HOUSTON (ICIS)--The year 2013 ushered in the advent of significant changes to global base oils, primarily led by increasing production and use of Group II stocks.
The year 2014 is likely to be the event horizon for Group III base oils.
The Group III influence on global supply and on the industry’s trends towards lighter oil grades has already begun, but examining several key points can underscore that an event horizon is approaching.
The gas-to-liquids (GTL) technology has been around for decades, according to industry sources.
No GTL lubes were made for some time, other than very small volumes from Shell in Bintulu, Malaysia, which was a relatively small commercial demonstration unit.
Base oil consulting sources pointed out that those GTL Group III volumes from the recent Shell Qatar plant added about 25% more capacity to world Group III overall capacity production levels.
Group III volumes are in excess of global demand, causing these high quality oils to be blended into Group I and Group II base stocks as well as finding their way into applications that might not require these premium grades.
“The volumes are huge and the quality is very high – it is like drinking brandy from a fire hose,” commented one industry expert.
Next year will see capacity additions that increasingly include Group III production.
Takreer-Neste at Ruwais, Abu Dhabi, and Taneco in Russia offered new Group III inputs to 2013 expectations via new additions, while PetroChina has a 6,000 bbl/day expansion of Group II and Group III expected for a 2013-2014 timeframe.
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Additionally, there are a number of other capacity additions that combine Group II with Group III production, although specific output about barrels per day by type is not readily available.
The onset of Group III means taking a look at the Fischer-Tropsch (FT) process for GTL.
According to ICIS Training consultant Amy Claxton of MyEnergy, there are presently six commercially operating FT plants: three in South Africa; one in Malaysia; two in Qatar.
Of these plants, only one of the Qatar plants is making base oils.
According to Claxton, the US shale gas phenomenon is generating interest in FT technology for base oil production.
Pushing the drive to Group II, II+ and Group III are regulatory and environmental requirements and the pressure applied to the industry to meet these issues.
Under evolving sets of specifications, the GF-6 Passenger car outline was developed by the International Lubricants Standardization and Approval Committee (ILSAC) for purposes of increasing fuel economy, enhancing oil robustness and expanding overall fuel efficiency.
In order to begin to achieve the goals of GF-6, lower viscosity grades of base oils will be necessary.
Below is the timeline ILSAC gives for GF-6, illustrating how these new lubricant needs are about to become reality:
January 2012 – June 2014
Finding of Test Matrix
January 2012 – April 2014
Test Acceptance for Matrix Testing
January 2013 – May 2014
Running of the test Matrix
June 2014 – November 2014
Test Acceptance by ASTM
October 2014 – March 2015
Engine Oil technology Demonstration
April 2015 – January 2016
GF-6A specification approval
January 2016 – April 2016
API first licensing
January 1 2017
Also according to ILSAC, gasoline direct injection, or GDI, and turbo-charged engines are expected to capture 60-65% of the North American new passenger car market by 2019.
The 2014 dates on the ILSAC chart underscore the need for lubricant changes that can achieve these goals.
Consequently, the 2014 event horizon of Group III base oils that appears to shadow a period of excess supply may well be a step that must happen in order to meet the requirements of the future.