group II/Group III base oil plant at its refinery in Pascagoula, Miss., according to LubeReport.com. Industry sources told the online newsletter that the new plant will have capacity to produce more than 1 million metric tons per year – over 19,200 barrels per day. A help-wanted ad posted at Oilcareers.com, seeking a planner-scheduler for a Pascagoula Base Oil Project, also signaled the companys intent.

Although company officials have not commented as of this writing, Chevron did announce last month that it will construct a pre-commercial plant at the refinery by 2010, using a proprietary heavy oil upgrading technology called Vacuum Resid Slurry Hydrocracking. This process is said to achieve 100 percent conversion of the heaviest crudes, and would be capable of supplying vacuum gas oil suitable for making base oils, as well as gasoline, diesel and jet fuel. Bolting on a base oil plant would then be a relatively economical step, industry consultants said.

If built as described, the Pascagoula project would be the largest new base oil plant erected in the United States in over 10 years. It would become a third supply point in Chevrons Group II/III global network, along with Richmond, Calif., and the newly opened GS Caltex plant in Yeosu, South Korea. Together, the three plants would have nearly 55,000 b/d of Group II/III capacity.

Fuchs to Build in India

Fuchs Petrolub Group AG has acquired a long-term lease for industrial land in India, where it plans to begin building a new lubricants plant in the second quarter, as part of expansion plans for its rapidly growing, wholly owned Fuchs Lubricants (India) Pvt. Ltd. Subsidiary.

According to Fuchs Executive Vice President Alf Untersteller, Fuchs has acquired a 95-year lease for 40,000 square meters of greenfield industrial land from the Maharashtra Industrial Development Corp. to set up a new lubricants plant in the Thane district near Navi Mumbai. The plant will manufacture corrosion preventives, metalworking fluids, greases and automotive lubricants for OEMs. Target customers include the steel, mining, construction, cement and automotive industries.

Fuchs has operated in India since 1995, beginning with a joint venture with Balmer Lawrie & Co. The Mannheim, Germany, based lubricant manufacturer bought out that venture in 2000, as a step to expanding in the country. The new plant is expected to start its initial production in early 2009, and could be expanded later as needed. Projected cost of the investment was not disclosed.

Nasdaq Boots Pitt Penns Parent

Industrial Enterprises of America was delisted from the Nasdaq exchange on Feb. 20, after the exchange notified the company that it failed to comply with the minimum bid price requirements (of at least $1 per share for 30 consecutive trading days) for continued listing. The delisting was the latest in a series of set-backs to hit the ailing automotive aftermarket supplier and its subsidiaries, Pitt Penn Oil, EMC Packaging and Unifide. The company earlier suspended and then terminated its chief financial officer, Jorge Yepes, and also has accepted the resignation of CEO and director John Mazzuto. It was seeking financing alternatives to add liquidity to Pitt Penn, which generates the vast majority of the companys revenues.

Also, on Feb. 5 former CEO James Margulies was brought in to replace Mazzuto on an interim basis, following disclosure that the company last year had agreed to issue a large number of shares to an investor group, in return for the privilege of allowing them to give the company a secured loan of $1.5 million. The company said it also was reviewing other issuances that resulted in a steep rise in the number of its shares.

Base Oil Output Slowed in 2007

Base oil production in the United States slipped 2.5 percent from 2006 to 2007, according to data released last month by the Department of Energy. U.S. refiners produced 65.1 million barrels of base oil last year, down from 66.8 million barrels a year earlier. Paraffinic production fell 2.7 percent, to 54.7 million barrels, while naphthenic production edged down 1.5 percent to 10.4 million barrels.

The largest drop in production was seen on the paraffinic side during the months of September to November, when refiners produced 2 million fewer barrels overall, compared to the same months in 2006. Industry sources suggested two principal reasons for the decline: outages such as Hurricane Humberto, which struck the Gulf Coast and shut down refining during part of September, and good margins on fuels such as ultra-low sulfur diesel which led refiners to divert feedstock from base oil units.

Kluber Opens Chinese Plant

Kluber Lubrication and its sister company ChemTrend are set to produce specialty lubricants and release agents at a recently opened plant in Qingpu, a district of Shanghai, China. With an investment of Euro 19 million (U.S. $29 million), the new Freudenberg Chemical Specialties (Kluber and Chem-Trends parent company) plant will be the groups most modern facility.

The site has a total area of more than 30,000 square meters. The company has used about one-third of the land for buildings to house offices, warehouses and logistics facilities, labs and production halls, recreation rooms and supply services. The plant, one of the largest in the Freudenberg Chemical Specialties group, is designed for a maximum annual capacity of almost 13,000 metric tons of lubricants and release agents.

U.S. Oil Launches AutoForce

U.S. Oil Co. has bundled three recent acquisitions into U.S. AutoForce, a new organization to market automotive lubricants, tires and parts in 14 upper Midwestern and mountain states. U.S. AutoForce, whose parts had a combined total of $300 million in sales last year, will operate as a division of privately held U.S. Oil Co., based in Combined Locks, Wis. The new venture will distribute Valvoline and Conoco-Phillips lubricants, as well as the companys private label, U.S. Supreme Gold. With a sales force of 60 people, it will supply auto dealers, installers and tire shops. According to the company, U.S. Oil reported over $1.5 billion in revenues last year, primarily from petroleum distribution.

OSHA Cites Citgo

The U.S. Department of Labors Occupational Safety and Health Administration has cited Citgo Petroleum Corp.-LCMC with proposed penalties totaling $169,000, for allegedly failing to protect employees from hazardous working conditions at its Lake Charles, La., refinery. The location, which includes a base oil refinery with capacity for 9,500 barrels per day of API Group I base oils, has 1,430 employees. OSHA charged the company with responsibility for three willful and 12 serious violations, following an investigation the agency began on Aug. 13. No employees were injured in the incidents, said OSHAs regional administrator in Dallas, Dean McDaniel.

The inspections were part of a new National Emphasis Program the agency launched last year, with a focus on eliminating workplace hazards associated with release of hazardous chemicals at petroleum refineries.

Sea-Land Adds Surfactants

Sea-Land Chemical Co. has expanded its distribution network for Air Products & Chemicals surfactants for metalworking fluid markets as well as industrial, household and institutional users, to include locations in New York, New Jersey, Pennsylvania, Delaware, Maryland and Washington, D.C. Although the companies have been in business together since 1976, the previous territory was limited to Illinois, Indiana, Ohio and Wisconsin. This is an opportunity to expand Sea-Lands efforts in the Northeast, said the companys Mark Christeon. Manufactured at Air Products facilities in Milton, Wis., and Reserve, La., the products include Tomadol linear alcohol ethoxylate surfactants, and Tomamine ether amine and amine derivatives used in metalworking fluid formulations.

Etna, Bechem Team Up Again

Etna Products Inc. and Germanys Carl Bechem GmbH have formed their second joint venture, Etna-Bechem Europe GmbH, to market both companies nonferrous tube-drawing lubricants in Europe, the Middle East and Asia. Etna-Bechem Europe comes almost 10 years after the companies formed their first joint venture, Etna-Bechem Lubricants Ltd., at Etnas headquarters in Chagrin Falls, Ohio. The European joint venture was formed after Etna acquired the Kubitrac brand from Bechem and consolidated sales activity for its Masterdraw products into Etna-Bechem Europe. The j.v. will operate from headquarters in Hagen, Germany, where it will coordinate all manufacturing, sales, technical service and support for markets in Europe, Russia, the Middle East, Africa, India and China.

Third Coast Completes Expansion

Third Coast Chemicals recently completed a $3 million expansion to its brake fluid production facility in Pearland, Texas, more than doubling its blending and storage capacity from 1.5 million gallons to more than 3 million gallons. According to company vice president Grif Carnes, The expansion added 24 new tanks with 1.5 million gallons of blending and storage capabilities. With the new tank farm, we now have 90 tanks with over 3 million gallons of capacity.

In addition to the new tank farm, the expansion includes a new research laboratory and adds more rail cars on the 16-acre site. The company sells its brake fluid product line to the aftermarket industry and produces and markets inhibited glycols for industrial coolant applications in North America.

Briefly Noted

Condat Lubrifiants of France has signed Gustavo Schiuma as its new Latin American agent. Based in Brazil, where Condat also has a subsidiary, hell represent Condats lubricants to target industries throughout the region, including forging, casting and glass manufacturing, aluminum die casting and aluminum extrusion, and to some customers in Mexico as well.

Specialty chemical supplier Cognis recently opened a marketing office in Mumbai, India, one of whose functions is to investigate local production. The Monheim, Germany-based company said it has experienced significant growth in recent years in India, where it has a network of distributors.

Germanys Lanxess AG has launched its own distribution company for central and eastern Europe in Bratislava, Slovakia, hoping to capture more of the market for specialty chemicals in the rapidly growing region. We expect growth in these countries to outstrip that of western Europe in the years ahead, said Rainier van Roessel, member of the Lanxess AG board of management. The company previously sold to the region through external distribution agencies.

High Velocity Alternative Energy said it has received an annual contract for $30 million to supply a major Midwestern distributor of lubricants, antifreeze and solvents. The most appealing thing is it takes us to a bit more national distribution because they distribute to really all over the Midwest and East Coast, said High

Velocity Chief Executive Officer Richard Carter, so it takes us out of our small Chicago market.

Faces in the News

Additive and lubricant manufacturer Chemtura has named Sean OConnor as vice president, Petroleum Additives, filling a vacancy left by the promotion of Robert Wedinger, who recently was tapped to become the corporations chief business officer. OConnors prior job as head of automotive products in the Petroleum Additives unit will be filled by Gerard Mulqueen, who also continues as head of business development. The company also named John Dennerlein to head its industrial lubricants and additives segment, and Avron Magram, who joined the company when it acquired Kaufman Holdings last year, has been named to head the companys refrigeration lubricants business.

After nearly 40 years, Bill MacDonald has retired as chairman and chief executive officer of Houghton International. To succeed him, the company has appointed Gary Cappeline as chairman and named Paul DeVivo as CEO. Cappeline is a managing director with AEA Investors LLC, Houghtons principal shareholder. DeVivo previously worked for Ashland Inc., Valspar Corp., Unitor A/S and Drew Chemical Corp.

Industry veteran Daniel McCoy has joined The Elco Corp. as sales engineer for the central region of the United States. In his new role, McCoy will be responsible for all commercial and technical contact with accounts in the area. In addition to being a past president of STLE, McCoys career includes working as a lubrication engineer at LTV Steel, and in industrial product development at Lubrizol.

Luca Raffelini has joined the Oxford, U.K., office of Kline & Co. as a director with Kline Europe, where he will work with chemical and energy industry clients throughout Europe, Russia and the Middle East. Most recently Raffelini was head of global marketing for Infineum Group; he also has held positions with Arthur D. Little and EniChem.

Brookfield Engineering Laboratories has tapped Eric Chiang to be senior sales engineer, responsible for providing sales assistance and technical support for domestic and international markets. Chiang also serves on the Brookfield Training Team, and previously held positions with Hexagon Holding Berhad (Malaysia) and Yokogawa Electric Corp.

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