Chinese oil demand to peak before 2030: CNPC

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

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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24/10/11

Florida fuel supply edging toward normal post-storm

Houston, 11 October (Argus) — Some Florida fuel terminals and a major refined products pipeline expect to restore operations over the weekend thanks to minimal damage from Hurricane Milton, but a return to normal in Port Tampa is being hampered by power outages. Kinder Morgan's Orlando terminal is operational but the company is still assessing its Tampa area terminals and the Central Florida Pipeline (CFPL) after Hurricane Milton made landfall as a category 3 storm late Wednesday, a spokesperson said at 3pm ET Friday. Kinder plans to have its Tampa fuels rack and 16-inch CFPL pipeline online by late Saturday and the 10-inch CFPL pipeline online by the end of the weekend. The company's three Tampa bulk terminals are likely to remain offline Friday due to widespread power outages and damage to the surrounding area. The CFPL pipeline transports gasoline, diesel, ethanol and jet fuel to Orlando, including to Orlando International Airport, and is connected to Kinder's Tampa refined products terminal that has 1.8mn bls of storage. Nearly half of Florida's supply of petroleum and refined products passes through Port Tampa Bay, the majority via waterborne cargo from the US Gulf coast. Port Tampa Bay is still assessing its land and seaside operations, port officials said this morning. It re-opened for limited operations late Thursday having avoided widespread flooding, though power outages in the area remain an issue. Global Partners' Tampa terminal is without power and running on generators, the company said today. Employees are cleaning up minor damage and Global expects the facility to be "fully operational soon". Buckeye Partners' Jacksonville and Fort Lauderdale, Florida, terminals are fully operational and the company is working to restore operations at its two Tampa terminals, a Buckeye spokesperson said today. Chevron is repairing damage at its Tampa terminal, but did not give a time line for a return to normal operations. The company's Port Everglades and Panama City terminals are online and selling fuels, the company said today. Citgo expects its Tampa terminal to restore operations by mid-to-late next week, the company said today. The St Petersburg-Clearwater International airport (PIE) west of Port Tampa is expected to open at 4pm ET Friday according to the Federal Aviation Administration. The Sarasota-Bradenton International Airport further south is expected to reopen early Saturday morning. Miami airport is open and Orlando International resumed commercial flights today. Prices for Florida CBOB delivered at Tampa and Port Everglades fell by 1.87¢/USG to $2.15/USG today. Cash differentials were stable in the Florida gasoline cargo markets at Argus Gulf coast Colonial CBOB +10¢/USG. Prices for Florida ULSD delivered to Port Everglades fell by 0.44¢/USG to $2.39/USG today. Cash differentials were unchanged in the waterborne ULSD cargo markets at Argus Gulf coast Colonial ULSD +12.25¢/USG. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Feds probing fatal Pemex Deer Park accident

24/10/11

Feds probing fatal Pemex Deer Park accident

Houston, 11 October (Argus) — The US Chemical Safety and Hazard Investigation Board (CSB) and Occupational Safety and Health Administration (OSHA) are both launching independent investigations into this week's fatal accident at Pemex's 312,500 b/d Deer Park, Texas, refinery. A hydrogen sulfide (H2S) release that killed two workers and injured dozens more occurred on Thursday evening at the plant located near Houston. It also led to shelter-in-place orders for surrounding communities, which have since been lifted. The CSB will investigate the causes of the fatal release, the agency said Friday. The CSB is responsible for investigating industrial accidents in the US, such as the deadly 2022 explosion at BP's Toledo refinery in Ohio and a probe into operations at Marathon's Martinez renewable diesel plant after several fires earlier this year . A representative for CSB was not immediately available for comment. OSHA — charged with enforcing compliance with federal workplace safety laws — is also investigating the incident, and has "up to six months" to complete the investigation, according to an OSHA representative. OSHA would not stop company operations during the duration of the investigation, but "could not speak for other agencies at the site," an OSHA official told Argus. The Harris County Sheriff's department has also opened an investigation into the incident. The release occurred as workers began planned maintenance on a unit. An H2S leak was detected, resulting in several units being shut down as staff sought to secure the leak. The Deer Park refinery had previously been damaged in a February 2023 fire, resulting in two weeks of repairs. A slew of accidents at Deer Park and several other Mexican state-owned Pemex's refineries in part led Fitch Ratings to downgrade Pemex's credit rating in July 2023 . By Gordon Pollock Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Opec+ cuts hit 4mn b/d

24/10/11

Opec+ cuts hit 4mn b/d

London, 11 October (Argus) — Opec+ has reduced its crude production by 4mn b/d since it started cutting output almost two years ago, Argus' latest output survey shows. Crude output by members subject to cuts fell by 220,000 b/d in September to 33.52mn b/d, driven by reductions in Iraq and Nigeria (see table). This compares with 37.52mn b/d in October 2022, when the alliance announced what would prove to be the in a series of production cuts. September output was not only the lowest since April 2021, but also 330,000 b/d below the group's collective production target. But even with the removal of such a vast amount of crude from the market, oil prices remain $11-15/bl below where they were when Opec+ announced its October 2022 cut. This is partly because production from non-Opec members such as the US, Guyana and Brazil has surged. The US alone has boosted production by 830,000 b/d over the past two years. The lower prices are also partly down to lower-than-expected oil demand, particularly in China. The IEA has made and sees global oil demand growing by under 1mn b/d this year and next, well below the 2.1mn b/d increase seen in 2023. Despite the gloomy demand picture, eight Opec+ members are scheduled to start unwinding 2.2mn b/d of production cuts from December — two months later than initially planned. This is not a foregone conclusion — the group has said this could change depending on market conditions — but a decision to push ahead would only widen an expected supply surplus next year. The eight members are expected to decide on whether to start returning production in early November. Opec+ will be keenly watching how the conflict between Israel and Iran plays out over the coming days and weeks. Rising tensions propelled Atlantic basin benchmark North Sea Dated above $81/bl on 7 October. There are fears that Israel could strike Iran's oil infrastructure in retaliation for . This would put Iranian production — which rose to 3.37mn b/d in September — at risk. Any attack on Iran's oil sector could conceivably see Tehran disrupt regional oil flows through the strait of Hormuz , through which more than 15mn b/d of crude and products are exported. Compensation questions Another factor that could influence Opec+ policy in the coming weeks is the extent to which serial overproducers Iraq, Kazakhstan and Russia can show they are for exceeding their targets. In an effort to start complying with its commitments, Iraq reduced its production by 130,000 b/d in September, Argus estimates. But this was still 70,000 b/d above its Opec+ target of 4mn b/d, and 170,000 b/d above its effective target in September under its compensation plan. Kazakhstan's output rose by 40,000 b/d to 1.48mn b/d in September, 10,000 b/d above its Opec+ quota and 40,000 b/d above the effective target in its compensation plan. All eyes are now on the country's October output, when it is due to deliver the largest chunk of its compensation commitment, which has been designed to coincide with maintenance at its Kashagan field . Russia's production edged down by 10,000 b/d to 8.97mn b/d, in line with its target. Libya's output fell by a hefty 370,000 b/d to 550,000 b/d in September as an oil blockade declared in late August took its toll. But with the blockade lifted in early October, production has already returned close to the country's normal level of about 1.2mn b/d. Venezuela's production rose by 20,000 b/d to 900,000 b/d — the highest since February 2019. Both Venezuela and Libya are exempt from production targets. Opec+ crude production mn b/d Sep Aug* Target† ± target Opec 9 21.18 21.45 21.23 -0.05 Non-Opec 9 12.34 12.29 12.62 -0.28 Total 33.52 33.74 33.85 -0.33 *revised †includes additional cuts where applicable Opec wellhead production mn b/d Sep Aug* Target† ± target Saudi Arabia 8.92 8.96 8.98 -0.06 Iraq 4.07 4.20 4.00 +0.07 Kuwait 2.46 2.40 2.41 +0.05 UAE 2.95 2.98 2.91 +0.04 Algeria 0.91 0.91 0.91 0.00 Nigeria 1.36 1.45 1.50 -0.14 Congo (Brazzaville) 0.24 0.26 0.28 -0.04 Gabon 0.21 0.23 0.17 +0.04 Equatorial Guinea 0.06 0.06 0.07 -0.01 Opec 9 21.18 21.45 21.23 -0.05 Iran 3.37 3.33 na na Libya 0.55 0.92 na na Venezuela 0.90 0.88 na na Total Opec 12^ 26.00 26.58 na na *revised †includes additional cuts where applicable ^Iran, Libya and Venezuela are exempt from production targets Non-Opec crude production mn b/d Sep Aug* Target† ± target Russia 8.97 8.98 8.98 -0.01 Oman 0.76 0.76 0.76 +0.00 Azerbaijan 0.49 0.48 0.55 -0.06 Kazakhstan 1.48 1.44 1.47 +0.01 Malaysia 0.32 0.31 0.40 -0.08 Bahrain 0.16 0.15 0.20 -0.04 Brunei 0.09 0.09 0.08 0.01 Sudan 0.02 0.02 0.06 -0.04 South Sudan 0.05 0.06 0.12 -0.07 Total non-Opec 12.34 12.29 12.62 -0.28 *revised †includes additional cuts where applicable Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Pemex Deer Park refinery H2S leak kills 2: Update

24/10/11

Pemex Deer Park refinery H2S leak kills 2: Update

Adds comment from Mexican energy minister, context from regulatory filings. Houston, 11 October (Argus) — A hydrogen sulfide (H2S) leak at Pemex's 312,500 b/d Deer Park, Texas, refinery on 10 October killed two workers and injured 35 more. The leak occurred accidentally during maintenance, according to a regulatory filing submitted by Pemex this morning. Several units, including an amine unit, an alkylation unit, a hydrocracker and a sulphur recovery unit were promptly shut and flaring was initiated so the leak could secured. Mexican energy minister Luz Elena Gonzalez said in a press conference in Mexico City Friday morning that the refinery was expected to restart operations later today. Deadly accidents at US refineries usually require extensive regulatory investigations by federal agencies, however, which require facilities or certain units at a plant to remain shut down. H2S is an extremely hazardous gas commonly produced as a byproduct of refining, which can be processed into pure sulphur in a sulphur recovery unit (SRU) or removed by hydrotreating. Shell's Deer Park petrochemical facility, located adjacent to Pemex's refinery, said it was doing a "controlled slowdown" of its operations as of 8:52pm yesterday in response to the accident as a precaution. A flaring event was initially reported by a Deer Park Office of Emergency Management (OEM) social media account at 6:23pm ET on 10 October. A shelter in place advisory was issued for all Deer Park residents in a follow-up notice and Texas State Highway 225 running adjacent to the refinery was also closed to traffic. Areas of nearby Pasadena were also placed under a shelter in place advisory. The Deer Park shelter in place was lifted at 10pm ET. The Pemex refinery had previously reported an aromatic concentration unit (ACU) leak on 6 October. Amine units strip H2S from methane gas generated by hydrotreaters. Alkylation units produce high-octane blendstocks used in gasoline. Hydrocrackers use hydrogen, pressure, and catalyst to produce distillates and gasoline low in contaminants like sulphur. SRUs help to remove sulphur and other impurities from refinery products and gas streams. By Gordon Pollock Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Iran slows oil exports as it braces for Israeli attack

24/10/11

Iran slows oil exports as it braces for Israeli attack

Dubai, 11 October (Argus) — Iran's crude exports have slowed down dramatically this month as the country braces for a possible strike on its oil facilities in retaliation for its large-scale missile attack against Israel on 1 October. Although US president Joe Biden has suggested Israel should think about an alternative response , potential strikes on Iranian oil facilities have been up for discussion and the Israeli government appears to be still weighing up its options. In the meantime, there has been a noticeable drop off in Iranian exports. Crude loadings from Iran only averaged about 600,000 b/d in the first 10 days of October, around a third of the amount it has exported in the past few months, according to Armen Azizian, senior oil risk analyst at trade analytics firm Vortexa. "The first 10 days has been very slow compared to what we usually see," Azizian said. "Normally, over this period, we see an average of 5-8 tankers load ꟷ a mix of VLCCs and Suezmaxes. But so far, we have only seen just 3-4 load." A VLCC typically carries 1.9mn-2.2mn bl, while a Suezmax can carry 800,000-1mn bl. Of the three VLCCs that have loaded this month, two did so at Iran's Kharg Island terminal in the Mideast Gulf and the third co-loaded between Kharg Island and the Soroush terminal, also in the Mideast Gulf. An Aframax also loaded at Kharg this month but it is a tanker that typically engages in domestic trade. The Kharg terminal is Iran's largest and most important by some distance, handling more than 90pc of Iranian crude and condensate exports. All of the vessels that have loaded at Iranian terminals this month have been sanctioned. "It seems like the operators of the non-sanctioned tankers are being more cautious," Azizan said. "The thinking being that the value of the sanctioned tankers is so low anyway, that they are more worth taking a risk with." The slowdown in exports coincides with Iran moving many of its empty tankers away from Kharg Island. "It was likely done as a precaution, in the event of an Israeli retaliation," said Homayoun Falakshahi, senior oil analyst at trade analytics firm Kpler. Iran's crude exports have been rising in recent years, notably since the start of 2023. Vortexa puts them s at 1.7mn b/d in July-September, while Kpler's estimate is slightly higher at 1.75mn b/d. September was a particularly strong month — 1.83mn b/d according to Kpler and 1.75mn b/d according to Vortexa. Kpler's September estimate is the highest since the fourth quarter of 2018 and Vortexa's is just 50,000 b/d short of a six-year high of 1.8mn b/d in June. This month's exports will be much lower. Even if Iran's loading activities were to return to normal for the rest of October, it would struggle to breach the 1.35mn b/d mark for the full month, a level it has surpassed consistently since the fourth quarter of last year. By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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