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What the future has in store-I: Refining glut in next five years?
Feb 21: The website has been carrying reports on the future of the oil & gas industry in recent days. One such report says that the threat of EVs has receded for the time being and India will continue to see an upsurge in demand for transportation fuels well into the 2030s
8But there are caveats to this line of thinking when the latest global forecasts are taken into account.
8The latest data seems to indicate that the world may have adequate refining capacity to take care of demand in the foreseeable future.
8A massive amount of data has been collated to show that a lower global growth in liquids demand combined with continued growth of NGLs and biofuels have put pressure on global refining.
8No doubt, liquid supplies grow by around 11 Mb/d, but only 3 Mb/d is accounted for by crude and condensates which need to be refined, with the rest met by NGLs (6 Mb/d) and biofuels and other liquids (3 Mb/d).
8The gradual plateauing in product demand, combined with continuing steady growth in non-refined liquid supplies, causes refinery runs to peak sooner than anticipated
8The conclusion is that new refinery projects which are already planned or under construction for the next five years or so are sufficient to meet all of this additional throughput, implying no net new refining capacity is needed beyond that.
8The warning is that if India continues to build refining capacities then throughput in the rest of the world will have to go down from today's levels.
8These realistic and long term projections must be taken into account while looking at refining capacity additions in India
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