After a fast start, first-quarter U.S. base oil production seemed to be dampened by rising feed-stock costs, numerous refinery turnarounds and wavering interest from buyers. Although domestic producers loosed a hefty 5.1 million barrels of base oil on the market in January, they quickly backed off from that pace, according to data from the Department of Energy. By the quarters close, U.S. refiners had mustered just 13.9 million barrels of base oil, 8 percent less than the 15.1 million barrels produced in the same period a year earlier.

The first quarter yielded 11.5 million barrels of paraffinic base oils, down 7 percent versus 1Q 2011, and 2.4 million barrels of naphthenics (off 11 percent).

Scheduled maintenance turnarounds at three naphthenic plants and brief outages elsewhere may have helped to limit output in some cases. The weaker production as well may reflect rising feedstock costs and narrower refining margins. In the end, U.S. producers also conceded demand in the quarter was decent, but not what they had hoped for.

Fuchs Digs Deeper Down Under

Germanys Fuchs Petrolub plans an A.$5 million expansion in Australia of its Sunshine facility and a major redevelopment of its Newcastle site. Global CEO Stefan Fuchs unveiled the investment plans during a presentation to staff at the 2012 Fuchs Australasia National Sales conference, according to a company statement.

Fuchs did not give details of the scope of work planned at either site. Newcastle is in New South Wales, and Sunshine is a suburb of Melbourne, in Victoria. Both have lubricant blending and filling plants, a Fuchs spokesperson said.

Australias total lubricants market in 2011 was an estimated 395,000 metric tons, according to Kline and Co.s Global Lubricants: Market Analysis and Assessment study. By market share, the firm ranks the continents top lube players as BP, Shell, ExxonMobil, Chevron, Fuchs and Valvoline.

Calumet Buys Royal Purple

Continuing its campaign of aggressive growth, Calumet Specialty Products Partners last month purchased Royal Purple, a privately held commercial and industrial lubricants producer in Porter, Texas, for approximately $335 million.

Founded in 1986, Royal Purple produces consumer and industrial lubricants and had net sales for 2011 of $109.5 million. It shares a similar customer base with Calumet that will lead to substantial marketing synergies between the two companies, according to Calumet President and CEO Jennifer Straumins.

Royal Purple also improves Calumets vertical integration, Straumins said. Earlier this year Calumet bought blender and distributor TruSouth Oil of Shreveport, La., and Ashland subsidiary Hercules aviation and refrigerant lubricants business in St. Louis, Mo. Terms were not disclosed for those transactions.

All three of these businesses [TruSouth, Hercules and Royal Purple], will integrate nicely with each other. There are a lot of synergies between the three, the Calumet CEO said. She added that Calumet is a current supplier to Royal Purple as well.

Indianapolis-based Calumet has a base oil plant in Shreveport with 7,000 barrels per day API Group II and 4,800 b/d Group I capacity, and another in Princeton, La., with 6,900 b/d naphthenic capacity. It employs 900 people in the United States and gains around 100 more with Royal Purple.

The company also will undertake a multimillion-dollar expansion of its Indianapolis corporate headquarters by 2015, creating 48 new positions there. The company said it is recruiting new management, accounting, sales, human resources and information technology associates.

Brenntag Buys Italian Firm

Brenntag signed an agreement to acquire Milan, Italy-based Petrolube, which distributes Infineums specialty lubricant and fuel additives.

According to Brenntag, the Petrolube acquisition further strengthens its strategic relationship with Infineum. Applications are vehicles, motorcycles, heavy-duty vehicles and industrial use, Brenntag spokesman Hubertus Spethmann said. Warehousing will be integrated into our existing facilities, which are planned for next year. Petrolube distributes only within Italy, he added.

Headquartered in Mulheim an der Ruhr, Germany, Brenntag in November acquired Multisol Group, which distributes lubricant additives and base oils in Europe and Africa.

Bahrain Gets Group I Plant

KB Petrochemical Industries said it is on the verge of opening a 50,000-metric-ton-per-year – roughly 1,000 daily barrels – API Group I base oil plant in the island nations South Alba Industrial Area. The plant was due to stream as this issue goes to press.

Some of the product will go to applications such as knitting oils, transformer oils and anti-static oil, Managing Director Jahangir Hossain Patwary told Lube Report. A significant portion will go to non-lubricant uses such as inks and paints. He said the plant cost $15 million and receives feedstock from Bapcos refinery at Sitra, Bahrain. That refinery is also home to Bapcos base oil joint venture with Neste Oil, a 400,000 t/y Group III plant that opened last year.

Patwary said KB will use some of its base oils to produce its own lubricants, while selling the rest to other manufacturers. The company already markets lubricants in India.

ExMo Lubes: Texas-bound

ExxonMobil confirmed that the corporate campus it is building north of Houston will house an additional 2,000-plus employees, absorbing many from sites in Fairfax, Va., Akron, Ohio, and elsewhere in Texas. Affected operations include ExxonMobil Lubricants & Specialties Marketing Co.; ExxonMobil Refining & Supply Co.; ExxonMobil Research & Engineering Co.; and ExxonMobil Fuels, all based in Fairfax County. The 110 employees at Akron-based ExxonMobil Chemical Co. will relocate, as will select employees from ExxonMobil R&E and ExxonMobil Chemical in Baytown, Texas. Workers at research facilities in Clinton and Paulsboro, N.J., are not included in plans for the coming move.

Employees will begin relocating in 2014 and by 2015, the 385-acre campus near Spingwoods Village, 30 miles outside of Houston, will house some 10,000. The company expects no staff reductions related to the move, a spokesman said.

Evonik to Invest in Asia

To compete in Asias fast-growing lubricants market, Evonik Oil Additives plans to build a new plant in the region and almost double its current lubricant additives capacity there by 2015. The Darmstadt, Germany, company, which makes a range of pour point depressants and viscosity index improvers, opened its existing Jurong Island, Singapore, plant in 2008.

Whether the new plant will be located in Singapore or elsewhere is undecided, company spokesman Richard Williams told Lube Report. The design is under way. We have people within the company already committed to the project who are working on it now.

Evonik Oil Additives specializes in additives for lubricants and refinery products based on polyalkyl methacrylates.

Briefly noted

Rockwood Holdings global lithium and special metal compounds business, formerly Chemetall, now trades under the new brand name Rockwood Lithium.

Feige Filling GmbH last month reported it has delivered the packaging equipment for the new Shell lubricants complex in Torshok, Russia, and also to the Gazprom complex in Omsk.

Champion Oil has added Pacific Performance Engineering as a master warehouse distributor and retailer for its line of Blue Flame Performance diesel engine oils.

Base oil, lubricant and petrochemical distributor Shamrock Shipping & Trading has added two more storage tanks at its facility in Latvia. With its other facilities in Belgium and the U.K., this brings the Cyprus-based companys total storage capacity to 25,000 metric tons.

Nynas and tire manufacturer Pirelli recently signed a global supply agreement under which Nynas will cater Pirellis demand for specialty tire oils over the next five years. Pirelli also named Nynas Best Supplier 2011, citing the naphthenic base oil marketers quick transfer away from aromatic oils, in light of the 2010 EU ban on highly aromatic content in tires.

Elgin, Ill.-based Heritage-Crystal Clean plans to offer to sell 2.3 million shares of its common stock, and said it may use some of the net proceeds to expand its rerefining business. It operates a 2,000 b/d Group II rerefinery in Indianapolis.

The Horn Co. will distribute Vertellus Specialties castor oil, castor oil polyols and derivatives to 11 Western states and four Southwestern states.

Delve into Turbine Varnish

Lubricant blenders, additive companies and anyone else interested in turbine oil issues are welcome to help with a proposed new ASTM test method, which aims to assess the varnish generation potential of turbine oils on industrial equipment.

The proposed standard, ASTM WK36093, Test Method for Determination of Oxidation Stability and Insoluble Formation of Inhibited Turbine Oils at 120 C Without the Inclusion of Water, is being developed by Subcommittee D02.09.0C on Oxidation of Turbine Oils, part of ASTMs Committee D02 on Petroleum Products and Lubricants.

The proposed test method could be applicable to any industrial lubricant as an indication of varnish potential, believes Mike Okazaki of Chevron Lubricants, technical contact for the effort. Lower varnish and deposit formation will ultimately correlate to increased reliability, for example, increased machine uptime and lower maintenance costs.

For information, e-mail Okazaki (mokazaki@ chevron.com), or ASTM staffer David Bradley (dbradley@astm.org).

IBC Maker Tackles EU

Custom Metalcraft Inc., the largest manufacturer of stainless-steel intermediate bulk containers in the United States, continues to expand internationally and has opened a European sales office in the Netherlands. The new office enables its representatives to serve clients on the continent with a broad range of IBCs and grease bins, said the companys Scott Higgins.

Last year, the Springfield, Mo.-based company inked an exclusive agreement with Australias Buschutz Engineering to manufacture its IBCs and grease bins under license in Australia. That includes the TranStore steel IBC, which Buschutz markets in Australia, New Zealand, Indonesia, East Timor and New Guinea under the trademark Best-Vessel.

Repsol Pursues Expansion, Sans YPF

Spains Repsol YPF officially changed its name to Repsol S.A., shedding the initials YPF after Argentinas seizure of that asset, and signaled that a base oil expansion project at its Cartagena refinery will continue as planned.

Argentinas government took over Repsols 51 percent share in YPF as of June 4. YPF is Argentinas leading lubricants supplier and operates a 4,700 barrels per day API Group I base oil plant in La Plata.

The unlawful expropriation of YPF does not in any way affect the growth capacity of any of Repsols businesses outside Argentina, as the companys financial strength and its assets allow it to continue with its growth plans in the coming years, Repsol said in a statement May 31 following its annual general meeting. Those plans include a joint venture with SK Lubricants of Seoul, South Korea, to build a 13,000 b/d Group II and III base oil plant at Repsols Cartagena refinery. It is due to start up in 2014.

Meantime, Repsol says it will pursue legal action to recover damage it suffered because of Argentinas April 16 expropriation of YPF.

Faces in the News

Jerry Byers, manager of R&D at Cimcool Industrial Products in Cincinnati, in May was elected 2012-13 president of the Society of Tribologists & Lubrication Engineers. Byers first joined STLE in 1977, and for decades has served the society at both the national and local levels. A noted author and editor of several key reference works, including Metalworking Fluids, he joined the STLE board of directors in 2003, and also served as its treasurer, secretary and vice president.

James Wu has become head of sales, China, for Rhein Chemies Lube Oil Additives business unit, based in Shanghai. The company also appointed Monica MacCagnan to be responsible for the Italian market; Daniela Jimenez for sales in Brazil; and Leandro Palada to be responsible for sales in Argentina.

Jake Rippstein joined Hoover Container Solutions as director of technology services, responsible for R&D and technology for its Liquitrac services. He brings 15 years experience to the industrial packaging supplier and a strong background in engineering, development and technology.

Jan Trocki has joined Morris Lubricants as general manager of marketing and technology, bringing 28 years industry experience to the family-owned U.K. blender. Trocki has been with BP and Castrol and recently SK Lubricants Europe, and chairs the Technical Council at ATIEL, the technical association of the European lubricants industry.

John Whittenhall has joined Rock Tenn Co.s Corrugated Packaging Group as corporate business manager. A longtime Petroleum Packaging Council member, he has over 20 years experience working on supply chain and innovation projects for the petroleum and lubricants industry.

The IFH Group has named Keith Ellefsen president. He takes over from James King Jr., who retains the position of CEO. Ellefsen joined IFH in 1999, and since 2006 has been vice president, operations, and COO for the Rock Falls, Ill., firm, which custom-fabricates hydraulic oil reservoirs, lubrication storage and handling systems, tanks and other assemblies.

Scott Shields is the new installed market specialist for the Southwest region at North American Lubricants. With long experience in automotive retail and warehouse distribution, he most recently was a regional manager for AcDelco, supporting distributors in Arizona.

Spectro, Inc., which provides oil analysis and reliability tools to industrial and military markets, has established an office in Beijing, led by China Sales Manager Alex Shi. His background includes positions with 3M, Sinovel Wind and Keithley Instruments.