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ExMo Bets Big on Synthetics


This spring, ExxonMobil Chemical more than doubled its capacity for making high-viscosity polyalpha­olefin base oils when it hung a complete sign on its new PAO plant in Baytown, Texas. Most critically, Baytown put a third leg under the companys API Group IV table, making it the only company in the world to own and operate three PAO plants and fortifying its supply security.

The freshly minted plant, which began commercial production earlier this summer, has capacity to make 50,000 tons per year of PAO via a proprietary metallocene catalyst process. It joined sister plants in Beaumont, Texas, and Gravenchon, France, that use conventional processes to make PAO. Marketed under the SpectroSyn Elite brand, Baytowns output is focused on beefy grades such as 65 and 150 centiStoke, which are in high demand for making automotive and industrial lubricants.

Company officials sat down for an exclusive interview with LubesnGreases in late May, and enthused about the market outlook for synthetic lubricants, their new mPAO plant, and other changes and expansions the company has under way, many of which stretch beyond PAO alone.

ExxonMobil Chemical has already spent 55 years in the synthetics base stock space, pointed out Brad Rinderknecht, global marketing manager, synthetics, and the Baytown plant represents a substantial commitment to this business. While declining to provide the exact cost of the project, he said it amounted to hundreds of millions of dollars. The Baytown metallocene production represents capital steel in the ground and also our substantial intellectual property, so the capital OK had to come from the highest levels, from the companys board of directors.

The return on these dollars will come from meeting the worlds need for energy efficiency and a cleaner environment, he said, and from enabling formulators to create higher-value products that go beyond the limitations of mineral oil base stocks. We see a proliferation of complexity in equipment and in transportation, and that means a need for more diversity in base stocks. OEMs are under pressure to deliver greater fuel economy, and lubricants are one lever they can pull, Rinderknecht said. Synthetics are part of the solution to solve the problem of fuel efficiency.

Looking ahead, in general we see a fairly flat lubricants market overall, due to lengthening oil drain intervals and longer-life products, he continued. For synthetics like API Groups III, IV and V though, we expect to see 5 percent to 6 percent growth annually. On the low-vis side, itll likely be 3 to 4 percent annual growth, and 4, 5 or even 6 percent growth a year in the high-vis grades. And when you step back and look at that, its exciting. Its why we do what we do.

Growth was one motivation for building the Baytown plant; another was security of supply. In 2008, Hurricane Ike swamped the Beaumont plant, putting it out of commission for months. The outage forced the company to allocate the PAO volumes that could be lifted by customers (including key account ExxonMobil Lubricants & Specialties, which makes best-seller Mobil 1 synthetic engine oil). That painful experience fired up the companys determination to have an alternate U.S. supply point.

To jump-start its plans, ExxonMobil Chemical first partnered with Albemarle Corp. to make PAO under an exclusive contract, using a proprietary ExxonMobil metallocene process at Albemarles custom synthesis plant in Pasedena, Texas. Pasadenas 15,000 t/y of high-vis mPAO helped ease the supply gap. It also bought time for engineering and building the Baytown plant, which broke ground in 2011.

Competitors in the meantime did not stand still. Chemtura, which makes high-viscosity PAO in Elmira, Ontario, boosted capacity there to 15,800 t/y and went on to build a second such plant in Ankerweg, Netherlands, which opened in 2013. Chevron Phillips Chemical, too, added high-vis PAO capacity via a toll manufacturer. And in China, the privately owned Naco Chemical launched a construction project in Shanghai, building a PAO plant that opened this May with 15,000 t/y of high-vis capacity.

While the Baytown plant eclipses all of those in size, there appears to be enough high-vis PAO demand to go around. However, with Baytown now complete, Rinderknecht confirmed that the need for Pasedenas supply is fading. He praised Albemarles able partnering, and reminds this was the plan all along. Once we make product, samples will still need to go to customers for approvals. So Albemarle will stay in place until Baytown is complete with a bow around it, and then those assets will go away.

Nor is there any plan to reduce the role played by Beaumont and Gravenchon. Absolutely, we are still committed to our conventional PAO capacity, assured Skip Thomas, global market segment manager for synthetics. The Elite plant does not replace that, but it gives formulators more flexibility in their choices of PAO.

LubesnGreases estimates Beaumonts capacity at 84,500 t/y of PAO (split between high- and low-vis grades) and Gravenchons at 60,000 t/y of low-vis. Thomas and Rinderknecht hinted that the latter estimate is a bit shy, as Gravenchon is essentially a sister to Beaumont. Thomas could not confirm Gravenchons actual capacity for reasons of confidentiality, but said, We may look at debottlenecking that plant, too.

More immediately, said Rinderknecht, coming towards the end of 2014 well see mechanical completions at our new Group V esters plant being built in Baton Rouge. This Louisiana site will replace one in Edison, N.J., which also produces jet turbine engine oils for the aviation industry. Opened in 1949, the New Jersey location over time has become pressed for space.

By contrast, Baton Rouge is a fully integrated chemical and refinery complex, like our facilities in France and Texas. Unlike those plants, the Group V plant in Edison, N.J., is a stand-alone facility, and it now is surrounded by neighbors which limit its growth. By moving this production to Baton Rouge, well also be increasing that capacity by 25 percent, Rinderknecht said. Its overall going to be larger.

The new Group V plant will make both alkylated naphthalene and esters, in separate trains. Once Baton Rouge is fully up and running, ExxonMobil Chemical plans to close the New Jersey plant, in accordance with plans laid out in 2012. Well draw down the inventory at Edison as we build up the Baton Rouge output, said Rinderknecht. And were working now with our suppliers to balance the volumes theyll need during the transition.

As a critical step in the hand-off, the synthetics team needs to ensure production from Baton Rouge fully matches that from Edison. Well have to do some qualification work with our customers, too, for products that have OEM approvals, observed Michael P. Sheehan of ExxonMobil Chemicals marketing technical service. And we always want to assure a safe startup, so Edison will remain in place until we have full production, added Rinderknecht. We expect to be phasing out of Edison during 2015, probably reducing capacity there throughout the year as Baton Rouge ramps up.

Sheehan said that ExxonMobil Research & Technology will remain in place in Clinton and Paulsboro, N.J., but Baytown will become the home of the companys pilot plant facilities. And since the esters production is moving, so will the associated jet turbine oils business: ExxonMobils lubricants arm is erecting a new blending plant for aviation lubes in Baton Rouge, too. Together, the new esters, alkylated naphthalene and aviation lube assets represent a $200 million spend.

Having more capacity for these Group V assets is vital, Sheehan said. In the engine oil area, we see the needs for lower viscosities and volatilities as continuing for fuel efficiency reasons. As formulators have to deal with an increasingly confined box for volatility and viscosity, the answers will come increasingly from Group V oils such as esters and alkylated naphthalene. So we see our new capacity as going to support automotive demand for the next five years. There is also an ongoing esters focus in the aviation space.

Where else will the Group IV and V base stocks be used? Rinderknecht said that depends on what customers want. But these investments send a signal that the chemical company plans to support synthetics for decades to come. As he put it, We listen to our customers, and one of the things they always want to know is, How long will this material be available? Its devastating for a customer to spend three and four years developing a product and getting approvals, and then find the material is not available.

With Baytown open and Baton Rouge on the way, that worrisome question has a clear answer, he said.

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