Global refining capacity set to increase 8.0 mpbd by 2015: study


By Perrine Faye
AFP
LONDON
Petroleumworld.com 02 15 06

The construction of new oil refineries around the world will increase global refining capacity by about eight million barrels per day by 2015, according to a study published Tuesday in Britain.

The building of 66 new refineries and the expansion of 70 existing sites across the globe had been announced by the end of January 2006, according to energy research group Wood Mackenzie.

If all those facilities came online, it would provide extra worldwide refining capacity of around 18 million bpd.

"Our analysis suggests that less than half of the announced projects will actually come to fruition," the report said.

"The 'realistic' global crude capacity additions (amounting to around eight million bpd) are significantly less than that needed to meet the growth in global demand," it warned.

Wood Mackenzie's oil demand growth forecast over the next ten years stands at around 15.7 million bpd.

The increased level of investment "has largely been driven by flourishing margins and concerns of a global shortage of refining capacity," added Aileen Jamieson, author of the report.

Spare global capacity in 2005, meanwhile, was estimated at just below three million bpd -- an "unprecedented" level.

President George W. Bush called earlier this month for a 75-percent cut in US oil imports from the Middle East by 2025 in a bid to wean the country off its "addiction" to energy from the region.

The study found that "the US remains deficit refining and last year's hurricane damage further highlighted the situation".

"However, it remains very difficult to build a new refinery in the United States due to current legislative and environmental regulations.

"In fact, no new refineries had been built in the US since the 1970s (and) the US is highly dependent on imports of oil products, particularly gasoline."

Bush has encouraged the construction of new US refineries to address crucial supply fears and record crude price levels following hurricanes Katrina and Rita last year.

North America should increase its refining capacity by around one million barrels per day over the next ten years, the report said, mostly through the expansion of existing sites.

The Middle East, which invests huge amounts in its crude refining capacity, remained a key source of refined products for the United States.

Oil prices in New York hit an historic high of 70.85 dollars per barrel in August 2005 after Hurricane Katrina ripped through the US Gulf Coast, ravaging oil rigs and refineries in the region.

"There is little doubt that current speculation that the world is running short of refining capacity is causing concern within the marketplace," the study added.

AFP 02/14/06

Copyright © 2006 AFP. All rights reserved

 

 

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