Accelerated recovery and transformation of global refining industry

Under the influence of such factors as the improvement of the world economic situation and the wave of green and low-carbon energy transformation,the world oil refining industry has also presented a series of new changes and new features.It is expected that the demand for gasoline and diesel will continue to recover strongly in the medium and short term,the crude oil processing volume will generally increase,and some delayed refining and petrochemical projects will resume in succession.At the same time,the investment of international oil companies has recovered,green and low-carbon development has accelerated,and scientific and technological innovation is still the first productive force leading the transformation and development of the refining industry.

Feature 1:The oil consumption recovers,and the demand for gasoline and diesel fuel recovers strongly

With the improvement of the global epidemic prevention and control situation,the impact of the epidemic on oil consumption is weakening and oil consumption is warming up.According to IEA statistics,the annual oil consumption in 2021 will be 96.6 million barrels per day,an increase of nearly 6%over the previous year,higher than expected.Oil consumption is expected to continue to grow in 2022.

In terms of varieties,gasoline is the oil with stronger demand growth.With the gradual recovery of people's demand for short-distance travel,the demand for gasoline is strongly supported.According to IEA statistics,by the end of 2021,gasoline demand in the United States,China,India and other countries had recovered or even exceeded the pre-epidemic level.In 2021,the demand for gasoline will resume to increase by 10.1%.Driven by the economic stimulus policies of various countries,the demand for diesel is also good,and the supply of diesel in many regions is even tense.The global demand for diesel is rising,and the inventory has dropped sharply,and the demand for diesel has increased by 5.6%.Aviation coal is a kind of oil that is more affected by the epidemic,and is also a kind of oil that has lagged behind the recovery.Due to the reduction of home office and air travel,although the consumption in 2021 increased by 24.6%compared with 2020,it is still far lower than the level in 2019 before the epidemic.According to statistics,the number of global flights in 2021 only recovered to 73%of the same period in 2019.The demand for aviation coal will not fully recover until 2023.

Feature 2:The international oil price has risen sharply,and the refinery processing capacity has generally increased

With the limited production of oil-producing countries,the implementation of the economic stimulus plan in the United States,and the substantial increase in the vaccination rate,the international oil price showed a fluctuating trend.After entering 2022,the international crude oil price continued to fluctuate slightly at a high level above US$100/barrel.It is expected that the approximate rate of oil price will continue to rise in 2022,and the fluctuation range and frequency will increase.Goldman Sachs predicts that the price of Brent crude oil in the second half of 2022 will be as high as$125/barrel.

Global refineries generally increased crude oil processing to meet the synchronous growth of demand in Asia,Europe and the United States.In 2021,the crude oil processing volume of the refinery will reach 3.867 billion tons,up 4.8%from the previous year.The crude oil processing volume of OECD countries,led by Europe and the United States,will reach 172 million tons,up 4%.China's crude oil processing volume exceeded 700 million tons,an increase of 4.3%over the previous year,an increase of 7.4%over 2019,and an average increase of 3.6%in two years.It is expected that the crude oil processing volume will continue to increase in 2022,but the recovery of crude oil processing volume in different regions will have obvious differences.North America and Asia-Pacific will exceed the pre-epidemic level in 2022,Latin America and Europe will continue to be depressed,while Africa and the Middle East will continue to recover,but there is still a gap from the pre-epidemic.

Feature 3 Refining and chemical projects resume construction and the Asia-Pacific region still dominates

With the recovery of the oil market,the number of new refining and chemical project plans and restart projects increased.The Asia-Pacific region is still the main region for new project construction,accounting for about 46%of the global new project construction,followed by the United States,accounting for about 12%,and Eastern Europe,Russia and the Commonwealth of Independent States(CIS),accounting for about 12%.

The new projects in Asia,such as China,India and Brunei,are mainly focused on refining and chemical integration projects,focusing on improving the output of petrochemical products;New projects in Russia focus on expanding LNG production and export;New projects in the Middle East focus on expanding the capacity of the value chain of clean fuels and petrochemical products;New projects in the United States focus on the infrastructure construction of natural gas export and the improvement of renewable fuel production capacity.

The annual better oil refining and petrochemical projects selected by the US journal Hydrocarbon Processing are BAPCO SITRA expansion and transformation project in Bahrain(oil refining capacity expanded from 13.35 million tons/year to 19 million tons/year)and the 1.8 million tons/year billion tons/year cracking ethylene project of the US Gulf Growth Enterprise Company.China's Zhejiang Petrochemical Refining and Chemical Integration Project and PetroChina Guangdong Refining and Chemical Integration Project have entered the nomination for better projects.Zhejiang Petrochemical 40 million t/a Refining and Chemical Integration Project(Phase I+Phase II)is currently the largest single industrial project in the world.In January 2022,its Zhejiang Petrochemical Phase II refining,aromatics,ethylene and downstream chemical devices were fully commissioned.PetroChina Guangdong Refining and Chemical Integration Project,including 20 million tons/year oil refining,1.2 million tons/year ethylene and 2.6 million tons/year aromatics,is planned to be put into operation in the middle of 2022.

Feature 4 Technical innovation continues to support the development of oil refining industry

As a technology-intensive industry,technological innovation plays an important role in supporting and leading the transformation and development of the refining industry.In recent years,remarkable progress has been made in the research and development of refining catalysts and the transformation from refining to chemical industry.ART's ICR450 catalyst was rated as the better refining catalyst in 2021 by the American journal Hydrocarbon Processing.By developing a new type of shape-selective molecular sieve,the catalyst can isomerize more complex raw materials at lower temperatures,with high selectivity,high activity and fewer by-products,and can effectively improve the yield and quality of base oil.The SRDC technology of Lummus Company(Single Regenerator Dual Catalyst)was rated as the best refining technology of the year by the American journal Hydrocarbon Processing.This technology can convert FCC gasoline,coking naphtha and C4 LPG into propylene,ethylene and aromatic naphtha with high yield.This technology has the characteristics of"build and use".It is mainly used to transform existing or newly built catalytic cracking units,increase light olefins and aromatics efficiently and to a greater extent,and reduce gasoline production to a greater extent.It has excellent economic benefits and application prospects.

The American"Hydrocarbon Processing"magazine selected two better petrochemical technologies of the year,namely AlphaButol?Technology and Olefin Catalytic Cracking process independently developed by Sinopec,which is also the first time that China has won the Better Petrochemical Technology Award of Hydrocarbon Processing.High-yield olefin catalytic cracking technology is a new process for the production of high-value chemicals such as ethylene and propylene,which can efficiently transform low-value olefins produced by the production process of petroleum refining and coal chemical industry,thus significantly increasing the output of high-value chemicals such as ethylene and propylene,and significantly reducing energy consumption and carbon emissions.At present,it has been industrialized in four enterprises.

Feature 5 Low carbon transformation accelerates oil companies to find new ways

International oil companies have accelerated the green and low-carbon transformation and are looking for new ways of development.From the perspective of investment plans of major oil companies,the overall trend is from traditional oil and gas to low carbon fields,and the expenditure on low carbon fields has increased significantly.In the past,large American oil companies,which invested less in low-carbon fields and were relatively cautious in transformation,also announced to increase low-carbon investment.

ExxonMobil announced that it planned to invest US$15 billion in the low-carbon field by 2027 to expand the low-carbon solution business,and promised in January 2022 to reduce the net carbon emissions of its global business to zero by 2050.Large European oil companies have shown a growth trend in low-carbon investment.BP plans to increase its investment in clean energy to US$3 billion-US$4 billion in 2025,Total Energy plans to invest US$60 billion in renewable energy in the next 10 years,and Shell plans to spend 25%of its total investment in clean energy by 2025.PetroChina has set up new energy and new materials research institutes in Dubai,Shenzhen and Shanghai respectively to promote the development of energy,new materials and chemical innovative technology and energy transformation.

In addition,a considerable number of refineries are undergoing transformation and upgrading,and some refineries are transforming to produce biofuels.For example,Shell clearly stated in its"enabling strategy"that by 2030,the output of low-carbon fuel will increase by 8 times compared with 2020,and the proportion of low-carbon fuel sales in its total traffic fuel sales will increase from 3%to more than 10%,and the existing refineries will be integrated into six energy distribution centers.

With the further decline of the impact of the epidemic on the global economy and oil demand,the global economy will maintain moderate growth and the oil demand is expected to return to or even exceed the pre-epidemic level,despite the increasing uncertainty of energy demand caused by geopolitics.The world oil refining industry will continue to develop and innovate around the themes of energy transformation,technological innovation,carbon neutrality,and low-carbon development,and enter a new era of diversification.