Brussels — There is a risk of more refinery closures in Europe once the initial impact of the IMO sulfur cap regulation on marine fuel is digested, while elsewhere in the world new capacities are coming on stream, delegates at the S&P Global Platts European Refining Summit in Brussels said Friday.
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Up to 800,000 b/d of refining capacity is at risk in Western Europe and this will dominate the environment in Europe after the IMO regulation comes into force if there is a prolonged period of low hydroskimming margins, said Giacomo Romeo, a senior analyst at Macquarie.
More refinery consolidation and potential closures in Europe was a view shared by several other delegates.
Meanwhile, others regions are set to see capacity increases and rising utilization.
By 2030, 50% of global refining runs would come from Asia, Macquarie's Romeo said, although China will see deteriorating utilization rates "reflecting policy changes."
However there will be more capacity increases in the Middle East, Romeo said.
Greenfield projects are also underway in Africa, according to delegates.
ADDITIONAL CAPACITY IN MIDDLE EAST
"The future is that major crude exporting countries are adding refining capacity," said Abbas Al-Naqi, secretary general of the Organization of Arab Petroleum Exporting Countries.
By 2022, Arab countries will add about 2.1 million b/d of refining capacity in order to satisfy growing domestic and global demand.
Those include Al-Zour in Kuwait, Karbala, Missan and Nasiryia in Iraq, Jazan in Saudi Arabia, as well as new capacity in Algeria and Fujairah and expanding capacity in Egypt -- Sitra and Sohar.
Refiners in the Arab petroleum exporting countries have already invested in building more complex refineries to produce higher-profit products, such as Satorp, Yasref and Ruwais.
The current refining capacity of OAPEC members is 8.09 million b/d, with 51 refineries. Along with 0.771 million b/d in other Arab countries, that represents around 10% of the current global refining capacity of 92.02 million b/d, said Abbas Ali Al-Naqi.
There are also major upgrades underway as refineries in the region still require additional hydrotreating and naphtha reforming processes to enable conversion of low value products into higher value products.
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