TALKING HEADS
Alan Outhwaite, Business Development Manager, Chevron Base Oils
A M
Two industry
Virgin base oils and re-refined base oils - a symbiotic relationship
The quality of base oil depends upon the quality of the feed stock and the refining process used. Virgin Group II/III base oils are produced by hydrotreating, hydrocracking and isomerizing feedstock components. All-hydroprocessing converts 98-99.99% of feedstock impurities to high-quality, high purity base stocks.
Group I base stocks are produced by solvent extraction and solvent dewaxing, which can leave a high level of impurities in the base stock.
Re-refined base stocks are produced from used-oil. Because used automotive lubricants generally have higher quality and lower viscosity, they are the preferred feed. The processing scheme used by the re-refiner will determine the quality of the re-refined base oil. There are 13 re-refiners in Europe. Only two are currently producing Group II base oils, with approximately 133 kMT output in 2016 (*). One manufacturer is starting to produce Group III base oils. Much of the used oil collected contains a significant amount of Group I and most re-refiners are not using high pressure hydrotreating, so, in general, re-refined Group II/III base stocks tend to have higher impurities (aromatics, organosulphur compounds, etc.) than virgin Group II/III.
Tightening specifications are changing the supply/demand balance for premium base stocks European automotive specifications for improved fuel economy and reduced exhaust emissions are pushing the market toward lubricants blended with high-quality, low-viscosity Group II and Group III base oils.
This is good news for re-refiners. It will increase the availability of high-quality feed. If the re-refiner is using high pressure hydroprocessing, that feed may
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add to the regional supply of premium base oil, which, may speed the adoption of tighter specifications, that will lead to more high-quality waste oil for re-refining. Symbiotically, as demand grows for higher performing virgin oils, supply increases for refined oils.
The greatest opportunity for re-refined base oils is also their greatest challenge. Processing used automotive lubricants can limit re-refiners to making base oils in the 100-200 SUS range with a V.I. of 105 – 120. Technical demand for Group II base oils in this range is 443 kMT* (55 - LN and 388 - MN). Base oils in this range typically do not provide sufficient lubricity for heavy industrial, gear, transmission or some heavy-duty engine oils and their V.I. is too low for high performance motor oils that are moving to base oils with V.I. well above 120.
Scale matters when meeting modern specifications In Europe, automotive lubricants require 1303 kMT* of base oil per year and have a complicated and expensive approval process. Completing the most recent ACEA sequence for a HDMO, supported by OEM claims, can take up to 2 years and require >$2million in engine testing costs. With today’s razor-thin tolerances on some tests, slight variations in base oil properties such as aromatic content can compromise a lubricant’s performance. Typically, the additive companies conduct the testing and select a base oil supplier with sufficient volume and quality to warrant the expense.
Whilst re-refined base oils may have acceptable properties, they can have very limited plant capacity. In 2016 European production was estimated to be 536kMT* across all base oil groups versus a total European base oil demand of 4426 kMT per year.
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