Singapore refineries face new India, China competition

Asian powerhouses, Thailand, Indonesia expand capacity despite downturn
Ronnie Lim, Business Times 22 Jun 10;

CHINA and India added significant oil refining capacity last year, as did Thailand, which poses new competition to Singapore's oil refineries.

The latest BP 2010 Statistical Review of World Energy said that the refining capacity increases of 820,000 barrels per day (or 10.5 per cent) in China and 580,000 bpd (19.5 per cent) in India followed increased energy demand in the two Asian powerhouses last year despite the global recession.

The economic downturn hit mainly the OECD, where energy consumption fell faster than GDP, it added.

BP said that the capacity additions in China and India, the latter arising from Reliance Industries' new Jamnagar expansion, resulted in the Asia-Pacific accounting for over 80 per cent of global refining growth in 2009. Reliance's 1.2 billion bpd Jamnagar complex is now the world's biggest.

Thailand also added 5.5 per cent capacity last year, taking its total refining capacity to 1.24 million bpd, or close to that of the combined total of the Singapore refineries of ExxonMobil, Shell and Singapore Refining Company which stayed at 1.385 million bpd. Neighbouring Indonesia also upped its capacity by 3.6 per cent to 1.1 million bpd.

Regionwide, the Middle East and Africa each added about 3 per cent of refining capacity, while capacity in the West - such as in the UK which shed 6.3 per cent - fell last year.

On inter-area oil movements, the BP report showed that Singapore's oil hub, comprising refineries and oil traders here, saw the biggest trade (ex-Singapore) with Australasia (227,000 bpd), China (138,000 bpd), India (52,000 bpd) and Africa (51,000 bpd), with Europe (39,000 bpd) a distant fifth.

In total, Singapore imported 930,000 bpd of crude and 1.67 million bpd of oil products last year, and exported 47,000 bpd of crude and 1.5 million bpd of products.

The BP report showed that in line with strong Asian demand last year - which saw oil consumption grow by 6.7 per cent in China and by 3.7 per cent in India - Singapore's oil consumption (including for aviation, marine bunkers and refineries) grew by 3.5 per cent in 2009 to just over one million bpd.

The strong oil demand in Asia, as well as in the Middle East last year, contrasted with that in Europe (which fell 4.2 per cent) and the US (down 4.7 per cent).

As for natural gas, the BP report showed that the Republic's consumption of piped gas from Indonesia and Malaysia grew 5.6 per cent last year to 9.7 billion cubic metres. Natural gas, which accounts for over 80 per cent of the Singapore power companies' total feedstock, is their main fuel of choice.

Indonesian natural gas consumption also grew by 10.3 per cent to 36.6 billion cu m in 2009, outstripping the growth rate of 3.5 per cent in its gas production to 71.9 billion cu m last year.

Growing domestic gas demand, plus supply shortages, recently prompted calls by Indonesian officials for the country to renegotiate a reduction in the volume of contracted gas exports to Singapore.