LUBE REPORT

Wednesday, May 6, 2009 VOLUME 9 ISSUE 18  


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Nynas Ups Pale Oil Output
By Lisa Tocci
 
NYNASHAMN, Sweden – Nynas, the world's largest supplier of naphthenic base oils, plans to double the capacity of its 7,800-barrel-per-day refinery here, company executives announced last week. Land is prepared already for a new hydrogen production unit, and construction of a new hydrotreater is set to begin.
 
Speaking to a crowd of clients and visitors at the refinery here Thursday, Jean-Marie Toullat, marketing director of naphthenics, said that the project awaits only a final thumbs-up from shareholders. Nynas Group, with annual turnover of $1.3 billion, is owned equally by Petroleos de Venezuela S.A. and Finland's Neste Oil.
 
The 1.5-square-kilometer Nynashamn site, on a sheltered harbor about 35 miles south of Stockholm on the Baltic Sea, already is home to three hydrotreating units for base oils, pointed out refinery manager Par-Ola Andersson. He said the expansion will involve constructing a new sulfur recovery unit and adding more hydrogen capacity, which then will serve the new hydrotreater planned for the site. The expansion also aims to give the refinery the potential to produce more bright stock.
 
Per Dahlstedt, the company's head of naphthenics, said capacity at Nynashamn is currently 400,000 metric tons per year, and the expansion will add another 300,000 to 350,000 tons. Major markets for its output include naphthenic base oils for making metalworking fluids and lubricating greases; replacements for aromatic extracts in tire production; process oils; and transformer oils for the electricity generating industry.
 
Nynas also is preparing to offer five new bright stocks designed for making metalworking fluids and greases, revealed Valentina Serra-Holm, market manager. These include two polymer-modified oils with good solvency and very low pour points that can be one-to-one replacements for conventional bright stock, and three non-polymerized grades for applications with less critical pour points.
 
Last week's presentation concluded a roadshow of sorts for Nynas, which earlier spoke about its ambitions to customers in Texas, Singapore and Curacao. This was the first of these events, however, to provide extensive details about the Nynashamn expansion. Company executives timed the refinery tour to coincide with the annual meeting of the European Lubricating Grease Institute, which brought many of their prime customers to Sweden last week.
 
Long-term, Toullat told visitors, the company wants to double its business every five years. At present, it claims 20 to 30 percent market share in tire, marine, transformer oil and lubricant applications for naphthenics, all of which it sees as growing markets.
 
In addition to its own refinery production, Nynas markets the pale oil output from PdVSA’s Rafineria Isla in the Netherlands Antilles (capacity: 3,700 barrels per day), Valero's Three Rivers, Texas, refinery (2,400 b/d) and Lyondell-Basell’s Houston plant (3,600 b/d). With Nynashamn, these bring Nynas' total capacity to 17,500 b/d.
 
The world's largest naphthenics refinery, however, belongs to rival Ergon Inc., which has its own massive expansion under way at Vicksburg, Miss. It expects to reach 16,500 b/d of capacity next month, followed later this year with a bright stock expansion that will bring its total to around 19,000 b/d – a comfortable lead on Nynas.
 
The expansion at Nynashamn will help the Swedish company leapfrog ahead of Ergon again, as measured by total supply controlled.
 
To support its larger output of base oils, Nynas has opened an office in Moscow, and is planning to add others in Asia. A new terminal hub for storing and shipping base oils is nearing completion in Houston, too.
 
Finally, Toullat also hinted that his company anticipates having a manufacturing presence in the Pacific. "We are missing Asia production, but are working on projects there. We will have it one day," he said.

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