22 November 2011 15:04 [Source: ICIS news]
AMSTERDAM (ICIS)--The supply of aromatics feedstocks in Europe could be severely impacted by changes in the upstream refining industry, the head of downstream consulting at UK-based energy analysts Wood Mackenzie said on Tuesday.
Speaking at the 10th European Aromatics & Derivatives Conference in Amsterdam, Bob Young said that there were three interlinked factors that would challenge aromatic feedstock economics.
These were gasoline demand destruction in the US, restructuring of the European refinery base and a move in the region away from using diesel.
Europe is unique in that it is a large structural exporter of gasoline, said Young. The region exports 35m–40m tonnes/year of gasoline, a large portion of which goes to the US.
Young said that the US mindset on car choice appears to be changing, with more focus on smaller vehicles with better fuel efficiency. "Given the size of European gasoline exports, a nudge in American habits could be significant," he added.
He said that "real" restructuring of Europe's refining industry is more likely today than ever before.
Some closures have taken place but the total is modest compared with the overhang of capacity.
In gasoline terms, the capacity reductions total 5m tonnes/year, but the excess is 40m tonnes/year.
The closures makes the European diesel balance worse, as for every tonne of gasoline, two tonnes of diesel are produced.
Lastly, a move in Europe towards using more gasoline will make refineries more viable but will increase Europe's reliance on diesel imports.
The 10th European Aromatics & Derivatives Conference, organised by ICIS and International eChem, is taking place in Amsterdam on 22–23 November 2011.
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