INTERNATIONAL
ENERGY
AGENCY
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December 2008
Supplement
Medium-Term Oil Market Report
Refining and Product Supply Outlook
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CONTACTS and ACKNOWLEDGEMENTS David Martin and Toril Bosoni took the analytical lead for this Supplement, backed by OIMD* Staff. The project was made possible by the generous support of the UK government. Editor Head of the Oil Industry and Markets Division
David Fyfe (+33) 0*1 40 57 65 90 e-mail:
[email protected]
Refining/Product Supply
David Martin (Consultant) Toril Ekeland Bosoni (+33) 0*1 40 57 65 95 e-mail:
[email protected]
Demand
Eduardo Lopez (+33) 0*1 40 57 65 93 e-mail:
[email protected]
Supply
David Fyfe (+33) 0*1 40 57 65 94 e-mail:
[email protected]
Pricing
Julius Walker (+33) 0*1 40 57 65 22 e-mail:
[email protected]
Trade
James Ryder (+33) 0*1 40 57 66 18 e-mail:
[email protected]
Statistics
Martina Repikova (+33) 0*1 40 57 67 16 e-mail:
[email protected]
Editorial Assistant
Fax
Anne Mayne (+33) 0*1 40 57 65 96 e-mail:
[email protected] (+33) 0*1 40 57 65 99/40 57 65 09 * 0 only within France OIMD* Oil Industry and Markets Division
© OECD/IEA. All Rights Reserved The International Energy Agency (IEA) makes every attempt to ensure, but does not guarantee, the accuracy and completeness of the information and the clarity of content of the MediumTerm Oil Market Report: Refining and Product Supply Outlook - Supplement (hereafter the Supplement). The IEA shall not be liable to any party for any inaccuracy, error or omission contained or provided in this Supplement, nor for any loss or damage, whether or not due to reliance placed by that party on information in this Supplement. The Executive Director and Secretariat of the IEA are responsible for the publication of the Supplement. Although some of the data are supplied by IEA member-country governments, largely on the basis of information they in turn receive from oil companies, neither these governments nor these oil companies necessarily share the Secretariat’s views or conclusions as expressed in the Supplement. The Supplement is prepared for general circulation and is distributed for general information only. Neither the information nor any opinion expressed in the Supplement constitutes an offer, or an invitation to make an offer, to buy or sell any securities or any options, futures or other derivatives related to such securities. This Supplement is the copyright of the OECD/IEA and is subject to certain terms and conditions of use. These terms and conditions are available on the IEA website at http://www.iea.org/ oilmar/licenceomr.html.
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CONTENTS 1. Executive Summary .......................................................................................................................................... 2 2. Product Supply Overview ................................................................................................................................. 4 3. Demand ‐ Overview .......................................................................................................................................... 6 4. Rising to the Challenge of a Rapidly Changing Crude Slate .............................................................................. 8 5. Regional Crude Trade ....................................................................................................................................... 9 6.1. Global Refinery Capacity Expansions ........................................................................................................... 11 6.2. Regional Refinery Utilisation ....................................................................................................................... 12 7.0. Global Product Balances .............................................................................................................................. 13 7.1. Global Product Balances ‐ Gasoline and Naphtha ....................................................................................... 13 7.2. Global Product Balances ‐ Gasoil and Kerosene .......................................................................................... 14 7.3. Global Product Balances ‐ Fuel Oil ............................................................................................................... 16 8.0 Regional Demand and Product Supply Outlooks .......................................................................................... 17 8.1.1. OECD North America – Demand ............................................................................................................... 18 8.1.2. OECD North America – Refining and Product Supply ............................................................................... 19 8.2.1. OECD Europe – Demand ........................................................................................................................... 21 8.2.2. OECD Europe – Refining and Product Supply ........................................................................................... 22 8.3.1. OECD Pacific – Demand ............................................................................................................................ 24 8.3.2. OECD Pacific – Refining and Product Supply ............................................................................................ 25 8.4.1. China ‐ Demand ........................................................................................................................................ 27 8.4.2. China – Refining and Product Supply ........................................................................................................ 28 8.5.1. Other Asia ‐ Demand ................................................................................................................................ 30 8.5.2. Other Asia – Refining and Product Supply ................................................................................................ 31 8.6.1. Middle East ‐ Demand .............................................................................................................................. 33 8.6.2. Middle East – Refining and Product Supply .............................................................................................. 34 8.7.1. Latin America ‐ Demand ........................................................................................................................... 36 8.7.2. Latin America – Refining and Product Supply ........................................................................................... 37 8.8.1. FSU‐Demand ............................................................................................................................................. 39 8.8.2. FSU – Refining and Product Supply........................................................................................................... 40 8.9.1. Africa ‐ Demand ........................................................................................................................................ 42 8.9.2. Africa – Refining and Product Supply ....................................................................................................... 43 8.10.1. Non‐OECD Europe ‐ Demand .................................................................................................................. 45 8.10.2. Non‐OECD Europe – Refining and Product Supply ................................................................................. 46 Appendix 1 ‐ Note on Methodology .................................................................................................................... 47 Appendix 2 – Selected Project List ...................................................................................................................... 49
Tables ........................................................................................................................................................... 52
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
INTERNATIONAL ENERGY AGENCY
1. Executive Summary Focusing on the refining sector and oil product supply, this report is a downstream supplement to the Medium‐Term Oil Market Report (MTOMR) released in July 2008. The work on modelling refined products supply, which forms a central part of the analysis, has been supported by a voluntary contribution from the UK government, for which we are extremely grateful. Taking forecast oil products demand and expected crude and gas liquids supply capacity for the period through 2013 as a starting point, we have matched these components with forecast refining capacity. This allows us to assess the adequacy of currently scheduled refining sector investment in meeting the evolving pattern of oil products demand, both regionally and across the main oil products groupings – light products (gasoline and naphtha), middle distillates (kerosene/jet fuel and gasoil/diesel), and residual fuel oil. While no attempt is made to optimise the global system, the results suggest a downstream environment in which gasoline/naphtha markets remain weak and in which the only way to generate sufficient middle distillate supply is by an unachievable tightening in residual fuel oil. This report has not considered the global product trade implications that might result. mb/d 6.0
Medium-Term Growth Balance
5.0 4.0 3.0 2.0 1.0 0.0 -1.0 2000 2002 2004 2006 Effective OPEC Spare Capacity World Supply Capacity Growth
2008 2010 2012 World Demand Growth
Certain key working assumptions underpin the analysis. Firstly, we assume that oil producers – largely OPEC – will continue to adjust crude production in line with fluctuating demand. Periods of weaker demand will therefore continue to see Middle East Gulf producers trimming, predominantly heavier/sourer, barrels to avoid a surplus in the market. This is not to imply a judgement on whether such a policy is either desirable or feasible, merely an enabling starting point for the analysis. Different results could be obtained were producers assumed to continue supplying oil in the face of slower demand – notably a lessening of the potentially stretched nature of fuel oil and residue markets implied by our working scenario. However, for simplicity’s sake, we assume that OPEC’s historical modus operandi holds. Secondly, it is important to note the degree to which we have rebased the medium‐term projections presented in July. The global market has been turned upside down since the summer by the impact of earlier high prices, an economic slow down and resultant plunge in crude prices, and by an evolving credit crisis. By far the biggest adjustments to base year market fundamentals have come on the demand side (2008 global demand is now expected to be 0.7 mb/d lower than anticipated in July, 2009 demand 1.4 mb/d lower and 2013 demand 2.9 mb/d lower). Installed crude production capacity and refining infrastructure availability have also been adjusted down slightly in line with year‐to‐date developments in 2008 (notably after severe hurricane disruption in the US Gulf of Mexico). But the supply adjustments have been much less than those for demand. Moreover,
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while there are signs that new investment projects for the medium term are also being squeezed by the new market environment, details of revised investment budgets and adjusted project timings remain sketchy. So our adjustments to July market fundamentals have a slightly one‐sided feel to them. However, supply‐side impacts are likely to become much clearer in the months to come and will be incorporated more fully in the 2009 MTOMR. In July, we presented a medium‐term market scenario envisaging that spare capacity (a proxy for market flexibility and one indicator among many for trends in prices) would increase in 2008 and 2009, stabilise in 2010 and tighten again sharply from 2011. The forecast was made when crude prices were approaching $150/bbl, and appeared to fly in the face of prevailing wisdom for a relentless tightening in markets for the foreseeable future. While the degree of market slowdown evident in the past five months has taken everyone by surprise, the shape of the likely market balance going forward implied in our July report still looks robust. Basing our forecast on the latest IMF economic prognosis, which suggests that economic growth rebounds again from 2010 onwards, oil demand growth, concentrated in non‐OECD markets and in middle distillates, similarly recovers. We see a potential tightening in spare upstream capacity once again from a notional 2010 high point of some 5 mb/d, also potentially suggesting a renewed strengthening for prices in that period. The exact timing, sharpness and extent of that market rebound remain of course subject to considerable uncertainty. The global economy could remain weaker for longer than assumed here, particularly if contagion to the non‐OECD is worse than anticipated. Interestingly, were that to occur, the temptation for OPEC producers to shut‐in lower value, heavy/sour crude production could exacerbate the growing tightness in global residue supplies already envisaged in our base forecast, although expected tightness in middle distillates might also be correspondingly less in a lower demand scenario. And in the base demand scenario, even if we were to strip away the assumption that the global system balances for crude oil, allowing surplus OPEC volumes to be processed, the anticipated tightness in residue supplies required to sustain middle distillate availability would not disappear altogether. Against a backdrop of marginal refining feedstock supplies becoming lighter and sweeter in the short term, the erstwhile perception of residue as the poor relation in the oil products complex may be about to change. As noted above, if economic weakness and tight credit conditions continue, non‐OPEC projects may slip further, OPEC may defer some of its own crude capacity expansions and the rise in hypothetical spare upstream capacity may be less pronounced than shown here. However, the more investments, both downstream and upstream, are deferred by the current market hiatus, the greater the need for new capacity for when demand growth recovers. Refining remains a highly cyclical business and much of the strength in margins seen these past five years has already dissipated. Refinery upgrading economics may look strained in the scenario presented here, and therefore a balanced market would suggest that more fuel oil demand will be destroyed, or upgrading capacity projects will have to slip and utilisation of existing capacity be reduced. But the huge levels of refining investment necessary for the future (at least $1 trillion through 2030 according to the IEA’s latest World Energy Outlook) cannot be deferred for ever. The deeper the weakening of market fundamentals in the short term, the sharper the market rebound may be when economies recover. Shrewd operators might do better to sustain their investment while costs face a cyclical downturn, rather than scrambling to join the queue for suppliers when markets recover. Maintaining investment in a market down‐cycle characterised by tight credit conditions will remain a key challenge for companies and regulators alike.
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2. Product Supply Overview The global refining industry faces several challenges over the medium term. Firstly, demand growth, though significantly lower than forecast in the July 2008 MTOMR, remains heavily biased towards middle distillates. Concurrently, weak gasoline demand growth and increased ethanol supplies will result in excess gasoline supply potential that will undermine gasoline and naphtha cracks. Lastly, the expected investment in upgrading capacity, combined with a lighter feedstock slate and stable overall end‐user demand, will tighten the fuel oil market significantly. However, a now‐lower forecast for product demand is assumed to be balanced by correspondingly lower demand for refinery feedstocks and hence oil production. We are not forecasting a specific level of OPEC or Non‐OPEC output, but merely placing a constraint on the forecasting framework used to assess product markets. Prices, and therefore refinery margins, will be determined by actual output and demand, but to assess the future potential pinch‐points within the oil market we assume there is a like‐for‐like trimming of crude supplies to keep markets balanced. Consequently, we assume that OPEC’s Middle Eastern member states shoulder the burden of reduced crude oil output under the influence of the prevailing OPEC quota regime. Liquids not subject to quotas, namely condensates and natural gas liquids (NGLs), are assumed to grow strongly, as per previous forecasts. Many of the projects will supply urgently needed natural gas for domestic markets (electricity generation, petrochemicals or oilfield reinjection), or are linked to already committed export oriented LNG schemes, although some of these show signs of slower progress. This raises an interesting conundrum for OPEC producers: sustaining gas supplies, and with them incremental volumes of gas liquids, would potentially undermine the market for more residue‐rich crude. mb/d
mb/d Crude Distillation Capacity Additions
Global Cumulative Demand Growth 2008-2013
6
2.5
Gasoline Distillates LPG & Naphtha Fuel Oil Other Total
4 2
2.0 1.5 1.0 0.5
-
0.0
(2) 2008
2009
2010
2011
2012
2013
2008 2009 2010 OECD Other Asia Other Non-OECD
2011 2012 2013 China Middle East
This assumption of lower Middle Eastern crude exports and higher condensate and NGL volumes presents a further challenge for refiners: where to source sufficient quantities of atmospheric and vacuum residues to fill the numerous upgrading capacity expansions already underway, which are required to supply middle distillates, while at the same time satisfying sustained medium‐term end‐user fuel oil demand. Ultimately, one or more of the major categories of fuel oil consumers must find an alternative source of energy or feedstock. Given the scenario of spare, heavy sour crude capacity and poorly utilised refinery capacity, it is easy to envisage that higher supplies of fuel oil and indeed middle distillates could be produced given higher crude throughput than assumed in this supplement. However, this would only exacerbate other product market imbalances, notably the excess gasoline/naphtha supply potential implicit in our forecasts. Furthermore, in a world where fuel oil and diesel are relatively constrained but gasoline supplies are in excess of demand, one might reasonably expect gasoline and naphtha cracks to remain weak over the
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medium term. Those refineries most exposed to the gasoline crack, namely those heavily dependent on catalytic cracking units, are thus assumed to bear the brunt of the impact. Gasoline and naphtha cracks are expected to remain under pressure, possibly staying negative for extended periods, in the face of anaemic demand and excess supply potential, including the impact of growing ethanol volumes on ex‐refinery gasoline markets. This clearly risks discouraging refinery upgrading investment, all the more so if ambitious volumetric biofuel mandates are achieved. The forecasts presented here incorporate the significant switch already made by North American refiners (primarily in the US) to a higher distillate yield, which has been evident over the course of 2008. We assume that this has been driven largely by an increased yield of middle distillate from crude distillation units, with limited changes to upgrading unit operations. Previously, we had assumed that North American refiners would continue to maximise gasoline yields on all units. As a result, the Atlantic Basin develops more two‐way trade, with rising volumes of gasoline heading west and diesel/gasoil moving east. This substantially reduces the excess gasoline position previously forecast for the Atlantic Basin. Although we briefly discuss a global balance assuming that North American refiners revert back to maximising gasoline, it seems unlikely this will emerge, short of a significant collapse in diesel demand, which would only follow substantially weaker economic growth than assumed here, and in any event would imply much lower global refinery utilisation than we have assumed. Furthermore, changes to operating modes present a host of issues, such as the availability of sufficient hydrotreating capacity, or the trade‐off that refiners face between higher throughput and shorter periods between shutdowns for maintenance and catalyst changeover. However, we do not address these issues in this supplement. mb/d
Global Potential Product Balances 2008-2013
1.0 0.5 0.0 -0.5 -1.0 -1.5 -2.0 -2.5 2008
2009 2010 2011 Naphtha/Gasoline Gasoil/Kerosene
2012 Fuel Oil
2013
The conclusion of this analysis is that middle distillate values are likely to sustain their significant premium to gasoline over the medium term. The degree of fuel oil conversion needed to meet the forecast diesel demand is such that we expect that fuel oil differentials versus crude will narrow and even move into positive territory. Under such circumstance the incentive to process fuel oil into gasoline appears much reduced, suggesting that some conversion equipment will be idled. The extent to which fuel oil can close the value gap to distillate remains unclear, but we suspect that a price response which reduces the incentive for upgrading fuel oil into distillate is also possible. This would in turn suggest a tighter diesel market balance than that presented here. Consequently, as demand growth is largely driven by diesel over the forecast period, it will also drive how refiners optimise their operations, subject to possible changes in fuel oil markets as discussed below.
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Lastly, our forecast points to a significant, and frankly unachievable, tightness in the fuel oil market over the medium term, driven by increased upgrading capacity, a lighter crude slate and the resumption of demand growth post‐2009. The rebalancing of the fuel oil market would require demand destruction for fuel oil, driven by higher prices. This adjustment must be made either by power generators, industrial users or international marine bunkers, as forecast market balances are untenable. An equally likely alternative is that scheduled upgrading capacity investments slip and refinery upgrading utilisation drops, particularly for catalytic cracking units, in the face of deteriorating price spreads between light and heavy products. 3. Demand - Overview Global oil product demand is expected to grow by 1.2% per year on average between 2008 and 2013, from 86.2 mb/d to 91.3 mb/d, representing an average volumetric increase of +1.0 mb/d per year. Oil demand will rise only in non‐OECD countries (from 38.3 mb/d to 44.4 mb/d, equivalent to +3.0% or 1.2 mb/d per year on average). By contrast, oil consumption in the OECD is projected to decline over the forecast period (from 47.8 mb/d to 46.8 mb/d, equivalent to ‐0.4% or ‐0.2 mb/d per year on average). mb/d
Cumulative Demand Growth
mb/d 48
OECD vs. Non-OECD
2.0 1.5
OECD vs. Non-OECD Oil Demand
46
1.0
44
0.5 0.0
42
-0.5
OECD - Transportation OECD - Other Non-OECD - Transportation Non-OECD - Other
-1.0 -1.5 -2.0 2008
2009
2010
2011
2012
2013
40 38 2008
2009
2010
OECD
2011
2012
Non-OECD
2013
Oil demand growth in both OECD and non‐OECD areas will be driven by transportation fuels. In the OECD, the use of motor gasoline, jet fuel/kerosene and gasoil/diesel is set to increase modestly (+0.2% per year on average over the forecast period), yet that will be insufficient to offset the structural decline in the other products (‐1.3% per year). In non‐OECD countries, demand for both transportation fuels and other products will rise, but the former will post a faster pace of growth (+3.1% per year) than the latter (+2.8% per year). As such, the structural drivers of our demand forecast are broadly unchanged versus the July 2008 MTOMR: distillates (jet fuel, kerosene, diesel and other gasoil) will remain the main growth drivers, followed by LPG and naphtha (mostly used as petrochemical feedstocks) and gasoline. However, the economic downturn and the impact of the sharp rise in prices during 2007 and 2008 have dragged down overall levels of demand, most notably in the OECD. Consequently, these forecasts result in significant downward revisions compared with the 2008 MTOM, totalling ‐2.9 mb/d by 2013. As we flagged in July, the key uncertainties at that time were the state of the global economy in light of the unfolding mortgage crisis in the US – which eventually became a global financial crisis – and the evolution of oil prices – which reached unforeseen highs close to $150/bbl in mid‐2008. Since our forecasts are based on the economic growth assumptions published by the International Monetary Fund, our oil demand projections can vary significantly if these GDP assumptions are revised. Five months ago, the IMF had
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predicted that the world economy would expand by +4.4% per year on average over the period. Its current assessment, by contrast, sees global economic growth running at about +3.6% on average – almost one percentage point less per year. This is virtually identical to the ‘low case’ scenario that we had volunteered in our last MTOMR in order to assess GDP sensitivity, in which we suggested that global demand could reach 91.4 mb/d in 2013, compared with 94.1 mb/d in the base case. It is important to note that this global GDP outlook somewhat obscures a major development versus July’s MTOMR: the fact that for the first time since 1945 most OECD countries are expected to face a severe economic recession in 2009. By the same token, emerging economies are bound to slow down, even if managing to maintain positive growth rates. Even though the world economy is expected to recover from 2010 onwards, there is a risk that the slowdown might be more prolonged. In addition, over the months and years ahead another key assumption of our current oil demand forecast – an oil price at $80/bbl in real terms over the forecast period (broadly based on the futures curve as of mid‐ November 2008) – will be tested. mb/d
Global Cumulative Demand Growth
Global Oil Demand: mb/d
2008-2013
6
Gasoline Distillates LPG & Naphtha Fuel Oil Other Total
4 2
Difference vs. Previous MTOMR
1.0 0.0 -1.0 -2.0
-
-3.0 (2)
2008 2008
2009
2010
2011
2012
2013
2009
OECD
2010
2011
2012
Non-OECD
2013
WORLD
There are other caveats to this outlook: 1) the baseline demand data used in this forecast were frozen in mid‐November; 2) we presume that administered price regimes in key non‐OECD countries will move gradually towards free market prices, rather than more suddenly and abruptly; 3) we assume normal weather conditions, defined as the rolling 10‐year average of observed temperatures; and 4) we expect that the current trends regarding alternative sources of supply (the gradual yet growing use of natural gas as a substitute for several refined products, including heating oil or fuel oil) will continue. Should any (or several) of these assumptions fail to materialise then this outlook could be markedly altered. mb/d
Global Demand Forecast
96 94 92 90 88 86 84 82 2006
2007
2008
2009
July 08
2010
2011
2012
2013
Dec 08
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4. Rising to the Challenge of a Rapidly Changing Crude Slate This supplement retains the global crude oil and gas liquids supply capacity forecast presented in the July MTOMR, albeit rebased for 2008 year‐to‐date actual production. Supply‐side revisions for 2008 have generally been of a lower magnitude than those for demand. Moreover, while the current period of lower crude prices and tighter credit markets will ultimately slow upstream investment, the real impact is only likely to become apparent after several more months, and in any case looks likely to be deferred until later in the forecast period. Consequently, we continue to foresee a period of strong volume growth over the next 18 months, largely on the basis of substantial capacity additions from within OPEC itself. As a result, effective spare OPEC capacity is expected to rise substantially, approaching 5 mb/d in 2010, largely due to the economic slowdown and much lower prognosis for demand growth. However, the annual rate of upstream expansion drops off considerably from the 2.4 mb/d seen in 2009, to around 1 mb/d at the tail end of our forecast, just as global economic growth and therefore demand has been forecast to pick up again. mb/d
World Supply Capacity Growth
2.5
mb/d 6.0
2.0
5.0
1.5
4.0
1.0
3.0
0.5
2.0
0.0
OPEC EffectiveSpare Capacity
1.0
-0.5
0.0 2008 2009 2010 Non-OPEC Supply OPEC NGLs
2011 2012 2013 Biofuels OPEC Capacity
2008
2009
2010
Jul-08
2011
2012
2013
Dec-08
Crucially, despite supply (as defined by the Oil Market Report) rising on a volumetric basis, the sources of supply are increasingly poorly suited to refinery trends identified in this supplement. A substantial proportion of both OPEC and non‐OPEC growth will come from condensates, NGLs and biofuels. Indeed, only a very limited contribution to non‐OPEC incremental supply comes from conventional crude. Rising supplies of biofuels and NGLs in particular, actually reduce the supply of crude oil within our forecasting framework. This presents refiners with a rapidly changing crude slate from which to select the most profitable grade. API, degrees 33.4
Global Quality 2008-2013
Sulphur (%)
API Sulphur (RHS)
API 1
Changes in Quality 2008-20132
0.5
Europe
Middle East
1.15 1.14
33.3 1.13 33.2
World
0
1.12
AsiaPacific
-0.5
1.11 33.1 1.10 33
-1
1.09 2008 2009 2010 2011 2012 2013
0.03
FSU
Africa
North America 0.00
Latin America
-0.03 -0.06 Sulphur %
-0.09
-0.12
Furthermore, with NGL volumes assumed to be partly processed elsewhere, e.g. petrochemical plants, this further reduces the availability of feedstock for use in refineries, as OPEC is assumed in this study to
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continue to balance the market overall, taking account of both its own and non‐OPEC’s rising volumes of non‐crude supply. The loss of crude at the expense of NGLs is a key driver of both the tightening middle distillate forecast presented here and the chronic potential shortfall in straight‐run residue supply. 5. Regional Crude Trade A reassessment of medium‐term oil balances has reduced the global demand prognosis for 2008‐13 considerably, in turn prompting a much lower ‘Call on OPEC crude’ production over the next five years. With potentially less crude on the water, inter‐regional global crude trade could drop sharply from 35.9 mb/d in 2008 to 34.4 mb/d in 2009 before gradually recovering to 37.4 mb/d in 2013. Averaged on a compound basis, this would equal just 0.8% annual growth over the whole five‐year period. The global trend is heavily influenced by export dynamics in the Middle East, the key region for global oil trade. As already noted Middle Eastern crude exports bear the brunt of reduced global supplies and may initially drop from 17.7 mb/d to 15.4 mb/d in 2009. Thereafter, exports could recover to 18.2 mb/d by 2013 as non‐OECD demand growth rebounds. Over the whole period, there is a marked decrease in exports to the OECD (where demand and refinery throughput are forecast to fall), notably flows to OECD Pacific (down 0.8 mb/d over the next five years) and OECD North America (off 0.4 mb/d). However, crude trade to China and Other Asia should continue to grow significantly, by 0.8 mb/d and 0.7 mb/d respectively, including substantial extra volumes of condensates (included in these numbers). Total condensate export volumes from the Middle East may increase by as much as 1.2 mb/d as regional production expands. Crude Exports in 2013 and Growth in 2008-13 for Key Trade Routes* (million barrels per day) * Excludes Intra-Regional Trade
OECD Europe OECD North America
3.0 (+0.7)
5.0 (-0.3) 1.8 0.1
5.0
OECD Pacific
1.2 (+0.5)
(-0.8)
China
2.6 (+0.5) 5.7 (+0.7)
1.9
2.1
Other Asia
(0)
(+0.8)
1.6 2.9 (-0.4)
(+0.5)
Red number in brackets denotes growth in period 2008-13
By contrast, African exports are set to increase from 7.5 mb/d in 2008 to 8.8 mb/d in 2013, equating to compound annual growth of 3.4%. This makes Africa the major growth area in terms of exports in our crude trade scenario. The extra cargoes will head mainly to OECD Europe (+0.7 mb/d between 2008 and 2013, largely Nigerian and Libyan grades), North America (+0.5 mb/d) and China (+0.5 mb/d). Rising domestic demand limits a potential rise in FSU crude exports to around 0.2 mb/d, with regional crude outflows reaching 6.9 mb/d in 2013. Trade to OECD Europe is set to dip by 0.3 mb/d, supplanted
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by a 0.5 mb/d firming of exports to China, facilitated by new eastbound pipelines such as the ESPO and the Kazakhstan‐China link. Higher Caspian production will account for much of the net increase in FSU export volumes. Latin American exports to other regions could also remain comparatively flat at around 2.1 mb/d as rising crude demand within the region itself erodes growth in exports. kb/d 1,800
Regional Crude Export Growth
Middle East Crude Export Growth 2008-13 by Destination (kb/d) Oth Eur Oth Asia OECD Pac OECD Nam OECD Eur Latin Am FSU China Africa
900 0 -900 -1,800 -2,700 2008 2009 2010 2011 2012 2013 Africa FSU Latin Am Mid East OECD Pac OECD Eur Other Asia
-900 -600 -300
0
300
600
900
According to this trade scenario, Chinese crude imports are set to increase the most of all the importing regions, potentially increasing by an average of 8.9%, from 3.2 mb/d in 2008 to 4.9 mb/d in 2013. Robust refining capacity additions underpin this rise in trade. Incremental inflows into the increasingly complex Chinese crude slate will emanate from the Middle East (+0.8 mb/d, the vast majority of which from Saudi Arabia), Africa (+0.5 mb/d, especially Angola) and FSU (+0.5 mb/d, mainly Russia). Any strategic stockbuilding in China will, of course, add to these import volumes. Imports into Other Asia could rise more modestly, from 6.1 mb/d to around 6.6 mb/d, or around 1.7% annual growth on average. This would overwhelmingly involve extra Middle Eastern crude, with a possible bias towards Qatari, UAE and Saudi Arabian grades. kb/d 1,800
Inter-Regional Net Trade Growth 2008-13
Regional Crude Import Growth
Mid East-China Mid East-Other Asia Africa-OECD Eur FSU-China Africa-OECD Nam Africa-China Latin Am-Africa Africa-Other Asia FSU-OECD Eur Mid East-OECD Nam Mid East-OECD Pacific
900 0 -900 -1,800 -2,700 2008 China OECD Pac Latin Am
2009
2010
2011
Other Eur OECD N Am Africa
2012
2013
Other Asia OECD Eur
kb/d
-1000 -500
0
500
1000
A lower demand prognosis means that OECD North American crude imports have the potential to fall from 7.8 mb/d in 2008 to 7.6 mb/d in 2013. Of this drop, arrivals from Middle East (especially of Saudi Arabian crude) and OECD Europe could fall the most severely, each by around 0.4 mb/d, the latter on declining regional production. Some higher imports from Africa may act as a partial offset, up 0.5 mb/d in the medium term in our scenario, with extra Angolan cargoes prominent. Elsewhere in the OECD, European crude imports will have to rise to counter the decline in domestic production and an envisaged dip in imports of FSU crude (heading east instead). Our scenario includes an increase from 9.7 mb/d in 2008 to 10.2 mb/d in 2013, driven by a rise of 0.7 mb/d in trade from Africa (especially from Libya and Nigeria) outpacing the 0.3 mb/d reduction in imports from the FSU (driven by
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lower flows from Russia). Conversely, OECD Pacific imports are seen to decrease by around 0.8 mb/d over the medium term, reaching 5.7 mb/d in 2013, aligned with a structural decrease in demand which could threaten the future viability of some refineries in this region. 6.1. Global Refinery Capacity Expansions Refinery investments are forecast to add 8.0 mb/d of crude distillation capacity by the end of 2013, significantly outpacing expected demand growth. Expansions are dominated by China, Other Asia and the Middle East, which together account for two thirds of global expansions. It should be noted that despite recent announcements by refiners of delays, cancellation and slippage to expected completion dates for projects, the forecast of global refinery capacity additions is largely unchanged from the July MTOMR. However, we have excluded two large‐scale projects in the Middle East which we feel can no longer realistically be completed within the forecast timeframe namely the Kuwaiti al Zour refinery and Saudi Aramco and Total’s joint venture Jubail refinery, which reduce total expansions by a combined 0.8 mb/d. Distribution of Crude Distillation Capacity Additions
mb/d Crude Distillation Capacity Additions 2.5
NonOECD Europe
2.0 1.5
Latin America
Middle East
1.0
OECD Europe OECD Pacific
Africa
0.5
OECD N America
FSU
0.0 2008 2009 2010 OECD Other Asia Other Non-OECD
2011 2012 2013 China Middle East
Other Asia
China
As highlighted in the July MTOMR, forecast additions are subject to slippage and in light of the weaker economic climate and credit crunch these have increased. Arguably, it is still premature to assess the full consequences of the current turmoil on all projects, but we will include a full update of the impact of the credit crisis on capacity expansions in the 2009 MTOMR. mb/d Gross Upgrading Capacity Additions
mb/d 3.0
2.0
Desulphurisation Capacity Additions
2.5 1.5
2.0 1.5
1.0
1.0
0.5
0.5 0.0
0.0 2008 2009 2010 OECD Other Asia Other Non-OECD
2011 2012 2013 China Middle East
2008 2009 2010 OECD Other Asia Other Non-OECD
2011 2012 2013 China Middle East
In addition to new crude distillation capacity, 7.2 mb/d of upgrading capacity and 9.2 mb/d of desulphurisation capacity is expected to be added within the forecast period. Additions are more evenly balanced between the OECD and non‐OECD regions, and aim to improve light product yields and product quality, and to meet with more stringent environmental standards being imposed on refineries.
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6.2. Regional Refinery Utilisation As a result of the increasing refinery capacity coming on line at a time of a significantly reduced demand outlook (and lower crude supplies to balance the market), refinery utilisation rates are seen dropping sharply over the forecast period. Global utilisation rates fall below 80% of capacity in 2009, before rebounding as global economic growth and demand picks up thereafter. In constructing our forecasts it has been necessary to allocate crude production to refinery regions for processing. This is discussed in detail in our appendix on methodology but in general, we have assumed that crude throughputs in non‐OECD regions, including those which are net crude exporters (e.g. Africa, the FSU, and the Middle East), will be maximised to reflect a variety of factors, including the following: 1. Many of these regions have administered or subsidised pricing regimes, and are forecast to maintain high demand growth rates over the medium term; 2. National industrial policies typically require domestic crude runs to be maximised to capture the value‐added downstream component and minimise product imports; 3. Regions that are net exporters may incentivise refiners to maximise crude throughput via the tax regime; 4. New refinery additions in Asia are typically more complex, suggesting that these refineries will be able to sustain the utilisation levels at the expense of less sophisticated cracking refineries in the OECD. Refinery Utilisation Rates 90% OECD Non-OECD 85%
80%
75% 1Q06
1Q07
1Q08
1Q09
1Q10
1Q11
1Q12
1Q13
Conversely, the structural factors facing OECD regions, namely declining demand, regional imbalances between supply and demand for specific products and potentially more onerous environmental regulations, all contribute to our more pessimistic outlook. Furthermore, the state involvement in many refineries outside the OECD would suggest that these refiners will be less responsive to market price signals than more commercially driven operators in the OECD. As a result of these assumptions, OECD refinery utilisation is assumed to fall to around 77% from 2009 onwards, substantially below historical norms. Conversely, non‐OECD regions are expected to maintain utilisation rates at around their historical average of 82%. The implications for the potential economic survival ‐ or otherwise ‐ among more exposed OECD operators are clear: those refineries that are economically disadvantaged, either in terms of crude slate, or product output, will struggle to achieve a satisfactory rate of return, with the weakest operators possibly forced to close.
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7.0. Global Product Balances Drawing together the regional product supply and demand forecasts, we discuss here the global outlook for light and middle distillates, as well as that for fuel oil, contrasting balances in 2008 and 2013. Gasoline and naphtha supply potential is expected to run well ahead of demand over the medium term, despite the assumption that North American refineries maintain a greater bias towards diesel production. Conversely, the ability of the global refining industry to match continued strong growth in middle distillates (largely diesel and jet fuel) appears challenged by the tighter fuel oil market that is a logical consequence of the lighter crude slate, increased upgrading capacity and rebound in fuel oil demand post 2009, suggesting a vigorous price response will curtail end user and refinery demand for residue. 7.1. Global Product Balances - Gasoline and Naphtha Global light distillate supply potential is forecast to increase faster than demand over the medium term, resulting in continued downward pressure on naphtha and gasoline cracks and, more generally, on refinery margins. The global excess supply potential could reach 550 kb/d in 2013, up from an estimated 185 kb/d in 2008. The Atlantic Basin is expected to see increasing gasoline supply potential over the medium term, although to a lesser extent than previously forecast, due to North American refiners becoming increasingly distillate‐focused in their output. Nevertheless, rising supplies in the Middle East and from export refineries in Asia push the world’s gasoline supply potential substantially above current levels. The potential for additional naphtha supply from rising condensate and NGL volumes, particularly from Middle Eastern countries, is not included in this assessment. This could add a further 200 kb/d by 2013, based on historical gas processing plant yields and expectations of an additional 0.8 mb/d of NGLs over the medium term. These additional volumes of naphtha will need to be absorbed into the petrochemical or gasoline markets, or indeed find new, alternative markets, e.g. power generation. Product Supply Balances‐ Gasoline/Naphtha Potential Evolution in Regional Balance 2008/2013 Thousand barrels per day
Europe 810
FSU
858
141
166
North America Middle East ‐807
‐879
504
Asia
588
‐788
‐577
Africa 30
29
Latin America 296
368
World 553 185
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European refiners will remain the main supplier of additional gasoline supplies to North America, as Europe’s export potential increases from its already substantial level. The European car fleet will become even more biased towards diesel cars, while distillate yields are at maximum levels already. Almost 900 kb/d of fuel will be available for exports, but it will be difficult for Europe to find markets for the whole amount, as other regions with excess supplies will fight for market share. The current import requirement for naphtha/gasoline supplies in Asia will diminish over the medium term, as capacity comes online in both China and Other Asian countries. Also contributing to the reduction in net imports is the continued shrinkage of gasoline demand in the OECD Pacific. However, this will not be sufficient to offset the large volumes of naphtha going to the OECD Pacific and Korea in particular. Additional supplies from the FSU, Latin America and the Middle East will compete in both the US and Asian markets, but unless the supply or the demand picture turns out very different than laid out in this scenario, some supplies will struggle to find a market, forcing changes in supply or demand– or in both, in the years ahead. As already mentioned, the biggest difference in this product supply scenario when compared with previous forecasts is the assumption that North American refiners will place more emphasis on producing diesel, rather than gasoline. As has already been seen during 2Q08, North American gasoil/diesel yields rose by 2.1 percentage points from their five‐year average to 25.6%, (representing an 8% increase in yields) to take advantage of strong distillate and weak gasoline cracks. Similarly, gasoline yields have decreased by around 1.4 percentage points, and provisional data for 3Q08 point to an even larger swing in yields away from gasoline towards diesel. This switch in operational mode allows the region to export the more valuable diesel and import cheaper gasoline supplies from abroad, improving global balances of both gasoline and distillates in the process. Assessing the flexibility for refineries to move yields further towards middle distillates suggests that, subject to hydrotreating capacity and cetane blending limits, an additional two or three percentage points may be feasible, and a significantly higher level achievable with the necessary investment. The likelihood that US refiners switch back towards gasoline production seems extremely remote, since global balances for light and middle distillates would move further out of equilibrium than we already anticipate, with North American (and hence global) gasoline supply increasing by around 300 kb/d by 2013 in an already over‐supplied market. This scenario would indicate that a more vigorous price response would be forthcoming, in order to balance the market and push refiners back toward higher middle distillate yields. 7.2. Global Product Balances - Gasoil and Kerosene Middle distillates will likely continue to support the refinery complex in the medium term as the global balance is set to remain tight over the forecast period. Importantly, a growing proportion of the better quality middle distillates will be produced from upgrading units, as opposed to crude distillation capacity, placing greater reliance on the availability of residue as a source of supply for upgrading units. As discussed elsewhere in this supplement, the likelihood that refineries will be able to secure sufficient volumes of residue without paying a significantly higher price relative to crude appears unlikely.
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Hence, it seems probable that some upgrading units will not be fully utilised, with a consequential shortfall in distillate supplies needed to meet forecast demand growth. Therefore, we anticipate that there will be continued strength in middle distillate crack spreads relative to the idealised and more balanced situation shown in the graph below. Furthermore, it should be noted that annual trade data show global net middle distillates exports of some 500‐600 kb/d. This can be partly accounted for by adjusting for those volumes reprocessed by refineries, which in some cases are reported as refinery feedstock. However, there remains the possibility that middle distillate demand is understated in some regions. The net global balance shown in the graph below, of around 400 kb/d, is therefore perhaps misleading, in that current distillate markets are relatively tight and little improvement is anticipated over the medium term. Lastly, it should be noted that these forecasts do not include any significant shift towards gasoil within the market for international marine bunkers, as any switch remains largely outside the timeframe of this supplement. Regionally, Europe’s supply shortfall will increase, as will that of Latin America and Africa, while Asia is forecast to move slightly short, compared to its current balanced position. Additional supplies will come from the FSU, the Middle East and North America, but this will only just be sufficient to balance the global market. Tightening residue supplies under our base scenario risk undermining these relatively benign middle distillate balances, leaving more of a potential shortage than illustrated below. Product Supply Balances‐ Gasoil/Kerosene Potential Evolution in Regional Balance 2008/2013 Thousand barrels per day
FSU 776
925
Europe North America 331
611
‐1189
Asia
Middle East ‐1402
694
302
775
247
Africa
‐302
‐355
Latin America ‐164
‐364
World 447
437
European refineries are already maximising middle distillate output, and the assumption of lower refinery utilisation over the medium term will further tighten the region’s distillate balance. The slowdown of demand growth, to an average of 0.3% per annum for gasoil/diesel, is driven by the ‘dieselisation’ of the vehicle fleet reaching its limit in the mature economies and the substitution of natural gas for home heating oil. Offsetting these factors, the new upgrading and distillation capacity in the region will boost middle distillate yields. Nevertheless, Europe’s import requirements could reach 1.4 mb/d in 2013, from an estimated 1.2 mb/d in 2008.
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A significant amount of middle distillates will be available to Europe and world markets from the Former Soviet Union (FSU). Product quality could be an issue, however, and material imported from the FSU might have to be hydrotreated to conform to regional standards. The Middle East will also increase its export potential as additional refinery supplies outstrip forecast demand growth. By 2013, a combined exportable surplus of 1.7 mb/d of middle distillates will be available from these regions. Asia will remain a net‐exporter over the forecast period, albeit at a slightly lower level than currently. China moves from being a net importer to a net exporter, OECD Pacific’s supply surplus will shrink slightly and Other Asia will move to become a net‐importer due to strong demand growth. However, we remain cautious over reported refinery losses in the region, potentially understating Asian production (and possibly demand) by around 250 kb/d. 7.3. Global Product Balances - Fuel Oil The product supply scenario presented within this supplement envisages a severe tightening in the global fuel oil balance over the medium term. A combination of increased upgrading capacity and a lighter crude slate significantly constrain residue supply while global fuel oil demand growth rebounds over the latter part of the forecast period. In part this reflects the fixed price assumptions underlying the forecasting framework, but it is also the necessary consequence of refiners maximising their capital intensive upgrading capacity. In reality, such a dramatic shift in the market balance cannot materialise and would undoubtedly force a change in consumption patterns from one of the three major consumer groups, or alternatively choke off some of the refinery upgrading capacity investment envisaged here. Product Supply Balances‐ Fuel Oil Potential Evolution in Regional Balance 2008/2013 Thousand barrels per day
FSU 1076
Europe
‐201
North America
‐473
860
Middle East
Asia
192 ‐658
‐502 ‐253 ‐820
Africa ‐1975 113
80
Latin America 154
185
World ‐144
‐2078
In broad terms, the industrial (including refinery fuel), power generation and transport (primarily marine bunkers) sectors each consume around 30% of global fuel oil supplies, with a further 10% used as refinery feedstock. The power generation sector would, where possible, look to switch energy sources with LNG, coal and possibly naphtha all being feasible. Industrial users may also look to switch fuel sources. However, it
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seems unlikely at this juncture that fuel oil used for marine bunkers and as a refinery feedstock will be easily curtailed, except where prices make such use uneconomic, particularly for refinery feedstock. The most dramatic potential development in the fuel oil market is expected in Asia. Here, import requirements increase from an estimated 820 kb/d in 2008 to almost 2 mb/d in 2013. Forecast demand growth continues unabated, while supplies are seriously restricted as new upgrading capacity comes online, and large volumes of condensate from the Middle East lighten the processed crude slate. Factors contributing to this shift include the increased processing of crude by full conversion refineries e.g. Reliance Jamnagar, which eliminates a large proportion of the fuel oil that would have previously been produced by cracking refineries. Similarly, the significant increase in condensate volumes processed in the region also cuts fuel oil supply. The Middle East will also become a net importing region over this period, despite its long history as a source of exports. Regional demand from power generation will continue to grow due to an inability to increase alternative fuel sources such as notably natural gas quickly enough. This will force power generators to increase fuel oil use to meet resilient demand growth for electricity. In part the regional growth has also been driven by the higher levels of bunker demand, particularly in the Fujairah area, but whether this continues when the region becomes a net importer is uncertain. North, and to a lesser degree Latin, America are the only regions that see their fuel oil balance improve over the forecast period. In North America, fuel oil demand continues to shrink as natural gas makes further inroads into power generation. Europe’s import requirements will increase despite lower demand as increased upgrading and lower throughputs reduce fuel oil outputs. FSU supplies will decrease as that region also improves light product yields, although 0.9 mb/d of fuel oil is still estimated to be available as an exportable surplus in 2013. It is important to note that as significant fuel oil volumes imported in Europe are destined for further processing, they are classified as refinery feedstocks and not counted in the fuel oil imports or demand calculations presented in the European product supply discussion section that follows. This inconsistency in classification, for Europe and indeed across other regions, means that in the unadjusted balances, fuel oil demand (and oil demand in general) will be lower than actual volumes used, as the feedstock demand is not counted in final oil product demand calculations. On the other hand, product supply will be double counted as supply of both fuel oil and the final product output of the reprocessed fuel oil will be counted. To alleviate this consistency issue, we have made adjustments for feedstock demand in the global balances, but not in the regional product supply discussions that follow. 8.0 Regional Demand and Product Supply Outlooks Considering the 10 regions that constitute our global forecasts, we now examine the outlook for demand, refinery utilisation and product supply in each region. Some regions are expected to see little change in their regional balance for light and middle distillates and fuel oil. Conversely, the prospects for rapid changes in Asia and the Middle East will have profound implications on the global supply and demand balance for certain products. It should be noted that no effort has been made to optimise between the 10 regional balances, with no account taken of the implications for inter regional product trade, nor the likely price responses that would undoubtedly occur were some of these changes to become a reality.
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8.1.1. OECD North America – Demand Oil product demand in North America is expected to decline by 0.3% per year on average between 2008 and 2013 (from 24.4 mb/d to 24.0 mb/d). This is mostly related to the evolution of consumption trends in the US, which accounts for the lion’s share of regional demand (82% in 2008). US demand has been hit by the country’s plunging economy (given high oil prices and the credit squeeze) and by changing behavioural patterns, such as a reduction in discretionary driving, the adoption of smaller passenger cars and the revamp of manufacturing supply chains. After a significant contraction over 2008 and 2009, we assume an economic rebound from 2010 onwards, but oil demand growth will remain subdued. Indeed, even though the growth in demand for transportation fuels will remain positive, demand for other products such as naphtha and fuel oil will continue to decline structurally. It should be noted, though, that this forecast discards a widespread adoption of diesel‐fuelled vehicles, since this technology has never really taken off in North America, and is based on the premise that the newer generation of passenger cars will mostly be based on hybrid or electric technologies. OECD North America: Demand Trends, Main Refined Products Product
Volume, 2013 (mb/d)
Avg. Growth Rate, 2008-13
Comments
Naphtha
0.3
-4.6%
Declining petrochemical activity in the US and Canada (as part of the ongoing structural shift from industry to services); growth expected in Mexico, but from a low base
+0.6%
Growth driven by all three countries, although at a faster pace in Canada and Mexico (better economic prospects and an expanding fleet, notably in the latter); no wide-scale switch to diesel cars is expected
Gasoline
10.9
Jet Fuel/ Kerosene
1.8
-0.8%
Weighed down by a gradual decline in the US as aircraft fleets become more efficient and airlines optimise loads; relatively strong growth in Canada and particularly in Mexico, where the market is rapidly expanding
Gasoil
4.9
-0.3%
Declining in the US and Canada, where heating oil displacement (in favour of natural gas and electricity) offsets diesel growth (in all three countries), which is mostly driven by economic activity
Fuel Oil
0.9
-3.8%
Declining use for power generation in the US and Mexico, as fuel oil is substituted by natural gas or other sources; modest growth in Canada
Source: IEA’s Demand Forecasting Framework
3.8% 3.0% 17.3%
OECD North America: Total Demand by Product, 2013 11.0% LPG
11.0% 1.2%
Naphtha
OECD North America: Oil Demand Growth by Product, 2008-2013, kb/d 200
100
-
-
(200)
Mogas (100)
(400)
Jet & Kero Diesel Other Gasoil HFO
7.3% 45.4%
18
Other
(600)
(200) Gasoline LPG & Naphtha Other
(300)
Distillates Fuel Oil Total (RHS)
(400)
(800) (1,000) (1,200)
2008
2009
2010
2011
2012
2013
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8.1.2. OECD North America – Refining and Product Supply The oil product supply picture is expected to improve in North America in the medium term. Demand contracts in the short term and remains largely unchanged thereafter, while refinery capacity expansions and upgrading additions are generally expected to continue as scheduled (albeit with some slippage within the forecast period expected), reducing net‐import requirements of the major refined products in the process. Offsetting the substantial changes to the regional demand outlook as discussed above, changes to refinery operating mode assumptions have significantly altered the regional product balances compared with previous outlooks. North America’s net‐import requirement of gasoline is now seen rising by the end of the forecast period while distillates will increasingly be available for exports to meet an ever‐increasing shortfall of global diesel supplies. It is difficult to assess the potential delays in several of the refinery capacity expansions and upgrading additions forming the basis of this forecast, as the impact and duration of the current credit crisis and economic slowdown are still unknown. Nevertheless, it is likely that some projects will be delayed by one or two years. This slippage is not expected to materially change the product supply picture in 2013 however, as project completions will still largely fall within the forecast timeframe. North American refiners are expected to add a total of 1.3 mb/d of crude distillation unit (CDU) capacity in the 2008‐2013 period. The most notable expansions include Marathon’s Garyville (2010) and Detroit (2011) refineries, BP’s Whiting refinery (2011) and Motiva’s Port Arthur refinery (2011). The only notable addition in Mexico remains the much delayed Minatitlán refinery expansion due in 2010. In addition to the CDU expansions, 1.3 mb/d of upgrading capacity, mostly coking and hydrocracking units, and 1.8 mb/d of desulphurisation capacity are expected to be added in this period. The investments in both CDU and upgrading capacity in the region are aimed at enabling refineries to process a heavier, sourer crude slate partly based on increasing Canadian feedstock volumes, but more generally to improve the refinery’s competitive position or, alternatively, to meet tighter environmental standards that are required by government agencies. mb/d 2.0
North America Utilisation Rates
North American Capacity Additions 95%
1.5
90%
1.0
85%
0.5
80% 75%
0.0 2008
2009
2010
2011
2012
2013
Crude Distillation Desulphurisation Upgrading
70%
1Q06
1Q08
1Q10
1Q12
As noted previously, we assume that OECD refineries suffer the brunt of reduced OPEC crude volumes, needed to balance the market. This is not only because those regions the will see the most pronounced demand slowdown, but also it is assumed they will lose out when competing for crude against the new large‐scale, complex export refineries coming onstream in Asia. This implies that crude supplies from the Middle East will be lighter than previously expected (as substantial volumes of condensate and NGLs are still to be brought to market) and that North American imports of Middle Eastern crudes will be much lower than previously forecast. Total North American refinery utilisation rates slides sharply by the end
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of 2008 and into 2009 as demand falls, dragging refinery margins lower. An initial low point of 78% is expected to be reached in 3Q09, but regional crude runs are expected to remain around 80% of capacity for the remainder of the period. The main changes in North America’s product supply potential in the medium term are related to its gasoline and distillate outlooks. In previous forecasts we have seen gasoline import requirements reduced significantly as new distillation capacity and upgrading additions are brought on line. Given recent gasoline and distillate cracks, and current trends in actual refinery output, we now see that refiners have shifted the operational mode towards a more aggressive distillate production at the expense of naphtha and gasoline. North America’s naphtha/gasoline import requirements will therefore increase from its 2008 position to 2013, while net exports of distillates will increase significantly. It is still assumed that ethanol will replace more than 0.8 mb/d of the region’s gasoline requirement by 2013 (bearing in mind that the global biofuels outlook has been left largely unchanged since the July 2008 MTOMR). Regional distillate supplies, including diesel/gasoil and jet/kerosene, are seen increasing substantially while demand contracts sharply from levels seen in 2007 and early 2008. It was obvious already in 2Q08 that refiners in the US had increased refinery yields of distillates (from an average of 23.4% in 2Q07 to 25.3% at its maximum in June 2008) at the expense of gasoline due to better cracks. Our forecast assumes a continued shift towards distillate production, although a complete switchover away from gasoline/naphtha maximised operation mode is limited by available and planned distillate hydrotreating capacity. The fuel oil balance will also improve slightly over the medium term as demand in power generation in the US and Mexico will continue to be substituted by natural gas, while supplies stay relatively unchanged. Fuel oil as a source of refinery feedstock is currently estimated around 800 kb/d, not included in the demand figures above.
20
mb/d
Naphtha and Gasoline Product Supply Potential vs. OMR Demand
12.0 11.5 11.0 10.5 10.0 9.5 9.0 8.5 1Q06 1Q08 1Q10 1Q12 Forecast Supply Reported Supply OMR Demand
Gasoil and Kerosene
mb/d
Product Supply Potential vs. OMR Demand 7.4 7.2 7.0 6.8 6.6 6.4 1Q06
1Q08
1Q10
Forecast Supply OMR Demand
mb/d
1Q12 Reported Supply
Fuel Oil Product Supply Potential vs. OMR Demand
1.4 1.2 1.0 0.8 1Q06
1Q08 Forecast Supply OMR Demand
1Q10
1Q12 Reported Supply
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8.2.1. OECD Europe – Demand Oil product demand in Europe is seen declining by 0.4% per year on average over the forecast period (from 15.2 mb/d in 2008 to 15.0 mb/d in 2013). As in North America, this weak outlook is largely related to economic woes, which translate into a significant contraction in oil demand over 2008 and 2009, with a rebound from 2010 onwards. Moreover, oil demand trends in Europe will be largely dictated by developments in its largest, but mature, economies – France, Germany, Italy, Spain and the United Kingdom, which will account for almost 61% of total European demand by 2013 (versus 62% in 2008), despite much faster growth in other countries. Yet oil demand in the Big Five is on a structural downward path, given lower economic growth, population decline (notably in Italy and Germany), the ‘dieselisation’ of vehicle fleets, and the gradual interfuel substitution of fuel oil and heating oil in favour of natural gas and renewable energy sources. The rising use of middle distillates (diesel and jet fuel) should offset the fall in gasoline consumption – as such, transportation fuels use (the bulk of demand) should remain unchanged. OECD Europe: Demand Trends, Main Refined Products Product
Avg. Growth Rate, 2008-13
Volume, 2013 (mb/d)
Comments
Naphtha
1.2
+0.7%
Moderate expansion in petrochemical activity in several smaller (Central European) countries, while largely stagnant growth in larger ones (western, i.e. France, Germany, Italy, Spain and the United Kingdom)
Gasoline
2.1
-2.4%
Older gasoline-fuelled cars will continue to be scrapped and replaced by diesel vehicles, notably in smaller countries, where the diesel market is not yet saturated
Jet Fuel/ Kerosene
1.4
+0.9%
Supported by increasing passenger travel in peripheral countries, despite airline efficiency gains as a result of cost-cutting efforts
Gasoil
6.3
+0.3%
Continued ‘dieselisation’ of the vehicle fleet, notably in smaller countries; meanwhile, heating oil will be further displaced by natural gas and electricity
-1.4%
Declining use for power generation as the two largest consumers (Italy and Spain) switch to other energy sources (natural gas, renewables and nuclear); however, bunker demand in the Netherlands and Belgium will expand (freight)
Fuel Oil
1.5
Source: IEA’s Demand Forecasting Framework
10.4% 10.1%
OECD Europe: Total Demand by 6.1% Product, 2013 8.0%
OECD Europe: Oil Demand Growth by Product 2008-2013, kb/d
LPG
150
50
Naphtha
100
-
Mogas
2.1%
50
Jet & Kero 14.1%
(50)
DECEMBER 2008 SUPPLEMENT
Gasoline LPG & Naphtha Other
(100)
HFO 9.2%
(100)
Diesel Other Gasoil
30.1%
(50)
(150)
Other
2008
2009
2010
2011
(150) Distillates (200) Fuel Oil Total (RHS) (250) 2012 2013
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MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
INTERNATIONAL ENERGY AGENCY
8.2.2. OECD Europe – Refining and Product Supply OECD Europe product supply will continue to be driven by opposing needs: increasing diesel production and minimising gasoline output over the next five years. In addition, how the refinery sector will be treated under the European Union’s Emission Trading Scheme (EU‐ETS) Phase Three, i.e. whether it will be considered exposed to carbon leakage and therefore receives free allowances, or whether its allowances will be auctioned, remains unclear at the time of writing. Our modelling of OECD Europe refineries indicates that the vast majority, if not all, pursue a strategy of minimising gasoline production in favour of middle distillates. We view OECD Europe as being at the limit of distillate production and with little potential to further curtail gasoline production, or increase exports. Furthermore, tighter diesel and gasoline quality specifications, including lower sulphur limits from January 2009, will force refiners to rely more heavily on energy/carbon intensive hydrotreating. The move to 10 ppm sulphur may constrain the distillate pool if refiners are unable to include comparable amounts of cracked gasoil as previously, due to hydrotreater capacity limitations. Investment in refinery capacity is needed to rebalance the heavy dependence on exports to absorb surplus gasoline, while raising diesel production to stem imports. Capacity additions in Europe focus largely on the addition of hydrocracking and hydrotreating capacity. Most of the 400 kb/d increase in crude distillation capacity forecast for the period is associated with the upgrading of less complex refineries to boost middle distillate yields, notably Repsol’s Cartagena expansion. The structural driver for European refiners remains the maximisation of diesel yields and the recent strengthening of diesel crack vis‐à‐vis gasoline only reinforces this incentive. The degree to which European refineries benefit from relatively strong distillate yields will support overall margins compared to other regions. However, the analysis of reported gasoil and fuel oil trade data suggest that a substantial volume of gasoil, which is reprocessed into ULSD through hydrotreating, is reported as refinery feedstock. We estimate that this unreported volume of gasoil represents approximately 175 kb/d on average, which suggests that refiners are not benefiting from the strength of diesel cracks vs. crude to the extent one might assume when considering published yield data. mb/d 0.6
OECD Europe Utilisation Rates 95% 90%
OECD Europe Capacity Additions
0.4
85% 0.2
80% 75%
0 70%
2008 1Q06
1Q08
1Q10
1Q12
2009
Crude Distillation
2010
2011
2012
2013
Desulphurisation Upgrading
Utilisation rates in OECD Europe are forecast to decline rapidly in 2009, in the face of lower refining margins, as marginal gasoline export capacity is shut down due to low profitability. Weak gasoline and naphtha cracks combined with the heavy dependence on exports to balance refinery output, all contribute to our assumption of lower European runs over the medium term.
22
DECEMBER 2008 SUPPLEMENT
INTERNATIONAL ENERGY AGENCY
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
European gasoline and naphtha exports are set to increase slightly over the medium term, as demand declines faster than production is curtailed, despite the lower forecast level of refinery utilisation. Further weakening of gasoline demand, driven by the continued dieselisation of the European car fleet, will necessarily result in increased gasoline exports, mb/d Naphtha and Gasoline given refiners’ inability to reduce gasoline production Product Supply Potential vs. OMR Demand 5.0 further. Partially offsetting this decline is a stable 4.5 demand forecast for naphtha which, with the lower 4.0 regional crude throughput highlighted above, results 3.5 in slightly higher net imports of paraffinic naphtha for use as a petrochemical feedstock. Nevertheless, the 3.0 1Q06 1Q08 1Q10 1Q12 impact of weaker gasoline demand remains the Forecast Supply Reported Supply dominant effect. OMR Demand Middle distillate supply is expected to continue to fall short of regional demand, leading to increased imports of both diesel and jet fuel over the forecast period. Product supply is set to decline over the course of 2009, before increased upgrading capacity drives the rebound. As noted above, regional refineries are already maximising middle distillate output. Consequently, the impact of increased upgrading capacity is offset by lower crude throughput forecasts for the period and results in higher imports, only partially offset by the higher biofuels supply. Within the regional balance, the increased imports of ULSD and jet fuel are partially offset by higher net exports of lower‐quality gasoil.
Gasoil and Kerosene
mb/d
Product Supply Potential vs. OMR Demand 8.0 7.5 7.0 6.5 6.0 1Q06
1Q08
Forecast Supply OMR Demand
1Q10
1Q12 Reported Supply
Europe is forecast to remain a net exporter of fuel oil Fuel Oil over the forecast period, excluding those volumes mb/d Product Supply Potential vs. OMR Demand 2.25 processed by refineries and reported as refinery 2.00 feedstock. The continued decline in demand outpaces 1.75 the impact of relatively limited investment in 1.50 increased upgrading capacity and marginally lighter average crude quality assumed within the region. A 1.25 1Q06 1Q08 1Q10 1Q12 reoccurrence of the 2006 natural gas supply Forecast Supply Reported Supply interruption could temporarily push the region back OMR Demand into a net importer of fuel oil on a reported basis, but this effect would likely be temporary. Nevertheless, towards the end of our forecast period, the completion of upgrading capacity in Spain, Portugal, Italy and Greece, and the lower runs assumed at hydroskimming refineries in the region almost balance the market. However, we retain an assumption that refineries process around 0.8 mb/d of additional Russian atmospheric residue not shown here.
DECEMBER 2008 SUPPLEMENT
23
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
INTERNATIONAL ENERGY AGENCY
8.3.1. OECD Pacific – Demand Oil product demand in the Pacific is forecast to decrease by 0.9% per year on average (from 8.2 mb/d in 2008 to 7.9 mb/d in 2013), a sharper decline than in other OECD areas. Regional demand is both facing the consequences of the global economic slowdown, as well as structural forces at play. Falling oil demand in Japan, which dominates oil demand developments in the Pacific with 55% of total regional demand by 2013, will offset strong growth in Korea (30% of regional demand). Although residual fuel oil consumption and direct crude burning have supported Japanese oil demand recently following widespread nuclear power outages, the country’s decline is structural, underpinned by negative demographic trends, increasingly efficient vehicles and the growing use of electricity for heating purposes, while the nuclear woes are expected to be solved during 2009. By contrast, Korean demand should rise continuously on the back of naphtha use (45% of the country’s demand by 2013, versus 39% in 2008), given its ambitious petrochemical expansion plans. OECD Pacific: Demand Trends, Main Refined Products Product
Volume, 2013 (mb/d)
Avg. Growth Rate, 2008-13
Naphtha
1.7
+1.0%
Strong growth in Korea, which offsets declining demand in Japan
Gasoline
1.4
-1.2%
Declining in Japan given demographic, technological and behavioural changes; marginal or stagnant growth in Korea and Australia
Jet Fuel/ Kerosene
0.8
-1.5%
Declining kerosene consumption (used for heating in Japan and Korea) given sustained switch to electricity, which offsets jet fuel growth in Korea and Australia
Gasoil
1.7
-1.0%
Sharp structural decline in Japan, which largely offsets growing demand in Korea and Australia as economic activity rebounds
Fuel Oil
0.8
-3.1%
Declining across the region, displaced by natural gas and other sources
Comments
Source: IEA’s Demand Forecasting Framework
OECD Pacific: Total Demand by Product, 2013
OECD Pacific: Oil Demand Growth by Product 2008-2013, kb/d
6.6% 10.2%
11.3%
5.2% 15.9%
LPG
40
-
Naphtha
20
(20)
Mogas Jet & Kero 21.8%
10.6% 18.3%
24
-
(40)
(20)
(60)
(40)
(80)
Diesel
(60)
Other Gasoil HFO
(80)
(100) Gasoline LPG & Naphtha Other
(100)
2008
2009
2010
2011
Distillates Fuel Oil Total (RHS) 2012
2013
(120) (140)
DECEMBER 2008 SUPPLEMENT
INTERNATIONAL ENERGY AGENCY
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
8.3.2. OECD Pacific – Refining and Product Supply OECD Pacific product supply is set to contract over the medium term in response to the weaker demand outlook and increased competition from other Asian refiners for crude. Limited new capacity additions, with the exception of Korean refineries, reflect the mature demand profile and structural issues that refineries face in the region. Regional capacity additions over the medium term are limited to residue upgrading in Korea and Japan and the installation of additional hydrotreating capacity for diesel and gasoline. Investment at SK Corp and LG Caltex refineries should deliver 100 kb/d of additional residue hydrocracking and catalytic cracking capacity, with further investment at the 275 kb/d Incheon refinery focused on lifting light and middle distillate yields with the addition of a hydrocracker. Recent reports suggest that current margin weakness threatens several of the planned Japanese upgrading projects, but for now we have left our forecasts unchanged from the July 2008 MTOMR, in common with other regions.
95%
mb/d 0.4
90%
0.3
85%
0.2
OECD Pacific Utilisation Rates
80%
OECD Pacific Capacity Additions
0.1
75% 0.0 70% 1Q06
1Q08
1Q10
1Q12
2008 2009 2010 2011 2012 2013 Crude Distillation Desulphurisation Upgrading
As already highlighted, we remain concerned over the ability of refineries in the OECD Pacific to maintain crude runs at historical levels in the face of weaker demand for products and weak industry margin levels. We have therefore trimmed average utilisation to levels last seen in the early part of this decade and after the Asian crisis of 1997. The region’s performance is dominated by the outlook for Japanese refineries, notably those which lack the economies of scale or complexity to weather the weaker margin environment. Furthermore, the outlook for crude runs in the less complex Korean refineries is equally uncertain. Recently, some Japanese refiners have sought to offset the weaker domestic demand by raising export volumes to markets such as China, Singapore and Australia. However, as growth in demand from non‐OECD Asian countries slows and the new refining capacity elsewhere starts up, regional competition for crude supplies will increase. Furthermore, within a weaker margin environment, driven by negative gasoline and naphtha cracks, we have assumed that OECD Pacific refiners switch to more aggressive run cuts in order to balance their output against domestic market requirements. . Although timing remains uncertain, we expect the pressure on some small hydroskimming and catalytic cracking refineries to close will increase over the medium term but we do not differentiate between idled and closed capacity with our forecast.
DECEMBER 2008 SUPPLEMENT
25
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
The OECD Pacific is forecast to remain a net importer of light distillates over the medium term, despite weaker demand for gasoline. The structural decline in gasoline consumption, driven largely by Japan, will contribute to rising exports of gasoline, despite the lower regional throughputs. Recent increases in exports largely moving to China or Singapore, it seems likely that those refineries exposed to such trade will be forced to curtail exports as China moves back to being a net exporter of gasoline. Naphtha demand in the region will remain essentially flat, with slightly higher imports required to offset the lower regional production.
INTERNATIONAL ENERGY AGENCY
mb/d
Naphtha and Gasolline Product Supply Potential vs. OMR Demand
3.5 3.0 2.5 2.0 1Q06
1Q08 Forecast Supply OMR Demand
1Q10
1Q12 Reported Supply
Middle distillate exports are set to remain robust in the face of structural decline in jet fuel, kerosene and gasoil demand and limited growth in diesel. Nevertheless, the highly seasonal nature of demand for kerosene in markets such as Japan and Korea will continue to generate significant quarter‐on‐quarter swings in the volumes exported. Increased middle Gasoil and Kerosene mb/d distillate production from upgrading units will partially Product Supply Potential vs. OMR Demand 3.5 offset the impact of lower crude throughputs in the region. Once again, the question mark over the future 3.0 of the region’s activity level rests on how successfully 2.5 refiners can sustain competitiveness in the face of renewed Chinese exports and the start‐up of new 2.0 refining capacity in existing export markets, e.g. 1Q06 1Q08 1Q10 1Q12 Forecast Supply Reported Supply Vietnam, with the associated reduction in their OMR Demand net imports. Regional fuel oil production is set to contract, due to the lower forecast crude runs, combined with the mb/d Fuel Oil Product Supply Potential vs. OMR Demand reduction and lightening of OPEC supplies in 2009, 1.30 associated with increased supplies of condensates to 1.10 the region. Subsequently, the start‐up of upgrading units in Korea and Japan will further erode the local 0.90 supply of fuel oil, keeping the region a net importer 0.70 throughout the forecast period. As with other regions 1Q06 1Q08 1Q10 1Q12 discussed in this supplement the presence of spare Forecast Supply Reported Supply OMR Demand hydroskimming capacity and heavy sour crude would suggest that additional supplies of fuel oil would be readily available, were margins strong enough to encourage incremental refinery throughput. However, within the forecasting framework set out in this supplement, we do not include such a scenario, as the resultant imbalance with other product markets would be unsustainable in the longer term.
26
DECEMBER 2008 SUPPLEMENT
INTERNATIONAL ENERGY AGENCY
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
8.4.1. China - Demand Oil product demand in China is forecast to growth by 4.0% per year on average (from 7.9 mb/d in 2008 to 9.7 mb/d in 2013). China is unique among most Asian countries in that all its main product categories are set to register significant growth rates, matching the country’s strong economic growth and rising per capita income levels. Although there are worries that China’s economic expansion will slow down in 2009, given the current global turmoil, the IMF sees GDP growth reaching a respectable 8.5% next year. As the world economy recovers, the country’s GDP growth should gradually bounce back to the double‐ digit levels observed in recent years. In general terms, oil demand growth will come from four main sources: 1) transportation, which will foster gasoline, diesel and jet fuel/kerosene needs; 2) petrochemicals, which will boost naphtha use; 3) power, which will support gasoil consumption given the supply issues faced by the coal industry; and 4) the re‐emergence of ‘teapot’ refineries, which will likely process more fuel oil given more favourable pricing conditions. It should be noted that this prognosis assumes that end‐user price deregulation will be gradual. China: Demand Trends, Main Refined Products Product
Volume, 2013 (mb/d)
Avg. Growth Rate, 2008-13
Comments
Naphtha
1.2
+8.4%
Buoyant growth , as China strives to become the world’s petrochemical powerhouse
Gasoline
1.8
+4.9%
Rapid growth as the country’s vehicle fleet expands, given rising income per capita, notably in urban areas
Jet Fuel/ Kerosene
0.4
+5.5%
Jet fuel will grow on the back of rising air transportation and expansion of the country’s aircraft fleet
Gasoil
3.5
+4.1%
Strong growth as a direct consequence of economic activity and given the fuel’s manifold usages
Fuel Oil
0.7
+2.8%
Growth driven by ‘teapot’ refineries, which typically process fuel oil into off-spec gasoil and other heavy products
Source: IEA’s Demand Forecasting Framework
China: Total Demand by Product, 2013
13.9%
China: Oil Demand Growth by Product 2008-2013, kb/d
6.7% 7.2%
400
Gasoline LPG & Naphtha Other
LPG 12.5%
300
Naphtha
370 350
-
Gasoil
4.0%
390
100
Jet & Kero
19.1%
410
200
Mogas
36.6%
430
Distillates Fuel Oil Total (RHS)
HFO
(100)
Other
(200)
330 310 290 2008
2009
2010
2011
2012
2013
DECEMBER 2008 SUPPLEMENT
27
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
INTERNATIONAL ENERGY AGENCY
8.4.2. China – Refining and Product Supply Chinese product supply will increase during 2009 due to the start‐up of 0.7 mb/d of crude distillation from new refineries highlighted in the July 2008 MTOMR and the later than planned start‐up of several refineries initially forecast for late 2008. Consequently, China is set to resume net product exports of light and middle distillates in the coming quarters. Fuel oil supplies are expected to shrink further as coking capacity increases in 2009 and 2010, although our estimates for fuel oil supply may be over‐optimised due to the aggregation of capacity data discussed in the methodology section. Furthermore, the gradual improvement in fuel quality mandated for Chinese urban areas should see more widespread availability of low and ultra‐low‐sulphur fuels by the end of the period. Capacity growth over the medium term remains strong, with nearly 1 mb/d of crude distillation capacity to be added during 2008 and 2009 by state‐owned oil companies. Over the entire forecast period, Chinese crude distillation will increase by a total of 2.1 mb/d, and account for a little over 25% of total global additions. In common with other regions, we do not include any slippage from the additions published in July, despite some recent reports indicating that Chinese refiners have suffered from delays to completion of projects. Unlike many of the OECD regions, utilisation rates are assumed to match and eventually exceed historical rates, despite a moderate slowdown in 2009, as lower global demand growth cuts OPEC allocations to Asian markets. Nevertheless, the state oil companies’ demonstrated ability to increase crude throughput under even the most unattractive margin environments, as seen in recent quarters, suggests that they will boost refinery crude runs again when additional crude becomes available. Consequently, China is expected to re‐emerge as a product exporter over the course of 2009. Furthermore, we assume this exerts downward pressure on margins, as countries that previously were exporting to China, e.g. Japan, have to find alternative markets for their output, or cut crude runs. mb/d 2.0
China Refinery Utilisation Rates
China Capacity Additions 95%
1.5
90%
1.0
85%
0.5
80% 75%
0.0 2008 2009 2010 2011 2012 2013 Crude Distillation Desulphurisation Upgrading
70% 1Q06
1Q08
1Q10
1Q12
The recent decline in oil prices has restored an element of profitability to Chinese state refineries, given the lack of movement in state ‐administered prices to date. However, wholesale market prices, at which independent and ‘teapot’ refiners can sell production, have weakened significantly in the face of slowing demand growth, suggesting that there remains a risk that our forecasts for Chinese crude throughput remains optimistic. Initial reports of possible changes to the state‐administered price scheme would force a reappraisal of likely crude runs, if it also entails changes to the state subsidies received by Sinopec and PetroChina.
28
DECEMBER 2008 SUPPLEMENT
INTERNATIONAL ENERGY AGENCY
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
After the balanced markets seen in recent quarters, gasoline and naphtha supplies are forecast to outpace demand growth over the course of 2009, leading to a resumption of export volumes. The strong demand growth witnessed in 2008 is not expected to occur in 2009 and 2010. However, the return of mb/d Naphtha and Gasoline Product Supply Potential vs. OMR Demand stronger economic growth in 2011, combined with a 3.3 3.0 lull in new refinery additions, will again tighten the 2.8 light distillates regional balance, before a series of 2.5 new refineries adds to supply potential post‐2012. 2.3 2.0 Tighter quality specifications will require refineries to 1.8 invest in additional hydrotreating capacity, while 1Q06 1Q08 1Q10 1Q12 moves to limit olefins and aromatics levels may, (as Forecast Supply Reported Supply OMR Demand seen with European specification changes), similarly result in further investment for refineries. Middle distillate product supply is similarly expected to increase ahead of demand growth in the short term, leading to a resumption of gasoil and diesel exports over the next 12‐18 months. Demand growth, although more muted in the short term, picks up in Gasoil and Kerosene 2010/11. However, the growth in new crude mb/d Product Supply Potential vs. OMR Demand distillation and upgrading capacity is expected to 4.5 marginally outpace this increase and, on average, China is seen remaining a small net exporter of middle 3.5 distillates over the medium term. Within the middle distillate balance, demand for kerosene outpaces the 2.5 domestic supply potential, suggesting that continued 1Q06 1Q08 1Q10 1Q12 Forecast Supply Reported Supply net imports of jet fuel are likely. However, we OMR Demand maintain the assumption that Chinese refineries continue to maximise diesel/gasoil production, and export the marginal supplies. In reality, it is possible for jet production to be increased, in preference to gasoil, with several refiners installing combined kerosene/diesel hydrotreating units, which may point to a more even balance between the two products than our forecasts envisage. China is forecast to remain a net importer of fuel oil over the medium term. The recent slowdown in fuel oil consumption will be reversed in 2009 and beyond with higher fuel oil use in ‘teapot’ refineries driving much of the increase. Conversely, the output for fuel oil is expected to be severely limited by the scale of new upgrading capacity additions in the coming quarters. However, as noted previously, this forecast may suffer from a degree of ‘over‐optimisation’ within our product supply model, for heavy product streams that typically are blended into fuel oil. We may therefore understate the probable level of future fuel oil production.
DECEMBER 2008 SUPPLEMENT
mb/d
Fuel Oil Product Supply Potential vs. OMR Demand
1.0
0.5
0.0 1Q06 1Q08 1Q10 Forecast Supply OMR Demand
1Q12 Reported Supply
29
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
INTERNATIONAL ENERGY AGENCY
8.5.1. Other Asia - Demand Oil product demand in Other Asia is expected to expand by 1.9% per year on average (from 9.5 mb/d in 2008 to 10.4 mb/d in 2013). Greater mobility – prompted by higher income levels and embodied in the rapidly growing vehicle and aircraft fleets across the region – will be the main driver of oil demand growth and, to a lesser extent, administered end‐user price regimes. Nonetheless, demand growth will experience a slump in 2009, as the effects of the global economic crisis in advanced economies and high oil prices (until 2H08) reverberate across the region. Gasoil will continue to command the largest share of the region’s oil product mix (32% of total demand by 2013, versus 30% in 2008), as it has multiple applications (transportation, agriculture and small‐scale power generation). The second‐largest product will be gasoline (13% of total demand), mostly supported by expanding passenger vehicle fleets, notably in India, where ultra low‐cost passenger cars are to be launched in 2009. Within the region (which excludes China), India is by far the largest consumer with 33% of demand, distantly followed by Indonesia, Singapore, Chinese Taipei and Thailand (with 10‐11% each). Other Asia: Demand Trends, Main Refined Products Product
Volume, 2013 (mb/d)
Avg. Growth Rate, 2008-13
Comments
Naphtha
0.8
+1.6%
Growth supported by Singapore and Chinese Taipei, despite decline in India, where natural gas gradually becomes the feedstock of choice for petrochemical production, notably fertilisers
Gasoline
1.3
+2.0%
Rapid growth as vehicle fleets expand, notably in India, as a result of higher income per capita
Jet Fuel/ Kerosene
1.1
+0.9%
Jet fuel will grow on the back of rising air transportation, while kerosene will remain the (subsidised) fuel of choice for the region’s poor, particularly in India and Indonesia
Gasoil
3.3
+2.9%
Strong growth across the region as a direct consequence of economic activity and given the fuel’s multiple usages; in addition, support is provided by pricing distortions, particularly in India
Fuel Oil
1.8
+0.7%
Growth mostly limited to maritime transportation (bunkers), as power generation switches to natural gas
Source: IEA’s Demand Forecasting Framework
10.8%
Other Asia: Total Demand by Product, 2013
Other Asia: Oil Demand Growth by Product 2008-2013, kb/d
9.1%
250
150
17.3%
LPG 7.9%
230
Naphtha
100
210 190
Mogas Jet & Kero 12.9%
170
50
150 Gasoil
-
HFO 31.8%
10.1%
(50)
Other
2008
2009
Gasoline LPG & Naphtha Other 2010 2011 2012
130 Distillates 110 Fuel Oil Total (RHS) 90 2013
30
DECEMBER 2008 SUPPLEMENT
INTERNATIONAL ENERGY AGENCY
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
8.5.2. Other Asia – Refining and Product Supply The oil product supply picture in ‘Other Asia’ (excluding the OECD Pacific and China) is set to change dramatically in the coming years as significant investment in crude distillation, upgrading and desulphurisation capacity starts up. In particular, new investment is set to significantly increase naphtha/gasoline yields at the expense of fuel oil. This trend is compounded by the rapidly changing slate of feedstocks processed, as condensates, which have practically zero fuel oil yields, account for a larger share of throughputs at the expense of heavier, more residue rich, crudes. Other Asia will add 1.6 mb/d of new crude distillation capacity over the next five years, second only to China. Three quarters of these additions will come from India, with Reliance Petroleum’s 580 kb/d Jamnagar export refinery, due to start in early 2009, being the largest project. Other Indian projects include the expansion of Essar Oil’s Vadinar refinery in 2010 and the Mangalore and Bina refineries, which we assume will be completed in 2011. Elsewhere in the region, Vietnam will see its first refinery, the 100 kb/d Dung Quat refinery, start operations in 2009. Thailand, Malaysia and Indonesia equally see additional crude capacity come on line in 2009, resulting in almost 1 mb/d of capacity being added in that year alone. mb/d 2.5
Other Asia Utilisation Rates
Other Asia Capacity Additions 95%
2.0
90%
1.5
85%
1.0
80%
0.5 75% 0.0 2008 2009 2010 2011 2012 2013 Crude Distillation Desulphurisation Upgrading
70% 1Q06
1Q08
1Q10
1Q12
Apart from additional crude distillation capacity, substantial upgrading and desulphurisation capacity is expected to be added in this period. A total of 1.3 mb/d of upgrading capacity will come onstream before 2013. Similarly, the bulk of the upgrades will take place in India, although widespread upgrades take place also elsewhere in the region 1.6 mb/d of hydrotreating capacity will also be added in the forecast period, greatly reducing sulphur levels in transportation fuels. We have assumed that Asian refiners do not suffer the same fate as OECD refiners in regards to securing crude oil supplies, although we see some drop in utilisation rates as the new large‐scale merchant refineries are brought into service. Utilisation rates will average around 75% for the forecast period, compared with 84% for the 2006‐2008 period. Equally importantly, and as discussed in detail in the introduction of this report, the rising condensate supplies from the Middle East result in lower fuel oil yields and higher light product yields for Asia as a whole.
DECEMBER 2008 SUPPLEMENT
31
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
Other Asia is forecast to become a major exporter of light distillates in the medium term, as both naphtha and gasoline supply growth far exceeds domestic requirements. From being relatively balanced in 2008, the region’s potential exports of naphtha and gasoline will reach almost 600 kb/d in 2013. Increasing import requirements from nearby regions, such as the OECD Pacific, for naphtha will provide an outlet for some of this increased supply but marginal barrels of gasoline will need to move further afield, e.g. the US West Coast, if the region is to achieve its full supply potential. The region’s middle distillate imports will significantly increase over the medium term. Both gasoil and jet kerosene demand are expected to grow strongly in the medium term, fuelled by economic growth and higher mobility needs as income per capita rises. Although the graph shows a relatively balanced outlook, this does not take into account adjustments made to the global balance based on our benchmarking exercise, subtracting around 250 kb/d of the regional supply total (see methodology appendix for further explanations). Distillate imports (jet kerosene and gasoil) could therefore increase to 195 kb/d in 2013 compared to being broadly balanced at the moment.
INTERNATIONAL ENERGY AGENCY
mb/d
Naphtha and Gasoline Product Supply Potential vs. OMR Demand
3.3 3.0 2.8 2.5 2.3 2.0 1.8 1Q06
1Q08
1Q10
Forecast Supply OMR Demand
Reported Supply
Gasoil and Kerosene
mb/d 4.7
1Q12
Product Supply Potential vs. OMR Demand
4.2 3.7 3.2 1Q06
1Q08 Forecast Supply OMR Demand
1Q10
1Q12 Reported Supply
As mentioned elsewhere in this supplement, the fuel oil market balance for the region looks unsustainable. In part this reflects the significant addition of upgrading capacity, not least that associated with the start up of the Jamnagar refinery. However, it is also a consequence of the lighter crude slate and rising volumes of condensates which we assume will be processed within the region in lieu of declining heavy crude imports. These two Fuel Oil factors will more than halve the region’s fuel oil mb/d Product Supply Potential vs. OMR Demand supplies. It is open to question whether Other Asia, 2.0 already being a fuel oil importer, will be able to secure 1.5 additional supplies, considering the forecast tighter market elsewhere. Fuel oil is still used for refinery fuel, 1.0 power generation and industrial use in the region, 0.5 although this will partly be replaced by natural gas, but 1Q06 1Q08 1Q10 1Q12 the largest single share of the demand (roughly one Forecast Supply Reported Supply OMR Demand third) comes from international marine bunkers which is forecast to continue to grow.
32
DECEMBER 2008 SUPPLEMENT
INTERNATIONAL ENERGY AGENCY
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
8.6.1. Middle East - Demand Oil product demand in the Middle East is seen growing by 4.3% per year on average over the forecast period (from 6.9 mb/d in 2008 to 8.6 mb/d in 2013). Demand will be driven by strong economic momentum (despite a momentary slump in 2009), continued urbanisation, industrialisation and population growth, coupled with substantial and apparently largely sustainable end‐user administered price regimes (among the lowest in the world). As such, demand for transportation fuels will continue to soar. Demand for residual fuel oil and naphtha is also set to increase sharply – to meet, respectively, ever growing power needs (also partly met with gasoil) given the lagging growth of natural gas facilities, and the region’s expanding petrochemical sector (expected to expand by almost 350 kb/d by the end of the forecast period). Two countries will account for most of the region’s demand (both in volumes and growth): Saudi Arabia (36% of regional demand by 2013) and Iran (28%). Middle East: Demand Trends, Main Refined Products Product
Volume, 2013 (mb/d)
Avg. Growth Rate, 2008-13
Comments
Naphtha
0.2
+3.0%
Driven by ambitious petrochemical projects across the region, particularly in Saudi Arabia
Gasoline
1.6
+4.0%
Fuelled by expanding vehicle fleets, given rising income per capita, and extremely low pump prices (especially in the largest markets, Iran and Saudi Arabia)
Jet Fuel/ Kerosene
0.5
+4.1%
Supported by rising air traffic across the region
Gasoil
2.3
+4.4%
Pulled up by rapid economic growth and, to a lesser extent, power generation
Fuel Oil
2.0
+4.1%
Used for power generation as long as alternative sources (mainly natural gas) remain commercially unavailable, notably in Iran and Saudi Arabia
Source: IEA’s Demand Forecasting Framework
9.0%
Middle East: Total Demand by Product, 2013 140
13.4% LPG
23.1% 2.5%
19.0%
26.5%
Naphtha
Gasoline LPG & Naphtha Other
120
430
Distillates Fuel Oil Total (RHS)
410
100
390
Mogas
80
370
Jet & Kero
60
350
Gasoil
40
330
HFO
20
310
Other 6.4%
Middle East: Oil Demand Growth by Product 2008-2013, kb/d
290
2008
2009
2010
2011
2012
2013
DECEMBER 2008 SUPPLEMENT
33
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
INTERNATIONAL ENERGY AGENCY
8.6.2. Middle East – Refining and Product Supply Oil product balances for the Middle East are expected to diverge over the medium term, as significant refinery investments add both crude distillation and upgrading capacity while the region experiences robust demand growth for all product categories (averaging 4.3% per annum over the forecast period). The region’s naphtha/gasoline balance is seen improving in the coming years as additional supplies outstrip projected demand growth, following the start up of refining capacity and gas to liquids (GTL) capacity in Qatar. The regional fuel oil balance on the other hand sees a significant tightening as demand growth, fuelled by economic growth and power generation needs, exceeds regional supplies. We have significantly reduced the forecast refinery capacity expansions for the region since the July 2008 MTOMR. From the previously envisaged addition of 2.4 mb/d of CDU capacity, we now estimate that the completion of 0.8 mb/d has slipped beyond the end of our forecast period. Specifically, we have delayed the forecast completion of Kuwait’s 615 kb/d al Zour refinery from the end of 2012 and the joint venture 400 kb/d Jubail refinery by Saudi Aramco and Total from 2013. Partly offsetting these delays, the closure of Kuwait’s 190 kb/d Shuaiba refinery from 2012 has also been postponed as this was to be done in conjunction with the start‐up of al‐Zour. Despite this slippage, significant investment will occur in the Middle Eastern refinery sector in the coming years. We estimate 1.5 mb/d of crude distillation capacity will be added over the forecast period (2008‐13). The most notable additions are the 400 kb/d expansion at Saudi Arabia’ s Ras Tanura refinery (2013), Qatar’s 250 kb/d Al Shaheen refinery (2013), Iran’s expansion programme totalling 380 kb/d at its Bandar Abbas, Isfahan and Tabriz refineries, plus the start‐up of one 120 kb/d condensate splitter in 2012, and Israel’s 60 kb/d Haifa refinery (2011). In addition, 670 kb/d of upgrading capacity and 1.4 mb/d of desulphurisation capacity are still scheduled to come online over the next five years, further improving the region’s light product yields at the expense of fuel oil as well as enhancing product quality to meet European and US standards. mb/d 1.5
Middle East Utilisation Rates
Middle East Capacity Additions 95% 90%
1.0 85% 0.5
80% 75%
0.0 2008 2009 2010 2011 2012 2013 Crude Distillation Desulphurisation Upgrading
70%
1Q06
1Q08
1Q10
1Q12
We assume that the region will operate its own refineries at historical utilisation rates before exporting crude oil to other regions. As such, we expect that Middle Eastern refinery utilisation will hover just below 90% of capacity until the tail end of the forecast, when utilisation will dip slightly as the new distillation capacity coming on‐line ramps up to full throughput rates.
34
DECEMBER 2008 SUPPLEMENT
INTERNATIONAL ENERGY AGENCY
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
The region’s naphtha/gasoline balance will likely improve over the medium term due to the large investments in crude distillation and upgrading capacity. Transportation fuels will grow strongly, given a young and growing population, low administered prices (among the lowest in the world) and strong economic growth. However, naphtha demand will mb/d Naphtha and Gasoline Product Supply Potential vs. OMR Demand remain relatively unchanged despite substantial 2.4 petrochemical expansions, which mainly use NGLs as 2.2 2.0 feedstock, leaving large volumes available for exports 1.8 to Asia. It is important to note that about 300 kb/d of 1.6 naphtha supplies are also coming from gas processing 1.4 1.2 plants (GPP), not included in the graph or our product 1Q06 1Q08 1Q10 1Q12 supply numbers presented here, which only refer to Forecast Supply Reported Supply refinery outputs (although GPP output is included in OMR Demand global product balances). The region’s middle distillate balance will tighten in the short term due to strong growth in diesel demand. Gasoil exports will fall sharply from an approximate current 300 kb/d in the coming years, with the balance particularly tight in the summer of 2010 and 2011 when it is possible that virtually no product will be available for export. A regional surplus mb/d Gasoil and Kerosene will again develop thereafter as new refineries come Product Supply Potential vs. OMR Demand 4.0 online, with additional supplies also expected from 3.5 Qatar’s GTL plant in 2012. Conversely, jet kerosene 3.0 will remain in ample supply in the region, slightly 2.5 increasing its export potential to 500 kb/d in 2013. It 2.0 should be noted that refiners retain some flexibility to 1.5 1Q06 1Q08 1Q10 1Q12 switch production away from jet/kerosene if needed, Forecast Supply Reported Supply rather than import significant gasoil, though much will OMR Demand depend on the relative value of the products at the time. Perhaps the most noteworthy aspect of the Middle East’s product balances is the region’s fuel oil outlook. mb/d Fuel Oil Product Supply Potential vs. OMR Demand As highlighted in the graph, the region is set to become 2.2 a net importer of fuel oil in 2009/2010, due to strong 2.0 growth in power generation needs and significant 1.8 1.6 investments in upgrading capacity, which will reduce 1.4 regional fuel oil yields. These two factors are being 1.2 compounded by rising volumes of condensate to be 1Q06 1Q08 1Q10 1Q12 processed in the region. Reports are already released Forecast Supply Reported Supply indicating that Saudi Aramco will cease term fuel oil OMR Demand exports (normally running at around 60 kb/d) as early as 1Q09. However, the development of Fujairah as a major international bunker port has been helped by the region’s net export balance and the price discount relative to other regions that this entails. Given the current outlook, it is questionable whether the region will be able to retain its competitive price advantage if it does indeed become a net fuel oil importer.
DECEMBER 2008 SUPPLEMENT
35
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
INTERNATIONAL ENERGY AGENCY
8.7.1. Latin America - Demand Oil product demand in Latin America is expected to rise by 3.2% per year on average between 2008 and 2013 (from 5.9 mb/d to 6.9 mb/d). The region has become a key source of oil demand growth over the past few years as a result of the strong expansion of its largest economies (Brazil, Argentina, Venezuela, Colombia, Chile and Peru) and heavily subsidised retail prices in some of them, notably Argentina and Venezuela. Although Latin American oil demand will continue to be largely dominated by Brazil, (42% of regional demand by 2013), growth will mostly come from Argentina and Venezuela. Capped – and very low – end‐user prices are feeding runaway growth, notably in transportation fuels, even though economic activity is set to be subdued in 2009 following the global credit woes and the fall in commodity prices. Latin America: Demand Trends, Main Refined Products Product
Volume, 2013 (mb/d)
Avg. Growth Rate, 2008-13
Comments
Naphtha
0.2
+0.0%
Stagnating petrochemical activity in Brazil (which represents over 86% of the region’s naphtha demand)
Gasoline
1.6
+2.8%
Growth driven by expanding vehicle fleets across the region and low end-user prices (mainly in Argentina and Venezuela); Brazil’s ethanol demand growth, meanwhile, will remain buoyant
Jet Fuel/ Kerosene
0.3
+2.2%
Rising air traffic as a result of rising income per capita, notably in the largest countries (Brazil, Argentina and Venezuela)
Gasoil
2.1
+3.0%
Demand driven by economic activity (mostly freight) and, in some countries (such as Chile) by power generation needs
Fuel Oil
0.8
+2.3%
Supported by power generation, either as a supplementary source (as in Brazil, where most power comes from hydro sources) or given the unavailability of natural gas (Argentina, Venezuela, Chile)
Source: IEA’s Demand Forecasting Framework
Latam: Total Demand by Product, 2013
16.5%
Latin America: Oil Demand Growth by Product 2008-2013, kb/d
10.6% 11.7%
2.8%
Naphtha Mogas Jet & Kero
22.9%
Gasoil HFO
4.2%
36
Distillates 250 Fuel Oil Total (RHS) 240 230 220 210 200 190
-
Other
31.4%
Gasoline LPG & Naphtha Other
90 80 70 60 50 40 30 20 10
LPG
180 2008
2009
2010
2011
2012
2013
DECEMBER 2008 SUPPLEMENT
INTERNATIONAL ENERGY AGENCY
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
8.7.2. Latin America – Refining and Product Supply Latin America’s product markets will tighten sharply in the coming years, as the region continues to see strong demand growth for all products while investment in its refinery industry lags behind. From being relatively self‐sufficient for gasoline and middle distillates in 2006, the region will import increasingly large volumes of both products in the coming years to meet domestic needs. Apart from 100 kb/d of crude distillation capacity added in 2008 (65 kb/d at Cuba’s Cienfuego refinery and 38 kb/d at Petrobras’s Paulina refinery), only two crude distillation capacity expansions are forecast to be completed by 2013. One is at the Cartagena refinery in Colombia and the other is Petrojam’s Kingston refinery (both in 2013). The total capacity addition of both projects is 120 kb/d. A multitude of grassroots refineries have been proposed by the governments of Venezuela, Nicaragua, Panama, and Ecuador but these are still being excluded from this forecast as we see completion as unrealistic. Equally, Brazil’s Comperj and Abreu‐e‐Lima refinery expansions are again excluded from the forecast as numerous delays to the start‐up schedule cast considerable uncertainty as to the progress and state of play of these projects. Investment in upgrading capacity is also lagging levels seen in other regions, with only 240 kb/d of additions deemed realistic within the forecast timeframe. Desulphurisation capacity investment on the other hand is quite extensive, with close to 1 mb/d of hydrotreating capacity being added. In common with other regions, several countries in Latin America are striving to improve product quality and reduce sulphur levels in transportation fuels, and most notably ,Brazil. mb/d 0.6
Latin America Capacity Additions
Latin America Utilisation Rates 95%
0.5 90%
0.4 0.3
85%
0.2
80%
0.1
75%
0.0 2008 2009 2010 2011 2012 2013 Crude Distillation Desulphurisation Upgrading
70% 1Q06
1Q08
1Q10
1Q12
By contrast to other regions, we assume that utilisation rates in Latin America will increase slightly over the medium term. The region, being a net exporter of crude oil, will likely choose to run its refineries harder in the face of sharply increasing product import requirements. Regional crude supplies are expected to increase (mostly from Brazil and Venezuela) and hence exports from the region will stay relatively stable. In addition to running local crudes, we assume that Latin American refineries continue to import African crudes such as Bonny Light, Cabinda and Forcados.
DECEMBER 2008 SUPPLEMENT
37
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
INTERNATIONAL ENERGY AGENCY
Latin America’s naphtha/gasoline balance (excluding Brazilian ethanol) is set to tighten significantly over the coming years. Gasoline demand in the region is forecast to grow rapidly, in particular in Argentina and Venezuela, where end‐user prices are capped well below market prices. Additional demand for Brazilian ethanol, which is forecast to grow by some mb/d Naphtha and Gasoline 6.8% on average, is captured within the ‘other Product Supply Potential vs. OMR Demand products’ category (not shown here), suggesting the 1.9 assessment presented here actually understates total 1.7 growth in regional gasoline/biofuel demand. For 1.5 consistency reasons, we have therefore also excluded Brazilian ethanol (likely to be consumed domestically) 1.3 1Q06 1Q08 1Q10 1Q12 from the adjustments to the global product supply Forecast Supply Reported Supply balances. The lack of investment in new refineries in OMR Demand the region limits the increase in gasoline supplies expected over the medium term. After a slight improvement in the regional middle distillate balance in 2008, following the sharp increase in imports seen in 2007, Latin America will have to import increasing volumes of gas/diesel oil to fulfil regional requirements by the end of the forecast period. Demand is forecast to grow at a reasonably rapid pace, (2.2%‐3.0%) due to increasing transportation fuel demand (in part fuelled by capped end‐user prices as for gasoline) and for increasing power generation in countries where alternatives are unavailable.
mb/d
Gasoil and Kerosene Product Supply Potential vs. OMR Demand
2.6 2.4 2.2 2.0 1.8 1.6 1Q06
1Q08
Forecast Supply OMR Demand
mb/d
Latin America will remain a net exporter of fuel oil in the medium term, as limited demand growth is expected, while upgrading capacity additions to reduce fuel oil yields are similarly scarce, with the exception of the coking capacity at Chile’s Aconcagua and Colombia’s Cartagena refineries. Excess fuel oil will be exported, most probably to the US, where it will be used for electricity generation, as a bunker fuel or as a feedstock for further processing.
38
1Q10
1Q12 Reported Supply
Fuel Oil Product Supply Potential vs. OMR Demand
1.5
1.0
0.5 1Q06
1Q08
Forecast Supply OMR Demand
1Q10
1Q12 Reported Supply
DECEMBER 2008 SUPPLEMENT
INTERNATIONAL ENERGY AGENCY
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
8.8.1. FSU-Demand Oil product demand in the Former Soviet Union is forecast to grow by 2.4% per year on average (from 4.2 mb/d in 2008 to 4.8 mb/d in 2013). After the precipitous oil demand fall in the early 1990s, growth has resumed at a quick pace over the past several years as the region’s economies have prospered on the back of rising commodity prices. Transportation fuels will continue to account for the largest share of growth, notably in Russia – the largest consumer, with 70% of FSU demand by 2013 – which is poised to become Europe’s biggest car market. Fuel oil demand is also expected to rise, given growing power generation requirements and the need to free additional volumes of natural gas for export, notably in Russia. Although the region will experience some turmoil in 2009 following the global slowdown, its economic prospects remain promising and oil demand is thus expected to grow strongly. Former Soviet Union: Demand Trends, Main Refined Products Product
Volume, 2013 (mb/d)
Avg. Growth Rate, 2008-13
Comments
Naphtha
0.2
-0.5%
Continuing gradual decline of Russian petrochemical output (94% of regional naphtha demand)
Gasoline
1.2
+2.3%
Growth driven by expanding vehicle fleets on the back of strong economic expansion, most notably in Russia
Jet Fuel/ Kerosene
0.3
+2.1%
Rising air traffic in Russia and elsewhere
Gasoil
1.2
+2.5%
Supported by strong economic growth, particularly in Russia
Fuel Oil
0.5
+4.1%
Used to meet rising power generation needs in Russia, while allowing to free additional volumes of natural gas for export
Source: IEA’s Demand Forecasting Framework
16.3%
FSU: Total Demand by Product, 2013
FSU: Oil Demand Growth by Product 2008-2013, kb/d
10.6%
80 LPG
10.9% 4.9%
Gasoline LPG & Naphtha Other
60
Naphtha
40
Mogas
20
140
Distillates Fuel Oil Total (RHS)
130 120 110
-
Jet & Kero
100
(20) Gasoil 24.3%
25.8%
7.2%
DECEMBER 2008 SUPPLEMENT
90
(40)
HFO
(60)
Other
(80)
80 70 2008
2009
2010
2011
2012
2013
39
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
INTERNATIONAL ENERGY AGENCY
8.8.2. FSU – Refining and Product Supply Oil product balances in the Former Soviet Union are set to tighten slightly over the medium term as domestic demand grows at an average 2.4% per year (from 4.2 mb/d in 2008 to 4.8 mb/d in 2013), outpacing limited regional refinery distillation additions. The region will nevertheless retain its position as one of the world’s most important oil product supply centres, exporting significant volumes of middle distillates and fuel oil, as well as some light distillates over the forecast period. mb/d 0.7
FSU Refinery Utilisation Rates
FSU Capacity Additions 95%
0.6 0.5
90%
0.4
85%
0.3 80%
0.2 0.1
75%
0.0 2008 2009 2010 2011 2012 2013 Crude Distillation Desulphurisation Upgrading
70%
1Q06
1Q08
1Q10
1Q12
Refinery investments in the region are mostly aimed at improving light product yields and product quality as refiners invest significantly in upgrading and desulphurisation capacity. Only one grassroots refinery, Tatneft’s Nizhnekamsk project, is expected to start up within the forecast period. Additional crude distillation capacity is also forecast as part of the expansion of the Tuapse and Novopolotsk refineries, due for completion in 2012, adding a total of 340 kb/d of crude distillation capacity. Key upgrading investments in Russia include Rosneft’s upgrade of Komsomolsk and Tuapse refineries (2012) and Lukoil’s planned upgrades in Volgograd, Perm and Nizhny Novgorod, all due to be completed by 2013. Regional investments will add a total of 740 kb/d of upgrading capacity and 530 kb/d of desulphurisation capacity. The current tax structure in Russia (which account for 75% of the FSU’s refinery activity) incentivises exports of refined products rather than crude oil. However, uncertainty over the future tax structure appears to have hindered refiners from additional investment in new distillation capacity. Light products attract a 30% discount relative to the export tax charged on crude, while fuel oil exports benefit from a 60% discount. The lower tax burden on fuel oil clearly reduces the incentive to invest in upgrading capacity, except where needed to fill domestic requirements. As with other crude producing and exporting regions, we have assumed that domestic refineries will get priority on crude to keep refinery utilisation at more or less historical levels. It is important to note that the FSU capacity figures are in some places Soviet‐era notional capacity, and in many cases mothballed, largely overstating actual usable capacity, and leads to unusually low utilisation rates. As such, total refinery utilisation rates will remain around 75% of capacity over the forecast period, leaving crude exports relatively stable from 2008 levels as new Azeri and Caspian volumes are brought onstream, offsetting lower Russian supplies and the slightly higher regional crude runs.
40
DECEMBER 2008 SUPPLEMENT
INTERNATIONAL ENERGY AGENCY
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
After a tightening in recent years, FSU’s naphtha/gasoline balance will remain relatively unchanged over the medium term. Growth in transportation fuels demand, in particular demand for high‐octane low‐sulphur gasoline, has fuelled investment in catalytic cracking, reforming, isomerisation and alkylation capacities, at a disproportionate rate to investments in crude distillation. As a result, light product yields have mb/d Naphtha and Gasoline Product Supply Potential vs. OMR Demand increased and allow supplies to keep up with forecast 1.8 demand through to 2013. 1.6
The FSU will retain its role as the world’s number one regional exporter of gasoil/jet kerosene for the medium term. Significant volumes of both diesel and jet fuel will be available to world markets. It remains to be seen whether problems over the quality of this gasoil materialise. Europe’s move to more stringent 10 ppm sulphur limits in 2009 may present additional constraints for exports towards Europe. However, European refiners retain the flexibility to desulphurise increased amounts of atmospheric gasoil, (although this in turn may lead to additional volumes of poorer‐quality cracked material) which may lead to higher demand for straight‐run gasoil. Failing that, FSU refiners will have to find alternative markets for their production, with less stringent environmental standards. The region’s fuel oil export potential will fall in the coming years as upgrading capacity additions come onstream, reducing fuel oil yields. Regional demand for fuel oil will likely remain stable, or slightly increase, as natural gas is preferred for exports, offsetting efficiency gains. The tighter global fuel oil balances presented in this supplement suggest continued robust demand for FSU fuel oil exports, a large portion of which goes to Europe to be reprocessed in refineries there. Similarly, the current Russian tax structure (mentioned above), further dilutes the incentive for refiners to minimise the production of fuel oil relative to total output.
DECEMBER 2008 SUPPLEMENT
1.4 1.2 1.0 1Q06
1Q08
1Q10
Forecast Supply OMR Demand
1Q12 Reported Supply
Gasoil and Kerosene
mb/d
Product Supply Potential vs. OMR Demand 3.5 2.5 1.5 0.5 1Q06
1Q08
1Q10
Forecast Supply OMR Demand
mb/d
1Q12 Reported Supply
Fuel Oil Product Supply Potential vs. OMR Demand
2.0 1.5 1.0 0.5 0.0 1Q06 1Q08 1Q10 Forecast Supply OMR Demand
1Q12 Reported Supply
41
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
INTERNATIONAL ENERGY AGENCY
8.9.1. Africa - Demand Oil product demand in Africa is foreseen to grow by 1.5% per year on average between 2008 (3.1 mb/d) and 2013 (3.4 mb/d). Despite its very large size, the entire continent’s demand is equivalent to that of a medium‐sized emerging country. Moreover, demand is – and will continue to be – dominated by two countries, Egypt and South Africa, which are set to account for almost 41% of the continent’s total by 2013 (unchanged versus 2008). Not coincidentally, both countries are Africa’s economic powerhouses and, as in other fast‐growing emerging economies, oil demand is a function of rising income per capita and expanding mobility and power generation needs (and in some cases, of very low end‐user prices). In addition, four other countries will also contribute to rising oil demand: Algeria, Libya, Morocco and Nigeria. The region has certainly benefited from the recent boom in commodity prices, although economic growth is set to slow down in 2009 given the global credit crunch. Recent declines in commodity prices are likely to affect the resource and mining industries however, oil demand should rebound from 2010 onwards. Africa: Demand Trends, Main Refined Products Product
Volume, 2013 (mb/d)
Avg. Growth Rate, 2008-13
Comments
Naphtha
0.04
+1.6%
Africa’s petrochemical output comes almost exclusively from Libya, where activity is set to expand a at relatively moderate pace
Gasoline
0.7
+2.0%
Growth driven by four countries as a result of a strong economic outlook (Algeria, Egypt, Nigeria and South Africa) and low retail prices (Egypt and Nigeria)
Jet Fuel/ Kerosene
0.3
+2.0%
Growth supported by rising air traffic, notably in countries with a developed tourism industry (such as Egypt, Kenya and South Africa)
Gasoil
1.2
+2.2%
Driven by economic activity, notably transportation in four main countries (Algeria, Egypt, Morocco and South Africa) and to a lesser extent by power generation needs (South Africa)
Fuel Oil
0.5
-0.1%
Declining use for power generation in the largest consuming country (Egypt) as natural gas makes inroads and stagnating or rising marginally elsewhere
Source: IEA’s Demand Forecasting Framework
14.1%
Africa: Total Demand by Product, 2013
6.4%
Africa: Oil Demand Growth by Product 2008-2013, kb/d
9.7%
50
1.0%
LPG 40 Naphtha
42
50 45 40
-
35
(10)
Other
55
10
HFO
9.6%
60
20
Jet & Kero Gasoil
36.9%
65
Distillates Fuel Oil Total (RHS)
30
Mogas 22.3%
Gasoline LPG & Naphtha Other
30 2008
2009
2010
2011
2012
2013
DECEMBER 2008 SUPPLEMENT
INTERNATIONAL ENERGY AGENCY
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
8.9.2. Africa – Refining and Product Supply Africa seems set to remain a net product importer of gasoline and middle distillates in the medium term. Forecast refinery investments fall short of the level needed to catch up with the current deficit in product supply, let alone to meet growing demand for transportation fuels across the region. However, naphtha and fuel oil supplies will continue to be available for export, given the numerous unsophisticated refineries in the region. Crude distillation capacity additions of 250 kb/d fall significantly below some reports’ expectations of nearly 2 mb/d, (see July 2008 MTOMR for more details), with numerous projects unable to move beyond the completion of a feasibility study. Of the forecast 250 kb/d growth, most will come from Algeria. Growth will be driven by the commissioning of a new 100 kb/d condensate splitter in 2009 and 60 kb/d of crude distillation capacity to Algeria’s Skikda refinery in 2011. Smaller expansions to existing facilities in Egypt, Ghana and Morocco are also included in the forecast. Existing forecasts envisage additional upgrading capacity investments in the Mohammedia refinery in Morocco (2009) and in at the Mostorod refinery in Egypt (2012) as well as some 120 kb/d of hydrotreating capacity being added, largely in association with the expansion of Algeria’s Skikda refinery in 2011 mentioned above. Despite growing volumes of crude and condensate production over the medium term, it is assumed that refinery utilisation rates for the region will hover between 75% and 80% for the forecast period. This is slightly lower than the historical average for the past two years. Consequently, the additional regional crude supplies (+1.7 mb/d) will be available for export rather than domestic processing, unlike our assumption for the other crude net‐exporting regions. mb/d 0.3
Africa Refinery Utilisation Rates
Africa Capacity Additions 95% 90%
0.2
85% 0.1
80% 75%
0.0 2008 2009 2010 2011 2012 2013 Crude Distillation Desulphurisation Upgrading
70%
1Q06
1Q08
1Q10
1Q12
Although not included within our forecasts, the restart in early 2008 of the Kaduna and Warri refineries in Nigeria also adds substantially to the region’s product supply potential. However, as has been witnessed recently, maintaining these refiners at continuously high levels of utilisation may prove difficult given the crude oil supply issues, due to with repeated attacks on the feeder pipelines. Interestingly, our work on estimating regional production volumes suggests that gasoline and naphtha production may in reality be higher than those reported in official statistics. This would suggest that some refinery production may be disappearing from official channels, either stolen from pipelines or smuggled out of some countries, and fails to be included in the product supply volumes. Conversely, the differential between our estimates and reported production may reflect inaccurate refinery configuration data which leads us to derive overly optimistic gasoline production. Nevertheless, we have adjusted for this in the regional/global balances.
DECEMBER 2008 SUPPLEMENT
43
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
Africa’s naphtha and motor gasoline outlook will stay relatively balanced for the medium term as increasing import requirements of gasoline will be offset by a growing naphtha surplus. Naphtha is currently being exported to Europe from Algeria, Libya and Egypt, and this trade is expected to continue over the medium term. Conversely, gasoline imports are centred around the structural deficits in Nigeria, South Africa and several smaller countries. In 2006, Nigeria imported half of Africa’s total gasoline imports of 250 kb/d, following the closure of two of its refineries in February 2006. Their restart in 2008 has been problematic and has resulted in renewed periodic imports for the country, which we expect to continue in the future. Middle distillate import requirements will increase in the region over the forecast period. Although Africa will remain a net importer of both gasoil/diesel and jet kerosene, the increasing shortfall in product supply is almost wholly concentrated in gasoil/diesel. The region will have to import a total of 350 kb/d of middle distillates in 2013, of which 300 kb/d is expected to be gasoil/diesel. The region will continue to be a net exporter of fuel oil until the end of the forecast period. However, the export potential will decrease to only 80 kb/d in 2013, compared with a little over 110 kb/d in 2008. This decline, despite falling regional demand for fuel oil, reflects both the impact of the assumed low utilisation rates in the medium term and the reduction in output of the heavy‐end of the barrel from regional upgrading projects.
44
INTERNATIONAL ENERGY AGENCY
mb/d
Naphtha and Gasoline Product Supply Potential vs. OMR Demand
0.8
0.7
0.6 1Q06
1Q08
1Q10
Forecast Supply OMR Demand
mb/d
1Q12 Reported Supply
Gasoil and Kerosene Product Supply Potential vs. OMR Demand
1.7 1.5 1.3 1.1 0.9 0.7
1Q06
1Q08
1Q10
Forecast Supply OMR Demand
mb/d 0.7
1Q12 Reported Supply
Fuel Oil Product Supply Potential vs. OMR Demand
0.6 0.5 0.4 1Q06
1Q08
Forecast Supply OMR Demand
1Q10
1Q12 Reported Supply
DECEMBER 2008 SUPPLEMENT
INTERNATIONAL ENERGY AGENCY
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
8.10.1. Non-OECD Europe - Demand Oil product demand in Non‐OECD Europe is forecast to rise by 1.6% per year on average between 2008 (764 kb/d) and 2013 (826 kb/d). As highlighted in other regions, oil demand will continue to depend on the resumption of economic growth after the economic slowdown in 2009. Notably, Romania and Bulgaria (26% and 15%, respectively, of regional demand by 2013), have experienced strong economic growth since becoming part of the European Union and together with Malta (2.2% of the region’s demand) account for much of the forecast regional growth. Cyprus* has also capitalised on its strategic location, becoming a financial centre in the Mediterranean. Nevertheless, demand in non‐OECD Europe will remain relatively marginal vis‐à‐vis global demand. Non-OECD Europe: Demand Trends, Main Refined Products Product
Volume, 2013 (mb/d)
Avg. Growth Rate, 2008-13
Comments
Naphtha
29
+1.0%
Moderate growth in the region’s three producing areas – Former Yugoslavia (mostly Serbia), Romania and Bulgaria
Gasoline
143
+1.1%
Growth driven by the largest countries (Serbia, Croatia, Romania and Bulgaria)
Jet Fuel/ Kerosene
26
+1.3%
Rising air traffic, resulting from higher income per capita and the increasing tourist appeal of some regional countries (such as Croatia and Cyprus)
Gasoil
286
+2.0%
Supported by the largest and fastest-growing countries (Serbia, Croatia, Romania and Bulgaria)
Fuel Oil
150
+1.4%
Driven by power generation requirements across the region, both because of rapid economic growth and location (Mediterranean islands)
Source: IEA’s Demand Forecasting Framework
15.7%
Non-OECD Europe: Total Demand by Product, 2013
Non-OECD Europe: Oil Demand Growth by Product 2008-2013, kb/d
7.6%
8 3.5%
18.1%
17.3%
LPG
7
17
Distillates Fuel Oil Total (RHS)
16
Naphtha
6
15
Mogas
5
14
4
13
3
12
2
11
1
10
Jet & Kero Gasoil
3.1%
Gasoline LPG & Naphtha Other
HFO Other
34.7%
9
2008
2009
2010
2011
2012
2013
* "Footnote by Turkey The information in this document with reference to "Cyprus" relates to the southern part of the Island. There is no single authority representing both Turkish and Greek Cypriot people on the Island. Turkey recognises the Turkish Republic of Northern Cyprus (TRNC). Until a lasting and equitable solution is found within the context of United Nations, Turkey shall preserve its position concerning the "Cyprus" issue.” Footnote by all the European Union Member States of the OECD and the European Commission The Republic of Cyprus is recognised by all members of the United Nations with the exception of Turkey. The information in this document relates to the area under the effective control of the Government of the Republic of Cyprus.
DECEMBER 2008 SUPPLEMENT
45
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
INTERNATIONAL ENERGY AGENCY
8.10.2. Non-OECD Europe – Refining and Product Supply Non‐OECD Europe oil product supply balances will stay relatively unchanged over the medium term, as neither the demand nor the supply picture sees dramatic changes. For the period as a whole, 60 kb/d of demand growth will be roughly matched by expansions in crude distillation capacity. In terms of product balance, the region will continue to export small volumes of naphtha and gasoline over the forecast period, while importing middle distillates and fuel oil. mb/d
Non-OECD Europe Utilisation Rates
Non-OECD Eur. Capacity Additions 100%
0.15
80% 0.10 60% 0.05
40% 20%
0.00 2008
2009
2010
2011
2012
2013
Crude Distillation Desulphurisation Upgrading
0%
1Q06
1Q08
Non‐OECD Europe will continue to generate a naphtha/gasoline export surplus over the medium term. Demand is essentially flat over the forecast period, at a little over 150 kb/d. With the installation of upgrading capacity in 2010 and 2011, and the new crude distillation capacity being added in 2011, supplies will increase slightly, allowing for higher product exports, despite the region’s focus on middle distillate production.
mb/d
The region will not manage to alleviate its middle distillate shortage in the coming years. Refineries are already maximising diesel over naphtha/gasoline and the car fleet is, as in the rest of Europe moving rapidly towards more diesel‐fuelled vehicles. Given the region’s use of gasoil for heating and industrial purposes, the pressure on refineries boost middle distillate yields will remain.
mb/d
Fuel oil will also have to continue to be imported as is currently the case. Non‐OECD Europe still uses fuel oil for power generation, both in Eastern Europe and on islands like Malta and Cyprus that do not have alternative sources for power installed. Given the relatively static outlook for refining capacity and steady crude slate of Urals and North African grades little change is anticipated over the medium term.
46
1Q10
1Q12
Naphtha and Gasoline Product Supply Potential vs. OMR Demand
0.3
0.2
0.1 1Q06
1Q08
1Q10
Forecast Supply OMR Demand
1Q12 Reported Supply
Gasoil and Kerosene Product Supply Potential vs. OMR Demand
0.4
0.3
0.2 1Q06
1Q08
1Q10
Forecast Supply OMR Demand
1Q12 Reported Supply
Fuel Oil
mb/d
Product Supply Potential vs. OMR Demand 0.2
0.1
0.0 1Q06
1Q08
Forecast Supply OMR Demand
1Q10
1Q12 Reported Supply
DECEMBER 2008 SUPPLEMENT
INTERNATIONAL ENERGY AGENCY
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
Appendix 1 - Note on Methodology This supplement relies on the forecasts for future refinery additions contained in the July 2008 MTOMR. However, several refineries, notably in the Middle East, have been excluded from these forecasts, for having failed to meet the level of progress we had assumed in compiling the 2008 Edition of the MTOMR. We have added further depth to our forecast by publishing a more detailed list of refinery projects in Appendix 2 to this supplement. Where possible, this is based on information from published data and industry sources. Where we have been unable to obtain such information we have modelled the likely refinery configuration assuming typical generic upgrading unit capacities for the proposed size of crude distillation. The disaggregated refinery capacity forecast feeds directly into the IEA’s Refinery and Product Supply Model, which integrates our product demand, crude supply and crude quality databases to drive our forecasts of crude demand, trade and product supply. For nine of the 10 regions modelled we categorise refineries based on the most complex type of upgrading capacity, as follows: •
Coking refineries – full upgrading refineries with the ability to minimise fuel oil yields, containing either delayed, flexi or fluid coking;
•
Hydrocracking refineries – primarily focused on upgrading fuel oil into naphtha, jet fuel or diesel, using high pressure/temperature catalytic cracking in the presence of hydrogen;
•
Catalytic cracking refineries – primarily focused on upgrading fuel oil into gasoline, using high temperatures in the presence of a catalyst. It is more common where it is necessary to maximise gasoline production, but can still yield significant quantities of fuel oil, depending on crude selection;
•
Visbreaking refineries – using thermal cracking to improve the quality of fuel oil and minimise the use of low‐quality distillate to meet viscosity specifications;
•
Hydroskimming refineries – those refineries that possess no upgrading capacity, but may have catalytic reforming and hydrotreating capacity and typically yield the highest percentage of fuel oil. This category also includes topping refineries, which simply distil the crude into naphtha, jet, gasoil and atmospheric residue; and
•
Lubricant and asphalt refiners – those refineries that specifically produce asphalt or lubricants, processing either heavy sour crude, or atmospheric residue.
For China, we retain from previous years an aggregated model for all refineries within the country. Consequently these forecasts may tend to ‘over‐optimise’ the production of light products at the expense of lower value fuels, e.g. fuel oil. Crude oil trade is essentially driven by the allocation of incremental crude supplies to areas of crude demand growth, as dictated by refinery expansions. On the supply side, it is assumed, firstly, that non‐OPEC upstream capacity growth will be fully utilised. Secondly, we assume that the growing call on OPEC will be met proportionately by OPEC members according to the call on their spare capacity. These volumes are then shipped to where they are needed. Crude demand and supply are matched according to changes in refinery capacity and complexity, and taking into account shifts in the crude quality, historical trade relationships and trade economics.
DECEMBER 2008 SUPPLEMENT
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MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
INTERNATIONAL ENERGY AGENCY
The refining and product supply model then replicates the output of each unit (assuming full optimisation of capital‐intensive units) to capture refinery output by product grade. The refinery units are then configured to mimic regional operating conditions. For example, European refiners appear to maximise production of diesel, above all other products, so the model parameters are set to maximise distillate production for the region. By considering historical data for each of the 10 regions for which the IEA assesses demand, we have constructed a product supply forecast for each region – benchmarked to the reported product supply. Comparing this data with regional demand allows us to generate a regional trade matrix by product. Global balances are adjusted for historical non‐refinery‐sourced product supply, e.g. naphtha from gas processing plants in the Middle East, although when we present the regional product balances these focus on the ex‐refinery production and regional demand. From this we have drawn our conclusions for the likely evolution of product markets pressures and potential trade shifts. Where significant differences in reported supplies and modelled supplies were evident, and it was deemed that reported/estimated data (as published in IEA statistics) were incomplete, we’ve attempted to adjust for the discrepancies in our global product balance. Also, where discrepancies in reporting between regions were evident, e.g. Russia reporting exports of fuel oil to Europe while Europe reporting imports of feedstock from Russia, we’ve adjusted global balances to avoid double counting or not counting at all product supplies. Finally, in the global product balances we’ve added in supplies coming from outside of the refinery system, e.g. naphtha from gas processing plants, as well as biofuels and gas to liquids supplies.
48
DECEMBER 2008 SUPPLEMENT
INTERNATIONAL ENERGY AGENCY
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
Appendix 2 – Selected Project List Country
Refinery Location
Project
Timing
Canada
PetroCanada - Edmonton
Heavy oil expansion
1Q2009
Canada
CCRL - Regina
Heavy oil expansion
1Q2012
Mexico
PEMEX - Minatitlan
Refinery expansion
2Q2010
Mexico
PEMEX - Cadereyta
Hydrotreating expansion
4Q2009
Mexico
PEMEX - Cuidad Madero
Hydrotreating expansion
4Q2009
Mexico
PEMEX - Salina Cruz
Refinery expansion
2Q2013
Mexico
PEMEX - Salamanca
Refinery expansion
3Q2013
USA
ConocoPhillips - Wood River
Heavy oil expansion
2Q2011
USA
BP - Whiting
Heavy oil expansion
1Q2011
USA
Marathon - Garyville
Heavy oil expansion
1Q2010
USA
Marathon - Detroit
Heavy oil expansion
3Q2011
USA
BP/Husky - Toledo
Heavy oil expansion
1Q2011
USA
ConocoPhillips/EnCana - Borger
Heavy oil expansion
2Q2011
USA
Motiva - Port Arthur
Refinery expansion
1Q2011
USA
Total - Port Arthur
Heavy oil expansion
2Q2011
USA
Valero - Port Arthur
Refinery expansion
3Q2011
Finland
Neste - Naantali
Heavy oil expansion
4Q2012
France
Total - Donges
Hydrotreating expansion
4Q2009
Germany
Bayernoil - Ingolstadt
Heavy oil expansion
2Q2008
Germany
ConocoPhilllips - Wilhelmshaven
Heavy oil expansion
3Q2012
Germany
Total - Leuna
Hydrotreating expansion
1Q2010
Greece
Hellenic Petroleum SA - Aspropyrgos
Hydrotreating expansion
1Q2009
Greece
Hellenic Petroleum SA - Elefsina
Heavy oil expansion
2Q2011
Greece
Hellenic Petroleum SA - Thessaloniki
Refinery expansion
1Q2009
Greece
Motor Oil Hellas - Aghil Theodori
Refinery expansion
2Q2010
Italy
Eni - Porto Marghera
Heavy oil expansion
2Q2011
Italy
Eni - Sannazzaro, Pavia
Heavy oil expansion
2Q2009
Italy
Eni - Sannazzaro, Pavia
Heavy oil expansion
4Q2012
Italy
Eni - Taranto
Refinery expansion
1Q2010
Italy
IES -Mantova
Hydrotreating expansion
2Q2009
Poland
Lotos - Gdansk
Refinery expansion
1Q2010
Portugal
Galp Energia - Porto
Heavy oil expansion
1Q2011
Portugal
Galp Energia - Sines
Heavy oil expansion
1Q2011
Spain
CEPSA - Huelva
Refinery expansion
3Q2010
Spain
CEPSA - Cadiz
Refinery expansion
3Q2010
Spain
Petronor SA - Bilbao
Heavy oil expansion
1Q2011
Spain
Repsol YPF SA - Cartagena Murcia
Refinery expansion
2Q2011
Spain
Repsol YPF SA - Puertollano
Refinery expansion
3Q2010
Spain
Repsol YPF SA - Tarragona
Heavy oil expansion
3Q2013
Sweden
Preem - Lysekil
Heavy oil expansion
2Q2012
UK
Total - Killingholme
Hydrotreating expansion
1Q2010
South Korea
Hyundai - Daesan
Heavy oil expansion
3Q2011
South Korea
GS-Caltex - Yosu
Heavy oil expansion
4Q2011
South Korea
SK Corp. - Ulsan
Heavy oil expansion
3Q2008
OECD North America
OECD Europe
OECD Pacific
DECEMBER 2008 SUPPLEMENT
49
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
Country
INTERNATIONAL ENERGY AGENCY
Refinery Location
Project
Timing
Belarus
Belneftekhim - Novopolotsk
Refinery expansion
2Q2012
Belarus
Slavneft- Mozyr
Hydrotreating expansion
1Q2009
Russia
Alliance Co. - Khabarovsk
Heavy oil expansion
3Q2011
Russia
Lukoil - Nizhny Novgorod
Heavy oil expansion
3Q2009
Russia
Rosneft - Komsomolsk
Heavy oil expansion
1Q2011
Russia
Rosneft - Tuapse
Refinery expansion
1Q2012
Russia
Surgutneftegaz - kirishi
Heavy oil expansion
2Q2010
Russia
Tatneft - Nizhnekamsk
Refinery expansion
4Q2010
Russia
TNK-BP - Ryazan
Heavy oil expansion
3Q2009
Russia
TNK-BP - Saratov
Heavy oil expansion
3Q2009
Iran
National Iranian Oil Co. - Abadan
Refinery expansion
1Q2011
Iran
National Iranian Oil Co. - Arak
Refinery expansion
1Q2012
Iran
National Iranian Oil Co. - Bandar Abbas
Refinery expansion
1Q2010
Iran
National Iranian Oil Co. - Bandar Abbas
Refinery expansion
3Q2012
Iran
National Iranian Oil Co. - Isfahan
Refinery expansion
1Q2012
Iran
National Iranian Oil Co. - Tehran
Hydrotreating expansion
1Q2010
Iran
National Iranian Oil Co. - Tabriz
Refinery expansion
3Q2012
Israel
ORL - Haifa
Refinery expansion
1Q2011
Kuwait
Kuwait NPC. - Mina al-Ahmadi
Hydrotreating expansion
3Q2013
Qatar
Qatar Petroleum - Ras Laffan
Refinery expansion
4Q2008
Qatar
Qatar Petroleum - Ras Laffan
Refinery expansion
1Q2011
Qatar
QPC - Al Shaheen
Refinery expansion
3Q2013
Saudi Arabia
SASREF - Al Jubail
Hydrotreating expansion
4Q2009
Saudi Arabia
Saudi Aramco - Ras Tanura
Refinery expansion
1Q2013
Saudi Arabia
Saudi Aramco - Rabigh
Refinery expansion
1Q2009
Saudi Arabia
Saudi Aramco - Ras Tanura
Hydrotreating expansion
3Q2010
Saudi Arabia
Saudi Aramco - Yanbu
Refinery expansion
1Q2012
Saudi Arabia
SAMREF - Yanbu
Hydrotreating expansion
1Q2012
UAE
Abu Dhabi National Oil Co. - Ruwais
Refinery expansion
4Q2011
UAE
Emirates National Oil Co. - Jebel Ali
Hydrotreating expansion
1Q2009
China
CNPC - Dalian
Heavy oil expansion
4Q2008
China
CNPC - Dushanzi
Refinery expansion
1Q2009
China
CNPC -Fushun
Refinery expansion
2Q2009
China
CNPC -Kunming
Refinery expansion
1Q2013
China
China National Petroleum Corp. -Qingyang
Hydrotreating expansion
4Q2008
China
CNPC - Qinzhou
Refinery expansion
3Q2009
China
CNPC - Weihai
Refinery expansion
3Q2013
China
CNPC - Jinxi
Refinery expansion
3Q2012
China
CNPC - Yumen
Refinery expansion
4Q2008
China
CNOOC - Huizhou
Refinery expansion
1Q2009
China
Sinochem - Quanzhou
Refinery expansion
2Q2010
China
Sinopec - Jinling
Refinery expansion
2Q2010
China
Sinopec - Jinmen
Refinery expansion
4Q2008
China
Sinopec - Jiujiang
Refinery expansion
3Q2008
China
Sinopec - Luoyang
Refinery expansion
3Q2008
Former Soviet Union
Middle East
China
50
DECEMBER 2008 SUPPLEMENT
INTERNATIONAL ENERGY AGENCY
Country
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
Refinery Location
Project
Timing
China
Sinopec - Maoming
Refinery expansion
1Q2010
China
Sinopec - Maoming
Refinery expansion
3Q2012
China
Sinopec - Qingdao
Refinery expansion
3Q2008
China
Sinopec - Shanghai Petrochemical
Heavy oil expansion
3Q2008
China
Sinopec - Tianjin
Refinery expansion
1Q2010
China
Sinopec/KPC - Nansha
Refinery expansion
4Q2012
China
Sinopec/Saudi Aramco/Exxonmobil - Quanzhou
Refinery expansion
2Q2009
China
Shaanxi Yanchang - Luochuan
Refinery expansion
3Q2009
Chinese Taipei
Chinese Petroleum Corp. - Ta-Lin
Heavy oil expansion
4Q2008
Chinese Taipei
Chinese Petroleum Corp. - Tao-Yuan
Hydrotreating expansion
4Q2008
India
Bharat Oman Co. Ltd. - Bina
Refinery expansion
1Q2011
India
Essar Oil - Vadinar
Refinery expansion
2Q2010
India
HPCL. - Mumbai
Refinery expansion
2Q2009
India
HPCL - Visakhapatnam
Refinery expansion
3Q2009
India
Indian Oil Co. Ltd. - Haldia
Refinery expansion
1Q2010
India
Indian Oil Co. Ltd. - Gujarat
Refinery expansion
1Q2011
India
Indian Oil Co. Ltd. - Panipat
Refinery expansion
3Q2009
India
Kochi Refineries Ltd. - Ambalamugal
Refinery expansion
4Q2010
India
ONGC. - Mangalore
Refinery expansion
1Q2011
India
Reliance Petroleum Ltd. - Jamnagar
Refinery expansion
1Q2009
Indonesia
Pertamina - Cilacap
Heavy oil expansion
2Q2012
Indonesia
Pertamina -Balikpapan
Refinery expansion
4Q2012
Singapore
Singapore Petroleum Co. Ltd. - Singapore
Hydrotreating expansion
1Q2009
Thailand
Rayong Refining Co - Rayong
Refinery expansion
1Q2009
Thailand
Thai Oil Co. Ltd. - Sriracha
Refinery expansion
1Q2009
Vietnam
Petro Vietnam - Dung Quat
Refinery expansion
3Q2009
Croatia
INA - Rijeka
Heavy oil expansion
3Q2010
Romania
Petrobrazi SA - Ploiesti
Refinery expansion
4Q2011
Algeria
Naftec SPA - Skikda
Refinery expansion
2Q2011
Algeria
Naftec SPA - Algiers
Refinery expansion
1Q2012
Egypt
Citadel - Mostorod
Heavy oil expansion
1Q2012
Ghana
Tema Oil Refining Co. - Tema
Refinery expansion
4Q2011
Morocco
SAMIR - Mohammedia
Refinery expansion
4Q2009
Brazil
PETROBRAS - Araucaria
Refinery expansion
4Q2010
Brazil
PETROBRAS - Betim
Hydrotreating expansion
4Q2009
Brazil
PETROBRAS - Paulinia
Hydrotreating expansion
1Q2010
Colombia
ENAP - Barrancabermeja-Santander
Hydrotreating expansion
4Q2009
Colombia
ENAP - Cartagena, Bolivar
Refinery expansion
4Q2013
Ecuador
Petroecuador - Esmeraldas
Hydrotreating expansion
1Q2012
Ecuador
Petroecuador - La Libertad
Hydrotreating expansion
1Q2011
Ecuador
Petroecuador - Shushufindi
Hydrotreating expansion
1Q2013
Jamaica
Petrojam Ltd. - Kingston
Refinery expansion
4Q2013
Peru
Repsol-YPF - La Pampilla Lima
Hydrotreating expansion
3Q2010
Peru
Petroperu SA - Talara
Refinery expansion
2Q2013
Other Asia
Non-OECD Europe
Africa
Latin America
DECEMBER 2008 SUPPLEMENT
51
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
INTERNATIONAL ENERGY AGENCY
Table 1 WORLD OIL SUPPLY AND DEMAND (million barrels per day)
1Q08 2Q08 3Q08 4Q08 2008
1Q09 2Q09 3Q09 4Q09 2009
1Q10 2Q10 3Q10 4Q10 2010
2011 2012 2013
OECD DEMAND North America
24.8 24.5 24.1 24.1 24.4
24.0 23.9 23.9 23.8 23.9
23.7 23.8 24.1 24.0 23.9
23.9 23.9 24.0
Europe
15.2 14.9 15.3 15.5 15.2
15.0 14.6 15.1 15.3 15.0
14.9 14.8 15.1 15.2 15.0
15.0 15.0 15.0
8.9
Pacific Total OECD
7.8
7.5
8.6
8.2
48.9 47.2 47.0 48.2 47.8
8.7
7.7
7.5
8.5
8.1
47.7 46.2 46.5 47.6 47.0
8.7
7.5
7.7
8.4
8.1
47.3 46.1 46.9 47.6 47.0
8.0
7.9
7.9
46.9 46.8 46.8
NON-OECD DEMAND FSU
4.1
4.1
4.4
4.3
4.2
4.2
4.2
4.5
4.5
4.3
4.3
4.3
4.5
4.6
4.4
4.5
4.6
4.8
Europe
0.8
0.8
0.7
0.8
0.8
0.8
0.8
0.7
0.8
0.8
0.8
0.8
0.7
0.8
0.8
0.8
0.8
0.8
China
7.9
8.0
8.1
7.9
7.9
8.2
8.2
8.2
8.3
8.2
8.3
8.4
8.6
8.9
8.5
8.9
9.3
9.7
Other Asia
9.7
9.7
9.2
9.4
9.5
9.7
9.8
9.3
9.6
9.6
9.7
9.8
9.6
9.9
9.8
Latin America
5.7
5.9
6.0
5.9
5.9
5.9
6.1
6.2
6.1
6.1
6.1
6.3
6.3
6.3
6.2
6.4
6.6
6.9
Middle East
6.7
7.0
7.3
6.8
6.9
7.0
7.3
7.6
7.1
7.2
7.4
7.5
7.8
7.4
7.5
7.8
8.2
8.6
Africa
3.1
3.1
3.0
3.1
3.1
3.2
3.2
3.0
3.2
3.1
3.2
3.2
3.1
3.2
3.2
3.2
3.3
3.4
10.0 10.2 10.4
Total Non-OECD
38.0 38.6 38.5 38.3 38.3
39.1 39.5 39.4 39.5 39.4
39.7 40.3 40.7 41.2 40.5
41.7 43.0 44.4
1
86.9 85.8 85.5 86.5 86.2
86.8 85.7 85.8 87.1 86.4
86.9 86.3 87.6 88.8 87.4
88.6 89.8 91.3
14.2 14.1 13.8 14.2 14.1
14.6 14.1 14.0 14.4 14.3
14.8 14.5 14.2 14.5 14.5
14.6 14.7 14.9
Total Demand
OECD SUPPLY North America Europe
4.9
4.8
4.5
4.6
4.7
4.6
4.2
4.1
4.2
4.3
4.2
3.9
3.7
3.9
3.9
3.7
3.5
3.4
Pacific
0.6
0.7
0.7
0.8
0.7
0.8
0.8
0.8
0.8
0.8
0.8
0.8
0.8
0.8
0.8
0.7
0.6
0.5
Total OECD
19.7 19.5 19.0 19.7 19.5
20.0 19.2 18.9 19.4 19.4
19.8 19.1 18.7 19.2 19.2
19.0 18.8 18.8
12.8 12.9 12.6 12.9 12.8
13.2 13.1 12.9 12.9 13.0
13.4 13.2 13.0 13.0 13.1
13.3 13.5 13.7
NON-OECD SUPPLY FSU Europe
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
China
3.8
3.8
3.8
3.9
3.8
3.9
3.9
3.9
3.9
3.9
3.9
3.9
3.9
4.0
3.9
3.9
3.9
4.0
Other Asia
2.7
2.6
2.6
2.7
2.7
2.7
2.8
2.7
2.7
2.7
2.8
2.8
2.8
2.8
2.8
2.8
2.7
2.7
Latin America
3.9
4.0
4.0
4.1
4.0
4.3
4.3
4.3
4.3
4.3
4.4
4.4
4.5
4.5
4.4
4.6
4.8
5.0
Middle East
1.6
1.6
1.6
1.6
1.6
1.6
1.6
1.5
1.5
1.6
1.5
1.5
1.5
1.5
1.5
1.5
1.5
1.5
Africa Total Non-OECD
2.5 2.5 2.5 2.5 2.5 27.4 27.5 27.3 27.9 27.5
2.5 2.5 2.5 2.5 2.5 28.2 28.2 28.0 28.0 28.1
2.5 2.5 2.5 2.5 2.5 28.6 28.4 28.3 28.3 28.4
2.5 2.5 2.5 28.7 28.9 29.4
Processing Gains2
2.2
2.2
2.3
2.3
2.2
2.3
2.3
2.3
2.3
2.3
2.2
2.2
2.2
2.2
2.2
2.2
2.3
2.3
Other Biofuels3
0.4
0.5
0.5
0.5
0.5
0.6
0.6
0.6
0.6
0.6
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
Total Non-OPEC4
49.7 49.6 49.0 50.4 49.7
51.1 50.2 49.8 50.3 50.3
51.0 50.2 49.7 50.3 50.3
50.5 50.5 51.0
OPEC Crude5 OPEC NGLs6 Total OPEC
32.4 32.2 32.4 4.9 4.9 5.1 37.3 37.1 37.5
Total Supply5
87.0 86.8 86.5
5.4
5.1
5.6
5.8
6.0
6.1
5.9
6.2
6.3
6.4
6.6
6.4
6.6
6.9
7.0
Memo items: Call on OPEC crude + Stock ch.7
32.2 31.3 31.4 30.7 31.4
30.1 29.6 30.1 30.7 30.2
29.7 29.8 31.5 31.9 30.7
31.4 32.4 33.3
1 Measured as deliveries from refineries and primary stocks, comprises inland deliveries, international marine bunkers, refinery fuel, crude for direct burning, oil from non-conventional sources and other sources of supply. 2 Net volumetric gains and losses in the refining process (excludes net gain/loss in China and non-OECD Europe) and marine transportation losses. 3 Biofuels from sources outside Brazil and US. 4 Non-OPEC supplies include crude oil, condensates, NGL and non-conventional sources of supply such as synthetic crude, ethanol and MTBE. 5 As of the March 2006 OMR, Venezuelan Orinoco heavy crude production is included within Venezuelan crude estimates. Orimulsion fuel remains within the OPEC NGL & non-conventional category, but Orimulsion production reportedly ceased from January 2007. 6 Comprises crude oil, condensates, NGLs, oil from non-conventional sources and other sources of supply. 7 Equals the arithmetic difference between total demand minus total non-OPEC supply minus OPEC NGLs.
52
DECEMBER 2008 SUPPLEMENT
INTERNATIONAL ENERGY AGENCY
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
Table 1A WORLD OIL SUPPLY AND DEMAND: CHANGES FROM LAST MEDIUM-TERM REPORT (million barrels per day)
1Q08 2Q08 3Q08 4Q08 2008
1Q09 2Q09 3Q09 4Q09 2009
1Q10 2Q10 3Q10 4Q10 2010
2011 2012 2013
OECD DEMAND North America
0.1
-0.5
-1.0
-1.1
-0.7
-0.4
-0.8
-0.9
-1.0
-0.8
-0.8
-0.8
-0.8
-0.8
-0.8
-0.9
-0.9
-0.9
Europe Pacific
0.1 0.0
-0.3 0.0
0.0 -0.4
0.0 -0.1
0.0 -0.1
-0.1 0.0
-0.3 -0.1
-0.2 -0.3
-0.1 -0.1
-0.2 -0.1
-0.2 -0.1
-0.2 -0.1
-0.1 -0.1
-0.2 -0.1
-0.2 -0.1
-0.2 -0.2
-0.2 -0.3
-0.2 -0.3
Total OECD
0.2
-0.8
-1.4
-1.2
-0.8
-0.4
-1.1
-1.4
-1.2
-1.1
-1.1
-1.1
-1.1
-1.1
-1.1
-1.2
-1.4
-1.5
Europe
0.0 0.0
0.1 0.0
0.1 0.0
-0.1 0.0
0.0 0.0
0.0 0.0
0.1 0.0
0.0 0.0
-0.1 0.0
0.0 0.0
-0.1 0.0
0.0 0.0
0.0 0.0
-0.1 0.0
-0.1 0.0
-0.1 0.0
-0.1 0.0
-0.1 0.0
China
0.0
-0.1
0.1
-0.2
-0.1
-0.1
-0.3
-0.2
-0.3
-0.2
-0.3
-0.4
-0.4
-0.4
-0.4
-0.4
-0.5
-0.6
Other Asia
0.1
0.2
0.0
-0.1
0.1
-0.1
0.1
0.0
-0.1
-0.1
-0.1
-0.1
-0.1
-0.1
-0.1
-0.2
-0.2
-0.2
Latin America Middle East
0.0 0.0
0.1 0.2
0.0 0.1
0.0 0.0
0.0 0.1
0.0 -0.1
0.0 0.1
0.0 0.1
-0.1 -0.1
0.0 0.0
-0.1 -0.1
-0.1 0.0
-0.1 0.0
-0.1 0.0
-0.1 0.0
-0.1 -0.1
-0.1 -0.2
-0.1 -0.2
Africa
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
-0.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
-0.1
0.0
Total Non-OECD
0.1
0.4
0.3
-0.4
0.1
-0.4
0.0
-0.2
-0.7
-0.3
-0.7
-0.7
-0.7
-0.7
-0.7
-1.0
-1.2
-1.4
Total Demand
0.3
-0.4
-1.1
-1.6
-0.7
-0.8
-1.1
-1.6
-1.9
-1.4
-1.8
-1.8
-1.8
-1.8
-1.8
-2.2
-2.6
-2.9
NON-OECD DEMAND FSU
OECD SUPPLY North America
0.0
0.2
-0.3
-0.2
-0.1
0.0
-0.1
-0.1
0.0
0.0
0.0
0.0
0.1
0.1
0.1
0.1
0.1
0.1
Europe Pacific
0.0 0.0
0.3 -0.1
0.2 0.0
0.0 0.0
0.1 0.0
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
Total OECD
0.0
0.4
-0.2
-0.2
0.0
0.0
-0.1
-0.1
0.0
0.0
0.0
-0.1
0.0
0.1
0.0
0.1
0.1
0.1
Europe
0.0 0.0
0.0 0.0
-0.5 0.0
-0.6 0.0
-0.3 0.0
-0.3 0.0
-0.3 0.0
-0.2 0.0
-0.1 0.0
-0.2 0.0
-0.2 0.0
-0.2 0.0
-0.1 0.0
-0.1 0.0
-0.2 0.0
-0.1 0.0
-0.1 0.0
-0.1 0.0
China
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Other Asia
0.0
-0.1
-0.1
-0.1
-0.1
0.0
0.0
0.0
0.0
0.0
-0.1
-0.1
-0.1
-0.1
-0.1
0.0
0.0
0.0
Latin America Middle East
0.0 0.0
0.0 0.0
-0.1 0.0
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
-0.1 0.0
-0.1 0.0
0.0 0.0
-0.1 0.0
-0.1 0.0
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
Africa Total Non-OECD
0.0 0.0
0.0 -0.1
0.0 -0.7
0.0 -0.6
0.0 -0.4
0.0 -0.4
0.0 -0.3
0.0 -0.3
0.0 -0.1
0.0 -0.3
0.0 -0.3
0.0 -0.3
0.0 -0.2
0.0 -0.1
0.0 -0.2
0.0 -0.2
0.0 -0.1
0.0 -0.1
Processing Gains
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Other Biofuels
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
-0.1
-0.1
-0.1
-0.1
-0.1
-0.1
-0.1
-0.1
Total Non-OPEC
0.1
0.4
-0.8
-0.7
-0.2
-0.3
-0.3
-0.3
0.0
-0.2
-0.4
-0.4
-0.3
-0.2
-0.3
-0.2
-0.1
-0.1
OPEC NGLs
0.0
0.0
0.0
0.0
0.0
-0.1
-0.1
-0.1
-0.1
-0.1
-0.2
-0.2
-0.2
-0.2
-0.2
-0.2
-0.2
-0.2
NON-OECD SUPPLY FSU
Memo items: Call on OPEC crude + Stock ch.
DECEMBER 2008 SUPPLEMENT
0.2
-0.8
-0.2
-0.9
-0.4
-0.5
-0.8
-1.3
-1.8
-1.1
-1.2
-1.2
-1.3
-1.5
-1.3
-1.8
-2.2
-2.6
53
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
INTERNATIONAL ENERGY AGENCY
Table 2 Summary of Global Oil Demand 1Q08
2Q08
3Q08
4Q08
2008
1Q09
2Q09
3Q09
4Q09
2009
1Q10
2Q10
3Q10
4Q10
2010
2011
2012
2013
Demand (mb/d) North America
24.84
24.53
24.12
24.06
24.38
23.99
23.91
23.89
23.84
23.91
23.68
23.77
24.11
23.97
23.88
23.90
23.94
23.99
Europe
15.20
14.88
15.34
15.49
15.23
15.01
14.62
15.08
15.27
15.00
14.87
14.75
15.14
15.21
14.99
14.99
14.98
14.96
Pacific
8.87
7.82
7.51
8.63
8.21
8.74
7.66
7.48
8.52
8.10
8.71
7.54
7.68
8.39
8.08
8.00
7.91
7.85
48.90
47.23
46.98
48.17
47.82
47.74
46.19
46.45
47.63
47.00
47.26
46.06
46.93
47.57
46.96
46.90
46.83
46.81
FSU
4.11
4.13
4.36
4.34
4.24
4.23
4.22
4.46
4.45
4.34
4.30
4.31
4.49
4.56
4.41
4.51
4.63
4.77
Europe
0.82
0.76
0.71
0.76
0.76
0.83
0.77
0.72
0.77
0.77
0.84
0.78
0.73
0.78
0.78
0.80
0.81
0.83
China
7.85
7.95
8.06
7.89
7.94
8.25
8.24
8.16
8.28
8.23
8.26
8.40
8.56
8.94
8.54
8.89
9.26
9.67
Other Asia
9.65
9.73
9.16
9.45
9.50
9.70
9.75
9.29
9.62
9.59
9.68
9.81
9.60
9.95
9.76
9.96
10.18
10.42
Latin America
5.66
5.88
5.95
5.94
5.86
5.86
6.08
6.15
6.14
6.06
6.05
6.25
6.35
6.31
6.24
6.43
6.64
6.85
Middle East
6.71
6.96
7.28
6.78
6.93
7.00
7.26
7.59
7.08
7.23
7.36
7.53
7.80
7.42
7.53
7.84
8.20
8.57
Africa
3.14
3.15
3.00
3.13
3.11
3.18
3.18
3.04
3.17
3.14
3.20
3.20
3.12
3.21
3.18
3.23
3.29
3.35
Total Non-OECD
37.96
38.55
38.52
38.30
38.33
39.06
39.51
39.39
39.52
39.37
39.69
40.28
40.66
41.18
40.45
41.66
43.00
44.45
World
86.86
85.78
85.50
86.47
86.15
86.79
85.70
85.84
87.15
86.37
86.95
86.34
87.58
88.75
87.41
88.55
89.83
91.25
Total OECD
of which: US50
19.99
19.76
19.29
19.19
19.56
19.19
19.22
19.11
19.01
19.13
18.87
19.05
19.33
19.14
19.10
19.11
19.13
19.16
Euro4
7.79
7.65
7.98
7.89
7.83
7.71
7.45
7.78
7.73
7.67
7.62
7.52
7.73
7.73
7.65
7.63
7.59
7.54
Japan
5.41
4.59
4.31
5.11
4.86
5.26
4.40
4.25
4.97
4.72
5.15
4.27
4.43
4.87
4.68
4.57
4.43
4.32
Korea
2.33
2.09
2.07
2.35
2.21
2.34
2.11
2.09
2.37
2.23
2.41
2.12
2.10
2.34
2.24
2.27
2.30
2.35
Mexico
2.10
2.16
2.11
2.15
2.13
2.07
2.11
2.06
2.12
2.09
2.07
2.09
2.09
2.10
2.09
2.09
2.10
2.11
Canada
2.37
2.25
2.37
2.35
2.33
2.33
2.23
2.35
2.33
2.31
2.33
2.26
2.31
2.34
2.31
2.32
2.32
2.32
Brazil
2.35
2.44
2.45
2.49
2.43
2.44
2.53
2.54
2.58
2.52
2.51
2.58
2.64
2.66
2.60
2.68
2.76
2.86
India
3.19
3.11
2.90
3.14
3.08
3.33
3.24
3.01
3.25
3.21
3.39
3.32
3.16
3.38
3.31
3.43
3.56
3.70
Annual Change (% per annum) North America -3.3 -3.4
-5.6
-5.6
-4.5
-3.4
-2.5
-1.0
-0.9
-2.0
-1.3
-0.6
0.9
0.6
-0.1
0.1
0.2
0.2
Europe
-0.2
-0.5
-0.5
-0.9
-0.5
-1.3
-1.7
-1.7
-1.4
-1.5
-0.9
0.9
0.3
-0.3
0.0
0.0
-0.1
-0.1
Pacific
-0.5
-0.7
-4.7
-1.0
-1.7
-1.5
-2.1
-0.4
-1.2
-1.3
-0.3
-1.5
2.7
-1.6
-0.2
-0.9
-1.2
-0.7
Total OECD
-1.8
-2.1
-3.8
-3.3
-2.8
-2.4
-2.2
-1.1
-1.1
-1.7
-1.0
-0.3
1.0
-0.1
-0.1
-0.1
-0.1
-0.1
FSU
0.0
5.1
4.3
1.4
2.6
2.9
2.1
2.1
2.5
2.4
1.6
2.2
0.8
2.4
1.7
2.2
2.6
2.9
Europe
1.5
1.8
1.8
1.7
1.7
1.1
1.4
1.4
1.4
1.3
1.2
1.4
1.4
1.2
1.3
1.5
1.8
2.0
China
7.1
2.9
7.2
3.9
5.2
5.1
3.7
1.2
5.0
3.7
0.2
1.9
4.9
8.0
3.8
4.0
4.3
4.4
Other Asia
4.5
4.2
1.1
0.4
2.5
0.5
0.3
1.4
1.9
1.0
-0.2
0.5
3.4
3.4
1.8
2.0
2.2
2.4
Latin America
4.6
5.2
3.8
3.7
4.3
3.5
3.4
3.3
3.4
3.4
3.2
2.8
3.2
2.9
3.0
3.1
3.2
3.2
Middle East
4.9
7.0
8.2
5.4
6.4
4.3
4.3
4.2
4.3
4.3
5.1
3.7
2.8
4.9
4.1
4.2
4.5
4.6
Africa
1.6
2.3
0.5
0.4
1.2
1.3
1.1
1.1
1.2
1.2
0.5
0.7
2.9
1.2
1.3
1.5
1.7
1.9
Total Non-OECD
4.3
4.5
4.4
2.6
3.9
2.9
2.5
2.3
3.2
2.7
1.6
1.9
3.2
4.2
2.8
3.0
3.2
3.4
World
0.7
0.8
-0.3
-0.8
0.1
-0.1
-0.1
0.4
0.8
0.3
0.2
0.7
2.0
1.8
1.2
1.3
1.4
1.6
Annual Change (mb/d) North America -0.84
-0.88
-1.42
-1.43
-1.14
-0.85
-0.62
-0.24
-0.22
-0.48
-0.31
-0.14
0.22
0.13
-0.02
0.02
0.04
0.05
Europe
-0.03
-0.07
-0.07
-0.14
-0.08
-0.19
-0.26
-0.25
-0.22
-0.23
-0.14
0.13
0.05
-0.05
0.00
-0.01
-0.01
-0.01
Pacific
-0.04
-0.05
-0.37
-0.09
-0.14
-0.13
-0.16
-0.03
-0.10
-0.11
-0.03
-0.11
0.20
-0.14
-0.02
-0.08
-0.09
-0.06
Total OECD
-0.91
-1.00
-1.86
-1.66
-1.36
-1.17
-1.04
-0.53
-0.54
-0.82
-0.48
-0.13
0.48
-0.06
-0.04
-0.06
-0.07
-0.02
FSU
0.00
0.20
0.18
0.06
0.11
0.12
0.09
0.09
0.11
0.10
0.07
0.09
0.04
0.11
0.08
0.10
0.12
0.14
Europe
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.02
China
0.52
0.23
0.54
0.30
0.40
0.40
0.29
0.10
0.39
0.29
0.01
0.16
0.40
0.66
0.31
0.35
0.38
0.41
Other Asia
0.42
0.39
0.10
0.04
0.23
0.05
0.03
0.13
0.18
0.10
-0.02
0.05
0.32
0.32
0.17
0.20
0.22
0.24
Latin America
0.25
0.29
0.22
0.21
0.24
0.20
0.20
0.20
0.20
0.20
0.19
0.17
0.20
0.18
0.18
0.19
0.21
0.21
Middle East
0.31
0.46
0.55
0.35
0.42
0.29
0.30
0.31
0.29
0.30
0.36
0.27
0.22
0.34
0.30
0.31
0.35
0.37
Africa
0.05
0.07
0.01
0.01
0.04
0.04
0.03
0.03
0.04
0.04
0.02
0.02
0.09
0.04
0.04
0.05
0.05
0.06
Total Non-OECD
1.56
1.65
1.61
0.98
1.45
1.10
0.96
0.87
1.22
1.04
0.63
0.77
1.26
1.66
1.08
1.20
1.34
1.45
World
0.65
0.65
-0.25
-0.68
0.09
-0.07
-0.08
0.34
0.68
0.22
0.16
0.64
1.74
1.60
1.04
1.14
1.28
1.42
Revisions to Oil Demand from Last Medium Term Report (mb/d) North America 0.08 -0.52 -1.03 -1.13 -0.65 -0.37
-0.78
-0.92
-0.97
-0.76
-0.82
-0.85
-0.85
-0.83
-0.83
-0.88
-0.92
-0.94
Europe
0.06
-0.26
-0.02
0.02
-0.05
-0.09
-0.28
-0.18
-0.13
-0.17
-0.17
-0.18
-0.15
-0.16
-0.16
-0.17
-0.19
-0.22
Pacific
0.05
-0.04
-0.35
-0.11
-0.11
0.03
-0.07
-0.32
-0.13
-0.12
-0.14
-0.09
-0.11
-0.13
-0.12
-0.18
-0.26
-0.32
Total OECD
0.19
-0.82
-1.40
-1.22
-0.81
-0.43
-1.13
-1.42
-1.23
-1.06
-1.13
-1.12
-1.10
-1.12
-1.12
-1.23
-1.37
-1.48
FSU
0.01
0.11
0.07
-0.07
0.03
-0.02
0.08
0.05
-0.09
0.00
-0.07
-0.05
-0.04
-0.07
-0.06
-0.10
-0.13
-0.15
Europe
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-0.01
-0.01
-0.01
-0.01
-0.01
-0.01
-0.01
-0.01
China
0.00
-0.15
0.09
-0.18
-0.06
-0.12
-0.32
-0.24
-0.26
-0.23
-0.35
-0.35
-0.35
-0.37
-0.36
-0.45
-0.53
-0.61
Other Asia
0.06
0.21
0.04
-0.06
0.06
-0.13
0.05
-0.02
-0.11
-0.05
-0.11
-0.11
-0.12
-0.12
-0.11
-0.16
-0.20
-0.24
Latin America
0.00
0.06
-0.02
-0.02
0.00
-0.01
0.04
-0.05
-0.05
-0.02
-0.05
-0.05
-0.05
-0.05
-0.05
-0.07
-0.08
-0.09
-0.01
0.17
0.15
-0.05
0.07
-0.06
0.13
0.11
-0.10
0.02
-0.05
-0.04
-0.04
-0.05
-0.05
-0.12
-0.18
-0.24
Africa
0.00
0.03
-0.03
-0.04
-0.01
-0.01
0.01
-0.05
-0.05
-0.03
-0.04
-0.04
-0.04
-0.04
-0.04
-0.05
-0.05
-0.05
Total Non-OECD
0.07
0.43
0.31
-0.42
0.10
-0.36
-0.01
-0.20
-0.66
-0.31
-0.68
-0.66
-0.65
-0.70
-0.67
-0.96
-1.19
-1.40
World
0.26
-0.38
-1.09
-1.64
-0.72
-0.79
-1.14
-1.63
-1.89
-1.37
-1.81
-1.78
-1.75
-1.82
-1.79
-2.19
-2.56
-2.88
-0.76
-0.53
-0.25
-0.65
-1.02
-0.91
0.17
0.03
-0.42
-0.40
-0.37
-0.32
Middle East
Revisions to Oil Demand Growth from Last Medium Term Report (mb/d) World 0.09 -0.44 -1.25 -1.68 -0.82 -1.04
54
DECEMBER 2008 SUPPLEMENT
INTERNATIONAL ENERGY AGENCY
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
Table 3 WORLD OIL PRODUCTION (million barrels per day)
1Q08
2Q08 3Q08
4Q08
2008
1Q09
5.38
5.08
5.58
2Q09 3Q09
4Q09
2009
6.14
5.88
1Q10 2Q10
3Q10 4Q10
2010
2011
2012
2013
6.37
6.65
6.89
7.04
OPEC Total NGLs1
4.89
4.91
5.13
5.82
5.97
6.19
6.31
6.43
6.56
NON-OPEC2 OECD North America United States Mexico Canada
14.20 14.06 13.75 14.25 14.06 7.65 7.78 7.30 7.57 7.58 3.28 3.17 3.13 3.20 3.20 3.26 3.11 3.32 3.48 3.29
14.61 14.11 14.04 14.35 14.28 7.92 7.90 7.70 7.91 7.86 3.10 3.01 2.92 2.86 2.97 3.59 3.20 3.42 3.58 3.45
14.79 14.47 14.18 14.54 14.49 8.11 8.14 7.98 8.01 8.06 2.97 2.90 2.84 2.78 2.87 3.70 3.43 3.37 3.74 3.56
14.59 14.73 14.86 8.11 8.03 7.92 2.73 2.65 2.59 3.74 4.06 4.36
Europe UK Norway Others
4.90 1.64 2.52 0.73
4.76 1.64 2.41 0.71
4.50 1.38 2.39 0.72
4.65 1.53 2.40 0.72
4.70 1.55 2.43 0.72
4.57 1.53 2.33 0.71
4.24 1.39 2.15 0.70
4.05 1.25 2.12 0.69
4.24 1.38 2.19 0.67
4.27 1.39 2.20 0.69
4.18 1.33 2.18 0.67
3.86 1.18 2.02 0.66
3.70 1.05 2.00 0.65
3.89 1.21 2.04 0.64
3.91 1.19 2.06 0.65
3.69 1.06 2.02 0.62
3.45 0.93 1.95 0.58
3.37 0.87 1.95 0.55
Pacific Australia Others
0.61 0.50 0.11
0.66 0.56 0.10
0.71 0.61 0.10
0.80 0.67 0.13
0.70 0.58 0.11
0.82 0.68 0.14
0.81 0.67 0.14
0.80 0.66 0.14
0.79 0.65 0.14
0.81 0.66 0.14
0.79 0.66 0.12
0.79 0.67 0.12
0.79 0.67 0.12
0.79 0.68 0.12
0.79 0.67 0.12
0.73 0.63 0.10
0.64 0.56 0.08
0.54 0.47 0.07
Total OECD
19.70 19.49 18.96 19.70 19.46
20.01 19.16 18.89 19.39 19.36
19.76 19.12 18.67 19.22 19.19
19.02 18.83 18.77
12.83 12.86 12.59 12.94 12.81 10.00 9.96 10.02 10.10 10.02 2.83 2.90 2.58 2.84 2.79
13.16 13.13 12.94 12.94 13.04 9.98 9.91 9.83 9.75 9.87 3.18 3.22 3.11 3.19 3.17
13.35 13.18 13.00 13.03 13.14 9.96 9.88 9.78 9.67 9.82 3.40 3.30 3.23 3.35 3.32
13.33 13.48 13.71 9.87 9.93 10.03 3.46 3.55 3.68
NON-OECD Former USSR Russia Others Asia China Malaysia India Others
6.44 3.76 0.77 0.81 1.09
6.43 3.82 0.74 0.82 1.06
6.46 3.83 0.74 0.84 1.04
6.62 3.89 0.79 0.84 1.10
6.49 3.83 0.76 0.83 1.07
6.65 3.91 0.79 0.84 1.12
6.66 3.91 0.80 0.84 1.11
6.64 3.91 0.79 0.84 1.10
6.66 3.91 0.78 0.86 1.10
6.65 3.91 0.79 0.84 1.11
6.68 3.92 0.78 0.86 1.12
6.68 3.93 0.77 0.88 1.10
6.74 3.95 0.77 0.92 1.11
6.77 3.97 0.76 0.93 1.11
6.72 3.94 0.77 0.90 1.11
6.72 3.94 0.73 0.93 1.13
6.64 3.91 0.70 0.90 1.12
6.65 3.96 0.75 0.87 1.07
Europe
0.13
0.12
0.12
0.12
0.12
0.12
0.11
0.11
0.11
0.11
0.10
0.10
0.10
0.10
0.10
0.09
0.08
0.07
3.95 3.96 4.02 2.21 2.26 2.27 0.75 0.71 0.75 0.57 0.58 0.58 0.50 0.50 0.50 -0.09 -0.09 -0.08
4.14 2.40 0.75 0.58 0.00 0.42
4.02 2.29 0.74 0.58 0.38 0.04
4.26 2.50 0.76 0.58 0.00 0.42
4.28 2.52 0.76 0.58 0.00 0.42
4.29 2.53 0.75 0.58 0.00 0.42
4.28 2.52 0.75 0.59 0.00 0.42
4.28 2.52 0.75 0.58 0.00 0.42
4.43 2.65 0.77 0.58 0.00 0.42
4.44 2.67 0.76 0.58 0.00 0.42
4.46 2.69 0.76 0.59 0.00 0.42
4.46 2.69 0.75 0.59 0.00 0.42
4.45 2.68 0.76 0.59 0.00 0.42
4.58 2.79 0.76 0.60 0.00 0.42
4.75 2.95 0.76 0.63 0.00 0.41
4.99 3.17 0.76 0.66 0.00 0.40
Latin America Brazil Argentina Colombia Ecuador Others Middle East3 Oman Syria Yemen
1.63 0.73 0.39 0.31
1.61 0.72 0.39 0.31
1.61 0.72 0.39 0.30
1.59 0.71 0.39 0.30
1.61 0.72 0.39 0.31
1.57 0.71 0.39 0.28
1.55 0.71 0.38 0.27
1.55 0.71 0.38 0.26
1.53 0.71 0.38 0.26
1.55 0.71 0.38 0.27
1.53 0.71 0.37 0.26
1.52 0.71 0.37 0.26
1.52 0.71 0.36 0.26
1.52 0.72 0.36 0.26
1.52 0.71 0.37 0.26
1.52 0.72 0.35 0.27
1.50 0.71 0.34 0.27
1.46 0.71 0.32 0.26
Africa Egypt Equatorial Guinea Sudan Others
2.46 0.62 0.28 0.52 1.04
2.47 0.61 0.28 0.52 1.06
2.50 0.61 0.27 0.52 1.09
2.48 0.60 0.26 0.51 1.11
2.48 0.61 0.27 0.52 1.08
2.49 0.59 0.26 0.51 1.12
2.48 0.59 0.26 0.51 1.12
2.48 0.58 0.26 0.51 1.12
2.48 0.58 0.26 0.51 1.12
2.48 0.58 0.26 0.51 1.12
2.47 0.59 0.25 0.50 1.13
2.46 0.58 0.25 0.50 1.13
2.46 0.58 0.25 0.50 1.14
2.46 0.57 0.25 0.50 1.15
2.46 0.58 0.25 0.50 1.14
2.48 0.57 0.27 0.48 1.17
2.49 0.57 0.29 0.47 1.15
2.50 0.57 0.29 0.48 1.16
Total Non-OECD Processing Gains4 Other Biofuels5
TOTAL NON-OPEC
27.43 27.46 27.30 27.90 27.52 2.22 0.39
2.22 0.46
2.25 0.46
2.29 0.52
2.24 0.46
49.73 49.62 48.97 50.41 49.68
28.25 28.22 28.01 28.00 28.12 2.29 0.55
2.29 0.58
2.29 0.58
2.29 0.60
2.29 0.58
51.09 50.24 49.76 50.28 50.34
28.57 28.39 28.28 28.33 28.39 2.20 0.51
2.20 0.51
2.20 0.51
2.20 0.51
2.20 0.51
51.03 50.22 49.66 50.26 50.29
28.73 28.94 29.39 2.23 0.51
2.26 0.51
2.29 0.51
50.49 50.53 50.96
1 Includes condensates reported by OPEC countries, oil from non-conventional sources, e.g. Venezuelan Orimulsion (but not Orinoco extra-heavy oil), and non-oil inputs to Saudi Arabian MTBE. Orimulsion production reportedly ceased from January 2007. 2 Comprises crude oil, condensates, NGLs and oil from non-conventional sources. 3 Includes small amounts of production from Israel, Jordan and Bahrain. 4 Net volumetric gains and losses in refining (excludes net gain/loss China and non-OECD Europe) and marine transportation losses. 5 Comprises Fuel Ethanol and Biodiesel supply from outside Brazil and US.
DECEMBER 2008 SUPPLEMENT
55
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
INTERNATIONAL ENERGY AGENCY
Table 4 WORLD REFINERY CAPACITY ADDITIONS (thousand barrels per day)
2008
Refinery Capacity Additions and Expansions OECD North America OECD Europe OECD Pacific FSU Non-OECD Europe China Other Asia Latin America Middle East Africa
116 86 3
Total World
Upgrading Capacity Additions OECD North America OECD Europe OECD Pacific FSU Non-OECD Europe China Other Asia Latin America Middle East Africa Total World
Total World
2010
2011
2012
2013
Total
80 20 34
410 301 71 140
530 88
45
100
1,281 409 191 343 50 2,108 1,562 241 1,543 252
1
430 283 18
200 50 40 220
200 20
60 120
537 12
512 60 103 246
726 979
1,125
2,009
1,653
1,108
1,014
1,070
7,980
86 45 133 145 16 516 107 20
159 73
295 172 25 79 26 365 209 33
655 282 195 140 34
65 231
80 40
1,340 843 353 742 76 1,520 1,272 237 670 122
50 120
200 120 650
2
1,069
107 458 570 89 80 45
276 136
270 90 110 20 229 77
90 75 225
1,581
1,204
1,718
1,092
510
7,174
160 28 102 43 3 787 195 39 40
500 102 100 170
196 75 42 115 4 444 182 253 182
726 95 52 54 30
120 19
120
1,822 318 296 527 38 2,106 1,608 941 1,397 140
1,396
2,870
Desulphurisation Capacity Additions OECD North America OECD Europe OECD Pacific FSU Non-OECD Europe China Other Asia Latin America Middle East Africa
2009
3
487 880 417 195 20
1,493
241 70 206 120 1,594
145 164 110 40 472
224
1,070
769
123 302
9,193
1 Comprises new refinery projects or expansions to existing facilities including condensate splitter additions. Assumes zero capacity creep. 2 Comprises gross capacity additions to coking, hydrocracking, residue hydrocracking, visbreaking, FCC or RFCC capacity. 3 Comprises additions to hydrotreating and hydrodesulphurisation capacity.
56
DECEMBER 2008 SUPPLEMENT
INTERNATIONAL ENERGY AGENCY
MEDIUM‐TERM OIL MARKET REPORT ‐ REFINING AND PRODUCT SUPPLY OUTLOOK
Table 4a WORLD REFINERY CAPACITY ADDITIONS: Changes from Last Medium-Term Report (thousand barrels per day)
2008
Refinery Capacity Additions and Expansions OECD North America OECD Europe OECD Pacific FSU Non-OECD Europe China Other Asia Latin America Middle East Africa Total World
Upgrading Capacity Additions
Total World
Desulphurisation Capacity Additions
Total World
2010
2011
2012
2013
Total
-425
-400
-825
-425
-400
-825
41
-220
-180
41
-220
-180
-576
-115
-691
-576
-115
-691
1
2
OECD North America OECD Europe OECD Pacific FSU Non-OECD Europe China Other Asia Latin America Middle East Africa
OECD North America OECD Europe OECD Pacific FSU Non-OECD Europe China Other Asia Latin America Middle East Africa
2009
3
1 Comprises new refinery projects or expansions to existing facilities including condensate splitter additions. Assumes zero capacity creep. 2 Comprises stand-alone additions to coking, hydrocracking or FCC capacity. Excludes upgrading additions counted under 'Refinery Capacity Additions and Expansions' category. 3 Comprises stand-alone additions to hydrotreating and hydrodesulphurisation capacity. Excludes desulphurisation additions counted under 'Refinery Capacity Additions and Expansions' category.
DECEMBER 2008 SUPPLEMENT
57
Medium-Term Oil Market Report
Refining and Product Supply Outlook What impact will recent volatility in the oil market have on the refining sector over the next few years? How will the slowdown in global demand growth affect downstream investment? What other challenges does the global refining industry face to 2013? These questions are all addressed in this supplement to the July 2008 Medium-Term Oil Market Report (MTOMR), which takes a look at potential downstream oil market pressures that could emerge in the next five years. It comprehensively updates the demand projections contained in the MTOMR in light of the dramatic slowdown seen since then in the global economy and in OECD oil demand in particular. Upstream oil supply projections have been rebased to incorporate year-to-date 2008 supply. This highlights the evolving crude and feedstock slate that refiners will have to deal with in years to come, and suggests how global crude trade patterns could change. Key regional refining capacity investment trends are assessed and the implications for availability of key refined products are discussed.
www.iea.org
