Global Refining & Petrochemicals Congress 2019

The Global Refining & Petrochemicals Congress (GRPC) is a leading international forum for policy makers, asset owners, licensors, contractors, technology majors, research organisations & equipment suppliers to explore next generation downstream opportunities whilst collaborating on emerging & future risks across industry markets. The conference builds upon the existing knowledge of experts & industry stakeholders defining critical areas of collaboration including: smart manufacturing, renewable fuels, sustainability, commercial opportunities, regulatory compliances, operational excellence, process technology innovations, catalyst developments & complex integrations whilst highlighting the global & regional market trends. The concurrent exhibition showcases international technology & equipment suppliers displaying the latest in equipment, technology, services & solutions for the downstream industry. It also serves as a niche-networking forum, providing an opportunity to meet and interact with the leading experts, technology partners, researchers, colleagues and friends from academia. Attracting a diverse and eclectic mix of speakers, delegates, exhibitors and attendees, GRPC facilitates the exchange of ideas and discussions on pertinent energy-related issues, while simultaneously meeting the strategic objectives of the industry, making it the most important event for those involved in the refining and processing of hydrocarbons. Showcasing, 50+ Speakers & 400+ Attendees from over 200 global organizations and Themed “Downstream 4.0 – Smart Manufacturing, Transformation & Sustainability”, GRPC 2019 is dedicated to facilitating the global downstream industry’s transition to an agile, lean & sustainable future.India, the world’s third largest oil consumer, consumed 206.2 Million Tonnes (over 4 million bpd) in the 2017-18 Fiscal. It’s demand growth recovered strongly in 2018, overcoming the aftermath of the implementation of Goods and Services Tax (GST) and demonetisation contributing 14 per cent of the global demand growth or 2,45,000 barrels per day. During April-December 2018, consumption of petroleum products was 157.4 million tonnes, up 2.5 per cent over year-ago period. In August 2018, OPEC projected India's oil demand to rise to 5.8 million barrels per day (bpd) by 2040, accounting for about 40 per cent of the overall increase in global demand during the period. As the fastest growing economy in the world, India is poised to become the second largest demand growth centre globally in 2019 itself, just behind the US but ahead of China. Transport fuels – gasoline and diesel – and residential LPG will continue to be the two main drivers of oil demand growth. Whilst, diesel, the most consumed fuel in the country, is projected to grow by 6.4 per cent or 1,12,000 bpd year-on-year in 2019 compared with 93,000 bpd in 2018, LPG demand growth will also remain robust in 2019 at 5 per cent (40,000 bpd) - driven by the Ujjwala scheme to promote clean cooking fuel in rural areas, a largely untapped market, with around 50 million households still remaining deprived of LPG. On the refing side, India is the next largest contributor of Asia’s crude oil refining capacity, after China. In 2018, India’s total refining capacity was 5.01 million barrels per day (Mmbd), which is 15% of Asia's total refining capacity. That capacity is set to grow at an average annual growth rate (AAGR) of 5.3% to 6.525 Mmbd in 2023; meeting the burgeoning demand for petroleum products that is in turn driven by the booming automobile and aviation sectors, fast urbanization and growing use of liquefied petroleum gas (LPG) for cooking. The country’s total crude distillation unit capacity, coking capacity, catalytic cracker capacity and the hydrocracking capacity are also expected to increase, during the same outlook period of 2018–2023. India’s total crude distillation unit capacity would increase from the current 5,010 mbd to 6,525 mbd in 2023. The total coking capacity is expected to slightly increase from 1,035 mbd to 1,147 mbd while the total catalytic cracker unit capacity is expected to increase from 991 mbd to 1,210 mbd by 2023. The hydrocracking unit capacity of the country is set to increase from 607 mbd to 1,064 mbd during the above period. In 2023, three of India’s 23 refineries will account for more than one-quarter of India’s 6.525 MMbpd refining capacity. They include the Jamnagar II (704,000 bpd), Jamnagar I (660,000 bpd) and Vadinar (405,000 bpd) facilities. During this period, the 180,000-bpd Barmer refinery is expected to start operations in 2022 & the announced 400,000-bpd Jamnagar III refinery is set to start operations in 2023. Securing a market for crude volumes is also a critical strategic goal for global NOC exporters to avert the risk of resource stranding. Securing access to the most competitive refining capacity increase an NOCs’ abilities to place crude in an increasingly difficult market. Resource-rich NOC crude exporters, even those at the low end of the cost curve, are therefore weighing up the options as intently as any IOC. In some cases it’s not just the company’s future in their hands but the national economy too. Whilst the typical model has been domestically focused - building refineries to meet product demand in the home market to monetize upstream resources in their own facilities, NOC’s have also invested in overseas refineries or taken minority shareholdings in refining companies. Eyes have naturally turned toward the East. Asia has been the axis of global oil demand growth, with Asia-Pacific countries – minus Japan contributing 70% of the non-OECD’s 14 million b/d of demand growth over that time. Add another 8 million b/d by 2035, and asia is comfortably ahead of any other region. It’s where all roads lead in the quest to build exposure to downstream over the next 20 years and beyond. The ideal investment location requires three main characteristics: a big oil market, strong demand growth and a deficit in refined products. India ticked all the boxes. Oil consumption is 5 million b/d – less than half China’s 12 million b/d but big enough. Refining capacity exceeds domestic needs at present. But that will quickly change – much more capacity will be needed in the coming years. Annual demand growth is set for sustained growth, accelerating beyond China’s growth rate by the mid-2020s. No other country on the planet can match that volume growth over this period. This formed the backdrop for Russia’s Rosneft Oil Co. PJSC’s entry into the market in 2016, acquiring 49% stake in Essar & access to a 400kbd refinery. Saudi Armaco and Adnoc also envisage a 50% stake in a proposed 1.2 million b/d refinery which will be the biggest in Asia. As the nation adds capacities to fulfill fuel consumption needs that are expected to outstrip all other nations in the decades ahead; Iran will invest about 15 billion rupees to expand a refinery run by Chennai Petroleum Corp. The state-run company is boosting capacity at its Nagapattinam facility by nine-fold to process 9 million tons per year. While Naftiran’s investment will ease the Chennai Petroleum’s fund raising task, it will ensure Iran maintains its grip in India, where surging fuel demand has turned it into a prized market for global oil producers. For India, Tehran has been a reliable and cheap source of crude extending favorable credit terms, a key driver for New Delhi to convince Washington to grant some exemption from sanctions that restrict trade with the Persian Gulf nation. These investments will arm these companies, which are already low on the supply cost curve, with highly competitive refining assets capable of weathering changing product consumption as India’s economy grows and the energy transition starts to take effect. Further these companies, in turn, are the natural partners for Indian NOCs that need to invest in new refining capacity and access crude. Whilst there is a risk of India diversifying away from oil in the energy mix, for the time being, this seems unlikely. Oil is the only practical solution for India to meet its transportation needs as it develops infrastructure and a burgeoning middle-class embraces more motorcycles and cars.