Forecast

Global growth in natural gas output (1.1%), demand

(1.4%) and trade (1.8%) slackened in 2013, with the most pronounced rates of slowdown seen in non-Organization for Economic Cooperation and Development (OECD) and emerging
economies, in the face of a sluggish global economy. Energy
consumption growth was below average in non-OECD countries, led by China, and above historical rates in mature OECD
nations, driven by the US.
Shale gas output growth, worldwide, slowed by 6% between 2011 and 2013, to 1.3%, as it remained more profitable
to divert drilling rigs from shale gas production to tight oil.
Nearly all of the growth in global gas output came from wet
shale gas and associated gas; the percentage of output from dry
shale gas declined.
Price differentials between NA and international gas prices
decreased somewhat in 2013, although international prices remained generally high. Price-advantaged coal, which saw costs
fall for the second consecutive year, stole market share from natural gas as utilities switched from more environmentally friendly gas to cheaper coal during the chilly winter. A return to mild
winter temperatures in 2014 and 2015, along with robust production of shale gas in the US, could help reverse this scenario.
The expansion of global LNG trade and project proposals is
being led by the US, which has rich reserves of shale gas to fuel
its gas export aspirations (FIG. 3). Outside of North America, a number of new
LNG projects are also being constructed
in Australia (FIG. 4), a nation with strong,
steady gas production that is well-positioned to serve the growing AP gas market. Top producer Qatar remained the
worlds largest LNG exporter in 2013,
with one-third of the global total.
Improved flexibility in LNG and
pipeline gas deliveries is a result of the
FIG. 3. Cheniere Energys Sabine Pass LNG
project in Louisiana is one of a handful of new
deeper integration of international gas
LNG export projects slated to begin operations markets. More than $700 B is expected
in the US over the next decade.
to be invested in LNG facilities world-

refining system is reconfiguring to meet growing demand for

middle distillates. In the US market, gasoline demand is stalling
and is forecast to decline with more fuel-efficient vehicles entering the market and the continued substitution of biofuels into
the gasoline blending pool.
The highest-demand region for refined products and transportation fuels is AP, which has been adding refining capacity since
2000. Two nations are responsible for most of the capacity expansionsChina and India. China, similar to other Asian nations,
must import crude oil to operate its refineries. By 2020, nearly
80% of crude oil processed by AP refineries will be imported.
China and the US operate the worlds largest refining networks. The difference is that Chinas demand for refined products will continue to increase, especially for diesel and gasoil.
At present, China is the largest importer of crude oil. Over
4.4 MMbpd of new refining capacity will come online in China
between 2013 and 2020. Chinas domestic refining capacity
may equal that of the US by 2020.
As shown in TABLE 1, demand for transportation fuels continues to shift toward diesel/middle distillates. Demand for
gasoline will continue to increase in developing nations. However, mature markets, such as North America and Europe, will
experience declining gasoline demand in the future.
Looking ahead, excess refining capacity is very possible.
However, cost-competitiveness will force
refiners to rationalize some capacity to
remain competitive. Countries will continue to make investments to increase
environmental and sustainability performance, as well.
Gas processing/LNG. Gas markets are

evolving on the backs of North American

(NA) shale gas production and an expansion of global LNG trade and project proposals. In 2013, these drivers paused as US
shale gas output growth slowed and the expansion in LNG capacity remained small.

TABLE 1. Rened product demand, 20122035

Global demand, MMbpd

Growth rates, %/yr

Shares, %

2012

2015

2020

2025

2030

2035

20122020

20202035

2012

2035

9.7

10

10.5

10.9

11.2

11.5

0.6

10.9

10.6

Light products
Ethane/LPG
Naphtha

5.9

6.2

6.8

7.3

7.9

8.5

1.6

1.5

6.7

7.8

Gasoline

22.7

23.3

24.4

25.5

26.5

27.5

0.9

0.8

25.6

25.3

Middle distillates
Jet/kerosine

6.5

6.7

7.1

7.4

7.7

8.1

0.9

7.3

7.5

Diesel/gasoil

25.8

27.3

30

32.2

34.1

36

1.9

1.2

29

33.2

Residual fuel*

8.2

7.8

7.1

6.6

6.3

1.8

1.1

9.2

5.5

Other**

10

10.2

10.5

10.7

10.8

10.9

0.7

0.3

11.2

10.1

88.9

91.6

96.3

100.7

104.6

108.5

0.8

100

100

Heavy products

Total

* Includes renery fuel oil** Includes bitumen, lubricants, waxes, still gas, coke, sulfur, direct use of crude oil, etc.
Source: World Oil Outlook 2013 and Organization of the Petroleum Exporting Countries (OPEC).

22DECEMBER 2014|HydrocarbonProcessing.com