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What Does 2018 Hold for The Downstream?

In this episode of Drill Down, we give you an executive summary of recent Hydrocarbon Processing (HPI) webcast for the downstream industry forecast. We welcome back Joe Perino to the podcast as we discuss the HPI outlook for downstream investments over the next 20 years.

We highlight Hydrocarbon Processing (HPI) industry in three sectors:

• Refining


• Petrochemicals and


• Gas processing and the LNG industry

Topics and Time Stamps:

[00:25 ]  Three publications we recommend

[01:20 ]  Summary the HPI Downstream Outlook Webinar

[03:05 ]  Joe Perino discusses Refining & Petrochemical outlook

[07:45 ]  Marty Stetzer discusses LNG outlook

[12:00 ]  Final wrap up – Trends looking favorable

Relevant Links:

Drill Down Oil and Gas Podcast: Downstream, Refining and Trends

Big Data and Analytics in Refining

Related Episodes:

Sound Off – Changing US Refining Landscape

Oil 101 – Introduction to Downstream

About the Experts

Marty Stetzer

In parallel with his 25-year energy career, Marty has over 15 years experience in providing custom digital training programs to a variety of oil and gas technical audiences – like EKT Interactive Oil 101.

Marty has been a consultant to U.S. and international oil and gas

companies since 1986, including 13 years with PriceWaterhouseCoopers.

He has 18 years management experience with Schlumberger, Superior Oil-Mobil, Wilson Industries and Exxon.

Marty has worked with numerous national and international oil and gas company managements to help improve business performance across upstream, midstream and downstream operations.

Like many of the team, Marty is active in the Society of Petroleum Engineers and often presents at industry forums.

Joe Perino

Joe brings over 40 years of experience in upstream, midstream and downstream. He has worked in engineering, maintenance, sales, marketing and business development, and technical, IT and management consulting.

Joe started his career with Diamond Shamrock as a process engineer, then spend 20 years with process automation and supply chain technology suppliers Emerson, Honeywell and i2, before joining the consulting ranks with IBM, Logica North America, KBC Advanced Technologies, and Schlumberger Business Consulting.

Joe was involved early on with the Digital Oilfield concept and has consulted on production efficiency and effectiveness improvements for KOC, Pemex, Petrobras, Sonangol and Statoil, and was a member of the Shell Smart Fields and Chevron iFields teams while at Schlumberger.

Today he focuses on using technology to improve the business as Digital Oilfield (DO) has evolved into technology-enabled Operational Excellence and now sees IoT, Big Data and Analytics as the next step in the evolution in DO. He works with several firms as a content contributor, in business development and as a podcaster on EKT Interactive, Inc. Joe holds an B.S. in Chemical Engineering from the University of Notre Dame and an M.S. in Finance from the University of Houston. He has also completed executive education at Northwestern's Kellogg School of Management and Harvard Business School. He is active in the AIChE, ISA, COS, NOIA, OESI, SPE and Oil Council.

Links:

HPI Downstream Outlook Webinar

Hydrocarbon Processing

3 Publications Oil and Gas Industry Execs Count On

World Oil

Oil & Gas Journal

Fuel Fix Article 

Sponsors:

EKT Interactive Oil and Gas Podcast Network

Oil 101 A Free Online Introduction to the Oil and Gas Industry

Transcript:

Marty:

Hi everyone! Hope the 2018 is starting off well for you. Welcome to the drill down with Marty Stetzer. This podcast as part of our EKTi Oil and Gas Learning Network, and brought to you by oil 101. Our free introduction to oil and gas.

We often recommend that our community listeners follow three major publications to stay in touch with the industry opportunities and challenges. They are Hydrocarbon Processing or HPI, world oil, and the Oil and Gas Journal. Each publication has a different focus and each one is doing it annual outlook for 2018. As the first in a series today, we’re presenting a 13 minute executive summary of a recent one hour HPI webcast on the positive future outlook for downstream investments. Today I’m joined by Joe Perrin, a longtime friend and industry veteran. You’ve heard Joe’s sound off series on our Website we’re happy to have his help today as we present the global opportunities in the downstream over the next 20 years.

Marty: Joe welcome back.

Joe: Thanks, Marty, It’s really good to be here.

Marty:

Here’s a quick summary of where we’re headed. In December 2017 webcast, two HPI editors presented the State of the global downstream processing industry and the major trends moving into 2018 and beyond. They covered construction and investment in three sectors: refining, petrochemicals, and gas processing and the LNG industry.

HPI has a respected survey that now tracks almost two trillion dollars and seventeen hundred downstream projects through 2030. These numbers represent projects that are either announced or in some phase of the project planning, engineering, or construction cycle.

In summary, Asia Pacific dominates the global trend in total active projects led by projects in China and India. Then the Close’s contenders are the Middle East followed by the United States. In 2018, HPI sees downstream spending at approximately 361 billion dollars. About 46 percent in petrochemicals, 36 percent in refining, and the balance in gas processing and LNG. In the near term capital spending should increase over 2017 with major refining projects in Asia and the Middle East. There is also a massive petrochemical projects spending in Asia and the Middle East and the U.S.. as you’ll hear from Joe. Gas processing and LNG investments are planned for the U.S., Canada, Australia, and gutter.

Let me turn it over to Joe to cover the refining and petrochemical presentation made by Lee Nichols, an editor and associate publisher of HPI.

Joe!

Joe:

Thanks again, Marty! In refining. Some background is first needed.

Depending on the forecast. Below oil demand is expected to increase from 95 million barrels per day of 2015 to somewhere between 99 and 102 to 103 million barrels a day by 2021 or 2022. Within that same timeframe HPI is tracking about seven to eight million barrels a day of new refining capacity that should begin operation.

Now over the past year..well that is 2017, some 70 new refining projects were announced. The majority of these projects about 60 will be located in the Asia Pacific and Middle East regions. There is an increase also in the integration of refining with petrochemical operations, especially in grassroots projects. There are also numerous investments to increase energy efficiency, crude oil processing flexibility, sulfur reduction, and a number of other initiatives basically making refining a more complex. China is continuing to build their refining capacity. Some will be the largest in the world. We’re also seeing a big new trend in China and that is integration of refining and petrochemical operations. I should add also that the major refiners in China are squeezing out these small teapot refiners who have been disrupting the market with non-specs quality products.

Now for petrochemicals, HP I see strong growth in the petrochemical sector to the rest of the decade. In 2017, 50 percent of the announced downstream projects were petrochemi