Oil, gas and petrochemicals in the Czech Republic

Oil and gas

BMI has commented that despite the fact that there is a moratorium on shale gas exploration in the region, the Czech Republic is going to remain highly dependent on imported oil and gas from Russia. This is because conventional hydrocarbons production is limited in the region. However, a small increase in refinery utilisation rates is anticipated and is likely to result in a modest increase in refined product import needs to answer rising domestic demand to 2023.

A closer look at the refining sector shows that the country is a small consumer of refined fuels. This is because the country’s electricity generation comes from coal and is also nuclear based. BMI forecasts an increase in coal based power generation to 2023 in the Czech Republic and has also said that an oil based power generation rise is most unlikely. The average consumption of refined products is expected to rise modestly by between 1.5% and 5%.y, mainly due to industrial consumption and the increase in the vehicle fleet. The country has a total refining capacity of 173 000 bpd with two refineries in operation. Both plants belong to Unipetrol after Eni and Shell sold their stakes in the Ceska Rafinerska Consortium last year.

Petrochemicals

It is hoped that the Czech petrochemical sector is going to enjoy strong profitability this year due to a strong growth in chemicals, plastics and rubber output which has been boosted by falling feedstock costs.

Unipetrol saw its margins increase due to cheaper oil prices and higher operating capacities at the end of last year and the demand for refinery and petrochemicals products in the Czech Republic has reportedly increased due to stronger performance by the country’s economy. Unipetrol has said that it is targeting an 11% increase in petrochemical sales volume to 1.4 million t by 2017 and it anticipated that the global demand for basic petrochemicals is to grow by an average 3 – 3.5% over the next five years. However, BMI has warned that Unipetrol will have to compete with producers that utilise cheaper ethane as feedstock in a regional market that is currently enduring a low growth period. The narrowing of the price differential between ethane and naphtha should be sufficient enough however to make sure the company’s long term operations continue.

There are plans to increase polyethylene capacity at the Litvinov site by replacing an aging 120 000 tpy high density polyethylene unit with a 300 000 tpy plant. Thiw would rais total polyethylene production capacity from 320 000 tpy to 500 000 tpy by the second half of this year. Unipetrol has also said that it is planning on closing the 350 000 tpy ammonia plant in Litvinov due to a lack of competitiveness and an ever diminishing market.

Adapted from report briefs by Claira Lloyd

Read the article online at: https://www.hydrocarbonengineering.com/refining/27052015/oil-gas-petchem-czech/