LONDON – Base stocks have seen multiple cycles of investment and rationalization, resulting in fewer but larger plants over time, an ExxonMobil expert said. And larger size means lower costs.
X B Cox, ExxonMobils global planning manager for base stocks and specialties, looked at base stocks from a historical perspective at the ICIS World Base Oils & Lubricants Conference here Feb. 21.
In North America, said Cox, there were 59 base oil plants in 1970, with average capacity of 3,800 barrels per day. Today, there are 20 plants with average capacity of 13,200 b/d, or one third the number of plants but theyre three times the size.
The same pattern holds in Europe, where there were 53 plants with average capacity of 2,200 b/d in 1970. In 2014, there are just 18 plants, with 7,300 b/d average capacity. Europes plants are much smaller than North Americas, Cox noted, but the same trend prevails: one third the number of plants, but three times the size.
Global naphthenic capacity has followed the same trend over the same period, going from 70 plants with 1,900 b/d average capacity in 1970 to 21 plants today, with 5,200 b/d average capacity. Again, said Cox, one third the plants and almost three times the size.
Base oil quality evolved with process technologies, Cox pointed out. Process technology has evolved from separation by boiling to vacuum distillation to reactions. New technology can be scaled up, and this brings efficiency. Big plants then need to reach afar for customers.
Operating expense is a function of size. Cox cited data showing that the operating costs of smaller API Group I plants can typically fall in the range of $50 per barrel of base stocks, with some of the smaller plants incurring costs of $75 to $100/bbl. By contrast, the largest Group II plants, with capacity of 20,000 b/d to over 35,000 b/d, enjoy operating costs well below $25/bbl.
Cox said 1997 saw the last Group I investment, in Thailand. That same year Excel Paralubes and Exxons Jurong, Singapore, plant opened major Group II facilities. This year, 2014, will see big Group II capacity increases at ExxonMobils Baytown and Singapore plants, as well as the opening of Chevrons Pascagoula, Miss., plant.
Engine oil quality has evolved rapidly over the past century. Until about 2000, base stock was basically a carrier for additives, said Cox. But around 2000, higher performance base stocks became more important, particularly for their contributions to the performance of top-tier engine oils. The proliferation of Groups II and III and PAOs has allowed engine oil quality to rise ever higher.
Both base stock and additive innovation contribute to lubricant performance, and they will continue to rely on each other.
Several factors underlie both base stock and lubricant success, Cox said. First, you must have the oil via a secure source of feedstock. Then you must have an efficient process technology to upgrade the feedstock. Modern blending and packaging efficiencies are essential, as well as effective logistics and shipping. Finally customer friendly distribution and a well-respected brand like Mobil 1 are extremely important in lubes and base stocks.