By George Gill
 
Effective June 1, ExxonMobil will stop supplying base oil from its Bayonne, N.J. terminal, industry sources confirmed to Lube Report.
 
The company initially informed customers last November about plans to close the terminal, sources said.
 
“Basically, ExxonMobil said in the letter, you needed to get hold of your rep and to figure out what you’re going to do for the future because sometime in the spring they would close that facility,” a base oil buyer told Lube Report. The source said they were informed they could instead acquire base oils from ExxonMobil’s Cicero, Ill., or Houston terminals.
 
“That doesn’t do you much good when you’ve got to pay the freight to get it here,” the source said. “We haven’t been buying from them anymore. We switched out of there because we were nervous about what’s going to happen.”
 
Another base oil buyer did not see the impending closure as a “huge event,” noting that ExxonMobil had few major base oil customers remaining in the Northeast.
 
Current Bayonne terminal customers may have to do things differently because the upcoming closure brings some logistical changes, the source suggested. For example, the buyer said in some cases it may be possible to deliver by vessel – with some reasonable overhead – at roughly what it costs now to deliver by rail car directly from the Gulf Coast refineries.
 
Sources suggested the closure could benefit refiner Valero, which has a base oil plant in Paulsboro, N.J., with 11,000 barrels per day API Group I and 500 b/d Group II capacities. “If Valero has Northeast customers, it certainly puts them in a better position to distribute, to compete with Exxon in the Northeast out of Paulsboro, and not have to pay a huge freight differential to compete with Exxon,” one source said.
 
ExxonMobil public affairs officials contacted by Lube Report declined to comment for this story.