Chevron Corp. began commercial production of premium base oils from a newly constructed manufacturing site at the company’s Pascagoula, Miss., refinery.

Base oils produced at Pascagoula will supplement capacity at Chevron’s Richmond, Calif., plant and a joint venture facility in Yeosu, Korea—roughly doubling Chevron’s production capacity and positioning it to be the world’s largest premium base oils producer.

“Lubricants are a high-growth business supporting economic development worldwide,” Mike Wirth, executive vice president for Chevron’s downstream and chemicals unit, said in a July 21 announcement. “The addition of the Pascagoula plant to Chevron’s base oil network enhances Chevron’s reputation as a reliable and flexible base oils supplier globally.”

The new Pascagoula site is expected to produce 25,000 barrels per day of premium base oils—helping countries around the world meet increasingly strict regulatory requirements and higher performance standards for lubricants.

Base oil is the name given to lubrication grade oils initially produced from refining crude oil (mineral base oil) or through chemical synthesis (synthetic base oil). Base oil is typically defined as oil with a boiling point range between 550 degrees Fahrenheit (F) and 1050 F, consisting of hydrocarbons with 18 to 40 carbon atoms. As defined by the American Petroleum Institute, base oil can be either paraffinic or naphthenic in nature depending on the chemical structure of the molecules.

Premium base oil is the main ingredient in the production of top-tier motor oils that help improve fuel economy, lower tail-pipe emissions and extend the time between oil changes, Chevron noted. Base oils are also used to make lubricants and greases for machinery and equipment in the commercial and industrial sectors.

In a July 28 interview, , Braden Reddall, Chevron’s senior downstream media advisor, told Hart Energy that the Pascagoula base oils plant will produce Group II base oils. Of the five categories of base stocks (Group I-V), the previously popular Group I base stocks have been phased out in recent years as Group II and III base stocks become more popular around the globe.

Chevron said base oil production from the Mississippi facility will supply customers in Europe, Latin American and the U.S. Northeast. Its Richmond production will continue to supply the U.S. West Coast, and both Richmond and Yeosu base oil production will supply Asia, according to the Chevron statement.

The Pascagoula base oils plant uses Chevron’s proprietary “Isodewaxing” technology invented in 1993. The technology results in higher yields and enables a broader range of crude oil to be used in the manufacturing process.

In fact, more than half the world’s premium base oil is manufactured with this technology through licensing agreements with Chevron, according to company officials.

According to Kline & Co. in a June 2013 white paper titled “From Crack to Crankshifts: How the shale gas boom is shifting natural gas conversion and lubricant base stock manufacturing,” its experts said that, “Group I demand is already expected to drop by 20% to 30% over the next few years, and a supply push from GTL-based UHVI stocks will accelerate that decline.”

Although the advent of shale resources in the U.S. “was not instrumental” in Chevron’s decision to build its new Pascagoula base oil facility, Reddall said, “it has been a bonus.”

In a June 2014 investor presentation, Chevron noted that compared with 2013, when it employed 34% of its capital to lubricants and chemicals within its downstream and chemicals portfolio, by 2016 an additional 7% of capital employed will be shifted to the lubricants and chemicals division to a total of 41%.

According to the presentation, major lubricants-related capital projects which are currently boosting earnings growth for Chevron and are expected to drive future growth, include the new Pascagoula premium base oils facility and additives plant expansion in France and Singapore.