Oil, gas & petrochemicals: Europe

Czech Republic

BMI believes that with a moratorium on shale gas exploration, the country is likely to remain highly dependent on imported fuel, as conventional hydrocarbons potential is limited. BMI have also said that demand trends in the Czech Republic are not strong, but refinery disruptions and the closure of the Pardubice refinery do show that the domestic fuels market is in a precarious state of balance. This has prompted the government to investigate ownership options for the national refining segment.

Natural gas production in the country is negligible at only 0.2 billion m³. BMI does not expect to see domestic gas production rise above this in the medium term and expects a decline to 0.1 billion m³ by 2023.

Denmark

According to BMI, Denmark is likely to remain an oil and gas net exporter, despite a decline in production. The Danish government is apparently confident the country can sustain its position as a net exporter until the end of this decade. BMI expect a partial recovery in oil and gas volumes over the medium term, but forecast that overall production will decline in the long term and that exports will become ever thinner. BMI have said however, that should production surprise to the downside, or consumption to the upside, Denmark could see itself becoming a net oil and/or gas importer.

Denmark has a crude refining capacity of 175 000 bpd. With declining consumption in Denmark and the saturated European downstream market, BMI see declining refinery utilisation rates over the coming years. In the long term, BMI also see crude distillation unit shutdowns, although there has been no mention of shutdowns so far.

Hungary

BMI has said that the Hungarian petrochemicals industry is seeing an improvement in demand, however, recovery is still uncertain in some segments. Producers are looking to stronger growth rates in external markets and BMI believes that are good grounds for optimism.

Last year, chemicals output grew by 6.7% and Hungary’s manufacturing sector grew by 3.8% in the second half of last year. Chemicals output was up 6.4% years in year while plastic and rubber grew 7.1%, but this was still behind a manufacturing growth of 12.6%.

MOL reported that ethylene production in Hungary for last year grew 8.9% year on year to hi 684 t, propylene grew 8.4% to 348 000 t, high density polyethylene grew 9.3% to 351 000 t and propylene rose 5.6% to 472 000 t.

BMI has said that while the recovery of Hungary’s chemicals and petrochemicals industries is uneven, investment continues to flow, while elsewhere in the EU capacity is being affected by plant closures.

Adapted for web by Claira Lloyd

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/04062014/bmi_europe_oil_gas_petchem/