Chinese oil demand to peak before 2030: CNPC

  • Spanish Market: Coal, Crude oil, Natural gas, Oil products, Petrochemicals
  • 28/12/21

China's petrochemical needs will fuel oil demand growth while a slowdown in incremental oil demand in the transportation sector will contribute to a peak in overall oil consumption before 2030, according to the latest forecast by state-controlled CNPC's research arm the Economics and Technology Research Institute (ETRI).

Chinese oil demand is expected to peak at 18.2mn b/d (780mn t/yr) before 2030, with the petrochemicals sector driving oil demand through 2030. But oil demand is forecast to drop to 8.8mn b/d by 2050 and 5.4mn b/d by 2060.

This will exacerbate the oversupply in refining capacity after 2030, requiring refiners to increase production of higher-end products, rather than transportation fuels, as part of energy transition efforts, the ETRI said. Beijing has already outlined a crude distillation capacity limit of 20mn b/d for Chinese refining capacity in 2025.

Electrification, or the use of electric vehicles, will be especially rapid in the transportation sector between 2031-50. This will reduce gasoline and diesel demand, although petrochemicals demand is still expected to be relatively stable during this period.

Demand for oil products including gasoline, diesel and jet fuel could peak at 8.4mn b/d by 2025 and decline to 1.3mn b/d by 2060, driven by the rise of new energy vehicles (NEVs) and development of railways. Chinese apparent products demand, including gasoline, diesel and jet fuel, averaged 6.9mn b/d in January-November, data from the National Bureau of Statistics and Customs Bureau show.

China's auto fleet still has room to grow, the ETRI said. NEVs will account for 10pc of China's total auto fleet in 2028, and rise to 80pc in 2052. NEVs currently account for just 2.3pc of vehicles in China.

China's auto sales in 2022 are expected to rise by 5.4pc from a year earlier to 27.5mn, with NEVs leading the increase, according to the China Association of Automobile Manufacturers (CAAM).

Sales of NEVs are forecast to rise by 47pc to 5mn in 2022, the CAAM said.

The country's primary energy consumption could also peak during 2030-35, at around 6bn t of standard coal equivalent (tce), then decline to 5.7bn tce by 2060 as renewables production rises, according to the ETRI. China only just met its 2020 consumption target of 5bn t tce with demand of 4.98bn tce.

The ETRI has also forecast Chinese coal demand to peak by 2025, and gas demand by 2040.

The institute expects Chinese crude production to remain at around 4mn b/d before 2035 but for natural gas output to grow at a faster pace, reaching 250bn m³/yr by 2030 and 350bn m³/yr by 2060. Chinese crude output averaged 100,000 b/d or 3pc higher on the year at 3.94mn b/d in January-November. Gas output rose by 8.9pc on year to 186bn m³ in January-November.

For 2021, national crude output is expected at 3.98mn b/d and gas output at 206bn m³, the National Energy Administration said.


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24/06/24

Industria mexicana se enfrenta a un peso más débil

Industria mexicana se enfrenta a un peso más débil

Mexico City, 24 June (Argus) — La depreciación del peso mexicano después de las elecciones ha afectado al comercio e inversión en energía, con un dólar estadounidense más caro elevando el precio de las importaciones de combustible y gas natural. El peso perdió aproximadamente 11pc de su valor frente al dólar estadounidense a medida que los mercados reaccionaron a la abrumadora victoria electoral del partido en el poder Morena en las elecciones del 2 de junio. El tipo de cambio saltó de Ps16.65/$1 solo una semana antes de la votación a un pico de Ps18.99/$1 en los días siguientes. Desde entonces, la tasa se ha estabilizado en Ps18.30-Ps18.50/$1 en los últimos días. "El nuevo umbral para el tipo de cambio probablemente será de Ps18 por dólar", afirmó Gabriela Soni, directora de inversiones de UBS Asesores México. Añadió que, aunque el movimiento ha sido abrupto, "creemos que está justificado dada la aprobación esperada de las reformas constitucionales que tienen el potencial de erosionar el sistema de división de poderes y afectar a las decisiones de inversión en el país." Soni se refirió a la consolidación histórica del poder político asegurado por Morena y los partidos aliados en las elecciones que les entregó no solo la presidencia, como se esperaba, sino el control de 27 de las 32 gubernaturas estatales, y solo a unos pocos escaños en el senado de obtener mayorías calificadas en ambas cámaras del congreso. Con los resultados, el camino está muy claro para que el presidente Andrés Manuel López Obrador apruebe las controvertidas reformas judiciales durante su último mes en el poder en septiembre. Esto podría significar la eliminación de las reformas energéticas promercado aprobadas en 2014, la disolución de los reguladores del sector energético de México y el endurecimiento de la visión estatista de López Obrador de un sector energético dominado por la empresa estatal de petróleo y gas Pemex y la empresa de electricidad CFE. El tipo de cambio podría bajar aún más en los próximos meses si la economía se mantiene estable, dijo Pedro López, director adjunto de análisis económico de Banco BASE, un banco especializado mexicano que apoya a las empresas internacionales con operaciones en el país. Dicho esto, el tipo de cambio frente al dólar estadounidense "continuará estando sometido a presiones más elevadas estos meses hasta las elecciones presidenciales de EE. UU. en noviembre", dijo López. López dijo que el mercado debería tener una imagen más clara de México para finales de año, después de las elecciones estadounidenses y con mayor claridad después de la próxima sesión legislativa mexicana. Añadió que las presiones inflacionistas derivadas del aumento del tipo de cambio probablemente llevarían al banco central a mantener la tasa de interés de referencia en 11pc, manteniendo tasas de interés altas en México. Estas, a su vez, atraen a los inversionistas globales de nuevo al peso bajo la dinámica actual de tasas, suponiendo que no haya perturbaciones adicionales. Balance de energía Dado que México es un importador neto de energía desde 2015, "una depreciación del peso mexicano tiende a empeorar el balance del petróleo", afirmó Soni. "Sin embargo, México es un exportador neto en sectores no energéticos, especialmente en la fabricación, y la balanza comercial se beneficiaría en estos sectores." Y aunque el tipo de cambio puede ayudar a México a ganar más dinero por las exportaciones de petróleo, "tenemos que recordar que son cada vez menos", dijo Víctor Herrera, jefe de estudios económicos del Instituto Mexicano de Ejecutivos Financieros (IMEF). Pemex está redirigiendo el petróleo hacia sus refinerías, bajo el mandato del presidente para aumentar la producción nacional de combustible. Como resultado, las exportaciones de petróleo crudo mexicano cayeron 31pc año con año en abril a 618,000 b/d. A pesar de los esfuerzos, los productos refinados importados de EE. UU. siguen representando aproximadamente 72pc de su consumo nacional de gasolina, diésel, gas natural y turbosina, según los datos de la secretaria de energía. Se necesitará tiempo para saber qué beneficios, si los hubiera, aportan las ventas de petroleo de Pemex al extranjero, que se traducen en pesos adicionales, afirmó Herrera. Mientras tanto, añadió: "pagaremos dólares más caros para importar gasolina." Por James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Trinidad considers offers for shut oil refinery


24/06/24
24/06/24

Trinidad considers offers for shut oil refinery

Kingston, 24 June (Argus) — Trinidad and Tobago is again seeking an operator for the mothballed state-owned 165,000 b/d Guaracara refinery, and will decide by the end of August on several offers for the facility, prime minister Keith Rowley said on Sunday. The government has received eight expressions of interest from domestic and foreign companies to purchase or lease the refinery at Pointe-a-Pierre on the southwest coast that was closed six years ago, government officials told Argus . Rowley did not name the potential operators. But Indian steel producer Jindal Steel and Power "is interested in the potential of the refinery," Rowley's office said last week after he met in Port of Spain with the company's chairman Naveen Jindal. Trinidad shut the refinery in 2018 after a steady decline in crude production forced increases in imported feedstock, sending up refining costs that the government said were "unsustainable." A new owner would likely face similar challenges in obtaining feedstock as the country's crude production has moved from 144,400 b/d in 2005 to average 49,880 b/d in January-March of this year. A restart of the refinery "will be feasible only if there are arrangements for access to competitively priced imported crude that will allow profitable operating margins," a government official told Argus today. The government is making "very good progress" in efforts to offload the refinery, energy minister Stuart Young said on 21 June. But the company that would take over the plant "would have to be able to address several issues including asset management and the financial capability to operate the refinery," Young said. The government has failed since 2018 to reach an agreement with domestic and foreign interests for reopening the refinery. It renewed efforts to offload the facility following the late 2020 collapse of a sale agreement with area labour union-owned company PET that made a $700mn offer, outbidding US private equity firm Beowulf Energy and German refiner and trader Klesch. The government and California-based electrical contractor Quanten failed to reach an agreement in December 2022 for the takeover of the refinery. Growing oil producer Guyana rejected a proposal from Trinidad in February that it should supply crude to allow the Guaracara plant to be reopened. By Canute James Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

MVP start-up shows permitting troubles in US


24/06/24
24/06/24

MVP start-up shows permitting troubles in US

Washington, 24 June (Argus) — The start-up of the Mountain Valley Pipeline (MVP) after a delay of over five years highlights the difficulty the US gas industry faces in building greenfield pipelines under current permitting rules — which are unlikely to change any time soon. The 500km natural gas pipeline began commercial operations on 14 June, at a $7.85bn price tag that was more than double the cost expected when the project was first proposed in 2015. The 2bn ft³/d (20bn m³/yr) pipeline will move shale gas from a mountainous region in West Virginia to demand centres in Virginia, with the possibility for future expansions. MVP is expected to run at just 35-40pc of its nameplate capacity until downstream bottlenecks are removed, according to analyst groups RBN Energy and East Daley Analytics. The pipeline offers the promise of eventually easing price pressure in markets in southeastern US and increasing Appalachian gas output that would otherwise remain constrained. The pipeline — soon to change ownership once US independent EQT closes its $5.5bn all-stock acquisition of operator Equitrans Midstream — is the sole survivor of a round of eastern US pipeline cancellations in 2020-21 caused by permitting issues. MVP was also delayed by permitting lawsuits that forced construction crews to repeatedly halt work, adding billions of dollars to project costs as inflation increased the price of both labour and materials. Construction on the project resumed last year only after extraordinary intervention from the US Congress, which approved all remaining pipeline permits as part of an unrelated law that raised the limit on federal debt. The permitting obstacles for pipelines in the eastern US show no signs of fading, despite smaller changes to speed permitting negotiated through legislation last year. Retiring US senator Joe Manchin, a Democrat from West Virginia, is circulating a comprehensive permitting package he says would fast-track the approval process for pipelines and renewable energy projects. Gas groups say any meaningful permitting bill will have to revise the judicial process and limit the ability of states such as New York to continue using water permits to veto new pipelines. In exchange, renewable energy projects could follow a faster permitting schedule for electricity transmission. But that is a deal many progressive Democrats are reluctant to take, particularly as they face the prospect that former president Donald Trump will win in US presidential elections in November. Far-right Republicans are hesitant to give President Joe Biden a permitting win when they believe they can get a better deal if Trump is elected. But without legislative changes industry officials expect permitting delays to continue whoever is in the White House. "This is not a left or right thing," EQT chief executive Toby Rice says. Sticky red tape Trump's campaign says if he is elected he will speed up approval of gas pipelines serving the Appalachian basin by removing "all red tape". But his regulatory changes when in office failed to make a material difference in permitting timelines, and he repeatedly failed to broker a legislative deal to hasten permitting. Gas industry officials say they want to expedite permitting regardless of the election results, and believe momentum could occur when voters start feeling the effects of delays. "The motivation for pipeline reform I think will increase when the American consumers believe that their energy needs are impacted by the lack of infrastructure," Iowa-based Berkshire Hathaway Energy's gas transmission president, Paul Ruppert, says. The difficulty and time required to permit large greenfield pipelines in the eastern US has led developers to focus on adding capacity to existing pipelines or pursuing shorter expansions instead. By Chris Knight Mountain Valley and its peers Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Rising middle distillate prices deter German buyers


24/06/24
24/06/24

Rising middle distillate prices deter German buyers

Hamburg, 24 June (Argus) — Rising middle distillate values weighed on domestic sales in Germany last week, although the price hike was less pronounced in the south of the country because of oversupply. German middle distillate prices increased for a second consecutive week. Heating oil averaged around €81.10/100 litres last week and diesel just under €125.60/100l, up by almost €2.00/100l and €1.80/100l on the previous week, respectively. The main driver was a rise in the front-month Ice gasoil futures contract, which reached its highest level since mid-April at $790/t on 19 June, underpinned by supply concerns. But according to traders and importers, Germany itself has no physical supply shortages. The opposite was true in some regions, where oversupply capped price rises last week. This was notably the case in the south and southwest of Germany, where prices went up at a slower pace than the national average. Rising prices are deterring buyers and weighing on middle distillate sales, traders said. This is reflected in nationwide traded spot volumes of heating oil and diesel reported to Argus, which fell by a respective 46pc and 22pc last week compared with the previous week. Gasoil imports via northern German ports are declining because of ample domestic production, which has resulted in the cif Hamburg assessment's premium to Ice gasoil futures falling by €2.50/100l since 11 June. Diesel cargo volumes imported to northern Germany in June are at their lowest level since February at 58,500 b/d according to Vortexa data. By Johannes Guhlke Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Toyo, SCG enhance waste plastics recycling partnership


24/06/24
24/06/24

Toyo, SCG enhance waste plastics recycling partnership

Tokyo, 24 June (Argus) — Japanese engineering firm Toyo Engineering and Thai petrochemical producer SCG Chemicals plan to enhance their partnership in the chemical recycling of waste plastics, aiming to launch an upgraded demonstration plant in Thailand by early 2025. The agreement to co-operate on the future commercialisation of the chemical recycling technology of SCG subsidiary Circular Plas (CirPlas) and the development of a licensing business is a follow-up to the companies' initial deal to study the feasibility of chemical recycling in Thailand in January 2022. CirPlas is 60pc owned by SCG and has developed chemical recycling technology turning mixed plastic wastes into naphtha and then plastic resins. Toyo and SCG plan to add a new unit to the operating pilot plant in south Thailand's Rayong province. The companies are still examining the output capacity of the enhanced pilot plant and future commercial operation. They are unsure when they will start operations of the commercial venture. The circular economy has been a major topic in Japan's petrochemical industry on the back of the country's 2050 decarbonisation goal. Petrochemical producer Mitsui Chemicals in March began using pyrolysis oil , generated from waste plastics, to manufacture petrochemical products at its Osaka naphtha-fed cracker. Sumitomo Chemical plans to begin recycling polymethyl methacrylate in 2025. By Nanami Oki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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