At a minimum, US natural gas liquids (NGL) plant production
will add about 525,000 bpd to global oil supply, and the rest
of the world will add another 350,000 bpd between now and the
end of 2015, according to the recently-released Global
Crude Oil Outlook from consultancy ESAI Energy.
The primary implication of growing NGLs is that they further
limit the call on OPEC crude, the group says. At the same
time, the growth in NGL plant output means end-use consumption
depends less on receiving supply from refinery operations.
The production of ethane, LPG and plant condensates (pentanes
plus) from gas processing can replace the demand for LPG or
naphtha from refineries. For example, new ethylene cracker
capacity around the world may either be geared to run ethane or
have the flexibility to switch between ethane, plant LPG and
Likewise, pentanes plus can replace naphtha as a crude oil
diluent. And of course, plant LPGs may compete with refinery LPGs. The contribution of
gas processing to oil supply is somewhat akin to
the growth in alternative fuels, which have replaced
refinery-derived transport fuels.
As a result, global refinery throughput growth will
increasingly not track global oil demand growth,
making refining profitability even more