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Middle East Base Oils Make Inroads

Data on imports of lubricant base oils published recently by the federal Energy Information Administration show that the United States hauled in more base oil in the first six months of this year than it did in the same period last year. And imports of Gas-to-Liquid and API Group III base oils from two new Middle East sources account for essentially all of the growth.

Total imports of base oil in the years first six months rose 20 percent, to hit 5.9 million barrels, the EIA data show; thats about 32,000 barrels per day. In the same period of 2011, imports of base oil were 4.9 million barrels, or 27,000 b/d.

Credit the spike to two rookies to the global market. The first is Qatar, home to the Pearl GTL joint venture of Shell and Qatar Petroleum. Last November, Qatar sent its inaugural shipment of base oil to the United States. Shell followed that up with four shipments from Qatar to the United States in the first six months of this year, totaling 757,000 barrels of base oil.

Meanwhile Bahrain, home to the new Neste Oil-Bapco joint venture, sent its first 67,000-barrel cargo to the United States in January. In all, it landed 404,000 barrels of base oil in the years first six months. Neste-Bapco, with 8,000 b/d of Group III capacity, is located in Sitra, Bahrain.

Together, Qatar and Bahrain accounted for 20 percent of imports in first-half 2012 – essentially all of the volume increase.

Despite the inroads made by Middle East producers, Asia remains by far the largest source of U.S. base oil imports. South Korean refiners, including S-Oil and SK Lubricants, sent around 2.2 million barrels of base oil in the years first half, versus 1.8 million barrels in first-half 2011. The next-largest source of imports was Canada, with 1.4 million barrels from January through June.

The leader here is Petro-Canada, which makes Group II and III base oils at its 15,600 b/d refinery in Mississauga, Ontario.

On the outbound side of the ledger, U.S. exports of base oils from January to June of this year reached 14.2 million barrels – a volume equal to 48 percent of the countrys total base oil production in that same period, EIA data show. First-half exports were 8 percent higher than the 13.1 million barrels moved offshore in the first six months of 2011, and Canada and Mexico are the leading destinations.

Chemetall Set To Stream

As this issue went to press, German metalworking fluids maker Chemetall in October was putting the finishing touches on its new $25 million chemical manufacturing plant. The plant, on a 40-acre site in Blackman Township, Mich., covers 200,000 square feet and houses offices, manufacturing, warehouse operations and a testing laboratory. It will be able to produce more than 900 products, among them metalworking fluids, drawing and stamping compounds, cleaners, rust preventives and surface treatment chemistries.

The plants automated features include bulk material handling systems, mixing vessels and packaging lines. It also has a semi-automated waste treatment system to reduce process waste-water by 90 percent. Chemetall is based in Frankfurt/Main, Germany, and its North American headquarters is in New Providence, N.J.

ExMo Bets Big On Synthetics

ExxonMobil Chemical will increase capacity for two key synthetic lubricant base stocks by more than 25 percent through a $200 million plus investment in its Baton Rouge, La., chemical and lubricants plants. The expansions, to get under way late this year, also will add new lube blending and packaging facilities.

When complete, the company said, its Baton Rouge facility will be the worlds largest producer of synthetic esters and alkylated naphthalene, which are used in a wide range of premium lubricants, including engine oils, gear oils, greases and specialty lubes for aviation, marine and industrial applications.

Plans also call for adding a state-of-the-art blending center for synthetic aviation oil in Port Allen, La., which reflects our continuing commitment to safe and reliable supply of aviation and other lubricant products, stated Julius Bedford, manager of the Port Allen blending plant. The 8.3-acre facility will manufacture more than 145 lubricant products and have an annual throughput of more than 90 million gallons.

The new facilities will replace existing Exxon -Mobil Chemical base stock and aviation lube operations in Edison, N.J., which will continue production until the Louisiana facilities begin operating in 2014. The company also is building a 50,000 ton per year high-vis polyalphaolefin plant in Baytown, Texas, due to open next year.

Vicksburg Will Grow Again

Ergon Inc. will invest $147 million more in its Vicksburg, Miss., refining operations as well as facilities in West Virginia and Ohio. The five-phase project will encompass new administrative and laboratory facilities, a new technical development center and upgrades to refining units to increase product diversity and quality control.

The expansion, to be complete in 2015, will enable Ergon to increase liquid production at Vicksburg, and add storage tanks and infrastructure at its Newell, W.Va., lube refinery and terminals in Magnolia and Marietta, Ohio. This investment in our Vicksburg refinery is not only an investment in our facility, but in Vicksburg as well. These upgrades allow Ergon Refining to continue to deliver the highest quality products in our markets, stated Leslie B. Lampton III, Ergon Refinings chairman.

Ergon enlarged Vicksburg in 2006, 2009 and 2010 to reach its present capacity of 22,000 b/d of naphthenic base oil. Its Newell lube refinery has capacity to produce 1,900 b/d of API Group I and 2,900 b/d of Group II paraffinic base oil.

New Owner for Ester Maker

Spanish ester producer I.Q. Lasem has been acquired by Nisshin OilliO Group, a Japanese supplier of plant and animal-based chemicals. Officials said the transaction helps Nisshin expand geographically and into new markets. Price of the transaction was not disclosed. IQL, which is based in the Barcelona suburb of Castellgali, supplies esters for lubricants and cosmetics. It employs 40 people and has annual turnover of Euro 30 million (U.S. $39.1 million).

Tokyo-based Nisshin said its financial and technical resources should allow it to strengthen IQL and expand its sales in Asia. IQL said the acquisition will also allow it to develop more sophisticated esters for lubricants.

Delfin Regroups

The U.S. Department of Commerce has not renewed a prohibition on Delfin Group USA exporting motor oil and lubricants, which permits the North Charleston, S.C., company to resume overseas trade. But company President John Gordon says it will be some time before Delfin sends its products abroad, especially to the Middle East.

I made a commitment that I am NOT interested in doing business with the former presidents partners in the U.A.E., Saudi Arabia or wherever else these products might have gone, Gordon said, emphasizing the word not in an interview with Lube Report last month.

Gordon was referring to federal charges filed last May against Markos Baghdasarian, former Delfin president, alleging the sale and export of aviation oils and polymers valued at $850,000 to Iran in violation of U.S. imposed sanctions. The legal case against Baghdasarian continues to make its way through the courts and he is no longer with the company. And for the foreseeable future, Gordon asserted, Delfin wants to do business with American companies. That means buying raw materials from American chemical companies, using Americans to blend and package our products and then selling them to people in the Southeast.

Gordon was promoted to president on April 14 by the Delfin Group Worldwide board of directors, which sits in Riga, Latvia. Restoring Delfins reputation will involve more than a recovery, he said. Recovery to me implies going back to the way things were. We arent interested in recovery, were interested in total reconstruction of the company. Ripping the whole thing down and rebuilding it from the ground up. Measures taken so far include applying best practices and document control, and carefully screening existing and potential customers. Gordon also created an export compliance procedure manual and brought in a compliance officer to make sure Delfin USA is following trade and export laws under provisions of the Patriot Act.

Luberef Adding Group II and Bright

Luberef last month formally announced a major expansion of its refinery in Yanbu al Bahr, Saudi Arabia, to produce 700,000 metric tons per year of API Group II base oil. In addition to the new Group II plant, scheduled for completion in the third quarter of 2015, Luberef will also increase bright stock output at Yanbu to 175,000 t/y.

Ali A. Al-Hazmi, Saudi Aramco Luberef Co. president and CEO, told last months ICIS Middle Eastern Base Oils & Lubricants Conference in Dubai that the construction will increase our combined capacity to over a million metric tons per year. The expansion, which will use Chevron Lummus Global technology, will add a hydrocracker unit, an Isodewaxing unit, hydrogen and hydrogen-recovery units, a sulfur recovery unit and a gas treatment unit.

JX Nippon Heads to Vietnam

Japans JX Nippon Oil and Energy Corp. says it will establish a lubricant plant in Vietnam with an intended capacity of 40 million liters of lubricants per year. The plans to expand its lubricant business into Southeast Asia puts it hot on the heels of a freshly minted company – Idemitsu Lube Vietnam Co. – from its competitor Idemitsu.

Similar to Idemitsus venture, the JX plant will be based in Haiphong Citys Dinh Vu Industrial Park. According to JX officials, the plant will begin full commercial production in early 2014. JX Nippon has yet to officially name the Vietnamese company, but said it will have $10.1 million in registered capital, approximately 100 employees, and will focus its production efforts on engine oil for motorcycles, automobiles, general industrial lubricants and other related products.

Share Your Grease Expertise

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Interested authors should submit their name, address, proposed title of paper and brief abstract to the NLGI Headquarters no later than Jan. 11, 2013. For authors guidelines or information, email

W.Va. Gets a Rerefinery

Mil Speck ReRerefining Oil Co. has selected a 40-acre site in St. Marys, W.Va., to build its rerefinery, and aims to begin production in early 2014. The company, which is jointly developing the rerefinery with non-profit group Renewable Manufact uring Gateway, expects the rerefinery to process 25 million gallons of used motor oil per year, and to produce vacuum gas oil, base neutral and asphalt flux. Both companies are located in Pittsburgh.

Mil Speck CEO Carl Greene put the projects cost at more than $45 million and said it will use technology from Sequoia Global Inc. of India to produce API Group II base oil. The site, in northwestern part of the state along the Ohio river, is in a strategic location for our main buyer, who will be purchasing our product, Greene said. He would not disclose the buyers name nor the base oil yield for the plant, but said the company will begin engineering and site preparation work for the project in this quarter.

Briefly Noted

Shell on Oct. 3 held a ceremony to herald the opening of its lubricant blending plant in Torzhok, Russia. The company claims that the 180,000 metric ton facility is the first large-scale foreign-owned lube plant in the country, and one of the largest blending plants in its network.

Lubrizol will build a resin manufacturing and compounding facility in Deer Park, Texas, adjacent to its existing additive facility there. The new plant wil support its CPVC customers in the building and construction industries, and will leverage current Lubrizol infrastructure and expertise. It will require a total investment of approximately $125 million over a three-year period.

Emerald Polymer Additives has picked MidContinental Chemical Co. of Olathe, Kan., to distribute its Good-Rite 3128 and Good-Rite 3131 aminic antioxidants. The additives are NSF HX-1 registered for use in lubricants designed for use in meat, poultry and other food-processing plants where incidental food contact may occur; theyre suitable as well for use in industrial and automotive lubricants, the companies said.

Faces in the News

Istvan Kapitany will be the new president of Shell Commercial Fuels and Lubricants Americas. He takes over Jan. 1 from Lisa Davis, who led the regional business for four years and is moving to the global arena as executive vice president, strategy and portfolio, for Shells downstream businesses. Kapitany joined Shell 25 years ago, and now serves as vice president of Shell Retail Fuels Europe.

Valentina Serra-Holm has been promoted to marketing director at Nynas Naphthenics, succeeding Jean-Marie Toullat as he moves to become senior advisor at the Swedish company. She will manage organic growth as well as the added supply from the planned acquisition of Shells Harburg base oil refinery in Germany. Serra-Holm joined Nynas in 2001 and most recently was market manager for lubricants. She holds two Ph.D.s (in Chemical Reaction Engineering and Chemical Plants), and has authored numerous articles and presentations.

Milacron Holdings Inc., parent company of metalworking and industrial fluids supplier Cimcool, has named Tom Goeke as Milacrons chief executive officer. Goeke, who has more than 25 years of executive experience in the plastics industry, succeeds CEO Dennis Smith, whom the company thanked for his service since 2009.

Andrew A. Bornstein has rejoined Amalie Oil Co. as vice president, global sales and marketing. He has over 20 years of lubricant industry experience, mostly at the Tampa, Fla.-based independent blender and packager, and was recently with North American Lubricants. Bornstein will focus on sales management, electronic initiatives and Amalies installer business.

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