Polyalphaolefin (PAO) is a nonpolar base oil characterized by a high viscosity index and the absence of double bonds, sulfur, waxy hydrocarbons, or ring structures. It is a colorless liquid with excellent low-temperature flow, good oxidation stability, and compatibility with mineral oils, paints, and seals. Widely utilized in automotive and industrial sectors, PAO is employed as a base fluid in some wide-temperature greases. Due to its wide temperature range, it can maintain its lubricating properties from low to high temperatures. It also boasts excellent oxidative stability, resisting degradation and performing well under high temperature and pressure conditions. PAOs generally exhibit very low vapor pressure, resulting in gradual evaporation and minimal loss during this process. Moreover, PAOs display high compatibility with a wide range of products, enhancing their versatility.
The production process of PAO includes a synthetic chemical procedure that originally stemmed from Ethylene. In this process, natural gas or crude oil is cracked to produce Ethylene. After assembling the ethylene feedstocks, petrochemically pure alpha-olefins are generated through a direct feedstock that undergoes chain growth and displacement. The PAOs are then produced through synthesizing Oligomers, which are distilled and hydrogenated to yield the desired molecular weight and viscosity grade. PAOs exhibit improved performance when blended with other lubricant additives tailored for specific applications. There are three basic types of PAO oils which are Low Viscosity PAO oils, High Viscosity PAO Oils, and High Viscosity Index PAO Oils.
The global Polyalphaolefin capacity was estimated to be around 760 kilo tons in 2021, with North America leading market with share of 55% which translates to around 420 kilo tons, followed by Europe at 40%. ExxonMobil Chemical is the biggest PAO producer in the world accounting for more than 39% of the global installed capacity followed by Ineos Oligomers at 33% and CP chem at 17%. In terms of future projections, it is anticipated that approximately 50 kilo tons of PAO capacity will be added annually in the coming years. The majority of these capacity expansions are expected to occur in the Americas and Europe, reflecting the growing demand and market opportunities in these regions.
PAOs find significant applications in various sectors such as automotive, aviation, industrial gear, marine, and more. The global PAO segment is further categorized into lubricants, encompassing transportation, industrial, and wind turbines, as well as non-lubricants, including heat transfer, dielectric, and insulation fluids. PAO is primarily utilized as a base oil for formulating synthetic motor oil that meets the stringent requirements of modern engines. It provides exceptional low-temperature fluidity, reduces engine wear, and prolongs the lifespan of the oil. In Industrial lubricants, PAOs are used as base oils for hydraulic fluids, gear oils, compressor oil, and turbine oils. These oils exhibit exceptional performance in high-temperature applications and are compatible with various seals and materials.
Due to their excellent low-temperature fluidity, PAOs provide easy cold starts and reduce wear during cold engine operation. The high temperature and high-pressure conditions provide superior performance by reducing engine deposits and extending the life of the oil. Even under high temperatures and high-stress conditions, excellent oxidation resistance is ensured to be maintained. By reducing emissions and friction in engine components it also helps to improve the fuel efficiency. The maintenance cost has also been reduced due to its external thermal stability and resistance degradation. The risk of leaks and component damage is decreased because PAOs are compatible with a variety of seals and materials used in automobile engines and systems. They are created by synthetic procedures, minimizing the negative effects of oil production and extraction on the environment.
With the introduction of increasingly stringent regulations, global trends are shifting towards reduced emissions, improved fuel/energy efficiency, and enhanced durability, becoming ever more crucial. Additionally, it is anticipated that the PAO market will continue to grow, as manufacturers strive to maximize equipment efficiency, lower maintenance costs and nations worldwide seek sustainable solutions for reducing CO2 emissions. PAO offer low volatility, excellent thermal stability, and reduced friction, making them a preferred choice for meeting stringent regulatory requirements. Furthermore, an increasing preference for synthetic lubricants over conventional mineral oils due to their superior performance characteristics will further drive the PAO market in the forecast period.
The global PAO market is experiencing a surge in demand, largely due to the increasing utilization of PAOs in wind turbines. PAOs play a vital role as lubricants within the gearboxes of these turbines, delivering multiple benefits such as reducing friction, enhancing thermal stability, offering anti-wear properties, and effectively managing heat generation. As the field of wind turbines continues to evolve and witness further advancements, this will serve as a driving factor for the growth and expansion of the PAO market in the coming years.
Recent Developments in PAO market:
In 2022, Chevron Phillips has announced to double its PAO production capacity from 60 kilo tons to 120 kilo tons in Beringen, Belgium by 2024. Situated strategically at the center of Europe, the expanded PAO unit will benefit from substantial advantages in terms of infrastructure, feedstock accessibility, and operational expertise. CP Chem already operates PAO units in Beringen, Belgium, and Baytown, Texas.
INEOS Oligomers has undertaken an expansion project at its Laporte, Texas facility, specifically targeting the high viscosity PAO unit. This expansion will result in a 50% capacity increase, adding 40 kilo tons. The site is expected to be fully operational by mid-2025. The expansion is a strategic move to meet the rising demand for specialty lubricants in applications such as wind turbines and industrial sectors.
INEOS Oligomers is one of the largest PAO producer in the U.S with an installed capacity of 105 Kilo tons of Low Viscosity PAO in La Porte, TX, and a high viscosity unit with a production capacity of 25 kilo tons in La Porte, TX. The company is further planning to build a low-viscosity PAO plant at Chocolate Bayou, TX with an installed capacity of 120 Kilo tons. The plant is expected to commence operations by H1-2022.
INEOS has signed a Memorandum of Understanding with Saudi Aramco and Total, France to construct a 400 kilo tons Linear Alpha Olefin (LAO) plant and associated world-scale PAO plant by 2025.
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