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VHVI Base Oils from Fuels Hydrocracker Bottoms by W. S. Moon, Y. R. Cho, C. B. Yoon and Y. M. Park SK Corporation, Korea Abstract There is a need in recent markets for significant improvements of base oil quality. In particular, engine oils require high quality base oils in order to meet tight volatility specifications such as ACEA A3/B3 and proposed ILSAC GF-3. Formulations based on VHVI base oils from fuels hydrocracker bottoms may be more cost effective than other high quality base oils like PAOs in solving the recent market problems. The severe hydrocracking and hydro-isomerized dewaxing process (named UCO lube process) developed by SK corporation is one of economic hydroprocessing routes to produce high quality VHVI base oils from fuels hydrocracker residue. Product quality of UCO lube process is similar to PAO in general performances. According to an application study, 15% PAO in ACEA A3/B3 SAE 10W/40 formulation was able to be replaced with 18% VHVI base oils from the UCO lube process and severe application like API CG-4/SH SAE 10W/40 heavy duty diesel oil was possible to develop utilizing the VHVI base oils. The demand of VHVI base oils is increasing rapidly because of their availability increase. The supply capability of VHVI base oils has big potential while their price may not be so high.. Introduction In the recent past there has been a clear change in automotive engine oil to lighter viscosity multigrades for achieving better fuel economy and low temperature performance. In North American market, this trend has been most strongly driven by CAFE (Corporate Average Fuel Economy) regulations. In Europe, the move to lighter viscosity multigrades has been slower than North American market, but this will be continued by regulations and product specifications. The market in Asia, especially Japan and Korea, has followed this direction both for export of their passenger cars and by their internal regulations.

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All these lead to increased use of high quality base oils like PAOs or VHVI (Very High Viscosity Index) base oils. Top-tier European SAE 10W-40 engine oil formulations have to contain high quality base oils in some amount in order to meet the tight volatility specification. The amount of high quality base oils is normally kept to minimum to make the lowest cost formulations due to high price of those special base oils in Europe. Proposed ILSAC GF-3 specification is also positive for the potential use of high quality base oils. Use of severe hydrocracking base oils, VHVI base oil, may be beneficial to overcome the recent market needs. Moreover, the price of these VHVI base oils may not be so expensive because their supply is increasing rapidly as their availability increases. This paper discusses a cost-effective hydroprocessing route to produce high quality VHVI base oils, their physical properties and the most economic formulation technology to produce top-tier automotive engine oils. And also we carefully predict the future of VHVI base oils. 2. New requirements for lube base oils Historically, the lubricant development used to be judged separately by equipment, oil and additive industries. Recently base oil refining processes and additive formulation technologies coupled with new market needs are moving toward more interdependence. Lubricant additives are frequently used to improve base oil performance to meet lubricant specifications. But the demand of lubricant industry will become so tight that this approach will no longer be useful. The major driving forces to change automotive lubricant industry are higher fuel economy, further low temperature improvements, longer drain intervals and emission system durability. Table 1 shows recent market needs related to base oils in automotive engine oils. Table 1 Recent market needs in automotive engine oils Market Needs Requirements of Base Oils North America

Low oil consumption Low temperature performance Fuel economy

Low volatility Good low temperature fluidity Inherent high viscosity index

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Good friction behavior Europe

Low oil consumption Shear stability Longer life

Good oxidation stability Low aromatic content High flash & fire point

Common

Environmentally friendly Safety

Increased use of lighter viscosity multigrades for achieving better fuel economy and low temperature performance has made base oil properties as keyfactors in lubricant design. Today, more severe demand for volatility and low temperature properties requires full integration of base oils and formulation technologies. And the conventional mineral base oils alone are no longer adequate to meet the top requirements among North American and European specifications, especially volatility. These trends will be further tightened in the future specifications like ILSAC GF-3. An economic route for VHVI base oil manufacture A high quality lubricant base oil, VHVI base oil, is a hydrocarbon lubricant having inherent viscosity index of 120 or above. There are several approaches to producing VHVI base oils. Generally, VHVIbase oils are produced by severe hydro-cracking of vacuum distillate fractions in the fuel hydrocracker. Since the late 1970s, BP has been producing a VHVI base oil from the residual fraction of their fuels hydrocracker in Lavera, France. This hydrocracker operates on a once-through single-stage basis at 90% weight conversion , which is very high in severity compared with hydrocracking units designed to optimize lube yields. The residue below the gas oil draw off is within the lube boiling range and has low aromatics and hetero-atoms. After vacuum distillation, the hydrocracker residue is conventionally solvent dewaxed to produce finished base oil. Fuchs(DEA) also produces a VHVI base oil in Germany from a hydrocracker residue. The other route of VHVI base oil production is hydro-isomerization of paraffin waxes. The first company to commercialize this route was Shell at Petite Couronne, France , in the late 1970s. Much more recently, it has been installed by Exxon at Fawley, U.K. The concept of the process is that slack

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wax made in conventional solvent dewaxing process is converted to branched chain paraffins under hydro-isomerization conditions with appropriate catalyst. Although isomerization of the wax takes place, it has still some unconverted wax materials because the conversion rate of the process is about 80 - 85%. To improve low temperature fluidity of finished products , the residual waxes are removed by conventional solvent dewaxing. Gas, Naphtha and gas oil are to be formed as by-products. Gas-to-liquids conversion technologies are providing another options to PAO orVHVI based lubricants. Shell commercialized its process in 1993 and is producing a variety of products including a high quality lube base oil feed (paraffinic wax) from natural gas. Shell uses this waxy feed to produce a VHVI base oil at refineries in Yokkaichi, Japan and Petit Couronne, France. These base oils are called XHVI (Extra High Viscosity Index) base oil because of their inherent viscosity index being above 140. They use this XHVI base oil in high quality lubricants and market as synthetic oils. South Africa’s SASOL also has a gas-to-liquids technology for producing fuels and lube base oils. By the definition, VHVI base oils are most usually classified as mineral base oils, not synthetic base oils. And also VHVI base oils prepared from slack wax of solvent dewaxing process are classified as mineral oils because they are been still prepared from crude oil. VHVI base oil prepared from paraffinic waxy feed of converting natural gas has basically identical properties to VHVI base oils produced from slack wax. However, the distinction between mineral and synthetic is becoming distinctly blurred for this base oil. SK Corporation (formerly Yukong Limited) has developed a new Technology which offers the refiners who operate fuels hydrocrackers an alternative to produce high quality VHVI base oils from a variety of crudes. The first commercial facility, designed by Raytheon Engineers & Constructors, came on stream at SK’s Ulsan refinery in October 1995 and produces 3,500 bpd of VHVI base oils named YUBASE. SK’s UCO lube process is a unique, patented process to produce a VHVI base oil from fuels hydrocraked residue, which we call UCO (unconverted oil). The point of this process is the recycling of hydrocracker bottom oils and integration of fuels hydrocracker with lube process to produce fuels and lube base oils economically. And also the UCO lube process is the first one utilized catalytic-dewaxing of fuels hydrocracked residue . The downstream dewaxing technology used to be the MLDW process. In order to improve dewaxed oil yield and quality, the

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catalyst was replaced with a new isomerization type dewaxing catalyst in June 1997. Some refineries are known to be producing VHVI base oils from fuels hydrocracker bottom oils. However, those plants have several disadvantages caused by uneconomic integration of the fuels hydrocracker with the lube process, such as : - Storage and transportation of the waxy fuels hydrocracker bottom oils between the hydrocracker and the conventional lube oil plant. - Cooling and reheating of the hydrocracker bottoms stream. The objective of the development of the UCO lube process was to solve the integration difficulties and develop a process which uses the hydro-cracker bottom oils efficiently, while improving the overall utilization on the hydrocracker as well as the lube base oil plant.

VacuumDistil'nUnit

HDTReactor

Vacuum StripperReduced

Crude

Fuels

Fuel Hydrocracking Complex

HDCReactor

VGO

VR

UCO

Gases

HDWReactor

YUBASE

Figure 1 SK's UCO Lube Plant Process Scheme

Vacuum Stripper

HDTReactor

Lube Hydrodewaxing Complex

VacuumDistil'nUnit

The UCO lube process results in dramatically low investment and operating costs compared with conventional processes. The following estimated costs are based on a plant for the production of 5,000 bpd of lube base oil from an existing fuels hydrocracker.

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UCO Conventional Process (1) Process (2) Investment Cost, US$ million (3) 80 160 Operating Cost, US $/bbl product (4) 21.8 39.9 Note (1) : excludes fuels hydrocracker (2) : includes vacuum distillation, solvent refining, hydrofinishing and solvent dewaxing (3) : inside battery limits US Gulf Coast, 1998 (4) : includes utilities, chemicals, labor, depreciation, maintenance, taxes, insurance and overhead, 15% return on investment. Product quality of UCO lube process The UCO lube process produces 3 viscosity grades in 2 quality levels with viscosity index in the range of 110 - 130. Table 2 shows some properties of those base oils. The UCO process products have following advantages ; high viscosity index, low volatility, excellent oxidation stability, low aromatics and low hetero atoms. Table 2 Typical properties of UCO lube process products YUBASE-3

(API GroupⅡ) YUBASE-4

(API GroupⅢ) YUBASE-6

(API GroupⅢ) Physical Characteristics Viscosity @40’C, cSt Viscosity @100’C, cSt Viscosity index Flash point, ‘C Pour point, ‘C CCS viscosity @-20’C, cP CCS viscosity @-25’C, cP Noack volatility, wt%

12.3 3.1 115 196 -24 <500 <500 40

19.1 4.2 126 220 -15 <500 770 17.5

32.5 6.0 133 234 -15 1230 2220 7.8

Chemical Characteristics

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Total acid no., mgKOH/g Sulfur, ppm Nitrogen, ppm Composition, wt% (1) Paraffins Naphthenes Aromatics

<0.03 <10 <1 41.0 58.0 1.0

<0.03 <10 <1 47.4 51.5 1.1

<0.03 <10 <1 55.5 43.7 0.8

Oxidation Performance RBOT, min (2)

440

480

520

Note (1) : ASTM D 2549 and ASTM D 2786 (2) : ASTM D 2272 oxidation life of oils formulated with 0.3wt% Phenolic Antioxidant (di-tert-buthyl phenol). The base oils produced by the UCO lube process have many desirable properties as lube base oils over those produced by conventional solvent refining or lube hydrocracking processes. Table 3 shows a comparison among various kinds of typical 150N grade base oils. Table 3 Property comparison of 150N grades Solvent

Refined Lube Hyd. Cracking

VHVI YUBASE 6

Synthetic PAO 6

Physical Characteristics Viscosity @40’C, cSt Viscosity @100’C, cSt Viscosity index Flash point, ‘C Pour point, ‘C CCS viscosity @-20’C, cP Noack volatility, wt%

30.1 5.1 95 216 -12 2100 17.0

29.6 5.1 99 222 -12 2000 16.5

32.5 6.0 133 234 -15 1230 7.8

31.3 5.9 135 240 -60 900 7.0

Chemical Characteristics Sulfur, ppm Nitrogen, ppm Composition, wt% (1) Paraffins

5800 12 27.6

300 4 33.4

<10 <1 55.5

<10 <1 100

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1-ring Naphthenes 2-ring Naphthenes 3-ring naphthenes 4-ring naphthenes 5-ring naphthenes Aromatics

20.8 25.9 2.9 0.3 0.0 22.5

30.2 17.2 9.3 5.1 1.1 3.5

20.4 12.1 9.1 2.1 0.0 0.8

Note (1) : ASTM D 2549 and ASTM D 2786 As our preliminary study shows in Table 4, the UCO process product has superior quality in main performance areas such as viscometrics, low temperature properties, volatility and oxidation performance. Base oil properties are depend on composition ratio of saturates, aromatics and hetero-atoms. The main components of the UCO process product are paraffins and mono-naphthenes, which give good viscosity-temperature behavior and excellent oxidation stability. Oxidation stability or anti-oxidant response is important in the performance of most lubricants. Screening test results by RBOT and PCT demonstrate that the UCO process product has much better oxidation stability than conventional mineral base oils. The UCO process products contain much higher saturates and lower sulfur which are beneficial for oxidation stability and give good response to antioxidants, respectively. The narrow hydrocarbon distribution of the UCO process products give very low volatility, which is similar to PAO’s. Table 4 Comparison of 150N grades in bench performances Solvent

Refined Lube Hyd. Cracking

VHVI YUBASE 6

Synthetic PAO 6

Low temperature property CCS viscosity @-20’C, cP @-25’C, cP MRV vis. @-30’C, cP (1) @-35’C, cP

2100 4500 8840 21720

2000 4000 7270 15540

1230 2220 4430 8500

900 1450 2180 3510

Volatility Noack volatility, wt% %off @371’C by Sim-Dis.

17.0 10.4

16.5 8.3

7.8 <2

7.0 <1

Oxidation Performance

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RBOT, min (2) PCT, mg (3)

185 158

250 140

520 50

533 32

Note (1) : Apparent viscosity by Mini Rotary Viscometer of oils formulated with 0.5wt% PMA type PPD. (2) : ASTM D 2272 oxidation life of oils formulated with 0.3wt% Phenolic Antioxidant (di-tert-buthyl phenol). (3) : Panel coking tendency of oils formulated with 13.0wt% ACEA A3/B3 performance additive and 10wt% OCP type VII. PCT ran for 3hrs at 100℃ of oil temp., 300℃ of panel temp. and 20/20sec. of stop/go time. According to preliminary study of UCO lube process products in general performance areas, the UCO lube process products as VHVI base oils are expected to be satisfactory for all straight forward applications. The VHVI based lubricants offer advantages over conventional mineral based lubricants in respect of many properties as Table 5. Table 5 VHVI based lubricants advantages Property / Improvement Reason Better low temperature properties Low oil consumption and higher flash/fire points Better thermal and oxidative stability Good friction behavior and wear reduction Environmentally Friendly

Low wax content, High VI Low volatility, Narrow boiling ranges High saturates, Good additive response High VI, High paraffins, Good additive response Low volatility, Low aromatics

Applications of UCO process products Case 1. European passenger car motor oil One of the advantages of the VHVI base oils is their excellent cost-performance feature. Top-tier European SAE 10W/40 engine oil formulations need to be blended with some high quality base oil to meet the tight volatility

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specification. The amount of high quality base oil is normally kept to a minimum to make the low cost formulation. The economic success of such formulations depends on the proper combination of conventional base oils and high quality base oils such as PAOs or VHVI base oils. The careful selection of VHVI base oils is necessary to improve economics of SAE 10W/40 engine oil formulations by replacing PAOs by VHVI base oils. In order to make SAE 10W/40, ACEA A3/B3 grade engine oils, about 15wt% of PAO-6 should be blended into the finished products. According to our study, the 15% PAO was able to be replaced with 18wt% VHVI base oils from the UCO lube process. The base oil interchange guideline for ACEA engine oils, permits the replacement from API Group IV base oil (PAO) to Group Ⅲ base oil (VHVI base oil) up to 30wt% with only one additional engine test. Some critical engine tests were conducted both for the performance qualification and for an OEM approval. Tables 6 and 7 give comparisons of physical properties and some engine performance between VHVI and PAO blended engine oils. The VHVI and PAO blended oils are equivalent in properties like volatility, low temperature properties and high temperature viscosity. Both in the ASTM Sequence VE engine test which is the minimum engine test by ACEA base oil interchange rules and in VW 1302 engine test which is one of the engine tests to qualify VW 500/505 specifications, the VHVI blended oil has certainly good results satisfying all the specification of detergency, oxidation performance and wear performance. Consequently, VHVI base oils from fuels hydrocracker bottoms are more cost effective than PAO based oils in achieving synthetic performances of top quality European 10W/40 engine oils. Table 6 Properties of 10W/40 A3/B3 type formulations VHVI based

oil (YUBASE-5)

PAO based oil (PAO-6)

10W/40 A3/B3 Specification

Formulation (wt%) SR 150N VHVI-5 (YUBASE 4+6) PAO-6 DI package additive

58.4 18.0 - 13.0

62.0 - 15.0 13.0

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VII (with PPD) 10.6 10.0 Properties Vis. @100’C, cSt VI CCS Vis. @-20’C, cP MRV Vis. @-30’C, cP HTHS Vis., cP Noack volatility, wt% Pour point, ‘C TBN, mgKOH/g

14.5 151 3270 11900 3.90 11.8 -33 8.2

14.5 152 3210 11600 4.06 12.1 -33 8.2

12.5 - 16.3 3500 max. 60000 max. 3.5 min. 13.0 max.

Table 7 Engine test results of 10W/40 A3/B3 type oils VHVI based oil

(YUBASE-5) PAO based oil (PAO-6)

Specification

Seq. VE engine test Average sludge Rocker arm cover sludge Average varnish Piston skirt varnish Average cam wear, um Maximum cam wear, um Oil screen clogging, % Stuck compression rings

9.1 9.1 5.0 6.6 0.6 1 0 none

9.1 9.0 5.0 6.7 0.8 1 0 none

9.0 min. 7.0 min. 5.0 min. 6.5 min. 130 max. 380 max. 20 max. none

VW 1302 engine test Piston merit Viscosity increase, % Piston ring wear, mg Crankshaft bearing wear, mg Camshaft bearing wear, mg Con. rod bearing wear, mg Oil consumption, g/kwh Ring stick

86 24 39.9 9.9 8.9 8.2 0.53 none

85 31 36.2 8.3 2.5 12.5 0.52 none

70 min. 40 max. 150 max. 100 max. 30 max. 30 max. 0.55 max. none

Case 2. North American heavy duty diesel engine oil

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SAE 10W/40 oils in the diesel engine offer many advantages over SAE 15W/40 oils. Among them the most particular one is wear reduction just after engine starting by reducing oil supply time at low temperature. While SAE 10W/40 oils have many advantages in the diesel engine lubrication, engine manufacturers are still reluctant to use lighter viscosity oils in the diesel engines, which sometimes result in higher oil consumption and more bearing wear than SAE 15W/40 oils. However, these possible problems could be prevented by using the VHVI base oils. Two diesel engine oils of API CG-4 performance are compared : one is a SAE 15W/40 oil with conventional mineral base oils and the other is a SAE 10W/40 oil with VHVI base oil from fuels hydrocracker bottoms in the UCO lube process. Their properties and engine performances are given in Table 8 and Table 9, respectively. The Noack volatility of SAE 10W/40 oil is 8.7wt%, which is even less than that of SAE 15W/40, 11.1wt%, blended with 150 solvent neutral and 500 heavy solvent neutral. The SAE 10W/40 oil gives reduced oil consumptions in both Caterpillar 1N and Sequence ⅢE engine tests, which are related to its low volatility. Modern diesel engines require lubricants with excellent soot control ability. Mack T-8 and GM 6.2L engine tests evaluate soot-induced viscosity increase and soot-induced wear, respectively. The viscosity increase and the filter plugging with increasing soot-loading are much higher for the conventional mineral based oil than for the VHVI based oil. In the GM 6.2L engine test, wear is at the same level for both oils, as shown in Table 9. In case of the VHVI based SAE 10W/40 oil, low temperature startability and pumpability are also excellent compared with the conventional mineral based 15W/40 oil as shown in the CCS (cold cranking simulator) viscosity. Table 8 Properties of API CG-4/SH type formulations VHVI based

oil (SAE 10W/40)

SR based oil (SAE 15W/40)

Specification

Formulation (wt%) SR 150N SR 500N

- -

66.9 10.0

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VHVI-6 (YUBASE-6) DI package additive VII (+PPD)

76.2 13.3 10.5

- 13.6 9.5

Properties Vis. @100’C, cSt VI CCS Vis. @ ( )’C, cP HTHS Viscosity, cP Noack volatility, wt% Pour point, ‘C TBN, mgKOH/g

14.2 153 3280 (-20) 4.1 - 8.7 -30 10.7

14.9 139 3250 (-15) - 4.1 11.1 -30 10.7

12.5 - 16.3 3500 max. 2.9 min.(10W) 3.7 min.(15W)

Table 9 Engine test results of API CG-4/SH type oils VHVI based oil

(SAE 10W/40) SR based oil (SAE 15W/40)

Specification

Caterpillar 1N engine test Weighted demerits no. Top groove fill, % Top land heavy carbon, % BSOC, g/kw.hr

183.7 7 0 0.12

190.0 10 0 0.23

286.2 max. 20 max. 3 max. 0.5 max.

Seq. ⅢE engine test 375% vis. increase, hrs Average sludge Piston skirt varnish Oil ring land deposits Avg. cam + lifter wear, um Max. cam + lifter wear, um Oil consumption, l

80.4 9.54 9.44 7.87 11.1 46 1.40

70.3 9.58 9.45 8.00 19.4 25 2.35

64.0 min. 9.2 min. 8.9 min. 3.6 min. 30 max. 64 max. 5.1 max.

Mack T-8 engine test Vis. increase @3.8% TGA soot, cSt Filter ΔP, psi

3.58 6.2

4.78 9.0

11.5 max. 20 max.

GM 6.2L engine test Average wear, mils

0.17

0.16

0.45 max.

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Case 3. Specialties - white oil The properties of white oil produced in the present process are mainly determined by the quality of feedstocks. The base oils from fuels hydrocracker bottoms are very good feedstocks for producing high quality white oils. The base oils from UCO lube process are inherently classified into technical white mineral oils satisfying FDA 21 CFR 178.3620(b) regulation. Therefore, the UCO process products can be used in indirect contact food processing and packaging areas. In order to use as food grade white oils defined in 21 CFR 172.878 and 21 CFR 178.3620(a) regulations, UCO process products have to be further refined in conventional white oil processes. In the acid treating process for white oil production, the base oils from the UCO lube process as white oil feedstocks provide higher yields, above 95%, than the conventional base oils, about 90%. According to a recent toxicological research in laboratory animals exposed to white oils, it was demonstrated that normal paraffins are apparently more readily absorbed than branched isoparaffins and cyclic alkanes. And also hydrocarbons of below C18 are more readily absorbed than above C18. In case of white oils used for the manufacturing of foods and for the medicine or cosmetic industries, these hydrocarbon composition should be warranted. Therefore there is a need to decrease the normal paraffin content and/or increase the isoparaffin content of the white oils. The white oils from the UCO process products have high proportion of isoparaffins due to selective isomerization of the normal paraffins to isoparaffins through the hydroisomerization dewaxing process. Inherently high isoparaffins content and narrow hydrocarbon distribution of the UCO process products provide many advantages for preparing high quality white oils. The gas chromatographic analysis demonstrated in Figure 2 illustrates that the white oil from UCO process products does not contain any strong spike peak which is an evidence of normal paraffins. The hydrocarbon content of below C18 is 0.88 vol% compared with 3.35vol% of a conventional white oil from lube hydrocracking base oil. Table 10 Properties of white oil (70N) from UCO lube process products

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UCO process product based

Lube hydro- cracking based

Remark

Acid treating test Yield, vol%

96

89

by 3% Oleum + 5% EtOH

Composition analysis Paraffins, wt% 1-ring Naphthenes 2-ring Naphthenes 3-ring Naphthenes 4-ring Naphthenes 5-ring Naphthenes 6-ring Naphthenes

41.7 26.3 18.0 13.8 0.2 0.0 0.0

30.6 25.6 19.6 11.7 8.0 3.4 1.1

ASTM D2549 and D2786

GC-Mass analysis Below C18, vol% Spike peak in GC graph.

0.88 none

3.35 detected

Spike peak → n-paraffins

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Figure 2 Gas Chromatographic analysis of white oils Supply and demand of the VHVI base oils VHVI base oils supply There are 7 plants in Europe to produce high quality lube base oils. BP, Shell, DEA and Total are major players in this market. In the late 1970’s, BP started the use of hydrocracking to produce quality fuels and lube base oils from a wide range of crude oil sources. Fully formulated brand products using base oils from this process have been introduced into the market from the early 1980’s. BP HC base oils have 3 viscosity grades ; 4cSt, 5cSt and 6cSt. Shell XHVI has been in the market for more than 20 years and is currently the world’s leading technology base oil. It is produced by hydro-isomerization of slack wax in a catalytic process unique to Shell. XHVI base oils are available in 3 viscosity grades, 4cSt, 5cSt and 8cSt. Neste, a PAO maker, has started producing VHVI base oils from October of 1997. Exxon UK experienced a problem at their Fawley plant in 1995 and they are known to be studying whether or not to make Exxsyn again. They are

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said to restart their plant from the second half of 1998. Addinol in Germany have stopped making VHVI base oils since 1997. There are 4 plants in Japan. All of them are using different technologies. Showa Shell and Japan Energy base oils have VI higher than 140. In North America, presently Excel Paralubes, Petro-Canada and Chevron produce as much GroupⅡ base oils as Exxon USA produces in total. They also have big capability to produce GroupⅢbase oils but they may control their supply until there is enough market for VHVI base oils. Star-Enterprise is building a 18,000bpd hydrocracked base oil plant and it is known that this plant could make GroupⅢ VHVI base oils. In other area, some plants produce VHVI base oils. KPC could make about 300bpd. BP Australia might have some problem on their VHVI base oils. They had stopped producing their base oils since 1997. There used to be one plant on Bosnia(Energoinvest) with 300bpd capacity. But it was wrecked by war in 1992. At present, it seems that SK has the largest capacity, around 3,500bpd to produce VHVI base oils. The total worldwide manufacturing capacity was about 12,000bpd in 1996 and will be around 22,000bpd in 2000. Figure 3 shows the current VHVI base oils supply and the predictive capacity in near future. It is expected that the growth rate of manufacturing capacity is about 20% per annum. However, this does not mean there will be 22,000bpd of VHVI base oils in market in year 2000. Most of VHVI base oils are produced by block operation and producers can switch to make conventional mineral base oils when there is not enough market for VHVI base oils. When the current VHVI base oils manufacturing capacity is classified by the process, about 79% of VHVI base oils were manufactured by Severe Hydrocracking process in 1996. Severe Hydrocracking process will maintain its position as a leading technology in year 2000.

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0

5000

10000

15000

20000

25000

'95 '96 '98 '00

N.A.ASIAEUROPE

Figure 3 Supply of VHVI base oils

BPCD

VHVI base oils demand Severe market requirements for emission regulations and energy saving and increase in VHVI base oils availability are major factors of VHVI base oils demand. So, VHVI based lubricating oils are expected to grow in market. Especially, automotive applications will be in a real growth phase. Noack volatility limitation of ILSAC GF-1 specification was max. 25% and GF-2 is max. 22%. In the latest ILSAC proposed specification GF-3, the volatility of 5W/10W-xx products will be regulated to max. 15%, which is almost the same level as European ACEA specification. These changes will make it even more difficult to formulate oils from conventional mineral base oils. Formulators need to use at least high quality API GroupⅡ or Group Ⅲ base oils to meet the tightened volatility specification of ILSAC GF-3. On the basis of previous market trends, the demand growth rate of VHVI base oils would be around 20% per annum in most likely case as shown in Figure 4.

19

0

20000

40000

60000

80000

'95 '96 '98 '00 '05 '10

Most Likely

Optimistic

Pessimistic

BPCD

Figure 4 Demand of VHVI base oils

Europe, Asia and Australia are current main markets of VHVI base oils but there is almost no companies using VHVI base oils in North America today. However, several companies in North America such as Mobil, Star-Enterprise and Exxon USA have announced to modify their current base oil plant or to build new lube base oil plants to produce higher quality base oils, mainly API GroupⅡ base oils. However, these plants may have capability to make GroupⅢ base oils also. Moreover, Excel Paralubes could make GroupⅢ base oils with minor modification of their current plant. Manufacturing capacity of VHVI base oils has been and will be higher than demand. But, it does not mean everybody can get VHVI base oils only if they want it. Many of suppliers will not sell their VHVI base oils as they have them in order to differentiate their own finished products or at least will not sell it at a low price. Today and tomorrow of VHVI base oils Today, though the quality of VHVI base oils is comparable to that of PAO and it is more economical than PAO in their applications, most of lube manufacturers still prefer PAO because PAO is easy to buy and easy to use while the viscosity grades of VHVI base oils are limited, just from 3cSt to 8cSt at 100℃.

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In the future, API GroupⅠbase oils are expected to maintain their position as main base oils though they might lose market share to GroupⅡ base oils. High quality GroupⅡ and GroupⅢ VHVI base oils demand may be increasing rapidly, double digit per annum. PAO synthetic base oils are considered to maintain their position as the first choice for blending synthetic lubricants. Conclusions SK has developed a new technology which offers fuels hydrocracker refiners an attractive method of producing high quality lube base oils from a variety of crudes. The UCO process produces higher quality lube base oils at lower investment and operating costs than conventional solvent refining or lube oil hydrocracking. The high quality base oils produced via the UCO technology are expected to ultimately replace conventional base oils currently found in the marketplace. And also, severe applications in lubricants industry will be benefit from these base oils. This study shows that the high quality lube base oils like VHVI base oils from fuels hydrocracker bottoms can offer end users comparable performance to PAOs at a lower price.

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