The South African downstream petrochemicals products marketer and affiliate of Petronas, Engen, has taken delivery of its first consignment of high-grade Group 3 base oils, marketed under the Etro brand name, from parent company Petronas, in Malaysia.
An oil tanker, on its way from Melacca, Malaysia, where Petronas’s advanced Group 3 base-oils refinery is located, to Santos, Brazil, where Petronas has a base-oils terminal, stopped over in the Port of Durban late last month to deliver Engen’s first cargoes of Etro 4 and Etro 6 base oils.
Engen Lubricants marketing manager Adnaan Emeran explains that the company now finds itself in a comfortable position, with its supply of high-performance Group 3 base oils being secured for use in the blending of oil products that meet the latest original-equipment manufacturer (OEM) engine specifications.
Emeran says that engine oils form the largest category within the local lubricants market and that these were traditionally created from Group 1 base oils, which are less refined. However, new oil specifications from OEMs and more-stringent environment emissions legislation are increasingly driving demand upwards for refined oils in Groups 2 and 3.
The choice of base oils is an important factor in dealing with engine emissions, Emeran notes. Group 3 base oils and, to a lesser extent, Group 2 base oils, contain less sulphur and aromatics than Group 1 base oils. Both sulphur and aromatics form emissions during combustion. Sulphur also affects emission control systems connected to engines; therefore, OEMs are pushing to reduce its presence, Emeran says.
“To meet the new standards, oil formulators can use a combination of Groups 1 and 3 base oils, or a combination of Groups 2 and 3 base oils. South Africa has traditionally had access to Group 1, through local manufacturing, and Group 3 base oils through imports,” he adds.Supply Challenges
Engen sources Group 1 base oils locally from its own Group 1 base-oils facility, which it shares with two other partners, while Engen’s Group 3 base oils have been historically imported from third-party sources.
However, Engen is now also sourcing its Group 3 base-oils requirements from parent Petronas’s plant at Melacca, Malaysia. Emeran reports that the facility in Melacca manufactures about 300 000 t of Etro base oils a year.
“Etro base oils were at first sold on the open market; however, since the creation of Petronas’s global lubricants business, known as Petronas Lubricants International (PLI), increasing amounts of the Etro base oils are placed within PLI for the com- pany’s own use,” Emeran reports.
Engen Lubricants represents PLI in Africa.
Meanwhile, Emeran points to the increasing demand for Group 3 base oils, owing to the significant impact engine oils have on engine emissions. The increased demand results in volatile base-oils prices and decreased supply security from oil merchants.
“We have seen base-oils pricing behaving erratically in the past ten years. The pricing of base oils is influenced by many external factors, including energy prices, plant maintenance issues, adverse weather conditions and the global financial climate, besides other factors.
“These factors, coupled with the current intermittent availability of Group 3 base oils, are making it difficult for lubricant manufacturers, dependent on merchant marketers for their base-oils requirements, to maintain a steady supply of base oils,” Emeran concludes.