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Romanian oil, gas and petrochemicals

Hydrocarbon Engineering,


Oil and gas

BMI has commented that upgrades are helping to improve efficiencies in the Romanian refining sector, though a weak demand market and alleged corruption are highlighting the ongoing challenges.

Fuel prices in the country fell 20% last year, and as a result BMI expect to see growth in refined product demand this year, albeit marginal, for the first time in six years. Also, OMV Petrom is expected to complete its 600 million Euro investment programme on the Petrobrazi refinery in June this year. The refinery will be slightly downsized, but capable of producing more diesel.

For unconventionals, BMI has reported that there continues to be a strong backlash against shale gas drilling in the country, and while the government continues to support shale gas exploration, organised protests are continuing to stifle drilling efforts.

Petrochemicals

BMI has commented on the continuing attempts to privatise Oltchim saying that the process is likely to involve some reduction in capacity in order to improve profitability in the country’s small and ailing petrochemical sector. Last year, Romania had modest olefins capacities of 200 000 tpy of ethylene, 100 000 tpy of propylene feeding capacities totalling 320 000 tpy of polyethylene and 80 000 tpy of polypropylene. Romania also has 60 000 tpy of polystyrene and 170 000 tpy of PVC. Due to this, BMI has said that the industry is small and lacks economies of scale to compete with foreign producers. Also, the country is constrained by the problems at Oltchim, caused in large part by the closure of the Arpechim refinery that fed it naphtha feedstock.

BMI has reported however that the local petrochemicals market is growing fast and sucking up imports. BMI is forecasting strong growth in petrochemicals consumption over the next two years, although it will be influenced by domestic trends due to sluggish demand in the Eurozone. This year, BMI are forecasting a 6.7% increased in total vehicle production, although this is less than the 7.5% estimated in 2014. However, by 2018 automotive output will be approximately 37% up on 2013 levels as plant capacity expands. As such, Romania holds significant growth opportunities for chemicals and plastics exporters from other countries in Europe, particularly given the constraints and problems facing domestic producers.


Edited from report briefs by Claira Lloyd

Read the article online at: https://www.hydrocarbonengineering.com/refining/20022015/oil-gas-petchem-bmi-romania/


 

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