Fuels & Lubes International 1997 – Issue #4 – #5

SAE Task Group issues recommendations for GF-3
DEARBORN, Mich. — The much awaited report on the need for ILSAC GF-3 was unveiled at the Society of Automotive Engineers (SAE) Technical Committees 1 & 2 Meeting of the Fuels and Lubricants Division n May.

More realignment in industry with ICI, Lubrizol purchases
KANSAS CITY, Kan. — The lubricants industry, converging here for the 52nd Annual Meeting of the Society of Tribologists and Lubrication Engineers in May, viewed ICI’s acquisition of Unichema International, and Lubrizol Corp’s purchase of Gateway Additive Company, positively.

New cetane tester
At the Canadian General Standards Board Middle Distillates Committee in April, Gary Webster, President of Advanced Engine Technology in Ottawa, Canada, described a new device for measuring the cetane number (CN) of diesel fuels.

Bias found in results from portable vapor pressure tester
Refinery butane is more valuable as a high octane number blending component in gasoline than as a refinery fuel. The price differential is approximately 10 cents per liter. Butane’s use as a blending component, however, has been severely restricted by the stringent summertime gasoline vapor pressure limits imposed in the United States for environmental reasons.

Group II base stocks seen as meeting immediate need
Williamsburg, VA — The issue of high performance base oils and their impact on automotive lubricants remains at the forefront of industry concerns.

World auto trends
WILLIAMSBURG, Va. — Globalization has even had an impact on Detroit Trends, a yearly presentation by Paramins, a division of Exxon Chemical Co. Detroit Trends was replaced this year by “AutoTrends,” which looks at the industry from a more international perspective.

Canada studies impact of reducing sulfur in gasoline and on-road diesel fuel
TORONTO, Canada — The Stakeholder Advisory Group on Gasoline Sulfur Reduction, at a meeting held here in April, reviewed draft reports by the panels dealing with Atmospheric Science Health, Refinery Cost and Competitiveness.

Hybrid vehicles
Hybrid gas/electric vehicles appear to be in the lead among alternatives for actually developing a commercial model for a more environmentally friendly car.

OEMs meet in Sweden to discuss global fuels harmonization
GOTHENBURG, Sweden — Apparently, a stab at achieving global harmonization will be made in the fuels area first, instead of lubes.

Lube Tech Report
Base oils in a changing environment:
Until recently, finished lubricants were prepared largely from solvent refined base stocks, with additive packages providing the primary means for achieving differentiated lubricant requirements.

SAE Report
What makes diesel fuel a premium product?
DEARBORN, Mich. — With U.S. refiners focusing their output on gasoline, it appears that the quality of diesel fuel in the U.S. has declined. At the same time, higher performance engines and emissions control regulations have created a need for higher quality diesel.

Other highlights from the SAE premium diesel session:
Barbara Goodrich, diesel specialist at Octel America, reviewed the diesel detergency issue in terms of both the Peugeot XUD 9 test engine used in Europe and the Cummins L10 engine used in North America.

The Impact on fuels and lubricants of advanced technology engines:
DEARBORN, Mich. — An overview of the impact of today’s advanced technology engines, direct injection gasoline and hybrid engines, on fuels and lubricants was provided by Masahiko Nakada of Toyota Motor Corporation for a technical committee meeting of the Society of Automotive Engineers (SAE) here.

Direct injection gasoline engines
In 1996, Mitsubishi placed into production a direct injection, in-line, four-cylinder gasoline engine and Toyota has followed suit. In April this year, Mitsubishi followed-up with the introduction of a V6, direct injection engine. Claims are made that fuel consumption is reduced by about 30 percent with the direct injection technology. Some of the technical details of this approach are now becoming available.

1996 Index
Index by Company:
AAF, 2.8-4 AAMA, 2. 1-7; 2.4-1, 5; 2..5-2,6-7; 2.7-8; 2.9-2; 2.11-8 AC Cars, 2.3-6

Special Report
Asian economic outlook:
In its recently released “Asian Development Outlook, 1997 and 1998,” the Manila, Philippines-based Asian Development Bank (ADB) discusses the primary causes of the widespread economic slowdown in Asia during the past year and presents its assessment of the regional growth prospects in the near term.

Fuel Tech Report
Developments in biodiesel:
DEARBORN, Michigan — Interest in biodiesel development continues. At the Spring Fuels and Lubricants Meeting of the Society of Automotive Engineers (SAE), a full-day session was held on the subject. Below are the highlights.

DME as a compression ignition fuel
Dimethyl Ether (DME), currently used as an environmentally friendly propellant for cosmetic spray cans, has been touted as a clean burning alternative fuel for compression ignition engines. NOVEM, a Dutch organization, has funded research at the TNO Road-Vehicles Research Institute on the possible use of DME as a fuel.

Lube Tech Report
Soot’s impact on diesel engine wear:
In January and February 1996 issues of FLI, a two-part review on several technical studies regarding the influence of crankcase soot on diesel engine wear was presented. The results from the studies were collectively inconclusive, even contradictory.

Asia-Pacific Regional News
New players are expected in New Zealand’s retail petroleum market. Supermarket operator Progressive Enterprises and Fletcher Challenge’s Energy Division are said to be planning a retail petroleum distribution network. Some have argued that retail margins are excessively high in New Zealand and consumer advocates await greater competition in the sector.

Sinopec lauched a promotional campaign of its new lubricant brand name, Torch, in May. The campaign is a first in the company’s history, according to China OGP.

The National Environmental Board (NEB) has decided that all diesel vehicles produced in Thailand will have to first meet the EURO-1 standards and then EURO-2.

Price competition continues among refiners in South Korea. Yukong, with 35 percent of the market, cut its prices below those of its competitors in early June.

Mobil Oil Pakistan Ltd. has entered into a joint venture with the Pakistan Army Welfare Trust to build a lube blending plant with a capacity of 25,000 to 30,000 tons per year.

A court case in which the Australian Competition and Consumer Commission (ACCC) sought to prove price-fixing between Shell, BP and Mobil at their retail stations has been thrown out by the presiding judge.

China has begun importing more lower sulfur, 1.5 to two percent, fuel oil in place of its traditional 3.5 percent sulfur fuel oil.

Mobil Sekiyu KK and Mitsubishi Oil Co. Ltd. are working out a sharing arrangement in their oil distribution systems that it is expected to save about 1.2 billion yen (US$10.7 million) a year.

Cosmo Oil has agreed to exchange oil products with Japan Energy Corp. and Nippon Oil Co. Ltd. It will invest about 2 billion yen (US$17.9 million) in distribution facilities to handle the increased product exchanges.

While Sinopec attempts to phase out low-grade engine oils from the Chinese market, six of its subsidiaries — Daqing, Dalian, Jingmen, Jinxi, Maoming and Fushun — were found to continue to produce API CA oils.

Shell Malaysia intends to register a company that aims to provide information technology support to Shell companies in the Asian region.

Legislative sources are demanding a review of Petron’s crude supply contract with shareholder Saudi Aramco.

Chinese Petroleum Corporation (CPC) says that it will use a floating-rate system for pricing its products, to reflect fluctuations in the cost of crude.

Convenience store sales and automotive repair services at Thailand’s service stations are accounting for a significant part of oil companies’ downstream revenues.

Indonesian government agencies may be told to buy only the national car, the Timor, for their offices.

New vehicle sales fell 9.4 percent in May from a year earlier in Japan.

A Japanese energy panel recommended a study of setting up an oil futures market in Japan as a means to increase market transparency. Restrictive provisions limiting establishment of oil refineries are to be removed as a result of decisions by Thailand’s National Energy Policy Office.

Restricted provisions limiting establishment of oil refineries are to be removed as a result of decisions by Thailand’s National Energy Policy Office.

Tonen’s Kawasaki plant and Taiyo’s Kikuma plant are to increase their capacities.

Thailand’s Bang Pakong Industrial Park 2 Public Co. Ltd. has signed a joint venture contract with three domestic firms to develop infrastructure for Dung Quat Industrial Park (IP) in Quang Ngai Province, in Vietnam.

The slowdown in domestic demand for automobiles is forcing restructuring of South Korea’s auto companies.

Esso Malaysia’s LPG operations manager Mohamed Shah Hamzah said that Esso currently has about 30 percent of the 200,000 bpd LPG market in peninsular Malaysia.

Thailand’s consumption of refined petroleum products dropped two percent to 749,830 barrels per day (bpd) during the first four months of this year, compared with a year ago period.

Thailand gained 392 service stations in the first quarter of this year, a four percent increase since the end of last year.

Thailand’s export’s of automobile products rose 121 percent in the first four months over the year ago period.

The Petroleum Authority of Thailand is preparing a petrochemical master plan for itself and four subsidiaries with the intention that each unit operate an integrated petrochemical complex in five years, according to PTT Governor Pala Sookawesh.

Mitsubishi Chemical Corp. and the Petroleum Authority of Thailand have agreed to combine three jointly-planned acrylic acid, acrylic ester, and oxo-alcohol projects in Thailand into a single operation.

Toyota Vietnam will start operations of an assembly line using complete-knock-down type of components.

Deregulation of the Philippine oil sector is moving beyond “clean restrooms.” Petron is now joining Shell and Caltex in re-imaging itself as a more dynamic company in the face of increasing competition in a deregulated environment.

Anticipating that competition, Pilipinas Shell launched an intense advertising campaign this year with its giveaways of Ferrari model cars, while Caltex fought back with Star Wars giveaways as it attempted to align its image with the fiery characters of that movie.

Nonetheless Petron is putting its new logo on some 40 refurbished stations and will build another 40 modern stations s well.

Currently Petron has about 40 percent of the market, with Shell at just over 33 percent and Caltex accounting for most of the remainder.

General Motors has signed a memo of understanding with Guangzhou province in China to take over the Peugeot share in the Guangzhou car plant.

Nissan Motor has a new technology that will reduce by more than 90 percent the amount of hydrocarbons emitted from gasoline engines.

Industry Minister Korn Dabbaransi said privatization of the Petroleum Authority of Thailand (PTT) is necessary for it to be internationally competitive.

Total will set up an LPG joint venture in Haiphong, Vietnam. Total will have a 70 percent share in Total Gas Haiphong and Tradimexco a 30 percent share.

Volvo has started construction of a heavy-duty truck factory near Bangalore, India. The venture will produce about 4,000 FH model, long-haul truck a year.

Eaton Corp. will open a plant in South Korea by October to produce limited slip differentials for Hyundai and Kia.

Car makers, including VW and General Motors (GM), now produce cars desinged in the home country for sale to the Chinese market.

On GM’s part, seen as VW’s long term major competitor, the Pan Asian Technical Automotive Centre (PATAC) with an initial investment of 320 million yuan (US$38 million) is being developed.

India’s Disinvestment Commission is deferring a decision on privatizing Oil India Ltd. (OIL) and Oil and Natural Gas Corp. (ONGC) pending decontrol of petroleum prices by the government.

An Indian industry group, the Confederation of Indian Industry, has urged the government to begin the phase out of its oil subsidy program by raising petroleum product prices immediately.

Pertamina reports that Indonesian domestic fuel consumption was up by six percent in the just completed fiscal year (April 1996 to March 1997).

China plans to develop catalytic converters for automobile use based on locally available rare earths rather than the more expensive platinum, rhodium and palladium.

Almost 300 gasoline stations in the Beijing area began selling unleaded gasoline in June, according to the Xinhua New Agency.

The Indian government has approved proposals to install hydro-desulfurization facilities at nine refineries.

Daewoo and Renault signed an agreement on engine technology and production.