BAKU, Azerbaijan, Dec. 26
By Leman Zeynalova – Trend:
Peaks of commissioning greenfield projects are expected in 2020 and 2025, Russian LUKOIL company said in its report titled Major Trends in the Global Liquid Hydrocarbon Market to 2035.
The company expects that new refineries will be commissioned mostly in regions with a growing demand for petroleum products – Asia-Pacific, the Middle East, and Latin America.
“According to our estimates, between 2020 and 2025, the global distillation capacity will increase by 12 mb/d,” said LUKOIL, Trend reports.
“Most new refineries are high-tech facilities that offer low cost refining due to economies of scale. In 2020, several mega projects are expected to be launched such as the 600 kbbl/d Al-Zour refinery in Kuwait and the Hengli and Zhoushan refineries in China, each with a capacity of 400 kbbl/d,” reads the report.
The company warns that the introduction of new modern refineries can change the balance of power in global oil refining, squeezing out less competitive participants from the market. “Given the stringent environmental restrictions and high electricity prices, it will be difficult for European refiners to compete with those from other regions. In the mid-term, another wave of refinery closures may be expected in Europe.”
“Given the expected rise in consumption of petroleum products, oil companies plan to expand their refining capacities. In the next few years, there are plans to commission a number of state-of-the-art, high-capacity refineries. In 2020, refiners will have to face yet another challenge as MARPOL imposes new requirements on marine fuels. In order to maintain the existing level of marine operations, the marine transportation sector will need additional volumes of fuel that meet the stringent environmental requirements.”
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