More oil, gas and petrochemicals: Europe

Greece

BMI has said that Greece needs to accelerate the completion of regulatory and governance structures that are being sought by international investors in order to move ahead with current plans. The company has also said that the absence of a declared and demarcated Exclusive Economic Zone is also an obstacle that is causing delays.

A great boost for Greece’s midstream sector is the announcement of the Trans-Adriatic Pipeline (TAP) as the preferred export route to market for Azeri gas. The pipeline is to run through Turkey, northern Greece and southern Albania before a subsea portion to Italy. This will bring great economic benefits to Greece, according to BMI. In the downstream sector, BMI has said that the expertise of Greek refiners and the country’s location as a regional refining hub has made the country one of the most important downstream markets in Europe. As the upgrading of refineries coincided with the depression in domestic fuel demand, the result has been that Greece is now an important fuels exporter.

Slovakia

BMI has reported that Slovakia has an above average energy import dependency with a very high energy intensity when compared to the regional average. Due to this, the EU has apparently made developments to better gas interconnections a priority as net gas exports are expected to cost the country approximately US$ 2.66 billion this year. Slovakia is dependent on Russia, but a newly announced infrastructure programme is aiming to allow for more flexibility for the country when negotiating gas purchasing, and this may boost supply.

BMI forecast that Slovakia’s gas consumption will increase to 6.4 billion m³ by 2023, almost all of which will be met by imports. Crude oil and other liquids imports are expected to hit 94 000 bpd by 2023, and Russia is expected to be the key source. Oil consumption in Solvakia is expected to rise at a steady pace, and keep up with underlying GDP growth over the short term. BMI expect net imports of crude oil to cost US$ 44 billion this year and by 2018 cost US$ 2.71 billion.

Spain

According to BMI, the Spanish petrochemicals industry is witnessing an increase in strength following a period of sharp downturn. It is thought that increasing export growth will be the key to reviving the sector, but, BMI believe that the industry will not get back to previous levels of production due to permanent plant closures in recent years. In the first quarter of this year, BMI report that chemical production grew by 3.5% year on year.

When it comes to the Spanish economy, BMI expects it to return to growth this year, however it will all depend on exports. Germany has been the chief purchaser of Spanish products and with the country’s industrial sector expected to grow by 3.9% this year, this is positive for Spain.

Ukraine

BMI has said that sustained interest from international companies in Ukrainian gas reserves is providing some upside potential in alleviating a part of its import burden. But, political instability in the country is causing delays, as international investors are waiting for a clearer future to emerge.

When it comes to shale in the country, the Energy Information Administration (EIA) released estimates in mid June of last year and said that when it comes to Europe, the country will benefit hugely from the revolution. The EIA believes that the Ukraine has 3.6 trillion m³ of unconventional resources at its fingertips. For gas production, BMI sees a gradual rise from 20.4 billion m³ in 2013 to 22.3 billion m³ in 2015. This is expected to rise even further in 2023 to 29.6 billion m³ as shale production finds its momentum, beginning in 2018. BMI does however expect lower gas consumption in Ukraine this year, but believes it will pick up again slightly in 2015. By 2023, BMI expect Ukraine to be importing approximately 20 billion m³ of gas. Ukraine is planning a LNG regasification terminal with a capacity of 10 billion m3. BMI do not expect this facility to come online until 2018, but the official target is 2015.

Looking at oil consumption, BMI expect it to increase slightly to 329 700 bpd in 2017 and 395 800 bpd by 2023. Ukraine is likely to require imports of 185 100 bpd of crude oil for refining and 60 000 bpd of refining products this year. By 2023, BMI believe total oil net imports to hit 358 500 bpd.

Adapted for web by Claira Lloyd

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