12 September 2013 20:42 [Source: ICIS news]
HOUSTON (ICIS)--Rising gasoline exports in the midst of declining US demand will play an important role in sustaining a profitable refinery, a company executive said on Thursday.
US gasoline and distillate demand has steadily declined in recent years following the recession and as more fuel-efficient vehicles come into the market.
At the same time, refineries are producing products at a higher rate. The latest US Energy Information Administration (EIA) report showed a US refinery utilisation rate at 92.5%.
Therefore, refiners are ramping up exports in order to deal with the increased supplies that are projected in the near future.
“Increasing exports we believe is going to be important,” said Phillips 66 CEO Greg Garland. “Today, we have a capability to export about 320,000 bbl/day. In the second quarter, we actually exported 180,000 bbl/day, and about 80% was distillate, 20% was gasoline.”
Phillips 66 has seven coastal refineries, including three on the west coast, one on the east coast and three in the US Gulf coast region.
“As we look to the future and we think gasoline demand declines in the US, we’re going to need to export more gasoline to run our facilities at rate,” said Garland during a webcast presentation at the Barclays Energy-Power Conference.
According to Garland, US gasoline demand will decline by 200,000-400,000 bbl/day over the next five to seven years.
Meanwhile, outlooks in Latin American markets will grow by that same amount.
“So we think that we can offset that decline in the US with exports out of the US into those close areas,” said Garland.
He explained that the US has more advantaged prices for crude oil and an optimal geography for exports.
“So I think that not only can we take the growth, we can compete and win in displacing others that are exporting into those markets today,” said Garland.
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