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China, Middle East refining boom to offset plant closures in Europe

11.07.2013  |  HP News Services

OPEC says rising Chinese refining capacity over the next five years can compensate for European closures. Meanwhile, Middle East refiners will add at least four new projects.

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By KONSTANTIN ROZHNOV
Bloomberg

An increase in China’s oil-refining capacity over the next five years will compensate for plant closings in Europe, and refiners in the Middle East will add at least four projects in the same period, OPEC said in a forecast.
 
Refineries worldwide will boost capacity by about 8.6 million bpd from 2013 to 2018, with China accounting for 2.5 million bbl of the expected increase, the Organization of Petroleum Exporting Countries said Thursday in its World Oil Outlook report.

New plants in Jubail, Yanbu and Jazan in Saudi Arabia and the expansion of the Ruwais refinery in the United Arab Emirates will contribute capacity in the Middle East, according to OPEC.
 
The group, which supplies about 40% of the world’s oil, noted a trend “for global capacity additions to be in excess of expected demand increases as the process of capacity relocation between the world’s major regions continues.”

Oil refiners in Europe will shut 10% of their plants this decade as fuel demand falls to a 19-year low, a Bloomberg survey of six European refinery executives showed in April.
 
Gains in Saudi refining capacity will probably outpace increases in India, OPEC said.
 
“To run at or near their full potential, refineries in these regions must succeed in either exporting product and/or backing out imports,” according to the report. “In other words, they will be competing for products exports markets with US and European refineries.”



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