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Released October 11, 2012 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Earlier this month, Technip Incorporated (Paris, France) hosted an audio webcast titled "Technip & Refining: Taking Our Track Record Further." Marie-Christine Charrier, senior vice president of Technip's refining product line and chief technology officer, and Andrea Gragnani, refining product line director of new technologies and research and development coordination, shared a wealth of knowledge about the refining world. Although engineers who work in oil and gas may have already known about the highly technical procedures of refiners, others, such as investors, market researchers and journalists, may have not been aware of some of the processes that these two experts explored. In addition to refining, Charrier and Gragnani discussed market trends.
Charrier explained that "refining is actually highly distributed across geographies." It can have different types of owners, such as small independent operators or large, international oil companies. According to Charrier, currently, there are 655 refineries operating worldwide. She also stated that the main products of refining are "transportation fuels, such as gasoline, diesel for read transportation, jets or airplane and bunker fuels for ships."
Gragnani noted that "refineries have to achieve transformations that can prove to be extremely complex." Both experts went into detail about various technical steps of refining. Charrier also talked about how refining has transformed since the 1960's, when it was a "simple" process. She said that the crude oil was distilled so that it was simply separated in different components or cuts "to produce refining commercial products." Boy, have things changed. The refinery scheme is totally different today than it was in the past. It is extremely complex and there are new technologies constantly emerging on the market that "maximize the motor fuel production out of the barrel of crude, or to adapt the refining tool to specific feedstocks," Charrier explained. In sum, refining will continue to evolve and change over time.
Gragnani informed listeners of the webcast that refining is by far the top spender of the onshore industry. It accounts for 45% of the onshore industry. With the level of investment totaling $25 billion per year, "refining is definitely a business that we cannot miss," Gragnani said.
Investment and Projects
Gragnani explained that new investments have been and will be of a different nature. For example, purification and quality improvement projects "represent medium-sized market opportunities, mainly in Asia-Pacific, Middle East, South America and Africa. They derive from the requirement to meet environmental regulation, and more stringent fuel specification."
Technip has been seeing a majority of additional grassroot refining capacity built in Asia-Pacific, which is 60% of the total capacity, the Middle East, which is 15% of the total, and lastly, South America, which makes up a little more than 10%.
Industrial Info is tracking many projects that Technip is involved in across the globe, including nine projects in Oceania worth approximately $17.5 billion.
Click on the image at right to view a chart showing a breakdown of Technip projects by world region. (This chart does not include Stone & Webster Process Technologies' projects.)
Capacity increase is only one driver for investment. Purification and quality improvement projects (also known as conversion projects) are also a driver for investments. Conversion projects, Gragnani explained, are "major expansions," and they are driven by the "declining demand of fuel oil replaced by cheap gas and power application." They are aimed at "increasing the transformation of heavy oil cuts into market fuels." And this improves business profitability. He explained that these types of projects don't have geographic restrictions and can happen in the U.S. and the United Kingdom.
Throughout the presentation, both Charrier and Gragnani discussed specific projects that Technip is involved in. Charrie said that in Malaysia, the company is currently executing the front-end design of a huge complex, owned by Petronas. It is known as the "RAPID project." Charrier said that this project is an example of a "first-class complex," and a refinery like this "will require over 45 different process units," which requires a lot of energy to operate. The project will require a total investment of $20 billion and is scheduled for completion December 2016.
She also said that in Canada and Venezuela, the company has built two upgraders "transforming the crude that is stored at ambient temperature into extra light crude." Charrier also talked about how Technip built the first refinery in Vietnam. "All these projects involve very sophisticated technology." Additionally, in Saudi Arabia, Technip is currently constructing a 400,000-barrel-per-day export refinery in Al-Jubail. According to Charrier, it is getting closer and closer to starting up. Industrial Info has been tracking this particular project since 2007, and it has an approximate investment value of $360 million. According to the Industrial Info database, it should be completed by the second quarter of 2013.
Gragnani closed the presentation before he and Charrier took questions by saying that, "We hope at this point, it is evident for you that in the positive market outlook that we see in refining, Technip is uniquely positioned to capture significant opportunities, thanks to its impressive track record, and its cutting edge technologies, enhanced by the recent acquisition of Stone & Webster Process Technologies." Toward the end of this month, Technip will share its third quarter financial results. For more information, see August 2, 2012, article - Shaw Group to Sell Energy, Chemicals Business to Technip S.A..
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, 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.
Charrier explained that "refining is actually highly distributed across geographies." It can have different types of owners, such as small independent operators or large, international oil companies. According to Charrier, currently, there are 655 refineries operating worldwide. She also stated that the main products of refining are "transportation fuels, such as gasoline, diesel for read transportation, jets or airplane and bunker fuels for ships."
Gragnani noted that "refineries have to achieve transformations that can prove to be extremely complex." Both experts went into detail about various technical steps of refining. Charrier also talked about how refining has transformed since the 1960's, when it was a "simple" process. She said that the crude oil was distilled so that it was simply separated in different components or cuts "to produce refining commercial products." Boy, have things changed. The refinery scheme is totally different today than it was in the past. It is extremely complex and there are new technologies constantly emerging on the market that "maximize the motor fuel production out of the barrel of crude, or to adapt the refining tool to specific feedstocks," Charrier explained. In sum, refining will continue to evolve and change over time.
Gragnani informed listeners of the webcast that refining is by far the top spender of the onshore industry. It accounts for 45% of the onshore industry. With the level of investment totaling $25 billion per year, "refining is definitely a business that we cannot miss," Gragnani said.
Investment and Projects
Gragnani explained that new investments have been and will be of a different nature. For example, purification and quality improvement projects "represent medium-sized market opportunities, mainly in Asia-Pacific, Middle East, South America and Africa. They derive from the requirement to meet environmental regulation, and more stringent fuel specification."
Technip has been seeing a majority of additional grassroot refining capacity built in Asia-Pacific, which is 60% of the total capacity, the Middle East, which is 15% of the total, and lastly, South America, which makes up a little more than 10%.
Industrial Info is tracking many projects that Technip is involved in across the globe, including nine projects in Oceania worth approximately $17.5 billion.
Click on the image at right to view a chart showing a breakdown of Technip projects by world region. (This chart does not include Stone & Webster Process Technologies' projects.) Capacity increase is only one driver for investment. Purification and quality improvement projects (also known as conversion projects) are also a driver for investments. Conversion projects, Gragnani explained, are "major expansions," and they are driven by the "declining demand of fuel oil replaced by cheap gas and power application." They are aimed at "increasing the transformation of heavy oil cuts into market fuels." And this improves business profitability. He explained that these types of projects don't have geographic restrictions and can happen in the U.S. and the United Kingdom.
Throughout the presentation, both Charrier and Gragnani discussed specific projects that Technip is involved in. Charrie said that in Malaysia, the company is currently executing the front-end design of a huge complex, owned by Petronas. It is known as the "RAPID project." Charrier said that this project is an example of a "first-class complex," and a refinery like this "will require over 45 different process units," which requires a lot of energy to operate. The project will require a total investment of $20 billion and is scheduled for completion December 2016.
She also said that in Canada and Venezuela, the company has built two upgraders "transforming the crude that is stored at ambient temperature into extra light crude." Charrier also talked about how Technip built the first refinery in Vietnam. "All these projects involve very sophisticated technology." Additionally, in Saudi Arabia, Technip is currently constructing a 400,000-barrel-per-day export refinery in Al-Jubail. According to Charrier, it is getting closer and closer to starting up. Industrial Info has been tracking this particular project since 2007, and it has an approximate investment value of $360 million. According to the Industrial Info database, it should be completed by the second quarter of 2013.
Gragnani closed the presentation before he and Charrier took questions by saying that, "We hope at this point, it is evident for you that in the positive market outlook that we see in refining, Technip is uniquely positioned to capture significant opportunities, thanks to its impressive track record, and its cutting edge technologies, enhanced by the recent acquisition of Stone & Webster Process Technologies." Toward the end of this month, Technip will share its third quarter financial results. For more information, see August 2, 2012, article - Shaw Group to Sell Energy, Chemicals Business to Technip S.A..
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, 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.
