June 18, 2014
Global refining throughput levels for 2014 will be one million barrels per day above 2013 levels, largely due to increased capacity in China and the Middle East, says research and consulting firm GlobalData.
The company's latest report* states that just over 500 thousand barrels per day (mbd) of new refining capacity will commence operation in China in early 2014, including the new 200 mbd Pengzhou and 240 mbd Quanzhou refineries and a 90 mbd expansion at Yangzi. However, these higher refining throughput levels in China from additional capacity will be somewhat offset by an increase in maintenance activities during the second and third quarters of 2014.
The start-up of new refining capacity in the Middle East will also result in higher runs in 2014, with refining throughput levels approximately 500 mbd greater than 2013. This increase in Middle Eastern refining capacity will have a profound impact on global product trade flows.
Carmine Rositano, GlobalData's Managing Analyst covering Downstream Oil & Gas, says: 'The higher refining throughput levels in the Middle East are a consequence of new large and efficient refineries in the region. Saudi Arabia's 400 mbd Jubail refinery is ramping up to full capacity and its 400 mbd Yanbu refinery will become operational in September 2014, while the UAE's 420 mbd Ruwais refinery is set to open later in Q4 2014.
'The increase in gasoline volumes will reduce 2014 gasoline imports into the Middle East by approximately 100 mbd from both Europe and India. Gasoline volumes from India will alternatively be sold intra-Asia, but European gasoline will have a tough time finding a home and likely result in lower refining runs. This will exacerbate the pressure on refining activities in Europe.'
GlobalData's report also says that additional aviation fuel from the Middle East will be moving primarily into Europe, displacing long-haul products from refineries in Asian countries, such as Singapore, Japan and South Korea, that will alternatively be sold within the Asian market.
Furthermore, the increase in the Middle East's diesel volumes will be used both to meet growing local demand and for exports into Europe.
'The first Ultra Low Sulphur Diesel (ULSD) was sent from the Jubail refinery into Europe in February. The Middle East will flex its muscles by increasing ULSD exports to compete with the US and Russia for market share in Europe,' concludes the analyst.
* 2014 Refinery Outlook: High refining utilization in U.S. and new capacity in Middle East drive higher refining runs in 2014
This report provides an overview of refining throughput activities forecast on a quarterly basis for 2014 by region compared to 2013, highlighting those areas where refining throughput volumes are forecast to be higher than or lower than last year's levels. The report also highlights the impact of new refining expansion projects to start-up during 2014 and their impact on regional and global refining throughput levels.
This report was built using data and information sourced from proprietary databases, primary and secondary research, and in-house analysis conducted by GlobalData's team of industry experts.
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GlobalData is a leading global research and consulting firm offering advanced analytics to help clients make better, more informed decisions every day. Our research and analysis is based on the expert knowledge of over 700 qualified business analysts and 25,000 interviews conducted with industry insiders every year, enabling us to offer the most relevant, reliable and actionable strategic business intelligence available for a wide range of industries.
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