HOUSTON, Jan. 9, 2013 (GLOBE NEWSWIRE) -- Major refining capacity expansion projects scheduled for completion within three-to-five years, totaling 9 million barrels per day, will add to the global refining distillation capacity surplus according to Hart Energy's study "Global Crude, Refining & Clean Transportation Fuels Outlook to 2035." This growth will occur despite recession-related drops in demand for finished fuels in some markets and closure of some existing capacity.
The capacity surplus narrows when it is defined by refined product finishing capacity (such as diesel production and desulfurization capacity for 10ppm sulfur for gasoline and distillate fuels). This narrow balance of refining finishing capacity is what is keeping global refining margins high.
Within India, for example, where export capacity soared in recent years, there will be continued capacity growth (to nearly 5 million barrels per day) prior to 2015. Even in low-growth regions of Europe and North America, major projects initiated prior to the more recent pull-back in demand will come online by 2012-2013.
These highlights are among the findings in the 2012 World Refining and Fuels Study (WRFS) that was released in Dec. 2012. The analysis, which quantifies both gasoline and diesel demand and trade flow by sulfur category, concludes expanding low sulfur diesel demand will challenge refining capability — and be the primary driver behind future refined product markets and margins.
Speaking to regional trends, Terrence Higgins, Hart Energy's executive director for refining & special projects, noted, "Growth in demand, led by developing regions in Asia, will outstrip these short-term capacity expansions by 2015-2017.
"Also, strong growth in Latin American markets, coupled with limited near term refinery projects, will offer market opportunity for surplus U.S. refined products," Higgins said. "New Brazilian refineries scheduled for later in the decade and/or beyond 2020 eventually will supply a larger portion of the region's needs."
The study further predicts:
- Declining Atlantic Basin gasoline demand will lead to severe competitive pressures in the U.S. East Coast market and rationalization in European refining centers
- Shale oil development and increasing global condensate production will provide near-term improvement in average crude oil quality
- Very heavy crude production, particularly crude from Canadian oil sands, will expand requiring continued expansion of bottoms processing capacity
The full report covers:
- Country-specific, regional, and global production data for crude and NGL and supply forecasts to 2030
- Supply and demand (by sulfur limit) for gasoline, naphtha, jet fuel, kerosene, diesel, distillate, marine, and residual fuel
- Impact of production, environmental, and CO2-related policy requirements on transport fuel quality
- Growth in China and increasing demand in Asia Pacific and the Middle East
- Brazil's ability to increase crude supply and output of refined products and advanced biofuels
- Short- and long-term crude and refined products pricing and margin analysis
For more information on the study findings, methodology, and geographical coverage, Terrence Higgins is available for comment at +1.703.891.4815 or thiggins@hartenergy.com
To learn more about this report visit www.hartwrfs.com.
About the Authors
Terrence S. Higgins
Terry Higgins has more than 40 years of experience in petroleum refining and related-energy industries. He provides special support to Hart Energy clients regarding worldwide trends in refined product quality, refining technology, crude and other feedstock supply, refined product markets, and training. Higgins manages Hart Energy's World Refining & Fuels Service and is the primary contributor to the service's annual Global Crude, Refining and Clean Transportation Fuels Outlook. He oversees crude and refined product, refining facility, product quality initiatives data, and forecast systems supporting the WRFS service. Higgins joined the company after 14 years with the National Petrochemical & Refiners Association (now the American Fuel & Petrochemical Manufacturers) where he served as technical director. He has also held positions in public and private sector energy and environmental consulting, including the U.S. Department of Energy, Amerada Hess, and Texaco. In all of these roles, Higgins has been involved in analysis of refining and crude oil and refined products markets. He has extensive experience in the application, design, and implementation of refinery modeling systems. Higgins earned his bachelor's degree in chemical engineering from the University of Notre Dame, U.S.
Petr Steiner, Ph.D.
Petr Steiner serves Hart Energy as director of refining and as an expert on Russia and the Commonwealth of Independent States (CIS) for the International Fuel Quality Center and World Refining & Fuels Service. While pursuing his Ph.D., Steiner worked closely with Statoil and the SINTEF research center, and spent six months at the department of chemical engineering at the Technical University of Delft, the Netherlands. Prior to joining Hart Energy, he worked for three years as a research associate at the department of chemical engineering at the University of Cambridge, U.K. His work was part of the ATHENA project, focusing on improving activity and selectivity of heterogeneous catalysts. Steiner is a native of the Czech Republic and received his doctorate in chemical engineering from the Norwegian University of Science and Technology by defending his thesis on kinetic and deactivation studies of hydrodesulphurization catalysts.
For 30-plus years, Hart Energy has been a leader covering news and technology for energy investors and executives. The Houston-based company publishes Oil and Gas Investor, E &P, Midstream Business, and FUEL, online data services (OilandGasInvestor.com, UGcenter.com, A-Dcenter.com), and industry newsletters, and provides research and consulting services. With its successful DUG™ conference series, maps, playbooks, and research studies, Hart Energy offers exceptional depth in unconventional resources information. Visit hartenergy.com for more information.
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