GlobalData has said that an addition 11.7 million bpd of crude distillation capacity (CDU) will come online around the world between 2014 and 2020, with an annual average of 1.6 million bpd. A new report from the company says that with an additional CDU of 3.1 million bpd planned in the above timeframe, the Middle East will be the largest contributor to the world’s total capacity increase, accounting for approximately 27%.
Refining additions in Asia, which include China with 2.6 million bpd will represent 22% of the global total, India will hold 1.9 million bpd and All Other Asia 1.7 million bpd, amounting to over 50% of the overall growth in refining capacity.
Carmina Rositano, Managing Analyst, Downstream Oil & Gas, GlobalData said, ‘as Asia will remain the world’s oil demand growth engine through 2020, this figure is unsurprising. Thanks mainly to the start up of large scale projects in the Middle East and Asia, these regions will contribute a combined 80% of new capacity, with refining balances further tilting to East of the Suez areas.
‘Eight large scale refining projects with at least 300 000 bpd of capacity are expected to begin operations globally, with seven of these projects coming online between 2018 and 2020. This will push the annual increase in global refining capacity to its highest level by the end of the forecast period, with 2.8 million bpd forecast to be added in 2018.’
GlobalData has said that approximately half of the remaining 20% of incremental refining capacity will come from Latin America, as a result of new grassroots projects, in Brazil and refinery expansions in Colombia, Ecuador and Peru. The US and Former Soviet Union are expected to each account for 3% of the world’s capacity, thanks to small projects, including condensate splitters, in the US and the construction of new refineries in Russia and Turkmenistan, along with an expansion project in Estonia.
Rosatino concluded, ‘overall, the increases in predicted refining capacity from 2015 through to the end of 2019 are significantly higher than the forecasted long term annual oil demand growth of 1.2 – 1.4 million bpd. This will impact negatively upon refining margins and likely cause additional refinery closures, or lower refining utilisation levels, in other areas of the world, including Europe.’
Adapted for web by Claira Lloyd