Russia has a long history with white oils, having processed them since the beginning of 20th century using a method called base oil acid treatment. But today the countrys position with these specialties is far from leading. Russias white oils market depends heavily on imports, and the domestic output that does exist mostly fails to meet upper-tier quality standards.
One industry insider contends that this creates an opportunity for domestic refiners and is working to develop a local production facility.
Russia consumes between 25,000 and 30,000 metric tons of white oils per year, according to Chemlube International. Chemlube is a base oils trader and lubricant marketer headquartered in Harrison, New York, United States, but it has dealings in Russia and other members of the Commonwealth of Independent States. The head representative and technical director at the companys Moscow office told a recent industry conference that approximately 70 percent of Russias white oils consumption is supplied by imports.
This is unacceptable for our country, Vladimir Timofeev told the WRA Base Oils and Lubricants in Russia and the CIS conference in March.
White oils are used in a variety of applications, including production of plastics and artificial silk and as a carrier in pesticides. Other applications require higher levels of purity, including pharmaceuticals, food-grade lubricants and cosmetics.
Around 30 percent of the white oils consumed in Russia are used as additives in production of plastics – largely polyvinyl chloride or PVC products. Twenty percent goes to pharmaceutical and personal hygiene applications, while 14 percent goes to additives for elastomers. Twelve percent becomes ingredients for food-grade lubricants, and 10 percent is used in other types of lubricants. Textile applications take 8 percent, and the remaining 6 percent goes to a variety of other uses.
According to Timofeev, Russias demand for high quality white oils is around 16,000 to 18,000 t/y, but domestic producers supply only 3,000 to 4,000 t/y. The rest comes from a variety of foreign companies. White oils exporters to Russia include U.S.-based ExxonMobil, Chevron, Calumet, and Citgo, Scojun Chemical of South Korea, Germany Hansen and Rosenthal and Statoil of Sweden, he said. Also there are companies that export white oils to Russia even from India and China.
Domestic producers include Samara-based MedChim, Licom in Yaroslavl and Ryazan-based Prom-provod. Timofeev said that even when these companies produce high quality technical grade white oils, they are unable to charge as much for them as Western suppliers. He did note that the Russians are able to charge higher prices than Asia-Pacific importers.
There are several reasons why domestic white oil production is hampered, Timofeev said. The first concerns manufacturing technology. Most Russian output still comes from acid contact techniques that are obsolete in many developed markets. Western suppliers generally begin with hydrocracked vacuum gas oil feedstock which they hydrotreat and polish to make technical white oils. Through further hydrogenation they can also distill medicinal white oils.
This processing of hydrocracked VGO feed is less expensive than acid contact treatment, Timofeev said. It also allows greater economies of scale and is safer for the environment than acid contact, which uses highly acidic materials and generates waste that must be detoxified. Acid contact operations also have more difficulty achieving consistency in the quality of their output.
Our producers cannot achieve viscosity higher than 20 to 70 centiStokes, Timofeev said. Also there is an absence of confirmed correspondence to international standards, and quality levels are insufficient.
When it comes to use in lubricants, Russian white oils are also hampered by their lack of original equipment manufacturer approvals, which discourages operators from using these lubricants while equipment is under warranty.
Timofeev contended that Russia can reduce its reliance on imported white oils only by establishing a first-class hydrocatalytic manufacturing facility. This plant will be able to produce high quality white oils, competitive with products of Western manufacturers.
To ensure efficient use of capital, Chemlube claims it would make sense to build such a plant at the site of a newly built or upgraded base oil plant that also incorporates a hydrocracker and hydrocatalytic processes.
At the moment, Chemlube is holding talks with several oil majors including Lukoil, Rosneft or Tatneft, about forming a partnership to build such a plant.