Shell puts pioneering natural gas-based motor oil on store shelves

HOUSTON — Natural gas probably isn’t running your car, but it soon may be lubricating your engine.

Royal Dutch Shell has produced motor oil from natural gas, a product that is now available in stores, the company will announce Friday.

The product was made possible by Shell’s $19 billion Pearl Gas-to-Liquids facility in Qatar, where the company converts natural gas into a variety of fuels and feedstocks. Materials from Pearl are used to make diesel fuel and plastics, for example.

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Shell began producing base oil at Pearl in 2012. Base oil is typically derived from crude oil and is used to make motor oil. The company has used some natural gas-derived base oil to make its motor oil since 2012, but announced that its premium motor oil brands are now made using only base oil from Pearl.

“Shell is unique in having this product and they are not selling it to others and it will make a great motor oil, there’s no doubt about it,” said Stephen Ames, managing director for SBA Consulting, which consults for the lubricants and refining industries. “Will it be better than other people’s motor oil remains to be seen.”

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Shell’s base oil made from natural gas is cheaper than those derived from crude oil, which gives the company an advantage, Ames said.

“Everybody is fascinated, to be honest, at the consumer level,” said Istvan Kapitany, president of Shell Lubricants Americas. “If you look at the base oil, it looks like clear water.”

GTL Base Oils Infographic V4
That’s a big difference from base oil made from crude, Kapitany said. Producing clear base oil from crude is like trying to filter muddy water, he said.

“You still have impurities in it,” Kapitany said.

A clearer base oil can produce motor oil that keeps engines cleaner and running more efficiently, he said.

“It is, of course, pure and it also offers lower viscosity levels to be achieved which is, in modern engines, becoming more and more important,” Kapitany said.

Others may dispute that description, Ames said.

“It depends how you define purity,” he said. “All the other base oils are 100 percent pure base oil.”

Shell’s new base oil was shipped last year to various sites worldwide, where it was converted into motor oil. Shell is now producing motor oil using the natural gas-based substance at a lubricants blending plant in Houston, the company’s largest such facility.

Shell, which owns the Pennzoil and Quaker State brands, believes the innovation will help it capture more customers in an era when new vehicles run mostly on synthetic oils, Kapitany said.

“Whether it’s going to be 10 years or 20 years, synthetic lubricants will be dominating the marketplace and this product will enable us to compete very effectively,” Kapitany said.

Shell’s lubricants business makes up a small portion of the company’s downstream operations, which accounted for about a quarter of the company’s earnings in 2013.

Global demand for lubricants was 38.7 million tons in 2012, with the United States accounting for 22 percent of consumption, according to data from Kline & Company, a market intelligence firm.

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If the motor oil could be made using natural gas produced in the United States, there domestic benefits, said Daniel Whitten, spokesman for America’s Natural Gas Alliance, although he said the organization would need to know more about the technology.

“Any product that uses natural gas, we feel, is a step in the right direction,” Whitten said. “If there is a potential for it to be made from American natural gas, that would be something we would like to know more about.”

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