ExxonMobil Breaks Ground on Group III Unit at Baytown

ExxonMobil builds Group III Unit

ExxonMobil builds Group III Unit –  ExxonMobil has begun construction on a major expansion of API Group III base oil production at its Baytown complex in Texas. The expansion is aimed at meeting growing global demand for high-performance base oils used in automotive and industrial applications.

The project is expected to add about 8,000 barrels per day of Group III capacity once completed, increasing ExxonMobil’s supply of Group III material and strengthening availability in the North American market.

Demand for Group III base oils continues to rise as stricter emissions standards, higher engine efficiency requirements and longer oil drain intervals push lubricant formulations toward higher-quality base stocks. Group III base oils are widely used in passenger vehicles commercial trucks, industrial equipment, agricultural machinery and wind turbines, where durability and performance are critical.

The Baytown expansion builds on ExxonMobil’s earlier investments in its global base oil network, including the Singapore Resid Upgrade Project, which began producing in September 2025 and the addition of Group II production at its Rotterdam refinery in the Netherlands in 2019. Together, these investments are intended to improve flexibility and resilience across the company’s global base oil supply chain, Exxon said in a press release.

Basel Al-Agbhar vice president of ExxonMobil’s base stocks and waxes division said in a press release that the groundbreaking is an important step in expanding the company’s base stock portfolio to support evolving customer needs and reflects a long-term commitment to large-scale manufacturing and supply reliability.

ExxonMobil plans to adjust operating rates and product yields across existing units at Baytown, shifting some output away from gasoline toward higher-demand diesel fuel and higher-value base stocks. Construction is expected to continue over the next two years with startup targeted for 2028.

“It was a bit surprising that ExxonMobil decided to start large-scale production of Group III base oils in the U.S. because in the past, the company had consistently positioned Group II as its core business,” Gabriella Wheeler, Lubes’n’Greases’ base stock price editor, told Lube Report. “However, ExxonMobil appears to have recognized that Group III base oils will be required in a growing range of applications and that its strategy needed to evolve.”

Securing optimal high-yield crude for Group III production in the U.S. remains a challenge, Wheeler added. “Most large Group III plants require very waxy crude, which is not widely available in the Americas.”

Other industry observers described the expansion as a “clever move.”

“This reconfiguration shifts the site away from gasoline toward higher-value products – diesel and API Group III lubricant base oils,” said Geeta Agashe, the president of industry consultancy Geeta Agashe & Associates, speaking to Lube Report.

With U.S. gasoline demand gradually declining and diesel consumption rising, Agashe noted that the project also addresses the country’s status as a net importer of Group III base oils, strengthening domestic supply while increasing diesel output.

ExxonMobil has long been the world’s largest base oil producer, but Baytown – once the project is completed – will become its sole source of Group III base stocks. The company’s base oil plant in Fawley, U.K., previously had capacity to make 1,000 b/d of Group III but the company shuttered it after 2019.

The U.S. has relatively little domestic capacity to make Group III. Chevron’s plant in Richmond, California, is configured to make 2,500 b/d and Avista can make 1,500 b/d at its Peachtree, Georgia, rerefinery, while small or undisclosed capacities are at Calumet’s plant in Shreveport, Louisiana, Motiva’s in Port Arthur, Texas, and Safety-Kleen and Vertex rerefineries in Wichita, Kansas, and Mobile, Alabama. Petro-Canada has capacity to make 4,000 b/d of Group III at its refinery in Mississauga, Canada.

As a result, the U.S. imports large amounts of Group III, but ExxonMobil’s is one of several domestic Group III projects now under way. Chevron has said it will add an undisclosed amount of Group III capacity to its Pascagoula, Mississippi, refinery later this year. Canadian start-up Cerilon wants to build a gas-to-liquids refinery in North Dakota and says it will make 5,800 b/d of Group III+ base oils, but a final investment decision has not yet been made.