Global Capacity and Capital Expenditure Outlook for Refineries - New-Build Refinery Pipeline Risks Over-Capacity and Puts Pressure on Refiners
The global refining industry, which witnessed a marginal growth rate of 6% since 2010, is expected to rebound and witness a high growth rate of 16% during 2014 to 2019. Asia will dominate the global refining industry, both in terms of capacity growth and capex spending. The region will account for 33.9% and 60.1% of global capacity growth and capex spending by 2019. Europe and North America will also witness substantial growth in their refining capacities accounting for 21.3% and 21.1% of the global refining capacity growth by 2019. On the other hand, Africa will witness the highest refining capacity growth rate of 14.1% among all the regions in the world by 2019.
Historical refining capacity data from 2010 to 2014, forecasts up to 2019
Annual breakdown of capital expenditure spending on refineries for the period 2015 to 2019
Planned refinery capacity additions and capital expenditure spending by major countries and operators
Capital expenditure spending on new refineries by region and by operator
Details of all planned refineries in the world up to 2019
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Asia’s Planned Refinery Projects Pose Threat to Disadvantaged European Refiners, says GlobalData
Major refineries planned to come online over the next four years, primarily new facilities in Asia, could lead to overcapacity pressures on the global refining industry and accelerate deterioration of the European refining sector, says research and consulting firm GlobalData.
According to the company’s latest report*, the slate of planned refining capacity expansions globally would bring the total Crude Distillation Unit (CDU) capacity to 100 million barrels per day (mmbd) by 2016, reaching nearly 115 mmbd by 2019. Refinery construction is particularly booming in Asia, with the region boasting 35 of the 91 currently-planned facilities.
China underpins this growth in the region, with almost $30 billion in capital expenditure alone between Sinopec and PetroChina for three new refineries, adding over 1 mmbd of CDU capacity.
Matthew Jurecky, GlobalData’s Head of Oil & Gas Research and Consulting, says: “China is planning infrastructure to support anticipated product demand into the new decade. There is a repositioning of global refinery capacity around Asia, which will pull away as the global leader in refining.”
If all planned projects are completed, Jurecky states that Asia would represent 35% of the world’s CDU capacity by the end of the decade with 40.2 mmbd of capacity, up from 29.6 mmbd in 2010.
GlobalData’s report adds that less efficient refineries will make way for newer facilities, while more speculative projects are likely to be scaled back in capacity, with delays or cancellations possible.
Jurecky says: “While projects will undoubtedly stall or be cancelled, the refining industry will still struggle, with new capacity mounting pressure on disadvantaged refineries, many of which are in Europe. Closures and capacity reductions at unprofitable refineries will ultimately occur to rebalance the market.
“European refiners have been strategic in extending operations for as long as possible. However, many of the planned refineries are backed by large national oil companies interested in playing a bigger role in the downstream sector, and market share will ultimately have to be ceded by the least profitable operations.”
*Global Capacity and Capital Expenditure Outlook for Refineries - New-Build Refinery Pipeline Risks Over-Capacity and Puts Pressure on Refiners
This report provides an annual breakdown of capital expenditure spending on refineries for the period 2015 to 2019. It includes details of all planned refineries in the world up to 2019, along with planned refinery capacity additions and capital expenditure spending by major countries and operators.
This report was built using data and information sourced from proprietary databases, primary and secondary research, and in-house analysis conducted by GlobalData’s team of industry experts.