Lanxess to Absorb Chemtura
Lanxess AG plans to form a new performance additives segment after closing its $2.5 billion all-cash acquisition of Chemtura in mid-2017.
The new segment will consist of Lanxess Rhein Chemie Additives business unit, along with Chemturas two additive segments-its lubricant additives and synthetic lubricant business for industrial applications such as power generation and aviation; and its brominated flame-retardant additives, elemental bromine and bromine derivativeness business.
Anno Borkowsky, head of Rhein Chemie Additives, noted that Philadelphia-based Chemtura holds a competitive position in industrial lubricant additives and also manufactures the necessary precursors and intermediates for these products. Combined with our own additives portfolio, we will be a major supplier for industrial lubricants and will further strengthen our competitiveness through our integrated value chain, Borkowsky said in a news release.
The acquisition of Chemtura also boosts Cologne, Germany-headquartered Lanxess position in medium-sized markets and increases the companys presence in North America, where about 45 percent of Chemturas revenue is generated, the company added.
Ineos Invests in PAOs
Ineos Oligomers will build a 120,000 metric tons per year low viscosity polyalphaolefin facility at an undisclosed location to stream in early 2019, making it the second-largest PAO plant for the company and worldwide.
Ineos has two existing PAO plants and is increasing capacity at both. An expansion at its La Porte, Texas, plant – which includes construction of a new, 20,000 t/y high-vis PAO unit announced in July 2015 – is still scheduled to stream during the first quarter of 2017, the company noted. That unit will use metallocene catalysts and will add to the sites existing output, which includes 85,000 t/y of Ineos PAO products along with additional capacity for toll manufacturing.
Shell Ponders Argentina Assets
Royal Dutch Shell is reviewing the possible sale of its downstream assets in Argentina, including one of the countrys largest lubricant businesses and a base oil plant in Buenos Aires.
Shells assessment of Argentinian downstream operations is part of an effort to raise U.S. $30 billion through divestments from 2016 to 2018. In addition to lubricant sales, those operations include the refinery with a 1,500 barrel per day API Group I base oil plant, along with 600 retail fuel stations and chemicals, liquefied petroleum gas and marine and aviation fuels activities. The review does not include Shells exploration and production operations in Argentina, which the company intends to keep.
Shell holds an estimated 20 percent to 25 percent of Argentinas lubricant market, according to Claudio Pereira, director of Brazilian consultancy LubeKem. As a result, a sale could have a significant impact on the market.
SK, Sinopec Discuss Cooperation
SK Group and Sinopec are seeking to expand their areas of cooperation in China to extend to their petroleum, base oil and lubricant businesses, the South Korean conglomerate said.
SK previously signaled its interest to expand its presence in Chinas lubricant market, where it already sells finished lubes. Last year, SK made an unsuccessful bid to buy Royal Dutch Shells 75-percent stake in Tongyi Lubricants, a large player in Chinas automotive lube market. Sinopec and PetroChina-both state-owned giants-are the two largest finished lube suppliers in China.
The South Korean refiner is the worlds largest supplier of highly refined API Group III base stocks used to make high-performance lubricants, including synthetic automotive engine oils.
Luberef Faces Production Delay
Saudi Aramco Base Oil Company, known as Luberef, is facing a one-year delay to new API Group II base oil and bright stock production due to financial problems of its main contractor.
Luberefs President and CEO, Salahaddin A. Dardeer, said he was worried by the situation and discussions were ongoing to resolve the issue. In 2012, Luberef awarded the U.S. $871 million Yanbu expansion project to Koreas Samsung Engineering for the engineering, procurement, construction and commissioning of the refinery.
Luberefs management expected production start-up in the first quarter of 2017 and molecules to market by mid- to late-third quarter of 2017, saying the project had incurred delays as a result of the contractors performance.
Rosneft Buys Control of Bashneft
The Russian government approved oil giant Rosnefts bid to buy a 50.08 percent stake in Bashneft, a regional player in the oil and lubes sector, for 330 billion rubles (U.S. $5.3 billion). Part of a broader asset sell-off aimed at raising cash, the deal consolidates control of the nations base oil and finished lubricant sector.
Rosneft is Russias second-largest finished lubricant producer and last year produced a combined 779,000 metric tons of base oils and finished lubes, while Bashneft produced 170,000 tons, according to Bashnefts website. Both companies are state-owned.
Bashneft is headquartered in Ufa, the capital of Bashkortostan Republic. The companys Novo-Ufa refinery includes an API Group I base oil plant with capacity of 220,000 tons per year and a lubricant blending plant. Moscow-based Rosneft markets lubricants through its RN-Lubricants unit. It also operates one 200,000 t/y Group I plant in Angarsk and another of the same size in Novo-Kuibyshev.
California Kills Regulatory Bills
A California bill that would have promoted longer engine oil drain intervals and placed further regulations on automotive service providers, including fast lubes, was vetoed by Gov. Jerry Brown, according to a trade organization that opposed the measure.
The Automotive Oil Change Association said the governors veto of California Senate Bill 778 also took out a related proposal, Assembly Bill 873, which sought to regulate automotive service providers who supply certain minor services such as tire-changing, installation of car accessories, fluid changes and other adjustments performed by automotive repair dealers. SB 778 would have prohibited installers from advising consumers to use oil drain intervals shorter than those listed in their vehicle owners manual, in an effort to reduce the number and frequency of oil changes. AOCA argued that the bill misunderstood drain interval recommendations.
AOCA opposed both bills because they sought to expand the California Bureau of Automotive Repairs oversight of automotive maintenance providers without due process, said AOCA Policy Adviser Joanna Johnson. The bills also would have made minor services subject to the same heavy regulations as repair dealers.
Advonex Scales Up Production
Biochemical company Advonex International anticipates bringing its biobased feedstock to commercial scale by 2019, after receiving funds to develop a 1 metric ton per day pilot production facility in Canada.
Advonex received just over 4.2 million Canadian dollars (U.S. $3.2 million) in funding for its three-year pilot program from Sustainable Development Technology Canada, a nonprofit foundation created by the Canadian government to finance clean technology projects in the country.
Advonex will use soybean and corn oil supplied by Minnesota Soybean Processors and Greenfield Specialty Alcohols as feedstock. Queens University in Kingston, Ontario, will assist with the projects engineering design, while Advonexs partnership with Valvoline includes incorporating the base oil into new formulations of finished lubes as well as future commercialization of products made with the renewable base oil.
Showa Shell, Idemitsu
The official merger of two of Japans largest oil refiners, Idemitsu Kosan Co. and Showa Shell Sekiyu K.K., has been postponed due in part to Idemitsu board members resistance.
Idemitsu Kosan announced that its purchase of 33.3 percent of rival Showa Shell from parent Royal Dutch Shell plc, which was inked last year, will be delayed. The companies will not be integrated by the planned April 1, 2017 date, Idemitsu wrote in an Oct. 13 statement, noting that it was still trying to negotiate with shareholders that have been blocking the deal. Idemitsu and Showa Shell had not announced the new effective date of the merger as of press time.
Analysts have cited Idemitsu Kosan and Showa Shell as holding 30 percent and 10 percent, respectively, of Japans finished lubricants market. Each operates a base oil refinery in Japan.
Puralube, NexLube Form
J.V. for Group III
Puralube and NexLube Tampa formed joint venture Puraglobe Florida LLC, which plans to complete and commission NexLubes API Group III rerefinery in Florida by the end of 2018.
Discussions of the deal came to light in March, when the Port Tampa Bay board approved transfer of a lease agreement from NexLube Tampa to Puraglobe Florida, reliant upon completion of the joint venture agreement between the companies.
The rerefinerys Group III base oil production capacity will be in the range of 1,040 to 1,170 barrels per day, said Puralube President and CEO Andreas Schueppel. According to Schueppel, the joint venture will act as the rerefinerys operator, while Puralube will serve as the parent company and have the majority stake in the j.v. Ownership percentages and financial details were not disclosed.
Hanjin Troubles Disrupt
Singapore-listed lubricant blender and trader AP Oil International was forced to realign its finished lubricant supply while waiting for raw materials to be unloaded from vessels of bankrupt Hanjin Shipping Co., the company said.
We have replaced finished lubes supply in some containers loaded on Hanjin vessels to help our customers ease the demand situation first, said Ling Tai Boon, senior business development manager of AP Oil. Being a global shipping hub, there are no issues to find alternative shipping lines to ship and export the lubricants with all the main line operators having service from Singapore.
According to a Singapore Supreme Court statement, Hanjin is the largest container-shipping firm in Korea and the ninth largest in the world. The company filed an application for rehabilitation proceedings to the Korean Bankruptcy Court under the Korean Debtor Rehabilitation and Bankruptcy Act on August 31. On the same day, the court granted provisional orders to preserve Hanjins assets.
Carbon Credit Approval
Hydrodec of North America now generates carbon offsets through rerefining of used transformer oil, thanks to approval of its technology by the American Carbon Registry. This creates an incremental revenue stream for the company and allows it to receive carbon credits for its output.
The approval is the final stage in a process that began prior to re-commissioning of its Canton, Ohio, plant last year. The American Carbon Registry has recognized 165,000 credits for the companys previous rerefined transformer oil production at the Canton site between 2009 and 2014. Hydrodec anticipates it will generate 50,000 to 60,000 tons of carbon offset annually.
Nynas opened a depot for naphthenic specialty oils in New Jersey for customers in North America, with deliveries expected to start late this year. The first oils introduced will be T 22, which can be used in products such as metalworking fluids, and heavy naphthenic tire oil Nytex 810, with heavier grades and transformer oils to be added later.
SGSs Oil, Gas and Chemicals Services expanded its laboratory in St. Petersburg, Russia, to include oil condition monitoring services. The lab is now able to test oil samples for viscosity, flash point, dilution, water content, sludge content and acid and base numbers.
SI Group acquired TPC Groups Baytown, Texas facility, including manufacturing assets for nonene and tetramer, propylene oligomers that are used as intermediates in production of lube oil additives and other products.
Faces in the News
James M. Rutledge, president of Clean Harbors, has retired after 11 years at the company. Rutledge joined Clean Harbors in 2005, serving as chief financial officer and vice chairman of its board of directors before being appointed president in 2012.
Michael Sommer has been appointed manager of product sales development for Vertex Energy, a new position created within the company. Prior to joining Vertex, Sommer worked at Safety-Kleen, where he held positions in management and sales over 23 years of service, serving as senior vice president from 2005 until 2010.
Sea-Land Chemical has expanded the roles and responsibilities for its executive team. In his role as executive vice president of NAFTA regional sales, Mark Christeon now has oversight of Canadian operations and will explore expansion into other regions. Craig Lundell has been named senior vice president of supplier relations and national accounts. Jennifer Altstadt has been named senior vice president of operations and strategy. Mark Getsay, CFO, has senior vice president of finance added to his title, and Jack McKenna has additional responsibility as vice president of business development.
Valvoline has hired Sara K. Stensrud has chief people and communications officer, based at the companys headquarters in Lexington, Kentucky. In this role, Stensrud is responsible for global management of human resources and corporate communications. She brings 25 years of senior leadership experience in the retail industry, most recently serving as executive vice president and chief human resources officer for Chicos FAS Inc.
Castrol India has appointed Kedar Apte as vice president of marketing, effective Sept. 1. Apte joined the company as general manager for motorcycle engine oils and most recently served as head of brand communications. Prior to joining Castrol India, Apte spent nearly a decade with Hindustan Unilever.
Graphics with the article U.S. Market Taps the Brakes in our October issue (page 32) gave an incorrect figure for the size of the U.S. consumer automotive lubricants market. The number shown, 2.2 billion to 2.3 billion gallons, refers to the entire U.S. lubricants market. Consumer automotive lubes are between 25 and 30 percent of that total, according to Kline & Co.