BMI believe that the Philippines is set to see growth in both oil and gas consumption due to economic growth, and the government’s promotion of gas use. This, BMI says, will be supported by rising imports rather than greater domestic output, however, exploration poses upside production risks.
In the refining sector, BMI expects maintenance to see refinery utilisation drop to 60% this year, but a gradual increase beyond 60% from 2015 when Petron’s refinery completes its modernisation work. Total refined petroleum output is therefore forecast to rise to 175 900 bpd in 2018. However, BMI believe that domestic consumption growth will still see an increase in its refined product import requirement despite an increase in domestic production. Refined product imports are expected to increase from 137 580 bpd in 2012 to 145 980 bpd in 2018 and 176 530 bpd in 2023.
When it comes to gas, BMI expects consumption to grow and outpace production growth, leading to the Philippines losing its self sufficient label by the end of the decade.
BMI believes that Singapore’s regional dominance in the downstream sector will be challenged by refining capacity expansion in the region and high crude oil prices that are wearing margins. Yet, the future of Singapore’s place in the global oil and gas industry could lie in its emergence as the preferred hub for growing gas trade in Asia Pacific.
BMI has said that recovery in the US and Europe should provide economic support for the export dependent country in the near term, which will in turn prop up oil consumption. BMI forecast consumption to increase to 1.39 million bpd by 2018, however gains in fuel efficiency and growing alternatives to oil will see slower growth to 2023.
Refining capacity in Singapore is expected to see a slight boost towards the end of this year/beginning of next when JAC brings a new refinery online. The country’s capacity will be boosted to 1.47 million bpd following this. However, BMI do not expect further growth in capacity beyond this, as it faces growing competition from large mega refinery projects in some of the largest centres of Asia Pacific demand growth. BMI believe that downstream investment will be targeted on technological improvements to boost productivity and to shift production in Singapore towards cleaner, higher quality fuels and more sophisticated products aimed at industrial consumers.
BMI has said that South Korea is set to remain a key importer of crude oil and LNG and public aversion to nuclear power is set to support LNG demand in the country, while oil demand could soften from 2020 due to rising fuel efficiency in the transport sector in particular.
BMI do not expect further increases in South Korean refining capacity beyond 2016, as poor refining margins from high crude oil prices and growing regional competition decrease the incentive for refining expansion. However, BMI believe that investments to upgrade existing plants and the shifts in consumption patterns are likely to see a recomposition of products produced by South Korean plants.
Despite government targets, BMI believe that the country will find it difficult to realistically achieve a reduction in imports without forcing down economic growth. BMI expect gas imports to rise from 54.6 billion m3 in 2013 to 65.1 billion m3 in 2018 and 77.7 billion m3 in 2023.
Taiwan is almost 100% dependent on imports to meet its energy needs and BMI believe this is likely to stay the case for the foreseeable future. A growing demand for imported gas has created a need for new LNG supplies and has created opportunities for potential LNG sellers, though US supplies will most likely be favoured due to lower prices, according to BMI.
Despite a relatively healthy economy, BMI believe that consumption will be slightly subdued with government plans to increase gas fired power generation capacity, renewables and various policies aiming at increasing energy efficiency. BMI forecast crude oil consumption to hit approximately 1.13 million bpd in 2018 and 1.16 million bpd by 2023.
When it comes to refining, the planned closure of the Kaohsiung refinery next year will bring the country’s crude distillation capacity to 1.09 million bpd. BMI believe that growing environmental consciousness among the public, alongside weaker growth in the local market and tougher competition in the regional market will likely stem any further expansion of the country’s refining capacity.
BMI has said that the energy relationship between Turkmenistan and China is continuing to grow with upgrades to existing long term supply agreements and investment commitments. Turkmenistan also, reportedly, has made ambitious gas production targets, increasing its forecast of gas production in 2030 to 250 billion m3.
BMI believes that despite strong interest from foreign investors, the business environment remains challenging and has limited opportunity for foreign players. A law has recently been approved on denationalisation and privatisation of state property and this means that the country’s hydrocarbon subsoil will continue to be state property.
Adapted for web by Claira Lloyd
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/05062014/bmi_more_asia_oil_gas/