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Safety-Kleen Fires Up Blending

Safety-Kleen has begun blending engine oils at a new $15 million East Chicago, Ind., facility, adjacent to its rerefinery there. Dave Sprinkle, executive vice president for oil rerefining, said initial blending capacity is 20 million gallons a year, with the option to increase production in the future. Production of blended products began July 2.

We are blending Ecopower motor oil and other passenger car motor oils, heavy-duty diesel engine oils and viscosity modifiers, added Paul Miller, Safety-Kleens director of oil rerefining. Miller said the new blending plant offers two main benefits. We have control of our own quality, said Miller. Obviously cost savings is a big deal. Plus, the operation is directly linked to the rerefinerys base oil. We have a tank farm that we pump our hydrotreated rundown to, and from that tank farm we feed directly into the blend plant, he explained.

Safety-Kleen is bringing about 90 percent of its blending in-house, Miller said. A third-party blender will continue to handle some products that are very low volume.

UES Rerefinery on Schedule

Universal Environmental Services has built up a supply of used oil for its rerefinery project in Peachtree City, Ga., which it expects to be operational in 2013. Plans call for a plant that can process 30 million gallons of waste oil per year and produce API Group II base oil. Our rerefinery project is going according to plan, and we intend to keep our deadline of being 100 percent operational by Q2 2013, UES CEO Juan Fritschy told Lube Report. The mechanical completion will be done by December 2012, and then the engineers need a few months for start-up, commissioning and a full performance test.

We now control 120 percent of the supply we need for the rerefinery, and the recent market changes gave us the opportunity to gain substantial market share in some parts of our footprint, Fritschy said.

SK-JX Venture Opens

The worlds largest single-unit API Group III base oil plant, SK Lubricants 26,000 barrel per day joint venture with JX Energy, started up in May. But net production only increased by 10,000 b/d, as SKs oldest Group III plant went off line, Steve H. Kim, manager of base oil business development at Seoul, Korea-based SK Lubricants, told the ICIS Asian Base Oils & Lubricants Conference.

The SK Lubricants-JX Energy joint venture plant in Ulsan, Korea, is owned 72 percent by SK, 28 percent by Japans JX Energy. It is the third Group III base oil plant to be built in SKs Ulsan refinery, where the oldest plant is now being modified for other purposes and no longer produces base oils, said Kim.

To date, SK has announced three joint ventures: the JX Energy project; its 9,000 b/d j.v. with Indonesias Pertamina, 65 percent owned by SK, which began production in 2008; and a j.v. with Repsol to build a 13,300 b/d Group III plant in Cartagena, Spain. The Repsol project, 70 percent owned by SK, is expected to start up in second-half 2014.

St. Petes Motor Oil Mess

Shelves loaded with several thousands tons of packaged motor oil collapsed in a St. Petersburg, Russia, warehouse on July 15, causing an oil spill about the size of a soccer field. The packaged motor oil is owned by the Moscow-based X5 Retail Group, Russias largest food retailer by sales.

The city investigative committee opened an inquiry into the spill that happened south of the city, in the industrial zone Shushary, and will determine appropriate legal proceedings on receiving the report. The committee noted that the spill contaminated an area of 5,000 square meters.

Base Oil Quality Soars at Sinopec

Sinopecs API Group II/III base oil capacity, 410,000 metric tons per year today, will soar to 1 million t/y by 2015 to help meet Chinas demand for high-quality lubricants. Sinopec is building a 240,000 t/y Group III plant in Yanshan, a 250,000 t/y Group III plant in Maoming, and an 86,000 t/y Group II unit in Jinan, Sinopec Lubricant Co.s supply department manager Zhang Ye told the ICIS Asian Base Oils & Lubricants Conference in June. All the projects are expected to stream before 2015.

Ownership of cars in China is booming, said Zhang, and reached 106 million units in 2011. By 2015, he said, Chinese lubricant consumption will reach 8.1 million t/y, of which 3.65 million tons will be engine oils. More focus on the environment and energy conservation will require top-grade lubricants, and this in turn will require higher-quality base oils.

Were putting more attention to producing better products, including eco-friendly products, Zhang said. Premium base stocks, meeting Group I, II or III standards, will make up at least 95 percent of Sino pecs production by 2015.

Total base oil consumption in China in 2011 was 6.91 million tons. Chinas three giant, government-controlled major oil companies, PetroChina, Sinopec and CNOOC, together supplied 2.75 million tons of base oil; 2.12 million tons was imported; and other, generally low-quality refiners supplied the remaining 2.04 million tons.

Hydrodec to Treat PCB-Tainted Oil

The U.S. Environmental Protection Agency issued Hydrodec Group a final permit for storage and treatment of used transformer oil contaminated with polychlorinated biphenyl (PCB). Hydrodec also won permission from Mexicos national electricity utility to process that countrys PCB-contaminated oil at another plant in Australia.

Hydrodec began commercial production at its transformer oil rerefinery in Canton, Ohio, in October 2008. The 22,000-square-foot plant can recycle up to 8 million gallons per year. The EPAs approval is effective immediately, according to company CEO Ian Smale.

Hydrodec and its Mexican partner, System of Energy SA, a transformer servicing and maintenance company, won a competitive tender from the Federal Electricity Commission of Mexico for the processing of PCB-contaminated oils. It will allow the export of 900,000 liters to Hydro -decs plant in Young, Australia, enough to sustain production capacity at the plant through the end of 2012, with potential for further contracts in 2013.

Pa. Team Plans Rerefinery

Mil Speck Re-Refining Oil Co. and Renew able Manufacturing Gateway, a nonprofit organization, signed a letter of engagement to jointly develop a base oil rerefinery. Mil Speck anticipates beginning operations at a new custom-designed plant in the fourth quarter of 2013. Based in Pennsylvania, Mil Speck expects the new rerefinery to process 25 million gallons of used motor oil per year and to produce vacuum gas oil, base neutral and asphalt flux.

There is a great opportunity in the Mid-Atlantic region to establish a motor oil recycling business because of availability of feedstock, proximity to recycled product off-takers and lack of competing rerefineries, said Mil Speck founder and CEO Carle Greene.

The rerefinery will use technology designed by Sequoia Global Inc. of India. According to its website, Sequoia supplied the hydrotreater for Bango Oils rerefinery in Churchill County, Nev., which produces about 2,000 barrels per day of API Group II+ base oil.

Record Year for Grease Output

The worlds lubricating grease manufacturers created nearly 2.4 billion pounds of the stuff during 2011, a record-high volume, according to the National Lubricating Grease Institute. The years total output of 2.38 billion pounds, as reported by 162 grease manufacturers worldwide, was 1 percent higher than 2010s yield of 2.36 billion pounds, the newly published NLGI Grease Production Survey Report shows.

2011s global production also comfortably surpassed the 2.30 billion pounds reported in 2007, the prior peak year.

Unsurprisingly, lithium based greases continue to dominate the market. Including both regular and complex types, lithium accounted for 1.8 billion of the total global production, 75 percent of the years volume. The next-most popular grease types were calcium-thickened (10 percent of the total), polyurea (5 percent), and aluminum greases (4 percent), the report shows. Clay, sodium and other thickeners accounted for the rest.

NLGIs survey sorts data to show in-depth detail of grease production by geographic zone, by thickener type and by base oil type. In addition to the 2011 results, it gives data for the prior three years, which makes it useful for discerning marketplace trends such as shifts in demand by thickener type or geographic region.

NLGI members each receive one copy of the annual Grease Production Survey Report at no cost. Additional copies are available at a price of $75 for members and $175 for nonmembers. For information about ordering, email nlgi@nlgi.org.

Correction

In Mays issue, The Eve of Disruption mistakenly summarized comments by Peter Kim of SK Lubricants regarding the outlook for API Group III base oils. Kim told the ICIS World Base Oil & Lubricants Conference that producing Group III from Group II plants may result in lower yield of base oils, which means poorer economics. There are Group II suppliers who are claimed to produce Group III as well, [but] who hardly produce Group III or even purchase Group III in the marketplace. Kim also observed that small-sized Group III base oil plants with traditional and old technology and facilities face challenges of meeting updated specifications, higher production cost and frequent maintenance turnarounds.

Sore Spot for Packagers: Shipping Costs

In a recent survey of materials handlers sponsored by Salt Lake City-based Packsize International, respondents cited reducing shipping costs as the number one aspect of their packaging operations that needs improvement. The survey, On Demand Packaging, collected information from 521 logistics and materials handling managers who on average ship more than 2,000 packages (primarily corrugated boxes) daily from their locations.

After shipping costs, many managers also ranked a packaging systems durability, reliability and performance as characteristics considered most important when evaluating box-making solutions. Also of note, 92 percent of those surveyed indicated that they ship items of varying sizes, with nearly two-thirds of these companies requiring at least six to 10 different-sized boxes.

Lean manufacturing of corrugated boxes could address many of these issues, by eliminating box inventory, using warehouse space more efficiently, and minimizing dunnage material, commented Packsizes Brandon Brooks. The study is available at www.packsize.com.

Diesel Market to Heat Up

World demand for diesel engines is projected to grow 6.7 percent per year through 2015, to $197.5 billion. Thats a sizeable gain on 2010s global demand of $142.5 billion, according to World Diesel Engines, a new study from market research firm The Freedonia Group.

Sales of motor vehicles including medium and heavy trucks and buses will drive much of the increase, the study says, but value will also rise due to the need for more technologically advanced engines that can meet increasingly restrictive emissions regulations.

Asia-Pacific led the world in diesel engine sales in 2010, and will continue to do so, the study says. China and India are the biggest drivers for growth in this region.

Healthy gains are also forecast for Africa and the Middle East, Eastern Europe, and Central and South America. Each of these regions, however, will still account for less than 10 percent of global sales in 2015. The scene in Japan will be brighter compared to the past five years, but growth there will still be modest, the study finds. Finally, demand for diesel engines in North America and Western Europe will grow with renewed strength following a period of weakness, Freedonia adds. It noted that Western Europes high level of diesel demand includes a large percentage of light-duty vehicles, which will continue to be popular.

For information or to order a copy of World Diesel Engines (478 pages, $5,900) see www.freedoniagroup.com.

Tank Manufacturer Sold

Tank Holding Corp., which includes tank manufacturers Snyder Industries and Norwesco, was acquired by the private equity firm Leonard Green & Partners along with the companys executive team, for an undisclosed amount.

Snyder and Norwesco are the primary brand names encompassing THCs business operations, which are well known for rotationally molded polyethylene tank and container products widely used in a variety of industries, including lubricants.

Briefly Noted

Calumet Specialty Products Partners completed its $333 million acquisition of Royal Purple on July 3… Through an agreement with BP Lubricants USA, Pasadena, Texas-based Apache Oil will distribute Castrol automotive and heavy-duty lubricants… Metalworking fluids supplier Fortech Inc. has invested more than $3.2 million to equip its new 80,000-square-foot headquarters in Brighton, Mich… Hamburg, Germany-based Krahn Chemie will distribute Petronas Etro API Group III base oils in Germany, Switzerland and Austria… Marine lubes supplier Total Lubmarine opened a commercial and supply hub in Copenhagen, Denmark… Quaker Chemical purchased Gorgonzola, Italy-based NP Coil Dexter Industries, which makes metal surface treatment products, for an undisclosed amount.

Faces in the News

Quaker Chemical elected Margaret Loebl to be vice president, chief financial officer and treasurer, succeeding Mark Featherstone, who resigned effective June 27.

John Gordon was recently promoted from vice president to president of lubricants blender Delfin Group USA. Under his leadership, the company also recently achieved ISO 9001:2008 certification of its manufacturing quality systems, a sign of ongoing strength and viability, said Gordon. Markos Baghdasarian, the former president who is accused of violating the U.S. ban on trading with Iraq, is no longer with Delfin.

Bel-Ray Company has named Huafeng (Bill) Shen, Ph.D., as director of technology. A lubricant formulation expert and tribologist with more than 18 years of experience, and member of the NLGI Board of Directors, Shen has published more than 30 technical papers and presentations, and is an expert in food-grade lubricants. He joined Bel-Ray in 1998.

Lubricants manufacturer and distributor Eastern Oil Co., of Pontiac, Mich., promoted Mike Skuratovich to president, in charge of company operations. Former president Theodore Plafchan continues as chairman, focusing on company financial and growth issues.

Wallover Oil Co. has added Jonathan LeGeune to its sales team, responsible for all sales operations in eastern Tennessee, western Georgia, western Florida, Mississippi and Alabama. LeGeune has 20 years of experience in the machine tool market, and holds three Haas Automation certifications.

Prolong Super Lubricants appointed Jon Apogee as marketing manager, responsible for brand management, strategic marketing, website design and enhancement, social media and search engine optimization. Apogee has 30-plus years of experience, including with Mitsubishi and the Specialty Equipment Market Association.

Josh Foldenauer joined Archway Sales as Memphis site manager. He brings over 10 years of customer service and management experience to the St. Louis-based specialty chemical distributor.

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