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Paulsboro Refinery Sold

Valero Energy is selling its Paulsboro, N.J., refinery, including its 11,500 barrel per day paraffinics base oil plant, to PBF Holding Co., in a deal expected to close before the years end. Greenwich, Conn.-based PBF, now owned by invest-ment company Blackstone Group and private equity firm First Reserve, will pay $360 million for the entire refinery, plus the value of working capital and inventories.

Two PBF subsidiaries earlier had acquired Valeros Delaware City, Del., refinery and terminal operation. The new owners say they intend to continue to operate Paulsboros base oil plant, and to actively market its output. Virtually all of the refinerys 450 employees will be retained as well, said PBF President Michael Gayda.

Turnaround Predicted for U.S. Lubes

U.S. demand for lubricants will climb to 2.25 billion gallons in 2014 – a gain of 1.3 percent a year – to reach a value of $22 billion, predicts a new study from The Freedonia Group in Cleveland. This represents a significant turnaround from the years 2004 to 2009, which overall saw lubricant demand plunge an average 5 percent annually.

Total lubricant consumption will not reach pre-recession levels, the study Lubricants indicates. Although motor vehicle production and usage are due for a significant rebound, the research firm points out that longer-lasting, higher-performing lubricants are enabling longer drain intervals and therefore will restrain over-all lubricant demand in volume terms. It expects aftermarket demand for automotive engine oils will decline, with do-it-for-me services regaining ground against the do-it-yourself segment.

In value terms, the picture is brighter. Freedonia sees finished lube prices rising due to growth in crude oil prices and a shift in product mix toward higher-value lubes, such as synthetics. Another bright spot will be process oils, including white oils, rubber oils, electrical oils, ink oils, agricultural sprays and defoamers. Industries such as food and beverages, chemicals, and plastics and rubber offer good opportunities for growth, too, the report says, but environmental and regula-tory standards could pose challenges.

The report Lubricants (375 pages, $4,900) can be ordered online at www. or by phoning (440) 684-9600.

Chavez Nationalizes Venoco

Industrias Venoco, Venezuelas largest independent lubricant company, was taken over last month by the countrys government. According to President Hugo Chavezs official news blog, the action was taken to bring down lubricant prices, and followed a recommendation from Venezuelas energy and petroleum ministry and the state-owned oil monopoly Petroleos de Venezuela (PdVSA).

Venoco President Ricardo Barreto could not be reached for comment. Two years ago, he had described Venezuelas lube market and his companys role in it at the 2008 ICIS Pan-American Base Oils & Lubricants Conference. Founded in 1960, Venoco by 2008 had grown to serve an estimated 21 percent of the countrys 290,000 metric ton lubes market, he said. It made private-label motor oils and lubricants for the state-owned companies plus its own popular brands. Subsidiaries also made lubricating grease and substantial volumes of chemicals and solvents.

In his Oct. 10 weekly broadcast, Chavez said the forced acquisition would take effect when the decree is published in the countrys official gazette, but on that same date government agents occupied Venocos premises.

Lubrizol Foresees Growth

Speaking last month to analysts in New York City, Lubrizol Corp. officials were upbeat about the lube additives business, and laid out plans to boost earnings to $13.50 per share by 2013 – 80 percent over 2009 results.

James Hambrick, chairman, president and CEO, said additive market trends are favorable for sustaining margins, with gross profit margins now in the mid-30 percent range, or at the levels of the mid-1990s. He noted that customers now are putting more focus on improving their own margins through differentiated offerings, another favorable sign for additive suppliers.

The company does not believe the additives business will see margins pressured by either new entrants or excess capacity, the analysts heard, due to high barriers to entry and capital costs. Meanwhile, lubricant additive volumes are likely to continue growing. The hottest spot for this growth is Asia Pacific and especially China, where Lubrizol is building a new $200 million, wholly owned plant. Production there should begin in 2013, with engine oil additives as the initial focus.

Dan Sheets, president of Lubrizol Additives, offered a glimpse of Lubrizols ranking in the global marketplace. The company leads in applications such as heavy-duty diesel oils and passenger car motor oils, he indicated, while Chevron Oronite has the first-place spot in additives for marine oils. Lubrizol also claims leadership for gear oil and industrial oil additives, and said it has a strong position in automatic transmission fluid technologies.

Group II Refiner Tackles Repairs

Chevron has accelerated a planned shutdown for maintenance and repairs at its Richmond, Calif., base oil plant which originally was scheduled for January 2011. It has also imposed sales allocations on two grades (100 and 220) of its API Group II base oils, which are expected to last through the end of the year. Richmond has capacity for 20,000 b/d of Group II.

The new schedule for the maintenance and repair operations is partially in response to reductions in base oil capacity which began in June, the company said in a statement to Lube Report. It also said it is assessing the impact on its finished lubricants to see if there are any supply issues.

SKF Reels in Lincoln Industrial

Swedens SKF will acquire Lincoln Industrial, the maker of automated lubrication systems, hose reels and grease guns, from St. Louis-based Harbour Group for $1 billion cash, the companies announced last month. Included in the sale are all Lincoln, Alemite and Reelcraft entities and brands. Lincoln has around 2,000 employees and is expected to generate sales of $400 million in 2010, with an operating profit of around 24 percent, SKF said.

Lincoln will become part of SKFs lubrication systems business, which it has been building over the past six years, largely through acquisitions.

Arizona Chemicals Resold

Rhone Capital is selling a controlling interest in Arizona Chemical to private equity firm American Securities, for an undisclosed amount. Once part of International Paper, until Rhone acquired it for $485 million in late 2006, Arizona Chemical makes pine chemicals for the lubricants, additives, oleochemical and other markets. It has more than 1,000 employees and refineries in six countries, including 10 production facilities in the United States and Europe. Its U.S. headquarters is in Jacksonville, Fla.

Rhone and other current investors will retain 25 percent of the company after the deal closes, which is expected before the year ends.

Third Coast Builds Big

Third Coast Terminals has undertaken a major expansion at its Pearland, Texas, facility, aimed ultimately at tripling capacity there by 2013, says Jim Clawson, president. This expansion makes Third Coast Terminals unique in the industry based on our ability to safely and efficiently handle a wide range of bulk and packaged chemicals, he noted.

Highlights of the project include a new tank farm with 7 million gallons of storage; six truck scales; the addition of 270 railcar spots for storage, handling and transloading; 65,000 more square feet of warehouse storage; and enhancement of existing utilities. The current phase of the work will see the opening this month of an automated, zero-emissions, zero-exposure tote and drum filling line – the only one of its kind at a public terminal in Texas, the company boasts.

Briefly Noted

Motor oil distributor Chesapeake Petroleum of Gaithersburg, Md., acquired Skyline Oil, Winchester, Va., for an undisclosed price, extending its reach from the mid-Atlantic region deep into Virginia. The move also adds Shell, Pennzoil and Quaker State brands to Chesapeakes portfolio, which already had Mobil, Castrol, Motorcraft, Mopar and Exxon motor oils…

Miami-based World Fuel Services bought Western Petroleum, includ-ing its wholesale lubricants business, for at least $95 million. Western distributes BP Lubricants, Castrol, Air BP, Conoco and ExxonMobil Aviation lubricants, along with Prestone antifreeze. World Fuel also got Westerns wholesale motor fuel and aviation fuel distribution businesses…

Biocides producer Arch Chemicals will consolidate U.S. R&D and technical services in Alpharetta, Ga., by the end of 2011. The consolidation and cost-saving measure, which will cost $6 million to $8 million to implement, will impact facilities in New Castle, Del., Cheshire, Conn., and Conley Ga., according to a filing with the Securities and Exchange Commission.

OMG Stuck on Soltex

Specialty chemical manufacturer OMG has tapped Houston-based Soltex as exclusive global supplier of OMG tackifiers. The high-molecular-weight polymer based additives provide tack, adhesion and non-drip characteristics for bar-and-chain oils, greases, way lubes, rust and corrosion inhibitor packages, and other products. They are made at OMGs facility in Belleville, Ontario.

Susan Kovacs, Soltex vice president of sales, said, OMG tackifiers are a natural extension of our well-known polybutene product lines. She said Soltex will provide both marketing and technical support for the OMG tackifiers, which include a grade for general applications; a water-white version; and a food-grade version registered with NSF for incidental food contact.

Faces in the News

Julie Kimes has rejoined Kimes Technologies International, becoming president of the specialty chemical firm, best known for its expertise in sulfonates. Kimes previously worked for Stoney Creek and most recently Soltex. She takes over from her father Norm Kimes who remains active as chairman of the Seven Fields, Pa., company.

John Buckley has become global manager of the performance materials unit at Dow, and president and CEO of its Angus Chemical subsidiary, which makes nitroalkane based chemistries used as additives and biocides for metalworking fluids. He joined Dow in 2009 when it acquired Rohm and Haas, where he had worked for 25 years.

Fuerst Day Lawson has named Philip Herst director for global sales, based at the companys offices in London. With FDL since 1994, he has 16 years experience working in the grease and lubricants industry. FDL supplies key components such as raw materials for grease thickener systems, molybdenum derivatives and corrosion inhibitors.

Synthetic lubricants manufacturer Ultrachem Inc. has tapped industry veteran Glenn Krasley as sales and marketing director, responsible for extending its reach into markets for food-grade lubricants, impregnating oils and gels, and compression lubricants. He joins New Castle, Del.-based Ultrachem from Advanced Lubrication Specialties.

Peter Pilon is now CEO of U.S. operations at Kittiwake Developments, specialists in machinery condition monitoring, fuel and lube oil analysis and water testing. Pilon joins the company from Hamworthys U.S. division specializing in offshore activities, and will work to develop its presence in marine and offshore applications.

ExMo Woos, Lands Partners

ExxonMobil Lubricants & Specialties has been very busy lately cementing deals with retail and brand partners. These include a multiyear agreement to continue supplying Caterpillar branded lubes to Caterpillars factories and dealers worldwide. The deal covers 33 lubricants used in CAT engines, transmissions, hydraulics and final drives. Aftermarket retail and service chain giant Pep Boys agreed to feature Mobil 1 as the preferred synthetic motor oil at its 590 stores, which together have over 6,000 service bays. And retailer Camping World, which focuses on recreational vehicles, picked ExxonMobil as its exclusive lubricants supplier. Its 75-store chain will carry Mobil branded products for diesel and gasoline engines, plus coolants, greases and ATF.

ExxonMobil also will continue as the supplier for General Motors U.S. dealer network for the next five years, providing engine oils (including Mobil 1) that are licensed to the new GM Dexos specification. And it will supply GM with a new semi-synthetic ACDelco branded Dexos-licensed engine oil, scheduled for roll out this year to GM dealers in the United States and Canada.

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