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API Reinstates Provisional Licensing

The American Petroleum Institute invoked provisional licensing for passenger car engine oil categories ILSAC GF-5 and API SN with Resource Conserving, marking the second time in less than a year that the industry has taken this action because it could not conduct a key test.

In a March 1 announcement, API said it was informed by testing organization ASTM International in February that the Sequence VID was no longer available because independent test labs had run out of usable engine test stands. APIs Lubricants Group is developing a replacement for the Sequence VID test for fuel economy, but it could be several months before the new test is ready.

API aimed to finalize a plan by mid-March to determine limits for using the Sequence VIE test as a replacement by testing oils previously qualified to GF-5 and SN-RC, said Kevin Ferrick, senior manager of APIs Engine Oil Licensing and Certification System. The timing of the potential replacement depends on the number of stands used as part of the test survey. If we can use three stands at the two independent labs, then its possible testing could be completed in three to four months, he stated.

A few hurdles must still be cleared before the industry can use the Sequence VIE as a replacement for the Sequence VID. The American Chemistry Council and APIs Lubricants Group must approve the survey plan, which calls for API to pull blind samples of approved GF-5 oils from the field and test them on the VIE. In this way, API and ACC would determine how oils that have passed the VID test should score on the VIE.

When the Sequence VIE is approved as a replacement test, or if the Sequence VID becomes available again, API will lift provisional licensing and companies with provisionally licensed formulations will have six months to obtain a passing result. Licensees will be required to submit new applications through the organizations EOLCS website, and once approved the provisional licenses will be withdrawn.

Motiva Separation Agreement Finalized

Royal Dutch Shell announced the signing of binding definitive agreements between its United States downstream subsidiary SOPC Holdings East and Saudi Arabian Oil Co. subsidiary Saudi Refining Inc. on the separation of assets, liabilities and businesses of Motiva Enterprises.

The companies confirmed that Saudi Refining will pay $2.2 billion in cash and assumed debt, and will have full ownership of the Motiva Enterprises name along with the Port Arthur, Texas, refinery and 24 distribution terminals. Subject to approvals, the transaction is expected to close in the second quarter.

Motiva was formed in 1998 and has operated as a 50-50 refining and marketing joint venture of Shell and Saudi Aramco since 2002. In March 2016, the companies signed a non-binding letter of agreement to divide the assets of Motiva, with its API Group II base oil plant in Texas becoming solely owned by Saudi Aramco.

Saudi Aramco Markets Base Oils

Saudi Arabian Oil Co. will launch a base oil marketing business, marking its shift to an active supplier rather than a base oil investor.

The companys website said it will offer API Group I oils under the Dura brand, Group II under the Prima name and Group IIIs as Ultra, but did not identify their sources. Aramco has not marketed base stocks until now, though it holds a 70 percent stake in Luberef, which operates Group I plants in Jeddah and Yanbual Bahr, Saudi Arabia. At least some of the Dura oils will come from Jeddah, the website stated.

Aramco said it is working with affiliates to arrange supply of at least some Group II and Group III base oils. Luberef is in the midst of expanding and upgrading its Yanbu plant to add Group II capacity, along with increasing capacity for bright stock. The company will also become sole owner of the 40,300 barrel per day Motiva facility in Port Arthur, Texas, its joint venture plant with Royal Dutch Shell and the worlds largest source of Group II (see page 56).

Aramco also has a controlling stake in South Korean refiner S-Oil, which operates a 41,000 b/d Group II and III plant in Ulsan, South Korea, the worlds largest base oil production plant. S-Oil markets its Group III oils under the Ultra brand.

OMV Sells Turkish Assets

Vitol Group acquired OMV Petrol Ofisis lubricants and fuels distribution business in Turkey, including a finished lubes blending plant, for 1.4 billion euros ($1.5 billion), a deal expected to be finalized in September.

OMV said its Turkish assets were a burden to its broader operations in the region and decided to sell the retail business to Vitol in order to better implement its corporate strategy, CEO Rainer Seele said in a news release. Vitol is a Switzerland-based commodities firm, and its operations in Turkey are led through VIP Turkey Enerji AS.

The subsidiary of Austrian energy giant OMV operates a 140,000 metric tons per year blending plant in Derince, Kocaeli province, which produces engine oils, industrial oils, hydraulic brake fluids, greases, diesel engine oil additives and antifreeze. In addition, it has the largest fuel retail network in the country with over 1,700 stations and is a leading fuels supplier to commercial and industrial customers in Turkey, the company stated.

Vitol said that OMV Petrol Ofisi holds a strong position in the countrys market, and President and CEO Ian Taylor said the company hopes to capitalize on Turkeys growing demand for energy products. OMV Petrol Ofisi is the leading domestic lubricant marketer in Turkey, with 114,000 tons of lubricants sold in 2016, the company said.

TonenGeneral to Rebuild

TonenGeneral Sekiyu K.K. aims to resume full production at its Wakayama refinerys API Group I plant by the end of this year after rebuilding equipment damaged by a fire in January, a company spokesman said.

The Japanese supplier of base oils, finished lubricants and fuels had two reportedly unrelated incidents occur at its integrated fuels and base oils refinery in Arida city, Wakayama prefecture. On Jan. 18, a fire broke out during the cleaning of an oil tank at the refinery. Four days later, a second fire ravished the No. 2 propane dewaxing and No. 2 n-methyl-2-pyrrolidone extractionequipment at its base oils plant, which has capacity of 370,000 metric tons per year of Group I.

The base oil unit has been running at partial capacity since. The spokesman said that TonenGeneral managed to restart production of finished lubricants at its blend plant on Jan. 25 using base oil stored at the refinery. The other facilities are still under operation but at a lower production rate, the company added.

Enterprise Expands Isobutylene Production

Enterprise Products Partners plans to construct a new isobutane dehydrogenation plant in Texas with capacity to produce 425,000 tons per year of isobutylene. Isobutylene is a building block for polyisobutylene or PIB, which is used as a chemical intermediate in the manufacturing of lubricant additives and as a base stock in lubricants.

The company anticipates the isobutane dehydrogenation plant will help meet demand in a market where supplies have been reduced. Enterprise said it will increase its production of both high-purity and low-purity isobutylene.

Supported by long-term contracts with customers, Enterprises project in Mont Belvieu, Texas, is expected to be completed by 2019. The company said the plants isobutylene will be used as feedstock for underutilized capacity at octane enhancement and petrochemical plants downstream of the hydrogenation unit.

More Group II from ExxonMobil

ExxonMobil will expand its API Group II base oil plant in Singapore, already the largest Group II source in Asia-Pacific, with construction slated to begin this year and be completed in 2019.

The company did not disclose how much the project will cost nor the size of the expansion. Exxon­Mobils 1.5 million metric tons per year Group II plant is part of its integrated operation, which spans Jurong and nearby Pulau Ayer Chawan. The site includes a 678,000 t/y Group I plant, a lubricants blending plant, two fuel refineries and a chemical plant.

The American refining giant, by far the worlds largest producer of base oils, has been sinking base oil investments into Group II projects, having completed expansions in 2015 of 300,000 t/y and 325,000 t/y at both the Jurong plants Group II train and its Group I/II plant in Baytown, Texas, respectively. In addition to these expansions, the company is constructing a new Group II plant in Rotterdam, the Netherlands, scheduled to open by 2018.

Industrial Synlubes Maker AML Acquired

Lubricants blender AML Industries will be acquired by a division of Japanese lubricant maker Moresco Corp., which aims to finalize the purchase of the Ohio-based manufacturer by May next year.

Moresco USA, a wholly-owned subsidiary of Moresco in Japan, signed an agreement to purchase AML Industries for an undisclosed amount. The company said this acquisition will help it capture the expanding demand for automotive and related specialty lubricants in the United States.

AML Industries produces a series of lubricants marketed under the Amlube brand, including water-based synthetic lubricants for hammers and presses, and graphite lubricants, which are used for industrial tools.

Briefly Noted

ExxonMobil broke ground on an additional research and development facility that will expand its 27,000-square meter customer support center in Shanghai. The multimillion dollar project is expected to be completed in early 2018.

Castrol created a joint venture with United Kingdom-based Romax Technologys InSight business, which will combine the lubricant manufacturers knowledge of wind turbine lubrication with Romaxs condition monitoring and predictive maintenance services for wind turbines.

TBC sold SpeeDee Oil Change & Auto Service, which has more than 100 shops across the United States, to automotive maintenance franchisor Grease Monkey.

Total Parco Pakistan Ltd. agreed to supply motorcycle engine oils to Service IndustriesLtd., a Pakistani manufacturer and exporter of footwear and two-wheeler tires and tubes. The former also signed a lubricants supply deal with Daewoo Pakistan Express Bus Service.

British firm Intertek commissioned transformer oil testing and analysis service at its laboratory in Jamnagar, India, which it said is the first of its kind in the country.It also expanded grease testing capabilities at its site in Farnborough, United Kingdom.

British Columbia-based Klondike Lubricants expanded its distribution network to Atlantic Canada, which it serves from a new warehousing center in Moncton, New Brunswick.

Pakistani supplier Hascol Petroleum Ltd. launched subsidiary Hascol Lubricants Ltd. and broke ground on its U.S. $20 million blending plant in Karachi, scheduled for completion in 2019.

Petroleos de Venezuela S.A. and the Association of Lubricant Manufacturers of Venezuela will establish a venture to increase distribution of lubricants and greases to companies, end-users and government-run distribution centers in the South American country.

Japanese transport company Mitsui O.S.K. Lines Ltd. carved out a unit dedicated to trading bunker oil and lubricants.

Faces in the News

Manfred Fuchs will step down as deputy chairman of the supervisory board at Fuchs Petrolub SE after 13 years, effective May 5. Susanne Fuchs, a third-generation member of the Fuchs family, has been nominated by the supervisory board to succeed him after the companys annual general meeting.

Used oil recycling expert Fabio Dalla Giovanna has taken a position with Egeo Oil in Portugal, working to establish an alliance of companies to develop and operate rerefineries around the world. He has served as president of UEIL and of GEIR, the European lube rerefining association.

Palmer Holland announced Russ Bachman is the companys new vice president of marketing, while Gus Munoz was appointed sales manager for the Southern United States.

Pilot Chemical named Bert Gutierrez new general manager for Latin America, replacing Sarah Mester, who was appointed director of corporate development in January.

Wendi Varner is Groeneveld Lubrication Solutions new national sales manager. She will support sales growth for the subsidiary of Netherlands-headquartered Groeneveld Group while based in the companys recently established branch in Atlanta.

Shell Australia appointed Zoe Yujnovich chairwoman of the company, which includes her predecessor Andrew Smiths roles as executive v.p. of Australia and New Zealand and country chair. Smith will become executive v.p. of trading and supply for Shells global operations in May.

BioAmber appointed COO Fabrice Orecchioni president of the company. Orecchioni replaces President and CEO Jean-Francois Huc, who will continue to serve on the board of directors.

W. Brian Smith will serve as executive v.p. and COO at Troy Corporation. He has held several leadership positions over 22 years with the company, most recently vice president.

Cyclo Industries hired Fabrizio Flaminio as international business manager for Latin America. Flaminio has 20 years of experience in international automotive aftermarket sales, and will develop Cyclos markets in Mexico, Central America and the Caribbean.

Perrysburg, Ohio-based metalworking fluids manufacturer Master Chemical appointedMichael McHenryCEO andDavid Barnedglobal v.p. of operations and supply chain.

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