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Shell supplied 13 percent of all finished lubricants in 2007, making it the global market-share leader, according to a new Kline & Co. study titled Competitive Intelligence for the Global Lubricants Industry, 2007-2017.

The report, a comprehensive assessment of select national markets for automotive and industrial oils and fluids, shows that Shell boxed out its largest competitors, ExxonMobil, BP, Chevron and PetroChina, to grab the largest chunk of the 39.3 million metric ton global finished lubricant market in 2007. Kline, based in Little Falls, N.J., forecasts that competition across the entire lubricant supply chain will remain intense as the mega-majors, including nationalized and independent oil companies like LukOil, Petronas, Petrobras and Indian Oil, try to differentiate themselves through supply chain initiatives, branding, marketing and product portfolio analysis.

Investors Package Graham

Graham Packaging Co. will go public through a proposed $3.2 billion transaction involving Hicks Acquisition Co., a special-purpose acquisition company. Recently, Hicks announced an agreement in principle, subject to an impending definitive agreement, where Graham will go public through a transaction with Hicks in partnership with The Blackstone Group (the New York-based owner of Graham Packaging) and the Graham Group. Following the transactions completion, which is expected to occur later this year, the combined enterprise will be renamed Graham Packaging Co., and will apply for listing on the New York Stock Exchange. Blackstone has agreed it will maintain the largest ownership stake for at least two years as it continues to play an important role in guiding the company strategically and operationally.

Sea-Land Catches Bug

Sea-Land Chemical is now distributing BioBugs product lines for Bio-Systems International. The distribution agreement adds to Sea-Lands portfolio of natural and biodegradable products for bioaugmentation in the U.S. household, industrial and institutional marketplace. By providing these products, we can help our customers to meet the demands of an increasingly environmentally conscious marketplace, said Sea-Land Vice President Mark Christeon. Bioaugmentation is a process that uses bacteria and other microbial agents to speed the natural process of decomposition. Industrial and institutional uses include grease control, sludge reduction, chemical and hydrocarbon waste reduction, and groundwater remediation; common household uses include pet stain removal and toilet deodorizers.

Welcome Back, Kaduna

Kaduna Refining and Petrochemical, a subsidiary of Nigerias national oil company, is expected to resume operation of its 110,000-metric-ton base oil plant during the third or last quarter of the year, after a two-year layoff. Industry sources told Lube Report that operational problems began in the 1990s, when turnaround maintenance was left undone, and vandalism to pipelines supplying crude oil to the refinery forced it to cease production in 2006. Today, the Nigerian government has awarded a $23 million maintenance contract, and placed an order for heavy crude from Venezuela. Lubricant blenders in the area welcome the prospect of the refinerys reopening, saying output from Kaduna will help lower base oil prices in a lubricant market that relies on imports.

Huntsman Goes from Courtship to Court

Arguing that its proposed merger with chemical company Huntsman is no longer viable, once-ardent Hexion Specialty Chemicals has filed suit to escape the deal. Huntsman was quick to reject the attempted rebuff, and in mid-July filed suit against its cold-footed suitor to force it to go through with the union.

Huntsman is citing Hexion affiliate Apollo Management L.P. and its partners for fraud and tortious interference in inducing Huntsman to terminate a previous merger agreement with Basell in favor of Hexion, back in July 2007. Hexion spokesman Peter Loscocco countered, We have a third-party opinion from Duff and Phelps that says these companies would be insolvent if we put them together.

Lubricant and fuel additives are key applications for Huntsmans polyetheramines, which are used as carrier oils, detergents and dispersing agents.

The European Commission recently weighed in too, approving the long-delayed merger, contingent largely on divestment of a portion of Hexions specialty epoxy resins business.

$7 Million Award in Castor Oil Suit

A Pennsylvania jury has awarded $7 million in damages to Jacob Stern, parent company of oleo-chemical distributor Acme-Hardesty, in its suit against two former employees and its erstwhile castor oil supplier. Castor oil and its derivatives are used in making chemicals for greases, lubricants and surfactants.

In the May proceedings, the jury heard how Jayant Oil and Derivatives Ltd., Mumbai, India, planned in 2006 to end distribution through Acme-Hardesty and to sell directly to customers in the United States. To that end, it hired Acme-Hardesty employees Adele Savaiano and Fred Hawco, who supplied Jayant with confidential proprietary business information, including customer lists, shipping, distribution and purchasing data, pricing and sales information, and other trade secrets. The two also were alleged to have met secretly with key castor oil customers on Jayants behalf before ending their employment with Acme-Hardesty.

The jury levied damages of $4.6 million against Jayant and $1.2 million apiece against Savaiano and Hawco. The defendants say they engaged in legitimate competition, and filed a motion to set aside or reduce the jury verdict amount; that hearing will be on Aug. 13.

ILMA Seeks End to Price Squeeze

The Independent Lubricant Manufacturers Association is accusing major refiners of using base oil profits to absorb finished oil sales losses, and has asked the Federal Trade Commission to step in. ILMA in June asked the FTC to include price squeeze – a major oil companys rapid escalation in base oil prices, followed by lengthy delays in raising its own finished lubricant prices – as manipulative under its rule-making to interpret and enforce provisions of the 2007 Energy Independence and Security Act.

The association contends that refiners are trying to grab market share. As examples, ILMA cited the pricing practices of ExxonMobil, Motiva and ConocoPhillips since last fall. ExxonMobil, for example, raised Group II+ base oil prices six times by a total of $1.30 per gallon since Nov. 29. According to ILMA, the companys first finished lube price increase – an average of 40 cents a gallon – came 154 days later, on May 1. ILMA gave similar examples for the other two suppliers.

The FTC is determining whether it should develop a rule defining and prohibiting market manipulation in the petroleum industry under the provisions of the EISA. It hopes to conclude the rulemaking process by the end of the year.

SK Boasts Higher V.I.

SK Energy Co. says its Yubase Plus API Group III base oils, from its joint-venture refinery in Dumai, Indonesia, are the first higher viscosity index Group IIIs to reach the merchant market. Eighty percent of the new refinerys output will be 4 cSt Yubase 4-Plus with a V.I. of 134; the remaining 20 percent will be 6 cSt Yubase 6-Plus, with V.I. of 145. The companys C.W. Park says testing is under way to demonstrate base oil interchange is feasible between these fluids and those produced at its Korean base oil plant.

The Indonesian base oil refinery, a joint venture with Pertamina, began operating in May, and will produce about 350,000 metric tons per year of base oils, marketed under SKs Yubase Plus brand.

Manila Welcomes Master Chemical

Master Chemical Corp. has opened Master Chemical Fluid Solutions Philippines Inc. in Manila, hoping to service a growing manufacturing and high-tech base, and feed its appetite for coolants and metalworking fluids. Our products in the cutting and grinding fluids area are going to be well-needed there, Master Chemical spokesman Mark Scherer told Lube Report recently. Large manufacturers like NIDEC, Fujitsu, Texas Instruments and Panasonic, as well as car manufacturers and other high-tech firms, are well established in the Philippines, the fastest growing economy in Southeast Asia. The company plans to add warehouse space soon, to serve future customer needs.

Evergreen Sprouts in California

Evergreen Oil plans to build a new base oil rerefining plant with 800 barrels per day of API Group II capacity in southern Californias Imperial Valley. The company is also in the final stages of an expansion project at its rerefinery in Newark, Calif., adding 550 b/d of new Group II capacity to its existing Group I production. Evergreen said it will announce additional details of the new facility at a later date, as it continues working on site selection and the plants basic engineering design with affiliate Chemical Engineering Partners. The Newark expansion is expected to be completed and operational sometime in the first quarter of 2009.

Base Oil Demand Climbs in Asia

Asia accounted for 34 percent of world base oil demand in 2007, and its share will rise to 37 percent by 2012, analyst John Paisie told the ICIS Asian Base Oils & Lubricants Conference in Kuala Lumpur, Malaysia, in June. While that demand is primarily for API Group I, there will be a shift towards Groups II and III as regional demand for both is projected to climb to 19 percent of demand by 2012, up from 11 percent today.

Paisie, who is partner and head of global downstream at PFC Energy, noted that Asian refineries produced about 12 million tons of base oil last year. With new base oil refineries opening in Malaysia, Taiwan and Indonesia, Group II and Group III output will rise to 46 percent of total regional production by 2012 – much of it destined for export. Due to this mismatch of supply and technical demand, the region is facing an overall deficit of base oils by 2012, most acutely Group I.

Bigger Footprint for Nynas

Nynas Naphthenics said it plans to increase storage capacity at its hub in Antwerp, Belgium, by 20 percent, in response to increased demand for its tire oils and recently introduced Nova Grades transformer oils. The Antwerp facility will also increase its number of transfer lines, giving the Swedish refining company greater blending flexibility and increasing capacity to 90,000 cubic meters (24 million gallons), from a current 75,000 cubic meters. It plans to increase loading capacity for trucks there as well. Earlier this year, the company opened a depot in Kotka, in southeast Finland, with storage for naphthenic base oils and transformer oils.

Lubrizol to Nip Spartanburg Ops

Lubrizol says it will transfer its metalworking additives business next year from Spartanburg, S.C., to its Wickliffe, Ohio, headquarters. The shift is to be completed in the third quarter of 2009, and will involve bringing 12 technical and laboratory workers to Ohio. Lubrizol will move only the metalworking laboratory, and once complete, no additional metalworking activity will occur in Spartanburg. The move will create a stronger, more collaborative research environment across the industrial additives product line, which includes metalworking industrial gear oil, grease and hydraulics, said Lubrizol spokeswoman Julie Young. It will also bring the metalworking group close to the sales force.

The Spartanburg area has been a key location for Lubrizols metalworking additives business for 10 years, following the acquisitions of Gateway Additive Co. in 1997, Alox Corp. in 2000, and others. Lubrizol Advanced Materials, which makes products for the personal care, plastics and coatings industries, will continue to manufacture in Spartanburg.

ExMo Picks Swedish Distributor

ExxonMobil Petroleum and Chemicals has selected G.A. Lindberg ChemTech to distribute its lubricants in Sweden. Lindberg parent company Indutrade said Lindberg won the distributor contract because of its technical know-how about Swedens industry and access to an active, local sales organization. The company also predicted that the arrangement will increase Lindbergs annual sales revenue by Swedish Kronor 40 million (U.S. $6.7 million) initially, and by SEK 200 million (U.S. $33.5 million) within three years.

Faces in the News

Rick Altizer has been named president of Jiffy Lube International. Altizer, who joined the fast-lube leader in August 2007, is expanding his current role as general manager, global operations. He replaces Luis Scoffone, who is departing to fill the newly created role of vice president, biofuels, in the Future Fuels and CO2 business unit of Jiffy Lube parent company Shell.

Castrol Industrial North America has appointed Todd Mitchell president of its industrial fluids and lubricants business for the Americas region. He joined the Naperville, Ill., business in 2001, and most recently was area director for Mexico.

Calumet Shreveport Lubricants & Waxes LLC has named industry veteran Tom Germany as its new plant manager. Germany helped guide the Shreveport refinery through its recent $350 million expansion, and has 30 years of refining experience, including with ExxonMobil.

Terry Grunke has joined packaging equipment maker Ideal Manufacturing and Sales Corp. as service manager, based in Madison, Wis. He previously worked in the injection molding industry.

Former congressman Cal Dooley, current president and CEO of the Grocery Manufacturers Association, will become president and CEO of the American Chemistry Council, effective Sept. 8. Current ACC President and CEO Jack Gerard leaves to head up the American Petroleum Institute on Sept. 1. Dooley has led GMA since its merger in January 2007 with the Food Products Association. He led FPA for two years before the merger, and prior to that served seven terms in Congress representing Californias San Joaquin Valley area.

The U.S. division of Dorf Ketal has hired Chelle Estades as national accounts manager. In her new role, she will lead sales and marketing efforts for the Lubricant Additive and Plastic Additive divisions. Darin Wilson has also joined the company as business development manager for petrochemicals. He has worked with Dupont, Betz Process Chemicals, and most recently as business development leader for GE Water and Process Technologies.