QUESTIONS & ANSWERS:
What does this mean for Chevron and its Lubricants business?
This project is significant from a regional and global viewpoint. It will impact the world’s base oil and
finished lubricants industry and this plant will strengthen the Chevron Lubricants business, significantly.
What’s the capacity of this plant?
When the plant comes online in November 2013, we expect to produce up to 25,000 barrels per day of
premium base oil here. With this capacity added to our current global production, Chevron will be
positioned as the world’s leading supplier of premium base oils.
What is the global production of base oils, industry wide?
Most estimates have global base oil capacity totals of about 950,000 barrels per day. About 30 percent of
that is premium base oil.
What are the company’s goals for this project?
We expect this new plant to have a positive and lasting impact for all our Base Oil customers, lubricants
marketer partners, and customers. It will improve the reliability of premium base oil supply for the whole
U.S. market. This region is a key area for Chevron Lubricants, and reliability is the cornerstone of our
Will this facility have any impact on Chevron’s global strategy?
The plant allows Chevron to strategically redirect some of the premium base oil we produce at our other
US plant in Richmond, California. It provides us with more premium base oil that can be used to
manufacture top-quality Chevron-branded finished lubricants in North America, Texaco-branded products
in Latin America and Europe, and Caltex-branded products in Asia Pacific, Africa and the Middle East.
What message do you hope this sends to your customers?
This investment reassures our base oil customers and finished lubricants marketers that we are here to
stay and well positioned for future growth.
What is premium base oil?
There is a difference between conventional or Group-1 base oil and the premium base oil that will be
made here in Pascagoula. Premium base oil is manufactured by a process called ISODEWAXING, which
Chevron commercialized in 1993. ISODEWAXING breaks down feedstock using catalysts instead of
using solvents. Chevron is the leader in this technology, and other suppliers use it, was well.
What are the benefits of ISODEWAXING?
The end result is a cleaner, clearer base oil with higher viscosity, and excellent resistance to oxidation.
The process also produces higher yields. ISODEWAXING also allows us to process a broader range of
feed stock and, in turn, develop a broader range of finished lubricants products.
How does this affect your finished lubricants business and products?
Our Havoline and Delo lubricant products are made with premium base oils to help meet the demanding
specifications of today’s engines, motors and industrial/manufacturing equipment. They are also suited to
meet the future requirements of the industry. New vehicles, for example, will require higher quality
lubricants, and in turn, will need a reliable supply of higher quality base oils. Finished lubricants made
with premium base oils are a step forward in addressing environmental concerns because they can help
improve fuel economy, lower tail-pipe emissions and extend the period between oil changes.
What is the decision that was just made on the Pascagoula Base Oil Plant (PBOP) project?
We have begun construction. After careful consideration, Chevron has decided to fully fund the $1.4
billion Pascagoula Base Oil Plant. This is the final investment decision for the project and signals the
transition from engineering/planning to construction.
Why is Chevron doing this project?
Chevron sees a long-term need in the marketplace for premium base oils. Chevron, Texaco and Caltex
branded lubricants use premium base oils to help meet the demanding specifications of increasingly
sophisticated engines, motors and manufacturing equipment. The requirements of the industry continue to
require higher quality lubricants, which increases the demand for premium base oil. Chevron is scaling up
to meet that demand. Increasingly stringent environmental requirements, the need for fuel economy and
the needs of today’s modern engines are all driving the market away from traditional Group I base oils.
By adding a 3rd premium base oil plant to the existing plants at Richmond and their JV in Yeosu, Korea,
Chevron will be able to strengthen its premium base oil supply position, globally.
When is the plant likely to start-up?
The plant is scheduled to start-up at the end of 2013.
Where is the plant located?
PBOP will be built at Chevron’s Pascagoula, Mississippi refinery, where we have worked hard to
establish and maintain a collaborative relationship with the community since the refinery began operating
more nearly 50 years ago.
Will the base oils only be available in the US Gulf Coast region?
No. The production from Pascagoula will directly supply North and Latin America, as well as Europe.
Chevron has already committed to supplying Group II base oils to Europe and Latin America as an
economic alternative to the traditional Group III and Group I/III blends used by European formulators.
Currently, they are sourced from Chevron’s base oil plant at its refinery in Richmond. Calif. Once
Pascagoula is operational, they will be supplied from Pascagoula.
What products will be produced at the Pascagoula Base Oil Plant?
The plant is currently designed to match the specifications of the Group II base oils (100R, 220R and
600R) produced at Chevron’s Richmond, Calif., plant. Additionally, PBOP will manufacture a 4th
product, 60R. Product specifications for 60R will be finalized at a later date. The plant equipment is also
designed to allow production of Group III base oils, giving Chevron the flexibility to respond to changes
in the market.
When will Group III be available at Pascagoula?
Chevron does not have plans to manufacture Group III base oils at the Pascagoula plant, at this time.
How does the production from Pascagoula relate to the production from Chevron’s other premium
base oil plants in Richmond California and Yeosu, Korea?
The Group II base oils from Pascagoula will have the same viscosity grades and product specifications as
those from Richmond. The base oils from Pascagoula, Richmond and Yeosu will be combined into a
global product slate. This will reduce our customer’s product qualification costs, increase their security
of supply and allow them to pursue global product development.
What is “base oil” and what do you do with it?
Base oil comprises 80-99% of modern lubricants. Premium base oils (Group II & III) are necessary for
formulating the highest quality lubricants. These lubricants satisfy government and OEM requirements
for improved fuel economy, lower emissions, and extended drain intervals.
Is this base oil plant unique? Are there others like it in the U.S. and abroad?
The Pascagoula base oil plant uses Chevron’s ISODEWAXING technology. This process technology has
been used in two-thirds of the premium base oil plants in the world, including Chevron’s Richmond and
Yeosu, Korea base oil plants.
How long does Chevron expect this plant to operate?
We expect the plant to continue to operate into the foreseeable future. For example, the Pascagoula
Refinery has been in operation since 1963.
Can the plant be expanded over time?
Yes, depending on future demand for base oil. However, we don’t have any plans to expand the plant
capacity at this time.