GTL has arrived

[Tom NJ]

Per Lube Report this morning:

"The Pearl plant is expected to begin making and shipping base stocks as early as August 2011."

“It’s fully competitive with other premium products. It’s just starting to ramp up in Qatar right now.”

"...during the Qatar plant’s startup, all of the GTL base stocks will be used in Shell’s own branded products."

"...Shell will likely emphasize the benefits of its GTL, which he said provides a very consistent, high quality base for lubricant formulations."

For more info, see: Lube Report

Tom NJ

 

[d00df00d]

Big news for sure! Thanks for posting, Tom!

 

[hate2work]

GTL has arrived? I didn't even know we were waiting for it lol

Thanks for posting Tom

 

[buster]

Thanks Tom. Good article.

 

[chevrofreak]

How does it compare to their XHVI base stocks for VI and such?

 

[INDYMAC]

Thanks Tom. Any idea how this group III (GTL) compares in base oil quality to their current XHVI group III, or even their previous EOP group V attempt. How much do you think that cost plays into this switch over, rather than quality?

 

[A_Harman]

So the next big topic for perpetual debate here will be:

"Is Grp III GTL a true synthetic?"

 

[addyguy]

Thought GTL base stocks had been around for a couple of years already....I thought shels XVHI base were already this.....?

 

[RF Overlord]

Originally Posted By: Tom NJ
"...during the Qatar plant’s startup, all of the GTL base stocks will be used in Shell’s own branded products."
Can I assume this means Pennzoil and QS as well, or just "Shell" only?

 

[Tom NJ]

I have not yet seen data sheets on Shell's GTL, but based on data I have seen in the past from other pilot versions of GTLs I would expect it to perform somewhere between Grp III and PAO, perhaps like a Grp III+. PAOs should continue to have advantages in low temperature flow and volatility, but current PCMO specs do not require these advantages.

I don't know Shell's cost structure, but they say it will be competitive with other Grp IIIs. I imagine they will address merchant market pricing after they assess availability and demand next year. Their change to GTLs is likely driven more by performance and uniqueness (marketing) than cost.

Since this base oil is built up from natural gas, it fits what some call "true" synthetic.

Tom NJ

 

[addyguy]

I'm really curious how this will affect competition in the Group-III market.

Right now, the low-cost group-III marlet is dominated by South-Korean made hydrocracked group-III's.

With the extremely depressed price of NG, I wonder if this Quatar-sourced GTL base will start to eat into that market.

If so, we could see a 'hold steady' on the price of synthetic oils, instead of the constant upwards price creep.

Any toughts on this, Tom?

 

[Finklejag]

 

[poiuy223]

Originally Posted By: Finklejag

My exact thoughts when I saw the thread.

Jersey shore got up in here?

 

[Tom NJ]

GTL will likely be marketed as a specialty product and its price will be set according to a marketing strategy rather than cost. I expect they will first squeeze every bit of value possible out of the product's technical advantages over the Korean Grp III, and apply this value to their own brands. Thereafter price will be a function of supply and demand, with the demand side set by the marketing strategy. If successful, they will keep demand ahead of supply and maintain pricing integrity. The last thing they will want to do is buy market share away from lower grade Grp IIIs, and I can only see that taking place if the supply/demand ratio gets out of whack for an extended time.

A lot will depend on the marketability of the product's technical advantages. If the technical advantages are not embraced by the market, then the product begins to commoditize, but I can't see a price war with standard Grp IIIs so long as they are the leader in GTLs.

Tom

 

[levi]

Originally Posted By: Tom NJ
GTL will likely be marketed as a specialty product and its price will be set according to a marketing strategy rather than cost. I expect they will first squeeze every bit of value possible out of the product's technical advantages over the Korean Grp III, and apply this value to their own brands. Thereafter price will be a function of supply and demand, with the demand side set by the marketing strategy. If successful, they will keep demand ahead of supply and maintain pricing integrity. The last thing they will want to do is buy market share away from lower grade Grp IIIs, and I can only see that taking place if the supply/demand ratio gets out of whack for an extended time.

A lot will depend on the marketability of the product's technical advantages. If the technical advantages are not embraced by the market, then the product begins to commoditize, but I can't see a price war with standard Grp IIIs so long as they are the leader in GTLs.

Tom


Words of wisdom, Tom, IMO.

 

[fdcg27]

What a good idea.
Given the large volumes of natural gas available throughout the Middle East, as well as the limited demand for space heating and the limited supply of LNG tankers, why not build a GTL plant?
The supply of the raw material is nearly free.
I look forward to seeing widespread use of this GTL Grp III, since this facility will likley be only the first of many.

 

[GMorg]

How can GTL be classified as Group III (severely hydrocracked)? Is the article actually about a GTL/GrIII blend?

I am clearly missing something...

 

[chubbs1]

Most of this will be going towards ULSD preparations. I don't think it is going to hit us in a big way...OTOH if we start building these plants we would be in business. We have such a huge supply of NG I can't understand why we are not building these types of refineries.

 

[kasedian]

 

[bluesubie]

From the Pennzoil Ultra Q&A:

Quote:
I’ve learned Shell has the expertise on GTL (Group 3+). Known as The Pearl project. Could Shell enlighten us what is GTL and how it performs? Also is the GTL included with the Pennzoil Ultra™.

GTL (Gas To Liquid) is a Group III base stock produced from natural gas. Shell has operated this technology since the 1990’s and the base oil is sold today under the Shell XHVI (Extra High Viscosity Index) brand. The Pearl project is a new much larger plant that will supply Shell XHVI base oil in a larger quantity globally.

Pennzoil® will always be looking for advantages for Pennzoil Ultra™, thus new base oils will be fully considered for future formulations to achieve enhanced performance for our products.


-Dennis
p.s. - Ok, you comedians. We have enough GTL logos now.