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June 21, 2017

Volume 17 Issue 52

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Base Oil Capacity Keeps Rising

Global base oil manufacturing capacity now tips the scales at 1.11 million barrels a day, roughly 55 million metric tons a year. Yet even though the construction frenzy of the past decade seems to be ebbing, refiners still aim to stream another 90,000 b/d of fresh capacity between now and 2021.

Those are among the insights to be found from perusing the “2017 Guide to Global Base Oil Refining” published this month by Lubes’n’Greases magazine. The annual guide provides a focused picture of the world’s base oil players as of early May, while also looking ahead at what’s to come.

Expanded to almost 40 inches wide, the 2017 Guide lists more than 160 facilities around the globe and their capacities for making API Group I, Group II, Group III and naphthenic base stocks. Plants are color-coded by geographic region and keyed to a locator map that makes it easy to see what and who is where (and where there are gaps).

North America, it shows, holds one-quarter of the world’s total base oil capacity, 40 percent of all capacity for making API Group II, and 47 percent of all naphthenics. It has a healthy amount of Group I, too, but a scant 4,800 b/d of native Group III supply.

Western, Central and Eastern Europe together hold 38 percent of the world’s Group I capacity, but have faltered in the race to make Group III. For that material, many buyers must look to Asia and the Middle East, the Guide indicates.

China meanwhile has let its Group II plants bloom, and now has over twice the capacity for making that grade (82,000 b/d) as for Group I (39,750 b/d). Among the new Chinese producers to be spotted on this year’s map are CNOOC’s refinery in Taizhou, with 12,000 b/d of Group II and naphthenics, and the independent “teapot” refiner Shandong Qingyuan, with 8,000 b/d of Group II in Zibo.

The 2017 Guide also includes a list of upgrades and projects slated for the next few years, starting with two more in China. Additionally, the industry should at last see Group II and bright stock barrels flowing this fall from Luberef’s upgrade at Yanbu’al Bahr, Saudi Arabia, which originally were expected last October.

Four more massive projects will crowd onto the scene next year, led by ExxonMobil’s grass-roots Group II plant in Rotterdam, Netherlands. Although the company has declined to reveal its planned capacity, Lubes’n’Greases has estimated it at 20,000 b/d, based on information from multiple industry sources.

The 2017 Guide is one-third larger in area than before, enabling its editors to improve its overall legibility and enlarge the map that pinpoints each plant geographically.

The larger 2017 Guide also has space to include footnotes about base oil plant ownership whenever it’s not obvious from the listed company’s name. HollyFrontier Refining & Marketing, for example, since Feb. 1 has owned the Petro-Canada Group II and III plant in Mississauga, Ontario, and Saudi Aramco on May 1 became the sole owner of Motiva Enterprises, including its massive Port Arthur, Texas, Group II refinery.

“In many cases the ownership is obvious, like SK-Repsol in Spain, but that’s not always so,” observed Michele Persaud, the editor who tracks base oil plants all year and maintains the integrity of the Guide’s data.

“We believe readers will find it useful as well as intriguing to see how many companies, like Saudi Aramco, Venezuela’s PdVSA and JXTG Nippon Oil in Japan, have invested beyond their own borders,” Persaud said. “Aramco’s name isn’t on any plant we list but it’s a major force in base oils, with holdings in Saudi Arabia, South Korea, Japan and now North America. With base oil being a global business, these ownership ties are important to know.”

“Many companies contribute their data to help maintain the Guide as an accurate picture of base oil refining capacity worldwide, and we welcome their feedback and updates,” said Lubes’n’Greases Publisher Howard Briskin. He said the magazine partners closely with R. David Whitby of Pathmaster Marketing in Surrey, U.K., to gather data and fact-check the Guide, which covers base oil plants around the world having more than 800 daily barrels of capacity. Rerefiners who use modern refining or hydrotreating processes to produce API-quality base stocks are also included, with an asterisk to distinguish them from their virgin base oil brethren.

Copies of the 2017 Guide to Global Base Oil Refining were mailed to Lubes’n’Greases subscribers with their June issue; copies also went to the magazine’s digital subscribers. To order a copy, visit https://pubs.lubesngreases.com/base-stock-guides/ .