Chevron puts global base oil customers on allocation

08 June 2010 17:06  [Source: ICIS news]

HOUSTON (ICIS news)--Chevron has put its base oil customers on allocation globally for its light and mid-viscosity grades produced at its Richmond refinery in California as a result of production shortages, a company spokesman said on Tuesday.

“Due to a temporary reduction in base oil production capacity at our Richmond Lube Oil Plant (RLOP), we are experiencing production shortages and higher than typical aromatic content of the following products: 100R, 220R, and 110RLV. 600R is not affected,” Chevron spokesperson Gustavo Santoyo said. “In mid-May, we informed our base oil customers about the aromatic content.”

Chevron established sales allocations to 75% on the RLOP 100R, 110RLV and 220R products for base oil customers globally effective on 1 June.

“The allocation is calculated as 75% of the customer’s historical average demand pull from 1 May, 2009 to 30 April, 2010,” Santoyo said.

Chevron’s global base oil supply capacity would be affected from July to December, according to Santoyo.

“This is a temporary condition, and we expect RLOP to return to full capability by the middle of the fourth quarter,” Santoyo said.

The Richmond refinery produced 20,000 bbl/day of Group II base oils.

Group II base oil supply in the US has been tight since the largest supplier, Motiva, put its buyers on an allocation of 50-75% of historical purchases in May.

Motiva would not comment on the status of the move, but its consumers said the allocation was ongoing.

“The Motiva allocation was increased to 75% of historical purchases last week, but the time frame is still uncertain,” a base oil buyer said.

Base oils are used in the formulation of lubricants across a broad spectrum of applications, from automotive engine oils to industrial and process oils.

($1 = €0.84)

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Author: Heather Doyle

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