Recycling and Rerefining Gulf Basin Petroleum Recycling Company 2 Company Overview Focus Mgmt Team Provide petroleum based environmental services to Gulf Basin industries Recover used oils and rerefine to generate valuable base lube oil and other refined products ID: 383842
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Slide1
Lube Oil
Recycling and Re-refining
Gulf Basin Petroleum
Recycling CompanySlide2
2Company Overview
FocusMgmt.
Team
Provide petroleum based environmental services to Gulf Basin industries
Recover used oils and re-refine to generate valuable base lube oil and other refined products
Extensive experience in used oil re-refining operations, used oil collection, commercial, civil and industrial construction
Exceptional
track record in building and growing business
across a wide range of industries
Near-Term
Plan
To develop the capability to
recycle used oils having a high level of contaminantsConstruct a new, state of the art, 30 MM GPY used oil recycling /re-re-refining plant in Bienville, MSUtilize the rail and barge capabilities of Port BienvilleSlide3
3Vision & Mission
Our Vision
Our
Mission
To become the leading used oil re-refiner in the Gulf Basin and partner of choice to existing used oil collectors
and generators of used oils.
To make a significant and lasting contribution to the environment and to sustainable development. To aid in the economic recovery of the Gulf RegionSlide4
More than a billion gallons of used oil is available for re-refining
Improper Disposal (400 MM GPY)
Asphalt, Cement Kilns
Re-refineries
Fuel Blending
4Slide5
US market is in the early stages of development5
USA
1.2 billion gallons collected
290 million re-refined
8 Plants operating
3 Plants announced
Europe
620 million gallons collected
500 million re-refined
28 Plants operating
No new plants announced
1200 MM GPY
620 MM GPY
Used oil volume – Million Gallons/yearSlide6
There is ample room for new re-refineries in each regional market
6Slide7
The collection market in the US is highly fragmented and estimated to include ~400 companies nationwide providing collection & recycling servicesThere is only one national company (Safety-Kleen)
& approximately 30 significant regional Companies; the balance of the industry participants are small “Mom & Pop collectors
These
small companies
typically sell their used oil to Industry as an alternative to virgin fuels
Burning used lubricants is a poor use of the material from both an environmental and economic perspective
Used oil generators would prefer to have their used oil recycled
USED OIL COLLECTION
Company
Annual Volumes
Primary Service Area
Safety-Kleen
180 ~ 200
National
FCC
75 ~ 80
Mid Atlantic / Gulf Coast
United Solutions
30 ~ 40
North Central
Thermo Fluids
70 ~ 80
Intermountain West
DeMenno / Kerdoon
40 ~ 50
California
Universal Lubricants
20 ~ 30
Midwest
Inter Gulf Corporation
25 ~ 30
Southwest
Universal Environmental Svcs
30 ~ 35
Southeast
Lorco Petroleum
15 ~ 25
Northeast
Aaron Oil
20 ~ 25
Gulf Coast
TOP 10 US
COLLECTORS (MM GPY)
The feedstock supplier (collector) market is extremely fragmented
7Slide8
Supplying re-refineries is the best option for collectorsMajority of collectors are now selling into lower margin burner markets as an alternative to virgin fuelsCollectors are experiencing erosion of margins
Lower cost of natural gas“Warm mix” asphalt reducing demand for fuelGeneral economic malaise
Due to margin squeeze, small collectors are losing market share to collectors with re-refining capability or access to higher paying markets such as fuel blending, exporting.
More re-refining capacity is needed to support used oil collectors
Most collectors desire to get into higher margin re-refining but don’t have the resources or expertise to go it alone
Capital cost of re-refining equipment
Lack of technical expertise to operate a re-refinery
8Slide9
StrengthsConstructed, commissioned &
operated a re-refinery
Have the team
& execution
c
apabilities
to grow
Have significant
Business
experience over a
wide rang ofindustries
Have constructed, commissioned and operated a re-refinery in Chester, SC
Team has significant expertise in building and operating oil collection and fuel processing facilities. Established customers for all re-refinery productsUnderstand the challenges and opportunities in the businessWe have a very strong and experienced management and operations team to grow the business across multiple locationsLessons learned from prior operations and commissioning experience give us a strategic advantage for technology selection and commissioning of plants
9
Expertise in government, military and government bid contracts
Managed and Directed operation of construction firms operating
across the globe
Managed and directed used oil collection company
Managed and directed fuel recovery company
Slide10
The time is right to build re-refineries in the US
Propelling Growth
Increased public awareness of the harmful effects of unregulated disposal of waste on the environment and on the health of
its citizens
Increasing
consciousness on recycling and people’s willingness to pay
the same or more
for recycled products
CONSCIOUSNESS
Increase in crude oil prices and tight supply of virgin lube oil
Payback period for re-refining is now less than 4
years. Re-refined base lube sells at a discount of around ~10% to virgin base lube
ATTRACTIVE ECONOMICS
Through continuous
development,
the technology has improved and is cost effective. Several players are successfully using the
company’s planned equipment set
Used oil collection systems have improved, partly through government initiatives
TECHNOLOGY IMPROVEMENTS
Several national, international regulations are in place for collection and processing of used oil
US DOE
targets by
2015,
1.0-1.2 B GPY to
be re-refined. This will require a tripling of current capacity in the U.S. Thus, re-refining in the US is a phenomenal growth opportunity
GOVERNMENT INITIATIVES
10Slide11
Lubricating oils are largely (75-95%) made of base oils, a mineral oil produced at an oil refinery; The balance would be additives, which are used to improve the lubricant’s performance
It takes approximately 2 barrels (84 gallons) of crude oil to produce 1 gallon of virgin base oil
The
US
Market represents 25% of global Lube Oil consumption, which total global consumption of approximately 10.3 billion per annum
Annual US sales of Lubricants between 2004-2010 have been relatively flat at ~ 2.5 Billion Gallons, due to the link between economic growth – net new vehicle sales and manufacturing equipment sales, offset by extended intervals in oil changes.
There are vast differences in per capita consumption – United States 8.40 Gallons; Asia 0.80 Gallons; Western Europe 3.47 gallons
Region
Demand, Billion (Gallons /Year)
Per Capita Demand (Gallons / Year)*
United States
2.5
8.4
Latin America
0.8
1.8
Europe
2.8
6.9
Middle East
0.5
3.1
Africa
0.5
0.7
APAC
3.2
09-5.3**
Total
10.3
1.7
Lubricant Market Overview
11