Heavy crude oil growth to outstrip new condensate supply to 2030: HART
Singapore (Platts)--14Sep2011/546 am EDT/946 GMT
The world will see far more incremental barrels of heavy crude in the
market over the next two decades than the additional condensate supply
that will come on stream, according to an analyst at Hart Energy, a
provider of specialized data and information products to the energy
industry.
Global crude production is expected to grow from 73.5 million b/d in
2010 to 93 million b/d in 2030, of which heavy crude oil (API gravity of
less than 22 degrees) will account for 38% and condensates and natural
gas liquids or NGLs for 14%, Hart Energy's executive director for
refining, planning and evaluation, Rodrigo Favela, told a recent
industry conference in Singapore.
The percentages translate to around 7.4 million b/d of new heavy
crude oil supply over the next 20 years, and approximately 2.73 million
b/d of condensates and NGLs.
Going into 2030, heavy crude supply should rise further to around 16
million b/d, according to Hart research, with growth coming from all
regions except Europe and the former Soviet Union countries, and
concentrated on the Americas.
The remainder of the 19.5 million b/d increase in oil supply will come
from biofuels (19%), gas-to-liquids/coal to liquids (9%), light/medium
crude (5%), shale oil (6%), and synthetic crude oil (9%), Favela told
the 27th Asia Pacific Petroleum Conference in Singapore September 7.
Asked about the relative production cost of unconventional oil, Favela
pegged it at $40-60/b for Canada's syncrude, around $38/barrel for US
shale oil, and "less than $35/barrel" for Venezuela's Orinoco
production.
GASOIL TO ACCOUNT FOR HALF THE RISE IN PRODUCTS DEMAND
Meanwhile, Favela projects global refined products consumption to rise
from 86.6 million b/d in 2010 to 113.5 million b/d in 2030, a compound
annual growth rate of 1.5%.
Gasoil will account for 49% of that increment, followed by gasoline at
15%, LPG at 9%, naphtha at 8% and jet fuel at 7%, he said.
Residual fuels will have the smallest share of the growth, accounting
for 3%, with total consumption declining from a little over 10 million
b/d in 2008 to just over 8 million b/d by 2030. All of that decline will
come from the industrial/power sector, with bunker fuel demand rising
slightly from just under 4 million b/d now to just over that level in
2030, Favela predicted.
The increase in bunker fuel consumption will happen despite a portion of
the market switching from residual to distillate marine fuel because of
new low sulfur specifications, he added.
The Middle East is projected to become the center of the marginal
refined product barrel supply to the world markets, Favela said.
In the global refining sector, Favela sees overcapacity until 2015,
characterized by low and volatile refining margins. But beyond 2015,
growth in demand will mop up the surplus and boost margins, he
predicted.
The evolution of the refining sector in the industrialized world will be
marked by capacity rationalization, accommodation of biofuels, and a
rebalancing to focus on more gasoil demand, he said.
In the developing world, Favela projects a 2.5% annual growth in
refining capacity because of expanding populations and growing economies
and a focus on cleaner fuels.
Both gasoline and gasoil markets will continue to evolve into less than
10 ppm sulfur going into 2030, with gasoline leading the way and gasoil
following more slowly. High sulfur gasoil will retain 25% of the gasoil
demand by 2030, mainly for industrial and bunker use, he estimated.
Desulfurization of fuel oil is unlikely, according to Favela, with ships
being economically retro-fitted or constructed with exhaust gas
after-treatment, or scrubbers.
--Vandana Hari,
vandana@platts.com
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