Southeast Asia’s oil products deficit will remain substantial, likely at between 1.2 million bpd and 1.5 million bpd despite an expected rapid increase in its refining capacity in the coming years.
Growing at a projected 2.5% a year from 2017, the region’s oil products consumption will reach 7.5 million bpd in 2023. This puts the combined oil demand growth rate of the 10 countries at more than double the global average.
This is hardly surprising as the economies of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam are among the fastest growing in the world.
“Although average per capita energy demand in the Association of Southeast Asian Nations (ASEAN) has increased by 20% over the past decade, it still remains at around half of the world average, indicating significant scope for future growth,” stated consulting firm PWC, citing the International Energy Agency (IEA).
According to data provided by BP and the Economic Research Institute for ASEAN and East Asia (ERIA), Southeast Asia’s oil consumption grew by an annual average 3.06% from 3.5 million bpd in 1997 to just under 6.5 million bpd in 2017. It far outpaced the global annual rate of 1.4% over those 20 years.
Over the same period, Southeast Asia’s oil refining capacity edged up by an annual rate of 1.2% from 3.9 million bpd to just under 5 million bpd.
As a result, the region’s oil products deficit surged nearly four times from 374 000 bpd in 1997 to over 1.47 million bpd in 2017.
According to projections by PWC and oil companies, Southeast Asia’s refining capacity could rise by more than 1 million bpd from 4.99 million bpd in 2017 to over 6 million bpd in 2023. If the region’s oil demand reaches 7.5 million bpd, its products deficit will remain stuck at around 1.5 million bpd.
In its 2018 report on Southeast Asia’s fuels outlook, PWC said it expects the region’s strong economic growth to underpin its fuel demand growth.
The consulting firm predicts Southeast Asia will become the world’s third-largest fuel consuming region by 2021, behind the US and China.
“This growth in fuel consumption will be driven mainly by the rising demand for mobility in the transport sector, for cleaner cooking fuels such as liquefied petroleum gas (LPG) rather than solid biomass in the household sector, and for petrochemical feedstocks in the industrial sector,” said PWC.....
Written by Ng Weng Hoong, Contributing Editor.
Read the article online at: https://www.hydrocarbonengineering.com/special-reports/12072019/playing-catch-up/