World Oil Outlook - Opec

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234 Coast. To the extent that either the TransCanada or Line 9 projects go ahead, they will enable light sweet and medium sour crude oils out of Eastern Canadian and possibly also to refineries on the US East Coast. Uncertainties over key pipeline projects, and steep discounts in US Lower 48 and Western Canadian crude prices, have spurred the above proposals (and additional ones) to modify and expand existing pipeline infrastructure, but they have also led to a growing role for rail. There has been marked growth in Bakken ‘takeaway’ capacity via rail. Faced with a dearth of existing infrastructure in North Dakota, mainly smaller producers and transport companies in 2009 began a rapid expansion of rail terminals. These use ‘unit train’ technology (load dedicated 60,000–75,000 barrel trains, often one or more per day) that then move to corresponding receiving terminals with no stops along the route. Bakken rail takeaway capacity went from 30,000 b/d in 2008 to 335,000 b/d by 2011 and should reach nearly 800,000 b/d by the end of 2012. Pipeline takeaway capacity is also expanding rapidly, but what is new here is that rail is becoming established as an important mode for moving crude oil, at scale, to multiple destinations. Most delivery terminals for Bakken crude are in the Gulf Coast, but movements are expanding to both the West Coast and, especially, East Coast. These movements are taking Bakken production – which recently passed the 640,000 b/d mark and is expected to go much higher – into mainly coastal US markets. The new trend for Bakken prices to exceed those for WTI is evidence of the new-found ‘freedom’ that rail to the coast is providing to the former. This year (2012) may also be the point when crude movement via rail starts to catch on as a means to move Western Canadian crudes. Small volumes of Western Canadian crudes have recently moved to the Western US, the Gulf Coast and the East Coast, as well as Ontario via rail. What is new is that longer term commitments and unit train developments are starting to surface – for instance, for the movement of Western Canadian crudes at scale to the Irving refinery in New Brunswick. Rail movement via ‘manifest’ train can be three times the cost of pipeline. However, unit trains narrow the gap and shorten the delivery time. Moving oil sands bitumen by rail can come even closer to pipeline costs as less diluent is needed; even bitumen with no diluent can be carried if the rail cars are heated. Given the severe price discounts on heavy Canadian crudes, rail looks to be an attractive option. Both pipeline and rail are also tying in with barge movements, notably from the Midwest to the Gulf Coast, using rail or pipeline for part of the way and then barges down the Mississippi river for the last leg. Within the Gulf Coast, midstream companies are also expanding their options to move crudes along the coast (for example, Eagle
Ford crude east along the Gulf and also via tanker up to the East Coast) and to move crude west to rail terminals in St. James, Louisiana. The net effect of all these developments is that the US and Canadian crude oil logistics system is changing rapidly as it seeks to adapt to a new reality of steadily growing oil production, both north and south of the border. There is appreciable uncertainty, however, over how the system will evolve in the longer term. It will depend in part on whether (and when) a few major pipeline projects are brought online, as well as on how much Western Canadian crude ends up moving west and to Asia versus south into the US and east into Eastern Canada. By 2014, WTI discounts could be partially alleviated, but we are witnessing a race between production growth and infrastructure restructuring. By several counts, crude oil discounts could persist to 2020 – and even beyond – if US shale production rises at optimistic rates. The emergence of rail is an important new factor. Although rail car availability is a constraint in the short-term, terminals are low cost compared to pipelines, can be put online within 12–18 months and offer shorter payback times. The bottom line is that the combination of pipeline expansion, and rail and barge transportation options, will enable US Lower 48 and Western Canadian crudes to flow in an increasingly less restricted way to coastal markets. Data shows that as of the third quarter of 2012, US and Canadian oil movements by rail have already increased by 650,000 b/d, compared to their historical level. This is consistent with the surge in rail loading and offloading capacity that, by the end of 2012, will see over 700,000 b/d of receiving capacity in operation, with over 200,000 b/d on the Eastern Seaboard (US and Canada), 450,000 b/d on the Gulf Coast and 50,000 b/d on the West Coast. By the end of 2013 and into 2014, this rail capacity will have essentially doubled to over 1.4 million b/d, with nearly 600,000 b/d of receiving terminals on the Eastern Seaboard, close to 750,000 b/d on the Gulf Coast and around 110,000 b/d on the West Coast. By 2015/2016, this new capacity may well have grown further and will have been joined by 1.65 million b/d of new pipeline capacity to the Gulf Coast from Cushing. Hence, a total of over 3 million b/d of capability will exist to take US Lower 48 and Western Canadian crudes to coastal markets in the US and Canada. This capacity growth is well under way; it is developing rapidly and is substantial. As presented in Figure 9.4, FSU exports to the Asia-Pacific increase by almost 3 mb/d between 2011 and 2035, while an additional 1 mb/d of crude oil will be exported to this region from Africa. The decline in European imports from both the FSU and the Middle East is projected to be in the range of 2 mb/d for the same period. The largest change in traded volumes of crude oil over the period relates to crude oil exports from the Middle East to Asia-Pacific, which increases by 6 mb/d. 235 Chapter 9
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World Oil Outlook 2012 Organization
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OPEC is a permanent, intergovernmen
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Contents Foreword 1 Executive summa
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Section Two Oil downstream outlook
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Table 2.16 Growth in oil demand in
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Figure 2.8 Increase in number of pa
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Foreword
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2 It should be stressed, however, t
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4 with all stakeholders aimed at fo
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Executive summary
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e 6.3 6.1 8 that year. The impact i
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10 Total shale gas production in th
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12 Demand for OPEC crude stays esse
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14 6 4 2 OPEC Non-crude Non-OPEC No
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16 3 2 1 0 -1 almost 5 mb/d and mor
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6.2 6.3 .1 1,100 18 1,000 2.6 mb/d,
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20 energy sector. At that time many
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Section One
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Chapter 1 World oil trends: overvie
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Box 1.1 Regulatory reform: swap der
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of swaps, as well as a complete aud
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Medium-term economic growth This WO
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Domestic Product (GDP), Italy and S
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Figure 2 Exports from China to the
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which average global fertility decl
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India Nigeria gional increase conti
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Figure 1.6 Figure 1.6 Real GDP by r
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By 2035, the Chinese economy will b
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imported technologies. Trends in TF
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Figure 1.8 World supply of primary
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Figure 1.10 Coal: proven reserves a
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to accelerate, averaging more than
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Figure 1.15 Evolution of energy dem
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• The Reference Case assumes high
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• New policies since WOO 2011, sp
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Figure 1.20 OECD and non-OECD oil d
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Figure 1.24 Average annual global g
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Figure 1.26 Proven oil reserves at
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Table 1.7. 7 The growth in non-OPEC
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The total increase of non-crude liq
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Figure 1.30 Incremental OPEC and no
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1970 1975 1980 1985 1990 1995 2000
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2 0 Figure 1.36 Per capita CO2 emis
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76 Figure 2.1 Percentage shares of
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78 870 million cars across the glob
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80 Table 2.1 (continued) Vehicle an
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82 Figure 2.7 Figure 2.7 Passenger
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84 Commercial vehicles The projecti
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86 In terms of the ICE vehicle effi
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88 a key question concerns the exte
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90 Table 2.5 Oil demand in road tra
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92 Oil demand growth in this sector
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94 300 200 2,000 Developing countri
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96 particularly due to the movement
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98 China 0 0.1 0.2 0.3 0.4 0.5 mboe
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100 Table 2.14 Growth in oil demand
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102 Table 2.15 Oil demand in other
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104 developing countries, by 2009 i
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106 this sector was in these countr
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108 Table 2.19 Oil demand in electr
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110 Figure 3.1 Changes to non-OPEC
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112 I), Russkoye (Yamal-Nenets), Su
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114 Table 3.1 Non-OPEC crude oil an
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116 The medium-term Reference Case
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118 Table 3.4 Estimates of world cr
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120 oil resources, particularly giv
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122 further indication of the large
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124 Figure 3.3 Table 3.6 billion ba
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126 The Reference Case sees biofuel
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128 much OPEC oil will be needed) g
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130 Table 4.1 Oil demand in the LEG
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132 considerably swifter than in th
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134 24 2000 2005 2010 2015 2020 202
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136 The improved acquisition, treat
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138 While access to electricity for
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140 In September 2012, OPEC and Rus
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Section Two
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Chapter 5 Demand outlook to 2035 Re
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Figure 5.1 Figure 5.1 Global produc
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Figure 5.3 presents the details of
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At first glance, retrofitting scrub
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Moreover, as already underscored, p
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Regional product demand to 2035 Tur
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e el el* cts** 0 8 mb/d of addition
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Figure 5.7 Figure 5.7 Outlook for o
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The increases already highlighted a
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Demand for fuel oil will remain rel
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Shell Chemicals and Formosa Plastic
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equirement of 10 ppm. China is expe
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observed in several countries since
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Germany, provide tax incentives for
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Chapter 6 Medium-term refining outl
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Figure 6.1 Distillation capacity ad
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expansion, however, remains to be s
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Russia and other FSU countries Refi
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Europe For the next few years, refi
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Page 201 and 202: Box figure 1 Figure 1 Estimated dis
Page 203 and 204: Box figure 1 mb/d The situation on
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Page 207 and 208: -1 2012 2013 2014 2015 2016 Figure
Page 209 and 210: Figure 6.7 Global secondary units a
Page 211 and 212: The situation in Europe is differen
Page 213 and 214: fuels mandates call for the continu
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Page 217 and 218: 80 70 with 60 1.3 mb/d globally. Th
Page 219 and 220: One implication of this is that reg
Page 221 and 222: Chapter 7 Long-term refining outloo
Page 223 and 224: Table 7.1 Global demand growth and
Page 225 and 226: Europe lose 5.5 mb/d of throughput
Page 227 and 228: Figure 7.2 Figure 7.2 Total gasolin
Page 229 and 230: 2035. As a result, crude throughput
Page 231 and 232: Table 7.3 Global capacity requireme
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Page 235 and 236: 5 of the refining base and demand,
Page 237 and 238: Chapter 8 Downstream investment req
Page 239 and 240: Other Asia, in the long-term, the p
Page 241 and 242: Figure 8.3 also summarizes total in
Page 243 and 244: Chapter 9 Oil movements Generally,
Page 245 and 246: 60 Figure 9.1 In summary, the combi
Page 247 and 248: cant decline in US crude imports -
Page 249: The Seaway line used to flow north
Page 253 and 254: 20 16 2011 2020 2035 For the Asia-P
Page 255 and 256: Figure 9.7 in these two regions. Th
Page 257 and 258: Chapter 10 Downstream challenges Th
Page 259 and 260: Shale gas developments could change
Page 261 and 262: Upgrading At around 18 mb/d install
Page 263 and 264: conversion. Advances have been made
Page 265 and 266: Section One 1. The OPEC Reference B
Page 267 and 268: Section Two 1. The World Oil Refini
Page 269: Abbreviations
Page 272 and 273: 256 G-20 Group of Twenty GDP Gross
Page 274 and 275: Annex B
Page 277 and 278: OECD OECD America Canada Puerto Ric
Page 279 and 280: Côte d’Ivoire Rwanda Democratic
Page 281 and 282: Gibraltar Turkmenistan Kazakhstan U
Page 283: World Oil Refining Logistics and De
Page 286 and 287: 270 Bolivia (Plurinational State of
Page 288 and 289: 272 Eastern Europe Albania Poland B
Page 290 and 291: Annex D
Page 292 and 293: 276
Page 294 and 295: 278 EnSys Energy & Systems, Inc Eur
Page 296 and 297: 280 Petroleum Economist PFC Energy
Page 298: Organization of the Petroleum Expor
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