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July 1, 2015

Volume 17 Issue 52

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Bottoms Up for Calumet Base Oil?

Calumet Specialty Products and MDU Resources Group marked the completion of their Dakota Prairie diesel fuels refinery this week, noting that its output includes about 6,000 barrels per day of residual tower bottoms that may be used as feedstock for base oil.

The partnership completed its first commercial production run on May 4 from the Dickinson, N.D., refinery, which is the country’s first greenfield fuels refinery since 1976.

The joint venture between Calumet and MDU Resources Group has capacity to process 20,000 b/d of Bakken crude oil and produce up to 7,000 b/d of diesel fuel oil, according to a recent MDU press release. MDU noted in the statement that the plant will also produce naphtha and up to 6,000 b/d of atmospheric tower bottoms, which it said can be used as a feedstock for base oils.

Indianapolis, Ind.-based Calumet declined to comment in response to Lube Report’s inquiries regarding how it will use the tower bottoms.

Industry consultant Amy Claxton of My Energy told Lube Report that Calumet could sell the Dakota Prairie residuals on the open market as feedstock for fluidized catalytic crackers, or it could feed it into one of its other fuels or base oils refineries.

She noted that it is possible that such atmospheric residuals could be used as feedstock for API Group I or II base oils. Calumet has a 6,900 b/d naphthenic base oil plant in Princeton, La., and a Shreveport refinery that produces 4,000 b/d of Group I and 4,000 b/d of Group II.

Stephen B. Ames, managing director of SBA Consulting, said the atmospheric tower bottoms could also be vacuum distilled to produce vacuum gas oil. Ames pointed out in in addition to the VGO from the atmospheric residue, the refinery will also produce some vacuum residue that can be further processed in a propane deasphalting unit (PDA) to produce deasphalted oil, the precursor for bright stock.

Ames told Lube Report that the primary purpose for a refinery that processes Bakken crude oil is to produce diesel. Because the Dakota Prairie refinery is focused on diesel production and doesn’t have a vacuum distillation unit or any other type of bottoms conversion unit, Calumet will need to move the product to another location for it to be upgraded into base oils, gasoline or low-sulfur distillate fuels.

If the residuals are used for base oil production, it will likely be for Group I base oils, both consultants concurred.

“Group II plants are mainly large integrated operations on the Gulf Coast and would not want or need the small volume of Bakken atmospheric residuals,” Ames said.