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Released January 20, 2022 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--As the world transitions into newer, greener forms of energy and companies increasingly focus on environmental, social and governance (ESG) issues, the petroleum sector and what's to become of it has been in the spotlight. In this week's 2022 U.S. and Canada Market Outlook webinar, Chris Paschall, Industrial Info's vice president of research for the Oil & Gas and Petroleum Refining industries, spoke about the outlook for the petroleum sector, with an emphasis on project activity in North America.
So what is the outlook for crude oil? According to the Organization of Petroleum Exporting Countries (OPEC), demand for oil is expected to peak around 2045. Various trends and demographics support this view, such as global population growth, particularly in Asia, and a rise in petrochemical production. Asian countries, especially India, are investing heavily in the downstream sector.
Focusing on North America, Industrial Info is tracking about $38 billion in active refining projects, $18 billion of which are under construction--consisting in large part of a grassroot refinery in Mexico and Exxon Mobil Corporation's (NYSE:XOM) (Irving, Texas) expansion of its refinery in Beaumont, Texas. Subscribers to Industrial Info's Global Market Intelligence (GMI) Refining Database can click here for the detailed reports.
According to Paschall, Industrial Info is tracking about $15 billion in planned North American refining project starts in 2022-24. Most of the spending is going toward crude units and gasoline and diesel production projects. Crude unit projects are aimed at squeezing more money from a barrel, such as increasing crude diet flexibility and other in-plant spending to lower operating costs. Light-heavy oil spreads could widen, spurring more bottom-of-the-barrel projects.
North American gasoline-focused projects are seeing about $2.8 billion worth of activity planned over the next three years. Projects include optimization of fluid catalytic cracking units (FCCUs) for increased yields and revenues. Octane improvement projects are driving some investments in reformers and alkylation units.
The diesel market may perhaps be the most changed as refiners opt to increase production of renewable diesel to satisfy renewable fuel standards set by states and green their companies' environmental footprints. Industrial Info is tracking about $3.5 billion in renewable diesel spending set to take place over the next three years at North American refineries. This figure becomes even larger when one accounts for grassroot, stand-alone renewable diesel production plants, which fall under the auspices of the Alternative Fuels Industry.
While global demand for transportation fuels is expected to continue growing over the near-term, most analysts are forecasting that peak oil demand is on its way. What does the future hold for refineries? How will they realign themselves as fuel demand declines? Paschall provided two trends that he expects to see strengthen in North America in the coming years: increased export space to reach strong global markets and increased petrochemical production. Paschall highlighted increased production of benzene, toluene and xylenes (BTX), a building block for other petrochemicals, and sulfur utilization projects for the sulfuric acid process.
In addition, spending also has already started to help keep refineries up to par with the energy transition: The implementation of solar power plants, carbon capture, and green and blue hydrogen are leading to new spending.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
So what is the outlook for crude oil? According to the Organization of Petroleum Exporting Countries (OPEC), demand for oil is expected to peak around 2045. Various trends and demographics support this view, such as global population growth, particularly in Asia, and a rise in petrochemical production. Asian countries, especially India, are investing heavily in the downstream sector.
Focusing on North America, Industrial Info is tracking about $38 billion in active refining projects, $18 billion of which are under construction--consisting in large part of a grassroot refinery in Mexico and Exxon Mobil Corporation's (NYSE:XOM) (Irving, Texas) expansion of its refinery in Beaumont, Texas. Subscribers to Industrial Info's Global Market Intelligence (GMI) Refining Database can click here for the detailed reports.
According to Paschall, Industrial Info is tracking about $15 billion in planned North American refining project starts in 2022-24. Most of the spending is going toward crude units and gasoline and diesel production projects. Crude unit projects are aimed at squeezing more money from a barrel, such as increasing crude diet flexibility and other in-plant spending to lower operating costs. Light-heavy oil spreads could widen, spurring more bottom-of-the-barrel projects.
North American gasoline-focused projects are seeing about $2.8 billion worth of activity planned over the next three years. Projects include optimization of fluid catalytic cracking units (FCCUs) for increased yields and revenues. Octane improvement projects are driving some investments in reformers and alkylation units.
The diesel market may perhaps be the most changed as refiners opt to increase production of renewable diesel to satisfy renewable fuel standards set by states and green their companies' environmental footprints. Industrial Info is tracking about $3.5 billion in renewable diesel spending set to take place over the next three years at North American refineries. This figure becomes even larger when one accounts for grassroot, stand-alone renewable diesel production plants, which fall under the auspices of the Alternative Fuels Industry.
While global demand for transportation fuels is expected to continue growing over the near-term, most analysts are forecasting that peak oil demand is on its way. What does the future hold for refineries? How will they realign themselves as fuel demand declines? Paschall provided two trends that he expects to see strengthen in North America in the coming years: increased export space to reach strong global markets and increased petrochemical production. Paschall highlighted increased production of benzene, toluene and xylenes (BTX), a building block for other petrochemicals, and sulfur utilization projects for the sulfuric acid process.
In addition, spending also has already started to help keep refineries up to par with the energy transition: The implementation of solar power plants, carbon capture, and green and blue hydrogen are leading to new spending.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
