November 2017

Ask the Expert

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Ask The Expert

Pascal de Bast Thiers
Business Venture Manager, Rotterdam Expansion Project
ExxonMobil

In his current role as Business Venture Manager (BVM) for the Rotterdam Expansion Project, Pascal is focused on supporting the objectives of the Basestocks and Fuels sales and marketing teams. He is responsible for ensuring continuous alignment between the construction and engineering, refinery operations and sales and marketing teams throughout the project delivery phase.

Pascal began his career with ESSO S.A.F. in France in 1994 as a Research & Development Engineer.  Before recently becoming the BVM for the Rotterdam Expansion Project, Pascal served in numerous manufacturing, technical, logistics, business planning, sales and customer service roles across ExxonMobil's Downstream and Chemical businesses. Throughout his career, Pascal worked in France, Belgium, the United States and the Czech Republic, where he recently served as Lead Country Manager for ExxonMobil from 2015 to 2017 and was a Director at ExxonMobil BSC Czechia s.r.o.

Pascal graduated from the Ecole Nationale des Ponts et Chaussées in Paris, France with an Engineering degree.

THIS MONTH'S TOPIC

The Challenges of Managing Base Stocks Expansion Projects

Background

In light of ExxonMobil’s significant expansions in Baytown, Jurong, and soon-to-be, Rotterdam, this topic gives Lubes‘n’Greases readers the opportunity to learn ExxonMobil’s best practices for managing projects of high caliber through innovative technology, project efficiency, strong commitment and teamwork.

ExxonMobil will be prepared to share insights on its catalyst technology (information denoted as not proprietary), working with customers and additive companies, managing base stock product transitions, maintaining product integrity, and facilitating a safe environment for employees on-site.

Note:
  1. Questions are submitted by email. Do not send links and attachments.
  2. After review, questions are submitted to the Expert.
  3. Questions and answers will be published (anonymously) below.
  4. By submitting a question you are agreeing to it being published, if chosen.
  5. LNG Publishing is not responsible for the content of the answers provided.

RECENT QUESTIONS

Q: In regards to your licensing of refining, gas and chemical technologies, does ExxonMobil offer operations support during startup and commissioning?
A: Yes, ExxonMobil does offer operations startup support as well as ongoing monitoring.
Q: Thanks for sharing your insight. How did you manage base stock product transitions? This is an area I have seen companies struggle with firsthand. Do you have any best practices you can share and perhaps any pitfalls to look out for?
A: Careful, extensive planning and integration on a number of levels is essential to execute successful base stock product transitions, especially following a base stock expansion project.

One of the most important aspects of a transition is early engagement with customers. As soon as the final decision to proceed with an expansion project has been made, the ExxonMobil team kicks off conversations with our customers to engage in transition considerations. These conversations can start three to four years in advance of a new unit start-up, as was the case with Rotterdam.

When helping a customer evaluate whether a product transition is right for them, it’s important to understand not only what the customer’s needs are, but to also work with them collaboratively to find ways in which the new products will be able to address their finished lubricant formulation needs today and in the future, and ultimately help their business succeed. By pre-seeding customers and helping ensure they’re familiar with our product, we’re working to ensure they’re prepared and able to make a smooth transition at a time and pace that’s right for them.

There are a few key concerns customers raise that we’re always prepared to talk through. Many are concerned about the long-term availability of raw materials, including base stocks, to meet their needs. Also, customers want to know how we can help them with their existing business as well as with their development objectives, including items such as their product offer. We also typically engage with customers on supply chain questions and logistics that are key for a successful transition.

At the end of the day, it is by engaging with customers early in the transition process that we are able to counsel and work closely with them to address each question individually and find the right solution for their business.

Of course, ensuring high quality product standards in parallel with customer pre-seeding and providing open communication with customers is paramount. A failure to share knowledge and communicate with key actors in the market in addition to customers, such as additive companies, original equipment manufacturers and equipment builders can be a pitfall for even the most well-established base stock supplier.
Q: How is your manufacturing technology implemented during expansion projects?
A: Each time we come up with a project, we’ll consider all available technologies, and then we’ll look to deploy the latest and greatest. We’ll always have that technology base that we’ve been building off of from the beginning, but there is also an opportunity for us to consider what can be improved upon. When considering improvements and perhaps new market needs, our team might decide that it’s the right time to develop and deploy a new technology that’s truly step-out in nature. If we can take a parallel path developing a new technology alongside the expansion project, well then that’s even better.

Refinery expansion projects certainly provide a platform for continuous advancement and innovation; it’s really very exciting for our team.
Q: The projects at Baytown, Jurong and Rotterdam are very diverse, as are the locations. I’m sure the differences in locations provided unique challenges. What project efficiencies was ExxonMobil able to replicate across these projects? Were there efficiencies that could not be replicated due to site-specific challenges?
A: We’ve leveraged our experiences from the Baytown and Jurong expansions quite a bit for the Rotterdam expansion project. We have exchanged personnel and information between the refineries to leverage our experience, and all are supported by global teams. While each site configuration presents a unique set of challenges, we’ve gained valuable insights from these recent projects, which have helped us make our Rotterdam project as efficient as possible. Naturally, Rotterdam was a bit different because there was a unique opportunity – Europe is lacking Group II supply, and it needs these base stocks to meet current and future industry needs. This gave us the opportunity to craft a solution that can provide the industry a reliable supply of Group II in that region.

These three projects do have some common ground – despite being different in some ways – which has helped create efficiencies with Rotterdam. A few key points to call out:

• First, all three sites employ catalytic dewaxing in addition to our proprietary hydrocracking technologies. Therefore, we’ve been able to leverage insights and processes from our Jurong and Baytown refineries for Rotterdam.
• Second, our process to manage and protect brand and product integrity is universal across all our sites; we use the same quality management systems across the board. Product integrity has served as a core foundation to our base stock production processes for more than 135 years.
• Third, when it comes to project management, we implemented the learnings from our colleagues who worked closely on the Jurong and Baytown projects for Rotterdam. These insights helped us in many ways including how to best prioritize certain project components, given past experience. In addition to successfully leveraging insights from these two recent expansions, I’d note that given ExxonMobil has a robust network of refineries across the globe, we’ve been fortunate to have a wealth of best practices and guidance to utilize from our broader corporation.
Q: As a global company, how do you most effectively manage global communications around expansion projects?
A: Ensuring effective global communications is a key component to having a successful expansion project. Without this, there can be confusion, and our customers and partners could feel there’s a lack of transparency or a clear line of sight. First, we always ensure our customers have regular updates when we meet them in person or chat on the phone. For Rotterdam, we’ve been regularly communicating our progress, so customers know we’re on track and on time. Should there be technical questions, we ensure these are addressed in real time or as a follow-up item.

Beyond our customer base, we regularly share updates with trade media, like Lubes‘n’Greases, and via our website. We have a news page that stores our periodic updates on our construction milestones, and we also created a quarterly newsletter, which syndicates updates as well.

We’re also active participants in industry tradeshows and often share updates during our presentations or keynote speeches. For an example, this past February, my colleague Ted Walko, Global Basestocks and Specialties Marketing Manager, shared insights on the growing role of Group II in Europe and the latest on our Rotterdam expansion project during his presentation at the ICIS World Base Oils & Lubricants Conference in London.
Q: It has been my experience that whenever a new facility is built, expanded or retrofitted, the maintaining of product integrity is especially challenging. How did ExxonMobil handle this challenge at Baytown and Jurong?
A: At ExxonMobil, we are proud of our robust systems to actively manage site and business change, including risk identification, planning, documentation, endorsement, implementation and post-change assessment.

Product integrity has been a key pillar in our base stock production processes for more than 135 years, and remains a cornerstone of our business today. Our process to ensure both brand and product integrity are uniform across the board is of the utmost importance. For the Baytown and Jurong expansion projects, we started with pilot plant testing programs to generate the technical data to ensure we had the optimal design to produce the products needed in each respective region.

As the Jurong and Baytown expansion projects progressed, our base stock business, quality and design team worked side by side with the onsite project engineers and construction team to ensure product integrity was protected, and to establish the correct processes to maintain that integrity. This collaboration focused not only on the product’s original development, but also on maintaining product integrity downstream all the way through to the customer.

Finally, we use our quality management and assurance systems to test the initial commercial production and confirm the products are fit for purpose and up to our industry-leading product quality standards. At both the Rotterdam and Jurong sites, rigorous testing and the unique insights garnered from past successful projects will again enable us to ensure our new offerings maintain their integrity.
Q: What support do you offer to customers that are interested in transitioning to Group II?
A: On one side, we closely collaborate with the major additive companies to ensure our base stocks are properly certified to meet OEM and equipment builder specifications. We’ve invested significant funds to develop formulations to meet our customers’ needs. We also work closely with our customers to understand their specific situation, product needs, logistics, technical support, etc. We’re well positioned to help enable transitions at a time and pace that are most appropriate to individual finished lubricant manufacturers’ operations.
Q: Your ExxonMobil team licenses refining, gas and chemical technologies. Can you elaborate on your engineering and operational experience with these technologies? Do they improve with every new refinery expansion project?
A: Absolutely. We do in fact license refining, gas and chemical technologies and also offer catalysts that provide significant value to customers. As one of the world’s largest refiners and chemical manufacturers, we’ve been in this technology space for 20 to 25 years and continue to proactively bring advancements to the market. In fact, we’re the world’s leading catalyst manufacturer for lubes base stock processes with our MSDW catalyst technology. Through an ongoing research and development program, our team assesses market needs and looks to deliver those needs through the processes and technology that we bring to the market.

We can’t stress enough how important it is for us to have our eyes and ears toward the market; we really work to be solutions-oriented and to understand what our customers want and need. We also recognize and embrace the importance of being forward looking when it comes to new technologies – we’re always looking to uncover breakthrough new technologies and understand how they can be deployed.
Q: In an answer to a previous question, you said the company needs to keep a finger “on the pulse” of the industry in order to decide which base stocks to produce at a new refinery. Please elaborate. Are you referring to feedback gathered from your sales team or perhaps market research? I am curious how this process works and how a go-forward strategy is then formulated.
A: Great question. Our feel for the pulse of the industry stems from a combination of factors. We try our best to plan for the future by rigorously studying data and analyzing a broad range of trends impacting our industry, our customers and consumers. These insights also help guide ExxonMobil’s long-term investments. An example of this would be the annual Outlook for Energy report, which is our view of global demand and supply through 2040. It’s a report rich with insights that help promote a better understanding of the issues that are impacting the world’s energy needs.

Our sales team works very closely with customers and regularly gains insights on areas of concern, ways to further improve our products and services, industry focus points, and challenges – to name just a few. A deep understanding of customer needs is paramount to what we do, and we take it very seriously. We also closely observe market changes and fluctuations that regularly occur on a global and regional level. Whether it’s changing consumer patterns or evolving specifications, we make efforts to understand the dynamics at play. Close interactions with key stakeholders such as additive companies, equipment manufacturers and industry associations helps us accurately determine which products and services are best suited for a particular market.

Last but not least, industry trade publications are another excellent source that helps us stay informed on key trends impacting the broader industry, in addition to investments by our company and others, new partnerships, project updates, and other notable announcements.

We believe having a strong sense of the industry’s pulse requires a multifaceted approach, and we look to learn and act on insights from as many reliable industry sources and channels as we can.
Q: The Rotterdam facility is a big development, and I have been following the news. Do you see this facility providing regional benefits, or do you see more of a global benefit for your partners?
A: Simply put, we believe the facility benefits both. As Group II becomes the heart of the market, Europe will greatly benefit from the local access to EHC Group II production through our Rotterdam refinery. We also believe that there are advantages for the entire global market; when Rotterdam is up and running, we will be the only global producer with significant Group I and Group II manufacturing assets strategically located in three continents. With EHC Group II soon to be produced in a third continent, there will be improved supply reliability, and global blenders won’t have to recertify their products in each region – reducing complexities and saving time and money.
Q: Given that you have a new diesel hydrocracker at the refinery, do you plan to manufacture any Group III base stocks in Rotterdam?
A: We are indeed building a new hydrocracker unit at our Rotterdam refinery to upgrade heavier byproducts into cleaner, higher-value finished products, which includes EHC™ Group II base stocks as well as ultra-low-sulfur diesel. This hydrocracker unit provides us with the option to manufacture Group III base stocks if we choose to.

At ExxonMobil, we’re keenly focused on meeting customer needs today and tomorrow. We’re investing in Group II base stocks at Rotterdam because we see Group II as the workhorse of the global industry. In the past, European base stock needs were largely met by Group I and Group III products. But today, base stock demand in Europe is changing due to evolving lubricant requirements from OEMs and equipment builders, driven by things such as car population turnover, shifting consumer buying behaviors and sustainability. By 2030, ExxonMobil is projecting that more than 50 percent of Europe’s overall base stock demand will be for Group II products. We’re confident that bringing Group II to the European market through Rotterdam will help meet current needs and play a large role in the region well into the future.

That said, we remain focused on the needs of our customers, and as their needs change, we will adapt to meet those needs as appropriate. So, we’re excited to finalize the installation our hydrocracker unit as it provides us flexibility for the future.
Q: Does ExxonMobil’s manufacturing technology help refineries to meet environmental standards? Does it play a role in sustainability?
A: The short answer is yes, absolutely. At ExxonMobil, we’re very good at maximizing the use of assets that the company puts on the ground. For example, we’ll put hardware on the ground with ExxonMobil’s catalyst and process technology, and over time we’ll improve that unit performance without even touching the hardware – making it more efficient and delivering even better quality and higher value products.
Q: How does the ExxonMobil team determine which base stocks will be produced at a new refinery expansion?
A: Great question, especially given this is an exercise we went through very recently in our planning for the Group II expansion project at our Rotterdam, Netherlands, refinery. There are a few main points that we take into consideration:
• First, we need to ensure the overall big-picture marketing strategy and the project meets a market need. This requires a deep understanding of our customers, industry trends, and evolving specifications.
• The regional applications at play and the quality of base stocks needed in the marketplace are also important considerations. In the case of our Rotterdam refinery investment project for example, we noted the fact that there was no large-scale Group II production in Europe and acted on the opportunity to be the first.
• It’s also important to note that we have a strong feedback loop with our customers and keep our finger on the pulse of what the market wants and values. Our close collaboration with customers definitely impacts our base stock design and also our go-forward strategy more generally.
Q: What are ExxonMobil’s three best practices for managing an expansion project?
A: Narrowing it down to three is tough – when managing the complexity of a large endeavor like a refinery expansion project there are a lot of things you need to get right. That includes:
1. Clearly define what you want to achieve from a market standpoint very early on. This helps ensure that what you want to build brings sustainable value to the market. In the case of our Rotterdam project, that meant understanding what base stock products could bring distinct and sustainable value to lubricant blenders and marketers and their end-customers.
2. Establish a very solid governance structure to manage the various dimensions of the project, including construction and marketing and make sure that all work effectively hand-in-hand.
3. Select the best and most qualified individuals for the project team. It’s important to have a mix of individuals with the right expertise in the many diverse fields that are required in such an endeavor, the right drive and a good amount of diversity so that new perspectives are always coming to the table.
Q: Rotterdam is clearly a large expansion project to undertake. What is one of the main challenges to managing a project at this scale, and how do you make sure you stay on track and on time?
A: Coordination and integration among the multiple functions – from the construction team to the refinery operations, sales to marketing, the technical side to the R&D side, etc. – can be challenging, and its importance cannot be overlooked. Consistent alignment across the board is key, and everyone is of course focused on ensuring the project is progressing safely and staying on track and on time. It’s key to have close interface between the various functions, ensuring full transparency between the functions and also with our customers.

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