At a minimum, US natural
gas liquids (NGL) plant production will add about 525,000
bpd to global oil supply, and the rest of the world will add
another 350,000 bpd between now and the end of 2015, according
to the recently-released Global Crude Oil Outlook from
consultancy ESAI Energy.
The primary implication of growing NGLs is that they further
limit the call on OPEC crude, the group says. At the same
time, the growth in NGL plant output means end-use consumption
depends less on receiving supply from refinery operations.
The production of ethane, LPG and plant condensates (pentanes
plus) from gas
processing can replace the demand for LPG or naphtha from
refineries. For example, new ethylene cracker capacity around
the world may either be geared to run ethane or have the
flexibility to switch between ethane, plant LPG and naphtha.
Likewise, pentanes plus can replace naphtha as a crude oil
diluent. And of course, plant LPGs may compete with refinery LPGs. The contribution of
processing to oil supply is somewhat akin to
the growth in alternative fuels, which have replaced
refinery-derived transport fuels.
As a result, global refinery throughput growth will
increasingly not track global oil demand growth,
making refining profitability even more