Profiting from the lubricants market
Pursuing a profitable and more sustainable purpose for crude oil through the lubricants market requires examination of lubricants production via hydroprocessing.
Marcio Wagner da Silva
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Fuel efficiency improvements and the expanding electric vehicle (EV) market reduce transportation fuels demand and, consequently, global crude oil demand. Furthermore, new technologies like additive manufacturing (3D printing) have the potential to greatly impact overall transportation infrastructure requirements, further affecting transportation fuels demand. These trends, added to the onus on minimising the carbon intensity of the energetic matrix, reinforce the reduction in fossil fuels and complete a negative scenario for fossil fuels.
On the other hand, non-energetic derivatives like petrochemicals and lubricants present a growing consumer market and higher added value than fuels. According to trend analysts and recent forecasts, the lubricants market size was valued at US$165 billion in 2022, will grow by compound annual rates of around 3.0%, and can reach a total value of US$188 billion in 2027.
Similar to other crude oil derivatives, economic and technological developments have predicated the production of lubricating oils with higher quality and performance and lower contaminants content. The main quality requirements for lubricating oils are viscosity, flash point, viscosity index (viscosity change with temperature), fluidity point, chemical stability, and volatility. According to the American Petroleum Institute (API), lubricating base oils can be classified as described in Table 1.
Lube oils from Groups II, III, and IV have higher quality than base oils from Group I. The content of contaminants like sulphur and unsaturated compounds is significantly reduced; moreover, the viscosity index is superior for Groups II, III, and IV.
Lubricant production routes
The first step in the lubricant production process is vacuum distillation of atmospheric residue, such as bottoms product obtained in the atmospheric distillation processes. For vacuum distillation units dedicated to producing lubricating fractions, fractionating needs better control than seen in units dedicated to producing gasoils-to-fuels conversion.
The objective is to avoid thermal degradation and control the distillation curve of the side streams. A typical arrangement for the vacuum distillation unit is to produce a lubricating fraction, as shown in Figure 1. A secondary vacuum distillation column is necessary when it is desired to separate the heavy neutral oil stream from the vacuum residue.
In lubricants production units based on the solvent route, the following steps are basically physical separation processes. The objective is to remove from the process streams any components that can affect the desired properties of base oils, mainly the viscosity index and chemical stability.
Figure 2 shows a block diagram with the corresponding process steps to produce base lubricating oils through the solvent extraction route.
As aforementioned in the vacuum distillation step, the fractionating quality obtained between cuts is critical for these streams to reach quality requirements like flash point and viscosity. After the vacuum distillation step, the side cuts are pumped to the aromatic extraction unit, and the vacuum residue is sent to the propane deasphalting unit.
The propane deasphalting process seeks to remove heavier fractions from vacuum residue, which can be applied as lubricating oil. The propane deasphalting units dedicated to producing lubricating oils apply pure propane as solvent because this solvent has higher selectivity to remove resins and asphaltenes from deasphalted oil.
In the aromatic extraction step, the process streams are put in contact with solvents selective to remove aromatics compounds, mainly polyaromatics. The main objective in removing these compounds is that they have a low viscosity index and low chemical stability, which is strongly undesired in lubricating oils. Understanding that nitrogen and sulphur compounds are normally present in polyaromatic structures, this step removes a significant portion of the sulphur and nitrogen content. The solvents normally applied in the aromatics extraction process are phenol, furfural, and N-methyl pyrrolidone.
The subsequent step is to remove the linear paraffin with high molecular weight through solvent extraction. This step is important because these compounds prejudice the lubricating oils flow at low temperatures. A typical solvent employed in the solvent dewaxing units is methyl-isobutyl-ketone (MIK), but some process plants apply toluene and/or methylethylketone (MEK) for this purpose.
After paraffin removal, the lubricating oil is sent to the finishing process. In this step, heteroatom compounds are removed, including oxygen, sulphur, and nitrogen. These compounds can give colour and chemical instability to the lube oil. Furthermore, some remaining polyaromatic molecules are also removed. Some process plants with low investment and processing capacity apply a clay treatment in this step. However, modern plants with higher processing capacity use mild hydrotreating units. This is especially important when the petroleum processed has higher contaminants content. In this case, the clay bed saturates very quickly.
The paraffin removed from lubricating oils is treated to remove the excess oil in the unit (wax de-oiling unit). In this step, the process stream is treated at reduced temperatures to remove the low branched paraffin, which has a low melting point. Similar to lubricating oils, the subsequent step is a finishing process to remove heteroatoms (N,S,O) and to saturate polyaromatic compounds. A hydrotreating process is generally applied in the paraffin case with sufficient severity to saturate the aromatic compounds to reach food-grade quality in the final product.
Changes in the lubricants market
As previously cited, the solvent route can produce only Group I lubricant oils. However, lube oils employed in severe work conditions (large temperature variations) need higher saturated compounds content and higher viscosity index. In this case, it is necessary to apply the hydrorefining route. A significant limitation in lubricant production via the solvent route is the necessity of paraffinic crude oils that tend to present higher costs and reduce the operational flexibility of refiners, especially when related to the crude oil supply in a geopolitical crisis scenario.
Despite the relevant strategic questions like crude oil prices and supply, Group I lubricating oils tend to lose market share quickly due to poor performance in comparison with the remaining groups, especially considering automotive industry technological developments and lubricants specifications.
This fact is one of the most relevant capital investments, driving forces towards improving refining hardware capacity to produce high-quality lubricating oils through the hydrorefining route. Another relevant factor that negatively impacts refinery competitiveness relying exclusively on the solvent route is that the Group I and II lubricants have lost market share over the past years. This is mainly related to the technology requirements of the newest automotive engines. Figure 3 forecasts the evolution of market share for the different base oils.
According to the data from Figure 3, a significant reduction in the demand for Group I base oils is projected, leading to a significant competitive loss for refiners relying on base oil production exclusively through solvent routes.
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