Transcript Refinery Planning & Economics

Refinery Planning & Economics
Topics
1- Oil Markets
2- Crude Oil Pricing
3- Refining
4- Refined Products Prices (Asia/AG)
5- LPG
6- Shipping
Oil Markets
• Crude Oil Markers (Benchmarks)
• World Refining Centers
• Oil Movement & Trade Paths
• Petroleum Trade Markets
• Petroleum Stocks
Crude Oil Markers
The Three Main Crude Oil Markers are:
• West Texas Intermediate - America
• Brent - Europe & Africa
• Dubai - Asia/Pacific
Crude Oil Prices
40
$/BBL
Dubai
36.1
35
Brent
WTI
30
25.9
25
20
15
10
5
0
77
79
81
83
85
87
89
91
93
95
97
99
01
03
Contango & Backwardation
27
Brent Crude Oil Prices
$/BBL
Dated Brent
Future (Month 2)
25
Current (Month 1)
23
WHEN FUTURE
PRICE IS HIGHER
21
19
WHEN FUTURE PRICE IS
LOWER THAN TODAY'S
17
15
Source: Platt's - 2001
1 Jan
9 Jan
17 Jan
25 Jan
2 Feb
10 Feb 18 Feb 26 Feb
6 Mar 14 Mar 22 Mar
WORLD REFINING CENTERS
NWE
US
MED
ASIA
OIL MOVEMENT & TRADE PATHS
BRENT
WTI
DUBAI
Arbitrage
• The Trade Between Geographical Areas to
Earn Profit
• The Arbitrage is Open When the Price in the
Loading Port Plus Freight is Less Than the
Price at the Discharge Port
Arbitrage
Demand
Naphtha Arbitrage
(Japan/MED)
$21/MT
$177/MT
$14/MT
$200/MT
$14 /MT
$30 /MT
MAR ‘97
“THE ARB IS OPEN”
$228/MT
Naphtha Arbitrage
(Japan/MED)
– $5/MT
$177/MT
$176/MT
$7/MT
$180/MT
$13 /MT
$29 /MT
SEP ‘97
“THE ARB IS CLOSE”
$200/MT
Saudi Aramco International
Crude Oil Storage
Petroleum Stocks Reports
American Petroleum Institute (API)
– Weekly Report Covering the US
Energy Information Agency (EIA/DOE)
– Weekly Report Covering the US - Official
International Energy Agency (IEA)
– Monthly Report Covering OECD
API Report
API STATISTICS
API NATIONAL PETROLEUM REPORT - SUMMARY
(STOCKS THOUSAND BARRELS)
08/06/99
07/30/99
CRUDE OIL STOCKS
323073
326234R
DISTILLATE STOCKS
139050
139697R
GASOLINE STOCKS
206627
210103
JET NAPHTHA STOCKS
126
43
JET KERO STOCKS
45468
45303
CRUDE RUNS
15366
15371
PCT OF CAPACITY
95.0
99.1
08/07/98
344736R
144358R
215351
49
40987
15247
97.8
API NATIONAL PETROLEUM REPORT - SUMMARY
(OUTPUT/IMPORTS THOUSAND B/D)
08/06/99
07/30/99
CRUDE PRODUCTION
5950
5950
GASOLINE OUTPUT
8236
8157
REFORM MOGAS OUTPUT
2548
2535
OXYG MOGAS OUTPUT
567
528
OTHER MOGAS OUTPUT
5121
5094
JET KERO OUTPUT
1590
1589
CHANGE ON
08/07/98
6285R
7892
2576
421
4895
1479
August 6, 1999
CHANGE ON
WEEK
YEAR
-3161
-21663
-647
-5308
-3476
-8724
+83
+77
+165
+4481
-5
+119
-4.1
-2.8
WEEK
+0
+79
+13
+39
+27
+1
YEAR
-335
+344
-28
+146
+226
+111
Stocks’ Impact On Prices
400,000
$/BBL
1,000 BBL
18
16
US Total Crude Stocks (API)
WTI Cushing Mth1
26-Oct
19-Oct
12-Oct
5-Oct
28-Sep
21-Sep
14-Sep
7-Sep
31-Aug
24-Aug
200,000
2
0
17-Aug
250,000
6
4
10-Aug
300,000
10
8
3-Aug
14
12
27-Jul
350,000
Topics
1- Oil Markets
2- Crude Oil Market
3- Refining
4- Refined Products Prices (Asia/AG)
5- LPG
6- Shipping
Crude Oil Market
• Evolution of Crude Oil Pricing
• Crude Oil Value
• Petroleum Oil Price Reporting
• Crude Oil Contracts
• Crude Oil Supply & Demand
Evolution of Crude
Pricing
• Posted Price:
– Set by Governments of Producing Countries
– Price Changes Infrequently & Varies by Producer
• Netback Price:
– Based on Product Prices Less Refining Fee
– Guaranteed Refiners a Positive Margin
• Market-Related Price:
– Related to Published Quotation of a Marker Crude
– Differentials Applied are Standard
– Refining Margins are not Protected
Crude Oil Value
Crude Oil Value is Related to the Value
of the Refined Products
• API
• Sulfur Content
Other Factors
• Refinery Type (Configuration)
• Paraffinic/Naphthenic
Oil Price Reporting
• Who Report Oil Prices?
– Platt’s
– Petroleum Argus
– London Oil Reports (ICIS-LOR)
Oil Price Reporting
• How are Oil Prices Published?
– Published Quotations Represent Fixed-Price
Spot Transactions, Confirmed Bids & Offers
and Market Talk.
– Price Reporting Agencies have Different
Bases for Trade Reporting, Freight
Assessment and Freight Calculation
Platt’s Crude Oil
Marketwire Report
PLATT'S CRUDE OIL MARKETWIRE VOL. 21 NO. 167 AUG 26, 1999
New York (Platt's)--26AUG99
BRENT(SEP)+20.69-20.73+
BRENT(OCT)+20.65-20.67+
BRENT(NOV)+20.43-20.47+
BRENT(DTD)+20.34-20.38+
FORTIES
+20.38-20.44+
EKOFISK
+20.24-20.33+
STATFJORD +20.23-20.29+
OSEBERG
+20.37-20.45+
FLOTTA
+19.69-19.78+
BONNY LT +20.52-20.59+
QUA IBO
+20.54-20.62+
DUBAI(OCT)19.94-19.99
DUBAI(NOV)19.72-19.80
DUBAI(DEC)19.50-19.60
OMAN (OCT)19.97-20.08
OCT "MPM" 0.27-0.30
URAL(MED) 19.71-19.80
URAL(RDAM)19.76-19.82
ILT(SIDI) 19.12-19.18
IHVY(SIDI)18.66-18.72
SUEZBLEND 18.42-18.50
ESSIDER
20.18-20.24
WTI(OCT)21.09-21.11
WTI(NOV)21.14-21.20
P-PLUSWTI2.71-2.73
WTI(MID)20.89-20.94
WTS
20.02-20.08
EUGENEI 20.32-20.38
BONITO 20.49-20.56
MARS
19.42-19.48
POSEIDON19.42-19.48
LLS
21.26-21.32
HLS
21.07-21.13
Platt’s Crude Oil
Marketwire Report
CRUDE QUALITY AT RUSSIAN BLACK SEA PORT OF
NOVOROSSIISK HAS FALLEN IN RECENT WEEKS AS A RESULT
OF INTERRUPTED FLOW OF AZERI LIGHT CRUDE THROUGH
BAKU-NOVOROSSIISK PIPELINE, TRADING SOURCES SAID
THURS. TRANSNEFT-OPERATED PIPELINE, LINKING AZERI OIL
FIELDS INTO URALS SYSTEM THROUGH DAGESTAN AND
SEPARATIST REPUBLIC OF CHECHNYA, HAS SUFFERED
REPEATED STOPPAGES THIS YEAR FROM SABOTAGE IN
CHECHNYAN SECTION. ALSO, RUSSIAN FORCES ARE BOMBING
INSIDE CHECHNYA IN PURSUIT OF MUSLIM REBELS IN AREA.
A HEAVIER MIX OF SOUR CRUDES ENTERING URALS PIPELINE
SYSTEM IN RUSSIA MEANT A SHIPMENT LOADED ON AUG 23
HAD AN API OF 30.48, COMPARED WITH EXPECTATIONS OF
AROUND 32.4, TRADERS SAID.
Contracts
• Contract Types:
– Term
– Spot
• Sales Types:
–
–
–
–
FOB
CIF
C&F
Others
Free On Board
Cargo, Insurance & Freight
Cargo & Freight
Lightering, ex-ship, ex-storage, …
Saudi Arabia
Production: 8.3 MBD
Consumption: 1.8 MBD
Export:
6.5 MBD
Far East:
Europe:
US
Others
2000 Data
48%
25%
22%
5%
Saudi Arabia's
5-Year Crude Production Plan
8.60
Million BBL/Day
8.40
8.20
8.30
8.20
8.10
8.00
8.02
8.00
8.00
7.90
7.80
7.60
7.40
7.20
7.00
2001
2002
2003
2004
2005
2006
2007
Saudi Arabia's
5-Year Crude Production Plan
(by Grade)
9
Million BBL/Day
8
7
5
4
Actual
6
ASL
AXL
3
AL
2
AM
1
AH
0
2001
2002
2003
2004
2005
2006
2007
Top 10 Oil Production 2002
9
Million BBL/Day
8
7
0
Source: BP
* Production
UK
Canada
Venezuela
Norway
1
Iran
2
China
Mexico
3
TOTAL WORLD: 73.94 Million BBL/Day
USA
4
Russia federation
5
Saudi Arabia
6
Oil Production -2002
FSU
11%
Asia Pacific
11%
Africa
10%
Europe
10%
Other
Americas
9%
North America
19%
Middle East
30%
Total World Oil Production: 73.94 Million BBL/Day
Oil Production -2002
Non-OPEC
42%
OECD
25%
OPEC
33%
Total World Oil Production: 73.94 Million BBL/Day
Top 10 Oil Consumption 2002
25
Million BBL/Day
20
0
Source: BP Amoco Statistical Review - 1999.
Italy
France
Canada
India
Russia
Japan
Germany
5
China
10
USA
15
South Korea
Total World: 75.8 Million BBL/Day
Oil Consumption - 2002
Europe
22%
Asia Pacific
27%
Other Americas
6%
Middle East
6%
North America
31%
FSU
5%
Africa
3%
Total World Oil Consumption: 75.8 Million BBL/Day
World Total Oil Consumption
25
USA
20
Million BBL/Day
Total World: 75.8 Million BBL/Day
15
0
Source: BP Amoco Statistical Review - 1999.
Saudi Arabia
Spain
Ukrania
Mexico
Canada
Brazil
Italy
France
Canada
India
S Korea
Russia
Germany
Japan
5
China
10
Global Supply/Demand
Balance
2.0
Million BBL/Day
1.5
1.0
SURPLUS
0.5
0.0
1992 1993 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
-0.5
-1.0
-1.5
-2.0
DEFICIT
50
0
113
Russia
98
Azerbaijan
Brazil
Iran
Kuwait
264
Kazakhstan
Algeria
Norway
Nigeria
China
Mexico
USA
Libya
Iraq
UAE
100
Venezuela
Saudi Arabia
Proven Oil Reserve by
country 2002
300
Billion Barrel
250
200
World Total: 1,034
150
Proven Oil Reserve by
region
Reserve/Production Ratio 2002
100
Years
90
87
80
70
60
50
40
41
30
20
10
0
North
Other
Europe
America Americas
Africa
FSU
Asia
Pacific
Middle
East
World
Average
Organization of the Petroleum
Exporting Countries (OPEC)
• Founded in Baghdad
in 1960
• Objective:
To Coordinate and
Unify Policies Among
the
Members
in
Order to Secure Fair
and Stable Prices for
Petroleum Producers
OPEC COUNTRIES:
IRAN, IRAQ, KUWAIT,
SAUDI
ARABIA, VENEZUELA,
QATAR,
INDONESIA, LIBYA, UAE,
ALGERIA, & NIGERIA
OPEC PRODUCTION LEVEL
30
29
40
Million BBL
$/BBL
35
28
30
27
26
25
25
20
24
15
23
10
22
21
5
20
0
Apr 01 Jun 01 Aug 01 Oct 01 Dec 01 Feb 02 Apr 02 Jun 02 Aug 02 Oct 02 Dec 02 Feb 03
TOPICS
1- Oil Markets
2- Crude Oil Pricing
3- Refining
4- Refined Products Prices (Asia/AG)
5- LPG
6- Shipping
REFINING
• Refined Products Supply/Demand
• World Refining Capacity
• Refined Products Applications
• Refined Products Specifications
• Regional Quality Variations
Refined Products supply/demand figures are based on Purvin & Gertz report (March 2001 update)
World refining capacity date are based on BPAmoco Statistical Review - 1999
World Supply & Demand
Refined Products
2015
Naphtha
2009
2007
Gasoline
2005
Jet/Kero
2003
2001
Gasoil
1999
1997
Deficit
(1,500) (1,000)
(500)
Surplus
1995
0
500
1,000
1,500
2,000
2,500
Fuel Oil
Thousand BBL/Day
World Supply & Demand
Refined Products by
Region
2015
Middle
East
2009
FSU
2007
Asia
2005
Europe
2003
Latin
America
2001
Africa
1999
Canada
1997
Net
Importer
(6,000)
(4,000)
Net
Exporter
1995
(2,000)
0
2,000
4,000
6,000
United
States
Thousand BBL/Day
World Refining Capacity
90
80
Million BBL/Day
82.0
74.86
70
60
50
40
30
20
10
0
1991
1992
North America
1993
1994
Other Americas
1995
Europe
1996
1997
1998
Former Soviet Union
1999
Middle East
2000
2001
Africa
2002
Asia Pacific
Refined Products
Applications
• Propane: Petrochemical Industry/Home
• Butane: Petrochemical/Home/Gasoline
• Naphtha:
Petrochemical/Gasoline
• Jet:
Jet Fuel/Domestic Appliances
• Gasoil:
Automotive Fuel/Heating Oil
• Fuel Oil: Bunker/Power/Industrial Boilers
Products Specifications
• Naphtha
– Naphthenic / Paraffinic
• Gasoline
– Octane Number (RON/MON)
– Sulfur Content / Olefins Content
• Gasoil
– Sulfur Content
– Cetane Number
• Fuel Oil
– Sulfur Content
– Viscosity
– Straight-Run vs. Cracked
Regional Quality
Variations
• End Use Requirement
• Climate Conditions
• Refinery Technology
• Environmental Issues
Regional Quality
Variations
• Gasoline
–
–
–
–
Lead-Free
MTBE Concern
Benzene Content
Volatility
• Diesel
– 0.05% Sulfur
• Fuel Oil
– 1.0% Sulfur
NORTH AMERICA
Regional Quality
Variations
• Gasoline
– Lead-Free
– Benzene Content
– Following the US
• Diesel
– 0.05% Sulfur
• Fuel Oil
– 1.0% Sulfur
WESTERN EUROPE
Regional Quality
Variations
• Gasoline
– Leaded/Unleaded
– MTBE
• Diesel
– 1.0 - 0.25% Sulfur
• Fuel Oil
– 4.0% Sulfur
ASIA/PACIFIC
TOPICS
1- Oil Markets
2- Crude Oil Pricing
3- Refining
4- Refined Products Prices (Asia/AG)
5- LPG
6- Shipping
REFINED PRODUCTS
(ASIA/Arab Gulf)
• Regional Products Balance
• Products Seasonality
• Spreads
• Refined Products Sales
• Refining Margins
Regional Products
Balance - 2002
1.2
Million BBL/Day
1.0
0.8
DEFICIT
0.6
0.4
0.2
0.0
Other
Diesel
Vietnam
Kerojet
Thailand
Mogas
Taiwan
Naphtha
S. Korea
LPG
Singapore
SURPLUS
Philippines
Pakistan
Malaysia
Japan
Indonesia
India
-0.6
China
-0.4
Australia
-0.2
Fuel Oil
Regional Products
Balance - 2005
1.6
Million BBL/Day
1.4
1.2
1.0
DEFICIT
0.8
0.6
0.4
0.2
0.0
Other
Diesel
Vietnam
Kerojet
Thailand
Mogas
Taiwan
Naphtha
S. Korea
LPG
Singapore
SURPLUS
Philippines
Pakistan
Malaysia
Japan
Indonesia
-0.8
India
-0.6
China
-0.4
Australia
-0.2
Fuel Oil
Refined Products Sales
• Naphtha
– Naphtha C&F Japan - Freight (Japan/AG) + Premium
• Jet
– Arab Gulf Jet Quotation + Premium
– Singapore Jet Quotation - Discount
• Gasoil
– Singapore Gasoil 0.5%S Quotation - Discount
– Arab Gulf Gasoil 0.5%S Quotation + Premium
– Quality Adjustment is Incorporated as Premium/Discount
Refined Products Sales
• Straight-Run Fuel Oil
– Singapore HSFO 180 Quotation - Freight (Singapore/AG)
+ %Premium (Gasoil - Fuel Oil)
• Cracked Fuel Oil
– Singapore HSFO 380 Quotation - Discount
– Quality Adjustment is Incorporated in Discount
Saudi Arabia Products
Supply & Demand - 2004
1200
Thousand BBL/Day
Exports
Demand
1000
800
600
400
200
0
LPG
Naphtha
Gasoline
Kero/jet
Diesel
Fuel Oil
Saudi Arabia Products
Demand 1970-2010
600
Forecast
500
400
300
200
100
1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2007
LPG
Naphtha
Gasoline
Kero/jet
Gasoil
Fuel Oil
TOPICS
1- Oil Markets
2- Crude Oil Pricing
3- Refining
4- Refined Products Prices (Asia/AG)
5- LPG
6- Shipping
World LPG Demand
250
240
Million MT
200
Oceania
Africa
150
Middle East
110
FSU / E Europe
100
Latin America
West Europe
50
Asia
North America
0
1985
1990
1995
1998
2000
2005
World LPG Demand
70
Million MT
60
1985
2005
50
40
30
20
10
0
North
America
Asia
West
Latin FSU / E Middle
Europe America Europe
East
Africa Oceania
Asian LPG Demand
70
Million MT
60
50
40
30
Indian
Subcontinent
20
Southeast
Asia
Far East
10
0
1990
1995
1997
1998
2000
2002
2005
Asian LPG Demand
by End-Use
70
Million MT
60
50
Town Gas
40
Chemicals
30
Engine Fuel
20
Industrial
10
Residential/
Commercial
0
1990
1995
1997
1998
2000
2002
2005
0
Pakistan
Indonesia
India
China
Philippines
Thailand
Singapore
Taiwan
Korea
Malaysia
70
Japan
Asian LPG Demand
Residential/Commercial
Kilograms LPG per Capita
60
50
40
30
20
10
Asian LPG Import
35
Million MT
Other Far
East
30
25
Indian
Subcontinent
20
China
15
Korea
10
5
Japan
0
1990
1995
1997
1998
2000
2002
2005
Major LPG Exporters
80
Million MT
75
70
60
53
50
40
58
FSU
L America
46
Australia
40
30
S E Asia
27
Canada
North Sea
20
10
12.5
19.6
23.6
25.6
1995
1998
22.1
29.6
Middle East
0
1985
1990
2000
Africa
2005
Middle East LPG Exports
30
Million MT
25
Bahrain
20
Oman
Iraq
15
Iran
Qatar
10
12.4
5
14.3
13.8
7.9
11.0
13.0
U.A.E.
Saudi Arabia
0
1985
Kuwait
1990
1995
1998
2000
2005
Local Petrochemical Demand
Local Petrochemical Demand
12
Million MT/Year
10
8
PROPANE
6
BUTANE
4
2
NG
0
1997
1998
1999
2000
2001
2002
TOPICS
1- Oil Markets
2- Crude Oil Pricing
3- Refining
4- Refined Products Prices (Asia/AG)
5- LPG
6- Shipping
SHIPPING
• Tanker Types
• Freight Calculations
AFRA
• “AFRA” - Average Freight Rate Assessment
• Compiled Monthly by London Tanker Broker
Panel (LTBP)
• Mainly Used in Oil Trade Transactions
• Represents the Weighted Average of the
Commercially Chartered Tonnage Employed
in the Transport of Oil
(16th Day of the Month - 15th Day of the Next Month)
Tanker Types
Coastal Tankers
Aframax
Suez-max
VLCC
ULCC
AFRA
AFRA is Assessed for Six Deadweight Groups:
1 General Purpose:
2 Medium Range:
3 Large Range 1
79,999
4 Large Range 2
159,999
5 VLCC
6 ULCC
16,500 25,000 45,000
-
80,000
-
160,000
320,000
24,999
44,999
319,999
are in metric tons
-above figures
549,999
Freight Calculation
Freight =
Worldscale x AFRA