World Oil Outlook - Opec

186
Box figure 2
Figure 2
Estimated distillation capacity closures by region as of mid-2012, 2008–2014
2.0
1.5
1.0
0.5
0
mb/d
Europe US & Canada Asia Latin America
China is another case where legislation is likely to have an impact, though it seems,
the effect could be double-sided. In an effort to eliminate small independent refineries,
known as ‘social’ or ‘teapot’ refineries, China’s central government in 2011
raised the minimum capacity limit to around 40,000 b/d, effective as of 2014;
anything below this requires refineries to close. Since then, these small, but numerous
refineries have been seeking partnerships with investors to expand above
the required limit and many of them have reportedly been successful. Some will
inevitably close, but it looks as though a principal, albeit unintended, consequence
of the regulation is that it has increased – rather than cut – the aggregate capacity of
small refineries. Separately, the Fushun refinery in China was closed in 2011 after
an explosion. Elsewhere in the region, Shell and Caltex announced closures of their
Australian refineries in Clyde and Sydney, respectively.
The wave of closures has also hit the US and Canada, including refineries in the US
territories in the Caribbean (reported under Latin America in Figure 2). Between
2010 and 2011, five refineries were closed on the East Coast, namely Sunoco’s
Eagle Point and Marcus Hook plants, Chevron’s Perth Amboy, Western Refining’s
facility at Yorktown and the Montreal refinery owned by Shell. In addition, two
other refineries, that of Sunoco in Philadelphia and Phillips66 at Trainer, have seen
‘narrow escapes’ from closures. However, these do not necessarily mean that these
refineries will remain in business in the long-term.
5.0
4.0
3.0
2.0
1.0
0