Globalisation drives refiners to consider multiple base oil sites

25 February 2011 12:40  [Source: ICIS news]

LONDON (ICIS)--Large refiners are looking at having multiple locations for base oil plants as original equipment manufacturers (OEMs) spread across the globe, an industry expert said on Friday.

“Engine manufacturers want global lubricant formulations to meet global emissions standards, engine platforms and specifications, and that is leading major oil companies to move to global availability of base stocks from multiple plants,” said Chevron's Tom Kovar.

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

Major global suppliers include ExxonMobil, Neste, SK Lubricants and Chevron.

Regional fuel demand dictates the type of base oil production - Group I, II or III - but demand for all groups is growing in each region.

“Group II is produced using vacuum gas oil (VGO) in a dedicated hydrocracker so best suited in regions where this is large gasoline demand,” Kovar said.

In North America, Group II is the core base oil, with 10.5m bbl/year of capacity expected by 2015. Group III base oils are imported from Asia.

Asia is the major Group III base oil supplier, but large demand for Group I base oils continues in the region.

“Group III is produced by using unconverted oil from a two-stage diesel hydrocracker and best suited in regions where there are large diesel hydrocrackers,” said Kovar.

Group I producers remain the core suppliers in Latin America, where there is a slow but growing transition to premium products. Group I base oils are also the core base oil supply in Europe.

The two-day conference ends on Friday.

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

Author: Heather Doyle

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