Re­fin­ing’s Real Growth Lies In Sec­ondary Unit Ca­pac­ity

Chemical Industry Digest - - News & Views -

Ac­cord­ing to mul­ti­ple in­dus­try re­ports, the global re­fin­ing sec­tor will add be­tween 7 mil­lion bar­rel per day (Mbpd) and 8 Mbpd of new crude dis­til­la­tion unit (CDU) ca­pac­ity by the early 2020s. Most of this new ca­pac­ity will be lo­cated in the Asia-Pa­cific re­gion. By 2023, the Asia-Pa­cific re­gion will add ap­prox­i­mately 3.5 Mbpd of new CDU ca­pac­ity. Most of this in­crease—ap­prox­i­mately 2 Mbpd—will be from China.

China has sev­eral ac­tive grass­roots and ex­pan­sion projects in the works, in­clud­ing re­fin­ing and petro­chem­i­cal in­te­grated com­plexes. In­dia has an­nounced am­bi­tious plans to in­crease re­fin­ing ca­pac­ity from 4.6 Mbpd in 2017 to 6.3 Mbpd by the early 2020s. These two coun­tries will be the lead­ers in new CDU ca­pac­ity over the near term, with the Mid­dle East close be­hind.

Most ca­pac­ity ad­di­tions will be for ad­di­tional sec­ondary unit pro­cess­ing ca­pac­ity. As re­ported in Hy­dro­car­bon Pro­cess­ing, the global re­fin­ing in­dus­try is fore­cast to add more than 11 Mbpd of sec­ondary unit ca­pac­ity by the early 2020s. Ac­cord­ing to OPEC’s World Oil Out­look 2017, most of this new ca­pac­ity will be new desul­fu­r­iza­tion units—con­ver­sion and oc­tane-boost­ing ca­pac­ity ad­di­tions thatwill in­crease by more than 3.2 Mbpd and nearly 2 Mbpd, re­spec­tively.

By 2023, nearly 7 Mbpd of new desul­fu­r­iza­tion ca­pac­ity is fore­cast to be­gin op­er­a­tions. Most new de- sul­fu­r­iza­tion units will be built in the Mid­dle East and Asia-Pa­cific re­gions. Many of these will be in­cluded in new grass­roots fa­cil­i­ties and brown­field ex­pan­sions to ad­here to new fuel qual­ity reg­u­la­tions and mit­i­gate emis­sions in densely pop­u­lated cities.

The higher-qual­ity fuels will also en­able Asia-Pa­cific and Mid­dle East­ern coun­tries to ex­port to more des­ti­na­tions, es­pe­cially those with strict lim­i­ta­tions on sul­fur con­tent. In to­tal, the Mid­dle East and Asi­aPa­cific re­gions are fore­cast to add 4.5 Mbpd of new desul­fu­r­iza­tion ca­pac­ity by 2023, which equates to ap­prox­i­mately 68% of to­tal market share for desul­fu­r­iza­tion ca­pac­ity ad­di­tions.

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