Asia has cost advantage for base oil production - industry expert

24 February 2011 14:07  [Source: ICIS news]

LONDON (ICIS)--Crude prices do not correlate to base oil yield or quality, but the type of oil used does, making Asia the most cost-advantaged for base oil production, an industry expert said on Thursday.

“Crude is 90% of the cost of base oils regardless of what type [of] crude is used, but the crude price does not impact base oil production, the crude selection does," said Amy Claxton, owner of My Energy, a US consultancy that covers lubricants, waxes and gas to liquids (GTL).

Claxton was speaking at the 15th ICIS World Base Oils & Lubricants Conference in London.

Crudes with higher paraffin content, such as Tapis produced in Asia, give a higher lube yield and a higher viscosity index (VI) after processing.

The American Petroleum Institute (API) categorises base oils based on VI and other characteristics. The Group III base oils have the most VI of Group I and II base oils and are considered the highest quality for many applications. Group III base oils are mainly produced in Asia.

Low paraffin crudes such as Alaska North Slope and Maya crude oil give poor base oil yields.

“The low VI crudes can be improved with hydro processing in a Group II plant, but at a yield debit,” Claxton said. “Low paraffin crudes are not economical for Group I and III base oil production.”

The crude price does not correlate to base oil yield or quality because the type of crude used in benchmarks is typically Brent or West Texas Intermediate (WTI) crude, some of the most expensive oils around, Claxton said.

“Lower-priced Arab crudes give better yields and qualities for lubes than light, sweet crudes like Brent,” Claxton said.

The Middle East has vast crude reserves, most of which are paraffinic, lube-friendly crudes.

“Crude fields in Europe and the Americas are not highly paraffinic, but Asia is cost advantaged for high-quality base oil production such as Group III and III+ base oils, because of the availability of crudes like Daqing, Minas, Tapis, Arabian light and Murban,” said Claxton.

The conference runs from 24-25 February.

Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy
To discuss issues facing the chemical industry go to ICIS connect


Author: Heather Doyle



AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

ICIS news FREE TRIAL
Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index