BY LISA TOCCI • DECEMBER 7, 2016

Used oil rerefiner Avista Oil is making API Group III base oil at its plant in Peachtree City, Georgia, steadily ratcheting it up to about a quarter of its total base oil capacity now and laying plans to double that in 2017.

This makes it the first rerefiner in the world to produce Group III commercially, as well as the sole U.S. producer of Group III on an ongoing basis, according to Lubes’n’Greases magazine’s “Guide to Global Base Oil Refining.”

Juan Fritschy, CEO of Avista Oil Refining and Trading USA, on Friday told Lube Report that the plant near Atlanta is punctuating production of its Group II and II+ stocks with regular batches of Group III.

Speaking on the sidelines of the ICIS Pan American Base Oils and Lubricants Conference in Jersey City, New Jersey, Fritschy said that Group III volumes now account for roughly one-quarter of the facility’s production. Peachtree City produces around 80,000 metric tons per year of base oil, he added.

According to Fritschy, a handful of U.S. buyers have snapped up all of its Group III barrels. So although Avista recently began posting U.S. base oil prices for its Group II and II+, the company isn’t ready to post this new material “because we essentially are sold out of the entire supply.” That ready acceptance, though, has encouraged Avista to further boost the Group III share of its output.

To achieve Group III quality without changing the plant’s overall capacity, which is 1,700 barrels per day, Avista Oil staff spent two years adjusting all the steps of its used oil collection and rerefining process. “Our first milestone was to have the capacity to produce Group II+ without yield loss and without extra operational cost,” Fritschy said. “This milestone was achieved in the second quarter of this year, and we can now produce up to 100 percent of our production [as Group II+] if we think this is the best economical decision. “Our second milestone,” he continued, “was to obtain 10 percent of our production (about 8,000 tons) as Group III quality.” That happened in the third quarter of this year.

“We are now working on gradually increasing Group III production,” he said. “Depending on market conditions and on what our customers require, our next milestone is to convert 50 percent of our production to Group III quality. We expect this achieve this milestone in 2017. Our ultimate goal is to have a cost effective and flexible process that adapts to the demand for different qualities of base oil.”

Asked if Avista is indeed the sole U.S. Group III producer, Fritschy demurred and said others may be quietly moving in that direction. “We heard that at least one refiner may be considering putting its already able equipment into Group III production, but we are not sure for certain.”

Technically speaking, up until now the United States had no capacity dedicated to making Group III, Stephen B. Ames of SBA Consulting (http://directory.lubesngreases.com/search/?mode=simple&query=sba+consulting&submit=Search%20) indicated in a presentation to last week’s ICIS Pan American Base Oils conference. Petro-Canada, with 4,000 daily Group III barrels in Mississauga, Canada, was North America’s only native producer.

Meanwhile, U.S. rerefined base oil capacity surged over the past decade, and by Ames’s count there are 10 paraffinic base oil rerefineries now operating in North America, with a combined 890,000 tons per year of overwhelmingly Group II capacity. Together they hold almost 8 percent of the continent’s paraffinic base oil capacity and 10 percent of the Group II, he pointed out.
Avista may be first out of the gate, but is not the only rerefiner with Group III ambitions. Wayne, Pennsylvania-headquartered Puraglobe, which operates a 2,000 barrel a day rerefinery with twin units in Troeglitz, Germany, is installing a UOP-Honeywell process to upgrade half of its output there to Group III. Deliveries are planned for spring 2017.

Puraglobe also is steering a scheme to make Group III in Tampa, Florida, in partnership with rerefiner NexLube Tampa. Originally slated to make 1,300 b/d of Group II base oils, that plant’s final construction phase was stymied by financial woes until Puraglobe stepped in as an investor.

In September, Puraglobe said it would use UOP HyLube technology to make somewhere between 1,040 and 1,170 b/d of Group III at the Tampa rerefinery, which now is targeted for completion by the end of 2018.

On Dec. 5, Chemical Engineering Partners and Gulf Solvents announced signing of a contract to build a 155,000 metric tons per year rerefinery in Hail City, Saudi Arabia, to produce Group II/II+ and III base oils (see related story in this week’s Lube Report). In addition to base oils, Avista’s Peachtree City plant produces fuel and flux for bitumen and asphalt. Avista opened it in 2013, after first assembling a large used oil collection network to feed it. Avista Oil in 2011 had acquired a 50 percent stake in Universal Environmental Services, the facility’s originator, and subsequently increased it to 100 percent.

Parent company Avista Oil AG, based in Uetze, Germany, operates two Group I rerefineries in Europe: in Kalundborg, Denmark, with 800 b/d of base oil capacity, and Dollbergen, Germany, with 2,300 b/d.