Lubricants have traditionally ensured the smooth functioning of engines in order to last as long as possible, and have played a single role of keeping all the moving components well-oiled. But in modern times, motor oils have been developed to carry out other tasks as well. Lubricants currently work more towards reducing friction, lowering emissions and increasing efficiency of engines, and Shell has been one of the oldest lubricants suppliers for the automotive industry. We interacted with Nitin Prasad, Managing Director, Shell Lubricants India to learn more about Shell's business in India.
India's overall lubricant market is the third largest in the world at about 2-2.2 bn l in total, with equal distribution between industrial oils and automotive oils. Shell's business is also split equally between industrial and automotive lubricants, Prasad said. Shell India caters to the commercial vehicle, passenger car and two-wheeler segments of the automotive industry in India, and claims a market share of 12-15 % in the segments it operates in. The company prioritises its business in Tier I to Tier IV cities and towns, without much focus on rural areas, Prasad noted. Shell Lubricants received about 40 % of its business from OEMs and the rest from the aftermarket.
GAS-TO-LIQUID (GTL) TECHNOLOGY
One of the major evolutions in the automotive industry over the years is in the increased standards of emission of engines. While oil used to be a generic solution and an afterthought in engine design process, it is now considered a critical component at the beginning stages of design itself, Prasad said. This has also changed the relationship that Shell has with OEMs, as it collaborates with companies to co-engineer oils with low emission levels.
GTL is a technology of processing base oil that will be employed over the next 20-30 years. Earlier, base oils were combined with additives to produce premium motor oils, and this technology has been able to keep up with regulations of Euro VI. Shell looked at taking the base oil technology to the next level of capability, by looking at gas as a source of producing base oils, said Prasad. The GTL process converts natural gas into crystal-clear base oil with virtually none of the impurities that are found in crude oil.
This process leads to the development of oils that have the best thermal stability and properties that result in lesser particulates. Fewer particulates means lesser friction, burning of lesser fuel and cleaner burning of fuel, which leads to better efficiency and higher fuel economy, Prasad explained. He noted that creating higher quality synthetic base oil keeps the engine cleaner.
Base oil from the GTL process is produced at Shell's Pearl plant in Qatar, where the company has invested about $ 20 bn. The process begins with the extraction of natural gas from Qatar's North Field, and then methane reacts with pure oxygen in a gasifier, to produce synthesis gas. The synthesis gas then enters one of the reactors at the plant, where chains of hydrocarbons are rearranged and transformed into a liquid base oil.
Currently, oil produced from the GTL process is available for passenger vehicles and two-wheelers. Prasad said the company is working with OEMs to get a deeper understanding of the properties of the oil, which would help the OEMs to design efficient engines. Shell is also developing motor oils from GTL for commercial vehicles, which should be ready as emission standards for the segment go forward, Prasad noted.
Shell Lubricants is developing more India-specific products in technological collaborations with OEMs. Prasad said. This includes three stages, the first being one where an OEM talks to Shell on the available oil solutions that are most suitable for their requirement and their engine specification. The second stage, which is what most OEMs are going for, is where an OEM asks the company to develop customised oil. The customers put down a list of benefits that the oil needs to provide, and Shell develops them and tests them for desired results. This stage takes an average of a year-and-half, and would include testing various oils on engines simulated to perform in road-load conditions.
The final stage of collaboration is when Shell performs complete co-engineering with OEMs. Here the company works with the OEMs so as to make engine modifications to ensure better efficiency. These even include modification of metallic compounds, paints and block design, among others, along with making changes to Shell's own products to ensure better suitability to the engine.
Another area where Shell collaborates with OEMs is in the racing arena, where it works closely with Scuderia Ferrari and Ducati. Especially in the case of Ferrari, Shell is the only oil company that works with a team on the track during the race, through its Trackside Laboratory.
Despite the present macro-economic conditions, Shell has not altered its investment plans in R&D, and continues expansion in the country. He noted that the company's technical centre in Bangalore is one of the focus areas for investments in R&D. The Bangalore tech centre is one of the three major development centres for Shell globally, besides facilities in Amsterdam and Houston, each having a separate area of technical capability. While Prasad did not divulge the specific capabilities of the Bangalore centre, he said the facility focuses on the needs of Asia-Pacific and the Middle-East from a broad oil and gas perspective.
Shell is expanding production capability at its Mumbai plant and increasing capacity of products manufactured. While Shell does import few products into the country, it is also looking at manufacturing certain products in India, and exporting them to other countries. The company is going to begin production at three new plants in the Asia-Pacific region, including Indonesia, Singapore and China, Prasad said. He added that Shell operates in a networked structure, and will invest across Asia-Pacific for expansion.
Text: Naveen Arul