October 27, 2020

Asian Lube Map 2020 | Leaderboard | 600×75
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By Alison Gaines

The decline of paraffinic Group I base oils is a well-known fact, as Groups II and III are becoming more relevant. So what happens in the industries that depend on Group I? Mehdi Fathi-Najafi, senior technical advisor at Nynas AB, a major naphthenic base oil producer based in Stockholm, Sweden, shared some possible solutions during the F+L Week conference in Singapore in March.

Fathi-Najafi illustrated a paradox: Group II base oils cost less to produce and yet have more value in the automotive market, whereas Group I base oils cost more to produce and are losing their value. This is happening partly because of what he calls a “paraffinic quality shift.” Paraffinic quality refers to the concentration of lower molecules within the oil. Subsequently, bright stocks cannot be produced at Group II/III refineries.

Paraffinic Group I oils are predominately used in industrial applications since the automotive segment has started moving to Group II/III. Naphthenic oils do not have sufficient high flash point, which makes them unsuitable for engine use. The automotive segment only represents around 30% of paraffinic Group I base oil use, while nearly 70% are used in industrial applications. However, the shift in the automotive segment towards lower viscosity and cleaner engine oils for better fuel economy and better refining economics are causing the abandonment of the Group I market altogether, Fathi-Najafi said. The larger molecules and higher viscosity of Group I as well as good solvency are essential to industrial applications, but less useful in engines, especially with today’s fuel economy and emissions mandates.

More than 2 million metric tonnes of Group I base stock disappeared from the market last year, Fathi-Najafi said. Because the automotive segment is moving on, “no private investor will support Group I refineries,” he said. Many Group I refineries are older, and cost more to maintain. Group I feedstocks are also more expensive than Group II/III feedstocks.

“A consequence of these changes,” he said, “is that the offering of the base oil industry is no longer optimised for industrial lubricant requirements.”

While naphthenic oils do not work well in engines, they have many applications. Fathi-Najafi estimated that naphthenics comprise about 10% of total base oil demand. They find use in lubricating applications, such as greases, metalworking fluids, hydraulic fluids, industrial gear oils and more. Outside of lubrication, they are used in the electrical industry as transformer oils, as process oils in adhesives, sealants, printing inks and battery separators, as well as an extender oil in tyre rubber.

All of these applications are part of the “collateral damage” that Fathi-Najafi said the paraffinic quality shift has caused. How can these industries move on from Group I?

Fathi-Najafi offered the following options: shifting these applications to Group II or III (where possible), switching to naphthenic base oils, or a combination of naphthenics and Group II/Group III. Nynas has developed a range of products, blends of Group II/III oils and naphthenics, under the brandname Nybase.

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Mehdi Fathi-Najafi

The product is comparable or better than traditional Group I oils in the areas of blending flexibility and low-temperature performance, although it has a slightly lower flash point, and a lower viscosity index than traditional Group I, he said. In testing that Nynas conducted, Nybase outperformed regular Group I oils in response to pour-point depressants, and performed comparably in elastomer compatibility. Fathi-Najafi said that it can be used as a drop-in replacement for solvent-neutral oils with a similar kinematic viscosity and aniline point.

He referenced the in-line blending facility in Antwerp, Belgium, where Nynas can make custom-blended base oils for customers’ particular applications, in whatever quantity the customer needs. “A customer could just buy a drum if that’s what they need,” Fathi-Najafi said. Since this industry is somewhat conservative and not prone to change quickly, this kind of flexibility is essential, he said.

The company also has a supply hub on Jurong Island in Singapore, with 32,000 cubic metres of storage capacity. With about two weeks’ delivery time, this hub can supply depots in Indonesia, South Korea, China, Australia and Japan, he said.

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