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Pentas Flora launches re-refined Group II N150 base oil

  • Spanish Market: Oil products
  • 11/09/24

Malaysia-based Pentas Flora launched its re-refined Group II N150 base oil grade today, in line with a shift in industry trends towards premium-grade base oils.

The re-refiner started producing Group I SN 150 in 2022 but has converted production to Group II base oils with high-viscosity index from mid-August. The re-refiner also has the capability to produce Group III base oils depending on market demand.

Its re-refining facility at Banting, Selangor has a capacity of up to 30,000 t/yr. Pentas Flora collects up to 40,000 t/yr of used motor oils from nine collection points, targeting to expand this to 28 collection points by 2026.

Most Asian re-refined base oils (RRBO) produced are Group I grades. The transition from Group I to Group II and III RRBO has been dictated by what has been happening in the lubricant industry, which is moving towards using higher performing base oils, said Pentas Flora technical director H Ernest Henderson.

"The industry wants to bring in oils that have better fuel economy, extended drain capabilities, reduce emissions and enhance fuel ability," Henderson said. "So over the years we have seen a shift from older performing standards to new performance standards. These are now demanding the use of higher VI and higher quality base oils."

"And because re-refining basically takes engine motor oil and recaptures and re-establishes the original base oil within those formulation. The fact that we are now using higher performance motor oil using Group II and III… that in turn becomes feedstock which allows us to capture and produce higher quality base oil," he added.

The shift driven by feedstock change is complemented by technology. Pentas Flora's re-refining processes involves distillation to separate the base oil components from the used motor oils, then purification using solvent extraction and lube polishing processes.

Pentas Flora started with Group I RRBO initially because of sulphur content exceeding the Group II and III specifications. But with a lube polishing system installed in August it has been able to increase saturates and reduce sulphur content to meet Group II and III classifications.

Lower carbon footprint

RRBO has been gaining traction in recent years with governments around the world pushing for sustainability and a more circular economy. More companies are also placing more emphasis on environmental, social and governance objectives. So blenders are increasingly looking to include RRBO in finished lubricants.

RRBO takes less energy to produce than virgin base oils, reduces carbon dioxide emissions and is therefore more environmentally friendly and sustainable, said Henderson.

Pentas Flora is one of the few re-refiners in Malaysia, with China and India bigger markets for RRBO. India in April this year implemented the Extended Producer Responsibility for Used Oil regulation where producers of base oils and lubrication oils and importers of used oil have a recycling target of 5pc in 2024-25. This target will progressively increase to 50pc from 2030-31 onwards.


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11/09/24

US summer gasoline demand lagged pre-Covid levels

US summer gasoline demand lagged pre-Covid levels

Houston, 11 September (Argus) — US gasoline demand ended the 2024 summer driving season well below pre Covid-19 pandemic norms and at the lower end of average post-Covid levels. US summer driving season gasoline demand — measured from the last Monday in May to the first Monday in September — averaged 9.1mn b/d this year, according to US Energy Information Administration (EIA) weekly demand data released Wednesday. That is up by 49,000 b/d from the same period in 2023 and up by 291,000 b/d from 2022 but well below the 9.4mn b/d levels in the summer of 2021 when demand surged in the wake of the pandemic as the US economy reopened. In the ten years prior to the pandemic, weekly US gasoline demand averaged 9.3mn b/d in the peak summer months ( See chart) . Even as Americans drive more than ever , demand has failed to keep pace, likely due to increases in the efficiency of internal combustion engines and fully-electric vehicles (EVs) and hybrids comprising a greater portion of the automotive fleet. The weekly EIA data released Wednesday is less accurate than the monthly numbers published by the agency at a lag, but those too have shown summer demand below pre-pandemic levels . Gasoline demand was 9.1mn b/d in June, the most recent monthly data, down by 246,000 b/d from the same month last year and down by 583,000 b/d from June 2019. Future outlook lowered The agency has also downgraded its demand outlook in recent days. On Tuesday it lowered its demand, price and inventory expectations for road fuels such as gasoline in its monthly Short-Term Energy Outlook (STEO). The agency revised down its expectations for gasoline demand in the second and third quarters of this year by 1.1pc and 0.4pc respectively to just over 9.1mn b/d. Demand in the second quarter of next year is expected to be 30,000 b/d higher than this year, but third quarter demand is expected to be 90,000 b/d lower, helping drive an overall 20,000 b/d gasoline demand decline next year. Headed into the third quarter, US refiners have been cutting runs after weaker-than-expected summer gasoline demand raised inventories and narrowed margins. Refiners also take plants offline for maintenance in the fall amid seasonally narrower margins. Access to the export markets could be a hedge against an uncertain domestic demand outlook, and several coastal refineries up for sale in North America could give a buyer access to global markets for the road fuel. US refiners have steadily exported more gasoline since about 2007, sending 298mn bls overseas last year compared to 46mn bls in 2007. By Nathan Risser US summer driving season gasoline demand ’000 b/d Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

WMO puts likelihood of La Nina at 60pc from October


11/09/24
11/09/24

WMO puts likelihood of La Nina at 60pc from October

London, 11 September (Argus) — There is a 60pc chance of La Nina weather conditions emerging from October to February next year, the World Meteorological Organisation (WMO) said today. The chance of the El Nino pattern redeveloping during that time are "negligible", it said. La Nina generally leads to a cooling effect on a global level, while El Nino typically has the opposite effect. The weather patterns are naturally occurring, but "are taking place in the broader context of human-induced climate change" that is increasing temperatures globally, the WMO said. The past nine years have been the warmest on record, even with the cooling influence of a La Nina period from 2020 to early 2023, the organisation noted. "Even if a short-term cooling La Nina event does emerge, it will not change the long-term trajectory of rising global temperatures due to heat-trapping greenhouse gases in the atmosphere", WMO secretary-general Celeste Saulo said. Last month was the joint-hottest August on record , and was on average 1.51°C above pre-industrial levels. The Paris climate agreement seeks to limit global warming to "well below" 2°C above pre-industrial temperatures, and preferably to 1.5°C. Global temperatures have been at or close to record highs to date this year and it is "increasingly likely that 2024 is going to be the warmest year on record", EU earth-monitoring service Copernicus said last week. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

No change to oil use soon, transition just began: Appec


11/09/24
11/09/24

No change to oil use soon, transition just began: Appec

Singapore, 11 September (Argus) — Fossil fuel use is not going to change much in the next few years as the energy transition is just beginning, delegates said at the S&P Global Commodity Insights Appec conference in Singapore this week. About 84-85pc of our energy is fossil fuel and that number has remained unchanged for the last 30 years, trading firm Gunvor chairman Torbjorn Tornqvist said. "If I look around, what I see today, is not going to be much different [in 2030]." "The oil industry is being blamed for everything in this respect — the solution seems to be just stop drilling," Tornqvist said. "Clearly, that is not the way." US private equity fund Carlyle's chief strategy officer of energy pathways Jeff Currie thinks the world is "not even in chapter one" of the energy transition story. "We're still, I think as Torbjorn says, at 84pc fossil fuels — that means we're in the introduction. We're not even in chapter one. We got a long way to go." The problem seems to be the "unrealistic targets" that countries and companies have set for themselves in their quest to move away from fossil fuels and lower emissions. "Or you put the target, but you don't put the resources to achieve those targets," Tornqvist said. "It doesn't matter how much we want it. The cost of the energy transition is not fully understood, and it needs to be communicated." But there are ways to go about this. "Solar power is, I think, actually extremely cheap," Tornqvist said. "So there are solutions. The problem is it's not big enough." Another issue is that the transition away from fossil fuels is being largely driven by subsidies, Currie added. "Looking at all the politics and elections everywhere in the world, it's more driven by subsidies — more carrots and less sticks." Southeast Asian countries like Singapore and Thailand have turned to carbon taxes to get producers and consumers to factor in the cost of carbon when making decisions — but the question is whether they should be set higher to be effective. "That would be optimal, but it's unlikely to happen," Currie said. "I think market-based solutions are becoming a thing of the past these days." The pace of renewables growth in Asia is an issue, meaning oil may need to be around for longer. "I strongly believe even in 2050, oil products will take a very important and critical role in the society, especially for Japan," Japanese refiner Taiyo Oil's president and chief executive Takahiro Yamamoto said. "We have very limited renewable energy in our country at this moment." Yamamoto is not worried about oil demand falling even as Japan's population continues to shrink because of the number of refineries that have shut down in the country, threatening oil product supply including transport fuels like conventional jet fuel. "So many refineries have been shut down in the past 10 years. I'm very anxious about how we can keep this supply ability as a country," Yamamoto said. "That's my concern, rather than the shortage of demand or consumption decreasing." But delegates agree it is going to take a while to get to net zero and not everyone is going to get there at the same time. "I think it's a race that will take from now [a] minimum of 10 years," said Kuwait's state-owned KPC managing director of international marketing Shaikh Khaled Ahmad Al Sabah. Not everyone can afford it in some countries, he added. "It needs a lot more investment. It will have a lot of cost. Economics is a big, strong factor in this one." By Reena Nathan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Port of NOLA to close prior to TS Francine


10/09/24
10/09/24

Port of NOLA to close prior to TS Francine

Houston, 10 September (Argus) — The port of New Orleans (Nola) in Louisiana and terminal operators there are limiting operations today in preparation for a full closure Wednesday as tropical storm Francine passes. Terminal operators are expected to reopen on 12 September after damages are assessed. United Bulk Terminals (UBT) issued a force majeure this morning from the Davant terminal on concerns for employee safety. The company did not disclose a timeline for reopening. UBT specializes in coal and petcoke along with other commodities. Associated Terminals will suspend operations 11-12 September and will assess damages on 13 September. The National Weather Service forecasts Francine to make landfall tomorrow on the Louisiana coast as a hurricane. Commodities including petcoke, coal, agriculture and fertilizer are likely to be affected by the port closure. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Italy's Falconara refinery widens crude slate


10/09/24
10/09/24

Italy's Falconara refinery widens crude slate

Barcelona, 10 September (Argus) — Italian refiner API is widening the crude slate at its 83,000 b/d Falconara refinery, joining other Mediterranean operators in seeking new grades because of political disruption and ownership changes. Falconara was a keen importer of Iraqi Kirkuk crude between 2019-23, before a dispute between the Kurdistan Regional Government (KRG) and Turkey halted exports. In 2022 Falconara received 33 crude cargoes, all but five of which were Kirkuk grade. Since the second half of July this year Falconara received six cargoes, all of different grades. August receipts were 75,000 b/d, up from 50,000 b/d a month earlier, according to Argus tracking. Deliveries were 35,000 b/d of Saudi Arab Light and 40,000 b/d of Libyan crude, split between Es Sider and Sarir. The latter was the first at Falconara in eight years. In September Falconara has taken 1mn bl of Kazakh Kebco and, according to Kpler data, a first cargo of 125,000bl cargo of Italian onshore Val'd Agri. At 38.4°API and 2.1pc sulphur Val'd Agri is close to Kirkuk's 36°API and 2pc sulphur, although output is far lower. Argus assessed Falconara's receipts at 55,000 b/d in January-August. The slate was a weighted average gravity of 30.6°API and 2pc sulphur content, compared with 31.8°API and 2pc sulphur overall last year and 35.6°API and 1.8pc in 2022, when Kirkuk dominated. Other regional refiners have changed their sourcing. Italy's Saras is importing a first cargo of Azeri Light since February 2022 , with light sweet Libyan alternatives halted by conflict. It may take different grades as trading firm Vitol becomes its new owner, after Trafigura had supplied large amounts of US WTI. Greece's Motor Oil Hellas (MOH) had to find an alternative to a 1mn bl cargo of Basrah Medium that was attacked in the Red Sea on the way to its 180,000 b/d Corinth facility. MOH opted for a first cargo of Guyanese Unity Gold. Helleniq Energy has changed its slate in the absence of Kirkuk and sanctioned Russian Urals, and it took first cargoes of Guyanese crude , and Ivory Coast crude and struck a deal with Iraq for Basrah grades. . Spain's Repsol is boosting cargoes of heavy Venezuelan crude under a sanctions waver and API's Trecate refinery has increased receipts of Nigerian Qua Iboe since it bought out ExxonMobil. Argus estimates Italian seaborne crude imports — excluding the northeast terminal of Trieste — at 1.13mn b/d in August, a four-month high and up from 1.06mn b/d in July. For a seventh consecutive month, Azeri BTC Blend and Libyan grades were Italy's largest imports, at 205,000 b/d and 195,000 b/d respectively. Nigeria and Caspian CPC Blend each supplied 125,000 b/d and Arab Light 115,000 b/d. By Adam Porter Italy crude imports mn bl Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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