PTQ Q1 2025 Issue

Vol 30 No 1 Q1 (Jan, Feb, Mar) 2025 ptq PETROLEUM TECHNOLOGY QUARTERLY

Downstream growth beyond 2025

A nticipated pro-oil industry support from the new US Administration ensures fossil fuel-based transportation fuels and petrochemical feedstocks will con- tinue benefiting the energy industry value chain. Market forces will restart capital projects put on hold at the onset of the COVID pandemic, including at least seven LNG grassroots and expansion projects along the US Gulf Coast. Earlier last summer, Argus projected that three steam cracker projects in North America are expected to come online over the next five years, increasing capacity by 3.6 million tonnes. However, operating rates in all regions are being negatively impacted by the combination of high-capacity increases and slower global economic growth. Regardless, the Middle East is experiencing a gas boom. Saudi Arabia plans to double its gas production capacity by 2030 and has awarded $25 billion in contracts to expand its natural gas production, aiming to increase gas sales by 60% to 2 bcf/day by 2030. Elsewhere, the completion of five refinery proj - ects in China through to 2028 is focused on the ability to pivot production from fuels to petrochemicals as market conditions warrant. Projects in Africa (such as the 650 kbpd Dangote refinery in Nigeria), India, and elsewhere will more than compensate for declining refining capacity in mature economies like Europe. Faced with a dwindling margin outlook, many refiners have simply opted to close their European refineries and refocus on other regions. The International Energy Agency (IEA) forecasts a closure risk of 1 to 1.5 million in Europe by 2030. However, the growing demand for sustainable aviation fuel (SAF) may extend a lifeline for some European and US facilities. A challenge that seems to be affecting every region is a reliable, clean water sup- ply. Besides competing with each other, the refining and petrochemical industry is competing for water resources with other industries such as steel, power, and data centres. While water scarcity has always been a challenge in the Middle East, refin - ers in Argentina, Brazil, China, the US, and elsewhere are also affected. For example, exploitation of Argentina’s vast Vaca Muerta shale play is limited due to the lack of fresh water and pipeline infrastructure in that arid basin. Due to high levels of pollution in China’s seven major river systems, refiners there only have as much water availability as Saudi Arabia. Severe drought in many parts of the US (South Texas, California) leverages planned downstream expansion projects. This has led to a strong emphasis on water and energy conservation, with a focus on thermal systems (preheaters) and mass transfer units (pumparounds, reboilers). A common thread across all regions is a focus on high-severity FCC units, hydro- crackers, and increased hydrogen demand. For example, rising hydrocarbon product demand in India will result in expanded FCC, hydrocracking, and hydrogen produc- tion to process a wide variety of imported crudes. The EIA estimates India’s liquid fuels consumption will increase from 5.3 million bpd in 2023 to 6.6 million bpd by 2028 while also evaluating pyrolysis oil (pyoil) upgrading to valuable hydrocarbons. However, mixed plastics pyoil upgrading first requires removal of chlorine, silicon, and other impurities. For example, upgraded hydrotreating systems are needed to remove total nitrogen, sulphur, oxygenates, and olefins saturation, but at reduced Capex/Opex, if possible. Incentives like the Waste Framework Directive and Global Plastics Treaty could accelerate these investments. Upgrading pyoil through steam cracking may be feasible, but further analysis of capabilities and financial modelling is required. Given that project announcements may reach a critical point in 2025, PTQ will be ready to share its global access to the best repositories of industry expertise.

Editor Rene Gonzalez editor@petroleumtechnology.com tel: +1 713 449 5817

Managing Editor Rachel Storry rachel.storry@emap.com Editorial Assistant Lisa Harrison lisa.harrison@emap.com

Graphics Peter Harper

Business Development Director Paul Mason sales@petroleumtechnology.com tel: +44 7841 699431

Managing Director Richard Watts richard.watts@emap.com

Circulation Fran Havard circulation@petroleumtechnology. com

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PTQ (Petroleum Technology Quarterly) (ISSN No: 1632-363X, USPS No: 014-781) is published quarterly plus annual Catalysis edition by EMAP and is distributed in the US by SP/Asendia, 17B South Middlesex Avenue, Monroe NJ 08831. Periodicals postage paid at New Brunswick, NJ. Postmaster: send address changes to PTQ (Petroleum Technology Quarterly), 17B South Middlesex Avenue, Monroe NJ 08831. Back numbers available from the Publisher at $30 per copy inc postage.

Rene Gonzalez

PTQ Q1 2025