importance of base stock choice to a finished lubricant ...€¦ · 2 competition law reminder...

This presentation includes forward-looking statements. Actual future conditions (including economic conditions, energy demand, and energy supply) could differ materially due to changes in technology,

the development of new supply sources, political events, demographic changes, and other factors discussed herein (and in Item 1A of ExxonMobil’s latest report on Form 10-K or information set forth

under "factors affecting future results" on the "investors" page of our website at www.exxonmobil.com). This material is not to be reproduced without the permission of Exxon Mobil Corporation.

Importance of Base Stock Choice to a Finished Lubricant Blender

A. (Bob) Duggal Global Basestocks Technical Advisor June 30, 2015

2

Competition Law Reminder

• It is ExxonMobil’s policy to comply strictly with all applicable antitrust and

competition laws.

• These antitrust and competition law rules also apply to this presentation.

• No discussions will be made on any other matter, including:

• Agreements or business transactions that ExxonMobil has with third

parties and/or customers.

• Base stock or lubricant future price moves or production capacity

changes not announced or in the public domain.

3

0%

25%

50%

75%

100%

Engine Oil Industrial Oil

Relative Composition

Base Oils Additives

Lubricant Relative Composition & Cost Estimates

0%

25%

50%

75%

100%

Engine Oil Industrial Oil

Relative Cost

Base Oils Additives Package Blending

• Base oils account for ~80-95+% of composition, ~50-75% of lubricant cost

• Have significant impact on lubricant performance and economics

* ExxonMobil assessment of typical cost distribution for example products

blended in a medium sized European blend plant with waterborne access

4

Global Lubricant Demand & Segmentation

• Demand growth in developing markets

• Automotive lubricants ~half of market

• Passenger Vehicle Lubes (cars)

• Commercial Vehicle Lubes (trucks)

• Industrial, Marine, Process Oil

remainder

% Growth

p.a.

’15 – ‘30

1.9

--

kBD

Lubricant Demand

Source: EM assessment of publically available information.

5

API & ACEA Base Stock Groupings

Very wide

chemical

spectrum

Narrow

chemical

spectrum

Classifications based on VI, Sulfur, and Saturates (by silica gel separation)

80 ≤ VI < 120

Sats < 90%

Sulfur > 0.03%

80 ≤ VI < 120

Sats ≥ 90%

Sulfur ≤ 0.03%

VI ≥ 120

Sats ≥ 90%

Sulfur ≤ 0.03%

PAOs All Others

< 80 VI

Paraffinics

Naphthenics

Alkylated

Napthalenes

Esters

Bio-based

Base Stocks

GROUP I GROUP II GROUP III GROUP IV GROUP V

Natural antioxidants,

with excellent solvency;

Good seal compatibility

Can be produced to very

high viscosities

Industrial oils, heat

transfer oils,

conventional greases,

and marine engine oils

Improved oxidation

stability and volatility vs.

Group I

Greater process

flexibility for higher VI

Passenger car motor

oils, heavy duty engine

oils, natural gas engine

oils, automatic

transmission fluid (ATF),

long-life turbine oils,

automotive gear oils

Similar to Group II

but more

isoparaffinic in

nature

Generally not

produced beyond 8

cSt KV at 100°C

Low viscosity, top

tier engine oils;

automatic

transmission fluids,

and some food

grade/white oils

Uniform composition free of impurities Broad viscosity range possible through different oligomerization catalyst technologies Top-tier motor oils; synthetic industrial oils; high performance greases

Unique properties: phosphate esters as fire retardation lubricants Esters as aviation base stocks Complementary to highly paraffinic stocks for seal compatibility and solvency

Source: ExxonMobil Research & Engineering

6

Lubricant Trends Impact on Base Stocks

Diluent

Oil

Marine

Industrial

Heavy

Duty EO

Passenger

Car EO LN

Solvency

Hvy

Sats, Ox Stability

CCS

Noack

GI GII/III

Fuel Economy

Severe

Sub-Categories

Oil Life

Increasing Quality

Changing TBN

and Fuels

Composition

Constraints

Application Trends, Basestock Impact


7

Evolving Base Stock Supply and Demand

Demand Outlook

0%

300%

'10 '20 '30

Group I

Group II / III

• Group II & III demand growth

• Improved performance

• Increasing availability

• Cost competitiveness

• Group I demand declining

(esp. light viscosity)

• Performance constraints

• Sulfur limits

• Soot handling

• Oxidation stability

• Volatility limits

• Supply uncertainty


8

Global Base Stock Capacity*

• Since 1980’s: Group I decline; Group II & III growth

• Group 1 as percentage of total: 1970 – 99%; 2010 – ~65%

• Limited contributions from re-refined, alternative basestocks

0

500

1000

1970 1985 2000 2015

Gp III Gp II Gp I


9

Regional Base Stock Capacity

kBD


10

Base Stock & Additive Influence on Lubricants

Base stocks contribute significantly to finished lubricant properties

Primary impact Secondary impact

Lubricant Property Basestock Additive

Oxidation stability

Thermal stability

Solvency

Volatility

Low temperature flow

Deposit control

Demulsibility

Foam prevention

Antiwear / EP

Color

Source: ExxonMobil technical assessment

11

Catalytic

Rearrangement

Base Stock Processing

Crude

Oil

Physical Separation

Wax

Moderate Conversion Catalytic

Hydroprocessing

High Conversion Catalytic

Hydroprocessing

Chemical Synthesis

Group III+

VGO

GTL

Group IV (PAO)

Group III

Group II

Group I

Feed Manufacturing

Processes

Natural

Gas

C=C Steam

Cracking Naphtha

Source: Exxon Mobil Research & Engineering

12

Analysis of Typical Lube Crude

• Hydrocarbon distribution of good lube crude

• Basestocks molecules of interests fall in the 300º C to 700º C distillation range

• Refining is needed to create/isolate the desirable basestock components

Paraffin 1-ring naphthene Multi-ring naphthene Alkyl Aromatics NaphthenoAromatics Residue

Increasing Carbon Number

700oC 300oC


13

Base Stock Composition Impact

Molecule Structure VI Low Temp Oxidation Solubility Toxicity Process

n-paraffin

Excellent Poor

Excellent

Poor Low

Iso-paraffin Good/

Excellent

Good Excellent Good Low

Linear

naphthenic

Good Good Good Good Low

naphthenic Poor Excellent Good Excellent Low

substituted

monoaromatics

Poor Good Good Good Medium

polynuclear

aromatics

Poor Poor Very

Poor

Good Very

high

• Sulfur and nitrogen in crudes are reduced or practically eliminated in refinery processing.

• Sulfur can contribute to oxidation stability in conventionally refined base oil.

• Nitrogen can contribute to product color and is generally eliminated in processing.

Dewaxing

Hydro-

processing

Base

Stock


14

Sales Specifications

Manufacturing Specifications

Application Testing

Process Integrity

Product Design

Elements of Base Stock Quality System

PR

OD

UC

T IN

TE

GR

ITY

Ultimate responsibility for Lubricant Performance lies with the Lube Marketer

15

• Overall formulation cost

• Blends wide range of lubricants

• Minimize Complexity

• Quality

• Reliability

• Logistics

• Business continuity

• Viscometrics

• Engine Performance

• Approvals

• Global Slate

Lubricant Performance

Supply Availability

Affordability Broad

Application

Base Stock Selection Criteria

16

0

5

10

15

20

25

30

35

0 2000 4000 6000 8000 10000 12000

No

ack v

ola

tility

lo

ss, w

t %

CCS @ -30 deg.C

Blend Properties of Typical 4 and 6 cSt Basestocks

Group I

Group II

Group III

Group III+ PAO

• Noack vs. CCS charting for blends of 4 & 6 cSt base stocks.

• Low volatility and good low temperature performance are desirable.

CCS / Volatility of Base Stocks

17

Differentiators:

• Volatility

• Especially of light

component

• Heavy viscosity

component

• Dewaxing

• Type, extent impacts low

temperature performance

Not All Group II Base Stocks Are the Same

8

12

16

1000 2000 3000 4000 5000 6000

Base O

il N

oack V

ola

tility

, w

t%

Base Oil CCS at -25°C, cP

Group III

Group II

Gr II+/II

18

• Grp II+/II Base Stocks meet CCS-Volatility for wide range of PCEO & HDEO lubricants

Optimizing Blend Coverage with Grp II+/II

Note: Shaded areas represent EM technical assessment of base oil volatility / CCS vis ranges

required to blend the designated engine oil with a market general additive. The exact range

depends on the actual additive technology used. Solid lines represent blends of light and medium

viscosity base stocks within a given slate

Grp III base stocks

are “over-designed”

(VI, volatility give-

away)

Grp II light viscosity

base stocks have

high volatility, need

Grp III “corrector

stocks”

19

Broad Engine Oils Coverage

• Broad viscosity coverage with limited number of base stocks

• EHC slate allows read-across reducing development cost, increasing flexibility

• Limits the amount of more expensive Group III required

*Source: ExxonMobil assessment of publicly available information

kBD

PCEO HDEO

20

Well Designed Group II+/II Slate Reduces Need for

Group III Stocks

• Comparison of Grp III appetite

of three Group II base stock

slates

• Same Additive Technology

• Group III needed to meet specs

with “conventional” Group II

• Grp II+/II slate does not require

any Group III “corrector stock”

Source: ExxonMobil technical assessment

Base O

il C

om

positio

n,

%

21

Group II - Broad Industrial Oil Coverage

• Broad viscosity coverage with limited number of base stocks

• Blends well with Brightstock

• Can provide performance improvements in some products

*Source: ExxonMobil technical assessment of publicly available information. Relative volumes estimated AP

22

• Base stocks have a significant impact on lubricant performance, cost

and performance

• Thoughtful choice of base stock slate can enable a wide lubricant

blend coverage with low complexity

• Emerging lubricant requirements are calling for increased use of Grp II

base stocks

• A well designed Grp II slate can meet a broad range of lubricant

applications, while minimizing the need for Grp III corrector stocks

• Lubricant product integrity can be enabled through a multi-layer base

stock quality & integrity system

Importance of Base Stock Choice to a

Finished Lubricant Blender

23

©2015 ExxonMobil. ExxonMobil, the ExxonMobil logo, the interlocking “X” device and other product or

service names used herein are trademarks of ExxonMobil, unless indicated otherwise. This document

may not be distributed, displayed, copied or altered without ExxonMobil's prior written authorization. To

the extent ExxonMobil authorizes distributing, displaying and/or copying of this document, the user may

do so only if the document is unaltered and complete, including all of its headers, footers, disclaimers

and other information. You may not copy this document to or reproduce it in whole or in part on a

website. ExxonMobil does not guarantee the typical (or other) values. Any data included herein is based

upon analysis of representative samples and not the actual product shipped. The information in this

document relates only to the named product or materials when not in combination with any other product

or materials. We based the information on data believed to be reliable on the date compiled, but we do

not represent, warrant, or otherwise guarantee, expressly or impliedly, the merchantability, fitness for a

particular purpose, freedom from patent infringement, suitability, accuracy, reliability, or completeness of

this information or the products, materials or processes described. The user is solely responsible for all

determinations regarding any use of material or product and any process in its territories of interest. We

expressly disclaim liability for any loss, damage or injury directly or indirectly suffered or incurred as a

result of or related to anyone using or relying on any of the information in this document. This document

is not an endorsement of any non-ExxonMobil product or process, and we expressly disclaim any

contrary implication. The terms “we,” “our,” and "ExxonMobil" are each used for convenience, and may

include any one or more of Exxon Mobil Corporation, or any affiliate either directly or indirectly

stewarded.

Thank you

25

• Importance of Base Stock Choice to a Finished Lubricants Blender

• Base stocks are recognized as a key component to lubricant formulations, and a

careful selection of the base stock for each lubrication application is necessary. As

base stocks are generally derived from naturally occurring crude oils, a thoughtful

selection of raw materials, processes and controls is needed to ensure lubricant

performance and product integrity. Performance requirements for engine oils are

constantly evolving, and base stock producers are responding with optimal solutions

to enable lubricant performance. A discussion of the importance of base stocks

parameters and quality to a finished lubricant blender will be presented.

• Speaker Bio:

• A. (Bob) Duggal is a Global Basestocks Technical Advisor at ExxonMobil. A MS

Chemical Engineer by training, Bob’s career spans 20+ years in lubricant additives,

formulations and basestocks development and application. Bob has authored several

industrial patents and publications.

Abstract

importance of base stock choice to a finished lubricant ...€¦ · 2 competition law reminder...

Documents