29 July 2013 20:22 [Source: ICIS news]
By Judith Taylor
HOUSTON (ICIS)--Whether it is considering the ?xml:namespace>
US Group II base oil supply is set to move, as are the changes this tier of production is set to create in the global lubricants’ market.
European sources say that increasing volumes of US Group II base stocks are entering the region, and players are scrambling to try to understand the potential changes that a significant entry of US Group II base oils might bring to the predominately Group I European supply area.
The advent of Group II has been talked about for several years as more stringent environmental requirements and an expanding slate of changing formulations and products are rapidly evolving in the
Production capacity addition discussions relevant to the
Announced in 2008, the refinery is targeted for start-up in the fourth quarter of 2013.
Dubbed "The Pascagoula Base Oil Project", or PBOP, this facility is expected to produce approximately 25,000 bbl/day of premium Group II base oils.
Chevron currently produces 20,000 bbl/day of Group II base oils at its
PBOP’s presence underscores the need for significant additional volumes of Group II to enter the markets in the NAFTA (North American Free Trade Agreement) countries of the US, Mexico and Canada and to stretch toward new vistas offered by an increasing synergy with South America.
Chevron is not alone in the
In February 2013, ExxonMobil announced plans to expand Group II and II+ base oil production capacity at its
Following completion of regulatory approvals and funding, construction on the expansion is scheduled to begin late 2013, with a 2015 target set for start-up of the base oil units, according to ExxonMobil’s announcement.
While no specific Group II base oil production volume expectation was released by the company, it did say the expansion will significantly increase its output of Group II and II+ base stocks.
Commenting upon the expansion, George Arndt Jr, general manager of global base stock and specialties for ExxonMobil Fuels, Lubricants & Specialties Marketing, said in the second quarter of this year: “We are committed to the base stock business and remain confident in our integration, technologies and product slate.”
According to most US market participants in base oil and finished lubricant production sectors, Group II base stocks are a necessary factor in moving ahead on formulations that can meet new regulatory and environmental performance requirements.
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