INSIGHT: Asia is the place for high-quality base oils

09 March 2011 20:43  [Source: ICIS news]

By Heather McGuire Doyle

HOUSTON (ICIS)--Paraffin content, rather than the price of crude, is important for base oil yield and quality, making Asia the most cost-advantaged region for base oil production.

“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 Amy Claxton, owner of My Energy, a US consultancy that covers lubricants, waxes and gas-to-liquids (GTL).

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

Crude oil is a mixture of molecules, mostly alkanes or paraffins, cycloalkanes or naphthenes, and aromatic hydrocarbons. The molecular content of crude and its location determine where the API base oil groups are produced, Claxton said.

“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,” she said.

“Light, sweet expensive crude may not be good for base oils. The base oil refinery prefers lower-priced Arab light or heavy.”

A high-alkane crude concentration means it is paraffinic crude, which is best for paraffinic base oils. A high-cycloalkane concentration means it is a naphthenic crude, which is best for naphthenic base oils. A high concentration of aromatic hydrocarbon in crude is best for fuels use.

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

During the base oils conference in London, delegates were polled and asked what the most important technical parameter in lube blending is. More than half said it was VI.

The American Petroleum Institute (API) categorises base oils based on VI and other characteristics. Group III base oils have the most VI 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, Nigeria Light 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.”

Most Group I base oils are produced through solvent processing, while Group II base oils are produced via hydro-processing technologies and Group III base oils are produced by severe hydro-processing.

Molecular composition is the better indicator of crude value for lubricant economics, Claxton said.

Higher paraffin crudes such as West Texas Intermediate (WTI), Brent, Arab Extra Light and Tapis offer an economic advantage for solvent processing, or hydro-treating, of base oils, Claxton said.

 “You get higher yield, higher VI, or both,” Claxton said. “But not all paraffinic crudes are equal. Some paraffinic crudes are better than others.”

Crude pricing is based on API gravity and sulphur content, because of refining economics, Claxton said.

“Crude pricing reflects refining intensity to make fuels, and is not necessarily a reliable indicator of base oil economics. Lower priced Arab crudes give better yields and qualities for lubes than light, sweet crudes like Brent,” she said.

The Middle East has vast crude reserves, most of which are paraffinic and lube-friendly. Arab Light and Murban are 60-65% paraffin content, compared with something like Alaska North Slope crude, which has less than 25% paraffin content.

North America, with its hydro-treating technologies, is a major global producer of Group II as well as a Group I producer. The rest of the world produces mainly Group I base oils.

Europe is one of the largest producers of Group I base oils but has begun to have a heavy appetite for the higher quality grades that are leaving Europe to rely on Asia for Group III base stocks.

There are no new investment plans in Europe or the US for Group I base stocks, and many say that this will only lead to greater reliance on Asia for Group III base oils.

Results of the delegate poll at the 15th ICIS World Base Oils & Lubricants Conference in London

 

Base oils poll 2

Read John Richardson and Malini Hariharan’s Asian Chemical Connections blog


By: Heather McGuire Doyle
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