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DOWNSTREAM ASIA 2010 in Singapore 27-29th October

Category: News Used-Refineries.com

The conclusion on this year?s conference on strategies and future outlook on the Asian downstream sector is cloven between ?booming market? and ?booming ? but for whom??

And, is this the right time to invest ? due to the current decreased demand on certain petroleum products (linked to low refining margins) while in parallel on long term, the demand is predicted to increase again. Hence, we are heading towards another bottleneck in a few years ? perhaps by 2015 already.

Subject to forecasts of market analysts, China and India, as the main driving markets in Asia, will heavily influence further investments into the downstream sector elsewhere. Not only because of the exponential increase of the numbers of cars per person in China and India ? which will ultimately lead to more consumption on high quality petroleum products, but also because of the planned investments into refining capacity. Actually, India is expected to export its surplus products even to Europe, where integrated oil companies are about to shut down refinery facilities in order to be prepared for future scenarios on lower refining margins, due to high operation costs.

So investing in oil refinery projects in Asia seems interesting so far.

But where exactly should investors look at? Into new Greenfield refineries or does it either make more sense to upgrading existing topping and hydroskimming refineries to further features such as gas oil conversion, etc. down to petrochemicals.

In fact, refinery margins seem to follow a kind of 10 years cycle of bottlenecks/increasing margins ? followed by investments ? leading to surplus production and decreasing margins.

 

However, today?s development shows that refineries are concentrating on optimization the energy consumption and production in order to maintain and increase profitability and efficiency. Most of the presenting companies highlighted optimization services, also concentrating on human resources and the value of training and local content.

 

The conclusion for Lohrmann, as supplier of pre-owned (used) oil refineries and refinery equipment, is that the market scenario is highly interesting on either side, dismantling and marketing the equipment in good condition and implementing it as package with engineering services for new conditions (market, environment, etc.).

by Nardi Datcu
Director Business Development

Website of "World Refining Association"