Global Refining Capacity On The Rise
Global refining throughput levels for 2014 might be one million barrels per day above 2013 levels, largely as a consequence of increased capacity in China and the Middle East, says research and consulting firm GlobalData.
The company’s latest report states that just over 500 thousand barrels per day (mbd) of recent refining capacity will commence operation in China in early 2014, including the brand new 200 mbd Pengzhou and 240 mbd Quanzhou refineries and a 90 mbd expansion at Yangzi. However, these higher refining throughput levels in China from additional capacity shall be somewhat offset by an increase in maintenance activities throughout the second and third quarters of 2014.
The beginning-up of recent oil prices eia refining capacity in the Middle East may even result in higher runs in 2014, with refining throughput levels approximately 500 mbd greater than 2013. This increase in Middle Eastern refining capacity could have a profound impact on global product trade flows.
Carmine Rositano, GlobalData’s Managing Analyst covering Downstream Oil & Gas, says: “The higher refining throughput levels within the Middle East are a consequence of new large and efficient refineries within the region. Saudi Arabia’s 400 mbd Jubail refinery is ramping as much as full capacity and its 400 mbd Yanbu refinery will become operational in September 2014, while the UAE’s 420 mbd Ruwais refinery is about to open later in Q4 2014.
“The increase in gasoline volumes will reduce 2014 gasoline imports into the Middle East by approximately 100 mbd from both Europe and India. Gasoline volumes from India will alternatively be sold intra-Asia, but European gasoline may have a tricky time finding a house and certain result in lower refining runs. It will exacerbate the pressure on refining activities in Europe.”
GlobalData’s report also says that additional aviation fuel from the Middle East shall be moving primarily into Europe, displacing long-haul products from refineries in Asian countries, comparable to Singapore, Japan and South Korea, that can alternatively be sold inside the Asian market.
Furthermore, the rise in the Middle East’s diesel volumes will probably oil prices eia be used both to meet growing local demand and for exports into Europe.
“The first Ultra Low Sulphur Diesel (ULSD) was sent from the Jubail refinery into Europe in February. The Middle East will flex its muscles by increasing ULSD exports to compete with the US and Russia for market share in Europe,” concludes the analyst.