Fuels & Lubes International 1997 – Issue #12

Thai Lube Base inaugurates lube refinery
Thai Lube Base Public Co. Ltd. inaugurated its new base oil refinery located in Sriracha, Chonburi province on November 28. The plant, which has an initial capacity of 300 million liters of paraffinic base oil per year, plans to start commercial production during the first quarter of 1998.

DEA, Fuchs, form joint venture
DEA Mineraloel AG and Fuchs Petrolub AG Oel+Chemie have entered into a joint venture for the German market, with each party holding a 50 percent stake.

Automotive fuel cell development: Implications for the industry
“A device that has been neglected for a century and a half is about to take its rightful place in industrial civilization.” Thus, does the respected magazine the “Economist” open a recent story on fuel cells.

OEMs seek to stop use of MMT in unleaded gasoline in Canada
OTTAWA, Canada — At the October meeting of the Canadian General Standards Board (CGSB) Gasoline Committee here, GM Canada, Chrysler Canada and the Association of Automobile Importers of Canada, sought to reduce the allowable use of MMT in gasoline by lowering the CAN 3-5 specification (unleaded gasoline) of 18 mg/1 maximum allowable manganese content to 1 or 2 mg/1 maximum and to allow no deliberate addition of MMT.

Clean diesel from natural gas
JAKARTA, Indonesia — A number of observers in the industry show considerable excitement at the prospects for use of excess or uneconomic natural gas reserves as sources of ultra clean crude or diesel.

India’s cabinet implements initial steps towards deregulating oil sector
NEW DELHI, India — The long anticipated decision on reducing the scope of regulatory interventions in the oil sector was taken by the Indian cabinet last month.

Honda’s ultra low emission engine
Honda Motor Co. showed at this fall’s Tokyo Motor Show a new engine system which it says will reduce tailpipe emissions on regulated substances to less than “10 percent of the world’s most stringent standards, those of the state of California.”

Neste starts VHVI production
Neste Oy has started the production of very high viscosity index (VHVI) base oils from a new unit at its Porvoo refinery in Finland. The new facility came on stream last October. It has an initial capacity of 50,000 tons per annum for an investment of FIMI 180 million (US$34.6 million).

Thai Lube Base was formed to help country attain self-sufficiency
In 1992, demand for lube base oil in Thailand was approximately 395 million liters, which was met by importing base oil as Thailand then had no lube refinery.

Philippine deregulation impasset
The Philippine Supreme Court struck down last month RA 8180 that deregulated the oil sector. The court found the following provisions of RA 8180 on differential tariffs (charging a higher rate for refined products than crude), on stockpiles (importers must maintain product inventory equal to 10 percent of average sales) and prohibiting predatory pricing all in restraint of open competition and therefore as unconstitutional.

SAE Report
Auditing API engine oil licensees
TULSA, Okla.—American Petroleum Institute’s Vince J. Livoti reported on the API Engine Oil After Market Audit Program (AMAP) at the Fuels and Lubricants Meeting of the Society of Automotive Engineers (SAE) here recently. A copy of this report is available from SAE.

NPRA Report
The World Petroleum Wax Market
HOUSTON, Texas—As noted in the FLI review of U.S. lubricant sales last month, wax sales have been growing at a faster rate than for most lubricant categories. However, as a by-product, wax sales tend to be as much supply dependent as demand driven.

ASCOPE Report
Will currency crisis result in return to greater government intervention in Asia?
JAKARTA, Indonesia—The once every four year conference and exhibition of the Asean Council on Petroleum (ASCOPE) took place here last month. Each of the Association of Southeast Asian Countries (ASEAN) is represented on the council by the respective national oil company.

Lube Tech Report
ATF for cars equipped with slip-control lock-up clutches
Some Japanese cars now are equipped with automatic transmissions with slip-control lock-up mechanism. This mechanism is viewed as a fuel-saving device.

Continuous oil replenishment system shown not to cause increased wear in engines:
Tulsa, Okla.—The introduction of a continuous oil replenishment system, where a small amount of the used engine crankcase oil is drawn into the fuel and burned in the engine while an equivalent amount of fresh oil is added automatically to the engine crankcase, allows operators to extend crankcase oil drain intervals and increase equipment uptime.

Fuel Tech Report
Novel method for water injection gives lower diesel NOx Emissions:
Tulsa, Okla.—At the SAE Fuels & Lubricants meeting held here, Friedrich Wirbeleit, senior manager, thermodynamics for Daimler Benz AG Stuttgart, described a novel system of injecting water into heavy duty diesel engines which in combination with exhaust gas recirculation, could achieve proposed Euro IV emission levels of less than 3.0 g/kwh oxides of nitrogen (NOx) and less than 0.01 g/kwh particulate (PM) on the ECE R49 cycle, without a loss of fuel economy.

Pertamina’s Musi reforming Project:
In support of Indonesia’s policy to reduce air pollution, Pertamina is planning to reduce lead content in gasoline over the next three years from 1.0 cc per US gallon to 0.5 cc in 1998-99 and to 0.1 cc in 1999-2000 [until April this year lead content was 1.5 cc per US gallon]. An important part of the program to accomplish these objectives is the upgrading of the Musi refinery. Currently, the area served by the Musi refinery located in South Sumatra has an annual consumption of about 630 million liters of gasoline.

Asia-Pacific Regional News
Australia hopes to deregulate its oil industry next year in an effort to lower retail prices.

BP Australia is closing 180 of its service stations and is restructuring its retailing division in the hope of increasing profits.

The Malaysian government has given its approval to Conoco, DuPont Corp.’s oil subsidiary, and its local partner Sime Darby Bhd to put up service stations.

The Bangkok Post reports that the Petroleum Authority of Thailand (PTT) is studying the merger of two subsidiaries, National Petrochemical Plc and Thai Olefins Co., which operate olefin plants, both at Map Ta Phut.

Exxon Chemical Singapore’s planning manager, Martin Jones, cited the infrastructure load that will be added when the proposed US$2.0 billion petrochemical complex in Singapore goes into operation early next century.

The recently announced “closer ties” between Esso Sekiyu KK and General Sekiyu KK will, according to a Reuters report, significantly increase competitive pressure in the Japanese retail petroleum sector.

BP Chemicals, BP Oil, Chandra Asri, Salim and Sumitomo, owners of the proposed 875,000 tons per year of ethylene/500,000 tons per year of propylene cracker to be erected in Bojonegara, Indonesia have invited bid for the supply of the facility.

Reliance Petroleum Ltd. and Essar Oil Ltd. are seeking equity participation in a product pipeline extension that is to hook up to their proposed refineries’ cross-country product pipeline.

Chinese officials continue their calls for structural reforms of state enterprises in the petrochemical sector.

As part of its efforts to rationalize the industry, China is merging Zibo Chemical Fibre Co. and Zibo Petrochemical Co. with Qilu Petrochemical Corp.

Sinopec Vice President Wang Jiming said he foresees China’s imports of crude oil increasing to 100 million tons by 2010.

Bangladesh Petroleum Corp. officials said that Petronas will install a second refinery unit at its Chittagong refinery to expand capacity from 31,000 bpd to about 90,000 bpd.

Indonesian Minister of Industry and Trade Tunky Ariwibowo announced as part of its obligations under the IMF Assistance Package, that a package of steps are to be taken to enhance exports an to make investment from abroad more attractive.

The New Delhi-based Center for Science and Environment, using a World Bank developed model, estimated that about 52,000 people died in 1995 in India’s 36 major cities because of pollution-related illnesses. New Delhi alone had almost 10,000 deaths.

Tokyo oil analysts say that retail gasoline prices, now often below refiners’ wholesale prices, are unlikely to bounce back.

The Philippine National Oil Company (PNOC) says that it will undertake a feasibility study for a plastics recycling plant to be built in conjunction with its naphtha cracker for construction start-up in 1998.

Clark International Airport Corp. (CIAC) and Lubwell Corp. have established a joint venture to build and operate fuel facilities at Clark International Airport.

The Petroleum Authority of Thailand (PTT) and PetroVietnam have signed a memorandum of understanding for joint development of petroleum-related activities.

A Caltex Oil Thailand official says his company has strong confidence in the early recovery of the Thai economy.

Brown & Root Holdings Inc. has formed a joint venture with Rotary Engineering Ltd. to provide engineering services to Singapore’s refineries and petrochemical plants.

Showa Shell Sekiyu K.K. and Uyeno Unyu Shokai K.K. will set up a company to manage the oil product storage tanks owned by Showa Shell.

Shell India and Essar have received approval from the Foreign Investment Promotion Board to build a 2.7 million ton LNG import terminal at Hazira on the west coast of India.

Schroders Energy Fund manager Elisabeth Scott said her firm expects energy demand in Asia to continue to grow more rapidly than in the West, despite the economic slowdown now impacting on the region.

Two of Australia’s eight refineries may be unable to meet competition from Asia, according to Ian Blackburne, managing director of Ampol.

The Xinhua News Agency reports that Chongqing in Southwest China, concerned about serious air pollution is promoting the use of LNG for motor vehicles.

India has been selected as a new market for oil developments by Shell and Saudi Aramco. It is the first joint venture of the two oil companies.

PT Asia Pacific Petroleum Refinery Indonesia (APPRI) said construction on its refinery in Situbondo, East Java will start this month.

Exxon Corp. has establish a trading and after sales service unit in Shanghai.

ABB Lummus of the Netherlands has received a contract from Hindustan Petroleum Corporation Ltd. (HPCL) to make a feasibility report on its Punjab Refinery.

The Ministry of International Trade and Industry said that Japan’s industrial and commercial energy use in 1996 went up 0.9 percent from 1995 to 264 million kiloliters of crude oil equivalent.

The Vietnamese government has stated it is planning to build a second oil refinery and has instructed Vietnam Oil and Gas Corporation to conduct studies for its construction.

Managing Director of Caltex New Zealand, Jim Champin, said that as many as two thirds, 1200, of New Zealand’s gasoline stations are marginally profitable and may be forced out of business by the new larger stations proposed by Fletcher Challenge Energy and Liberty Oil of Australia.

A 600,000 ton per year methanol plant in Vietnam is being considered by a consortium of Lurgi Oel Gas Chemie GmbH (Germany), Ancom Bhd (Malaysia), Finansa Ltd. (U.S.) and local firms Vinachem and Petro Vietnam.

The Philippine’s National Power Corp. said it expects to reach agreement this month with a consortium of Shell Philippines Exploration B.V. and Occidental Philippine Inc. for the supply of natural gas for the company’s 1,200 MW power plant in Batangas Province.

The South China Morning Post reported that Hino Motors’ joint venture plant in Vietnam to produce medium size trucks has been officially opened.