Market Topics

PlacesnFaces

Share

COP Bets Big on Kendall

ConocoPhillips Lubricants is placing a heavy bet on Kendall, with a relaunch of the old-line motor oil brand. Now bolstered with Liquid Titanium antiwear agents, Kendall GT-1 oils wear glamorous new packaging, and will be available to all ConocoPhillips marketers – even those which previously did not carry Kendall.

Since Conoco and Phillips Petroleum merged in 2002, our challenge has been that we have four regional brands – Conoco, Phillips 66, 76 Lubricants and Kendall – but no strong national brand for passenger car motor oil, explained Steve Tarbox, director of product management at ConocoPhillips Lubricants. Thats why, said Marshall Cohen, the companys director of brand management, the Kendall GT-1 brand is getting the limelight. Its a strong brand, but has been a quiet one. So now we expect to grow by differentiating Kendall.

All Kendall GT-1 engine oils will be made with Liquid Titanium, the anti-wear additive that first appeared last year in COPs heavy-duty engine oils. The additive is based on patents held by Afton Chemical. ConocoPhillips has exclusive rights to use it in engine oils, and holds the trademark on the name Liquid Titanium. Reflecting this formulary change, Kendall GT-1 oils also wear new dressing. Silver bottles replace the old black ones, and labels feature a strong call-out to Liquid Titanium. The Kendall two-finger logo has been polished up, too.

Kendall GT-1 products, including full-synthetic, high-mileage, racing and other premium oils, will be available to all ConocoPhillips marketing partners. All our marketers will have access to some Kendall with Liquid Titanium, our exclusive differentiator, Tarbox said, adding, The good news is that we did not change the price at all from us to the marketers; even though we added the Liquid Titanium technology, theyll get it at the same price as Kendall without it.

Knell for Kurnell

Caltex Australia said it will close its base oil refinery at Kurnell, near Sydney. The 3,300 b/d API Group I plant -Australias sole surviving base oil refinery – is not viable going forward due to the fact that the plant manufactures outmoded lubricant products and faces declining feedstock sources, the company said.

Spokeswoman Georgie Wells told Lube Report that Caltex Australia has made long-term arrangements to replace the refinerys base oil with imports, and to ensure that the plants bitumen customers continue to be supplied. A precise date for the closing has not been fixed.

With a domestic market estimated at 420,000 to 450,000 metric tons per year, Australia already imports most of its base oil, according to Wayne Petersen of Hilditch Pty. Ltd., a Melbourne-based trading company. Group I oils have faded though, driven out by engine oil upgrades and emissions mandates.

Shell Inaugurates China Blending Plant

Shell opened its newest lubricants blending plant in China in late November, with 50 million gallons of annual capacity now and potential to double that as demand grows. The plant, in Zhuhai in Guangdong Province, is ideally situated to serve the southern China market, said Courtneye Barrett, a company spokeswoman. It joins five other plants the company operates in China.

The Zhuhai plant makes lubricants for Chinas consumer, transport, industrial and marine markets, and will have about 300 employees in its initial phase of operation. Shell also plans to add a technical facility at the complex, to offer quality control, research, marketing and training support.

According to Little Falls, N.J.-based consultants Kline & Co., Shell is Asias largest international lubricants supplier by sales volume, and Chinas largest international lube supplier by market share. Kline pegged Chinas lubricant market at an estimated 5.5 million metric tons, worth $12.1 billion.

Kost USA to Expand

Despite the recession, Mason, Ohio-based Kost USA, which makes industrial and automotive lubricants, coolants and chemicals, says it had a very healthy 2009. In fact, the 24-year-old company recently bought an 11-acre site and 150,000-s.f. building in Cincinnatis Bond Hill area, and will move its production there upon completion of a $10 million expansion. The new plant will add about 10 more jobs, as well.

Tom Overdeck, owner and president, said May 1 is the target startup date for the new location. Quite frankly, we have outgrown our capabilities, he told Lube Report. Fundamentally, we need the new facility just to support our growth. Kost has primarily dealt in bulk products until now, and the new plant will let it do more packaging and toll blending, added Steve Overdeck, vice president of sales and operations. We will also be getting into the diesel exhaust fluid market and some retail opportunities, he said.

Lube Glitches Prompt Recalls

Lubrication has been involved in a flurry of recent vehicle recalls. In November, Chrysler recalled more than 160,000 model year 2007 and 2008 Jeep Wranglers with automatic transmissions, due to a risk of fire if the transmission fluid boils over and contacts a hot engine. Dealers will inspect the vehicles and install a hot oil alert to their instrument panels.

Two weeks later, a dangerous oil leak prompted Kawasaki to recall 259 motorcycles (model year 2009 and 2010) sold in the United States. The bikes are at risk of engine oil leaking onto the rear tire and contributing to a crash. The repair will include checking the crankcase for leaks and applying a sealing epoxy.

And a Ford joint venture in China last month had to recall 11,000 Volvo S40 sedans due to a defective oil pump pipe. Loosening of joints in the oil pipe can result in leakage, a Chinese safety agency cautioned.

4,000 Evacuate near Heartland Rerefinery

Firefighters evacuated thousands of workers from nearby office buildings after a failed gasket led to a hydrogen sulfide gas leak on Dec. 14 at Heartland Petroleums rerefinery in Columbus, Ohio. The rerefinery had suffered a power outage and was attempting to restart that morning when the gasket failed and a cloud of steam was released, containing low levels of hydrogen and hydrogen sulfide. Hydrogen sulfide is produced in the process that the plant uses to separate sulfur from used oil.

According to a company statement, safety plans were implemented immediately and no employees were injured. Responders said three people from neighboring buildings were treated at the scene for minor symptoms, and one was taken to a hospital. Low and moderate concentrations of hydrogen sulfide can irritate the eyes, nose, throat and respiratory system, while high concentrations can cause more serious problems.

The rerefinery, with capacity to make up to 1,300 barrels per day of API Group II base oils, had not restarted as this issue went to press.

Cross Refining Assets Sold

Martin Midstream Partners of Kilgore, Texas, bought the refining assets of Cross Oil Refining & Marketing on Nov. 25 in a stock transaction worth $45 million. Seller of the assets was Martin Resource Management Corp., an affiliate which also owns Martin Midstreams general partner. The companies also entered into a tolling agreement under which Martin Midstream will process crude oil into finished products for MRM to market.

MRM also will continue to market and distribute all finished products under the Cross brand, and to own and operate Crosss packaging business. The Cross refinery, located in Smackover, Ark., includes a 7,500 b/d naphthenic base oil refinery and more than 45,000 barrels of storage capacity.

Total and Ultramar Cut Canadian Deal

Total Lubricants Canada has acquired the lubricants business of Ultramar (a subsidiary of Valero Energy), and will begin selling Total branded lubricants throughout the Ultramar network of service stations, the companies announced last month. Montreal-based Ultramars outlets will offer Total lubricants to their customers, and Ultramar will also recommend Total lubes to its business partners.

Five employees of Ultramar who are directly involved in the lubricants business are expected to join Total. Price of the deal was not disclosed.

Russian Scientist Honored

The 2009 Tribology Gold Medal, the fields highest honor, was awarded to Prof. Irina Goryacheva, for outstanding achievements in the field of contact mechanics. Goryacheva heads the tribology laboratory at the Ishlinsky Institute for Problems in Mechanics at the Russian Academy of Sciences. She also is president of the Academys Scientific Tribology Council.

Petro-Canada Picks White Oil Partner

Petro-Canada, which boasts it is the worlds largest white oil producer, has added The Azelis Group to its European distribution network. From its ISO-certified facilities in Germany, Azelis will promote, supply and distribute packaged Puretol white mineral oil to the personal care and pharmaceutical sectors throughout Europe.

Faces in the News

Following six years each at Chevron Oronite and then Nynas USA, Jeremy Kriska last month joined Tulstar Products as director of sales and marketing. Kriska will seek to expand the Tulsa, Okla.-based firms base oils and chemical offerings, both internationally and domestically. He holds a bachelors in chemical engineering from Texas A&M, and an MBA from the Univ. of Houston.

Renato C.T. Marques de Oliveira has been named retail marketing manager for Brazil at Petrobras Distribuidora, also known as BR. He has been with the oil giant for 23 years, most recently in the international business area. Oliveiras new responsibilities include the marketing for more than 7,000 service stations and convenience stores, and 1,200 Lubrax lubricant centers around Brazil.

Petrobras also named Leonardo Braganca de Carvalho as lubricant coordinator for its international business. Braganca joined the company in 2002, working in lubricants development and technical support, and since 2002 has been involved in the international area of its lubes business.

Dirk Reese, managing director at Evonik RohMax Additives, retired Dec. 31 after nearly 30 years, including the last 11 as the companys chief. His co-managing director, Norbert Westerholt, will continue to lead RohMax. Westerholt joined the specialty chemical company in early 2008, after 11 years with other Evonik units.

Anju Singla was named national accounts manager at International Petroleum Products & Additives (IPAC), effective Dec. 1, providing sales representation and technical support for the U.S. Northeast and Midwest. Based in Richmond, Va., she holds a chemistry degree from St. Louis Univ., and an MBA from Averett University. Most recently with O.C. Tanner Co., she also spent 11 years at Ethyl (now Afton Chemical).

Base oil and specialty product supplier UniSource Energy announced the retirement at the end of November of Don Shook, who had been with the company since 1994 after careers with Gulf and BP Oil. Replacing him as operations manager is Maggie Nilles, a chemical engineer formerly with ExxonMobil. Also, Jennifer Zwadlo was promoted to manager, customer service. She has been with UniSource for seven years.

Kevin Calelly has been promoted to national sales manager at Specialty Equipment, the Houston-based builder of packaging systems that he joined in 2007. His background includes field service, maintenance, logistics and sales.

Related Topics

Market Topics