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Energy and commodity price benchmarking and market insights
Race to refine: An assessment of Latin America’s downstream projects Patricia Garip
Bureau Chief, Latin America
5 September 2013
illuminating the markets
• Latin America’s current refining landscape
• A growing appetite for refined products
• Greenfield projects, upgrades, expansions
• Brazil’s lead
• China’s growing downstream presence
• Venezuela’s retrenchment
• Outlook
Agenda
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illuminating the markets
Mexico
1,540 Venezuela
1,310
Ecuador
137
Peru 208
Argentina 660
Chile 220
Curacao 320
Brazil 2,070
(’000 b/d)
Colombia
325
Latin America´s shrinking refining landscape
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illuminating the markets
• LatAm non-OECD oil demand growth lagging Asia-Pacific, the Middle East and Africa
• Economic growth driving oil demand, albeit more slowly ◦ IMF: downward revisions
• Persistent fuel price subsidies distort demand curve
Demand: Upward bound, but not so fast
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6.3
6.6
6.9
7.2
7.5
2012 2013 2014 2015 2016 2017 2018
mn b
/d
Source: International Energy Agency
illuminating the markets
US oil product exports to selected LatAm destinations 2004-2012
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0
200
400
600
800
2004 2005 2006 2007 2008 2009 2010 2011 2012
mn b
/d
Argentina Panama Venezuela Colombia Chile Peru Brazil
Source: EIA
illuminating the markets
US oil products exports to Mexico 2004-2012
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200
300
400
500
600
2004 2005 2006 2007 2008 2009 2010 2011 2012
mn b
/d
Source: EIA
illuminating the markets
Tightening sulphur limits (ppm)
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Country Diesel Gasoline
Argentina 10 (Grade 3); 500 urban, 1,500 rural (Grade 2)
50 (97-octane) 150 (93-octane)
Brazil 10 800, moving to 50 in 2014
Chile 15 in Santiago; 30 in rest of Chile 15 nationwide in Sept 2013
15
Colombia 50 300
Ecuador 500 250 in 2014
150 (90-octane) 600 (87-octane)
Mexico 15 80
Peru 50 in Lima/Callao 2,000 in rest of Peru
1,000 50 in 2015
Uruguay 50 30
illuminating the markets
US Gulf Coast prices for conventional gasoline and diesel
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0
100
200
300
400
500
Jan-03 Feb-05 Apr-07 May-09 Jul-11 Aug-13
¢/U
SG
Conv Unl Ultra low sulfur dsl
Source: Argus Media
illuminating the markets
Country Company Refinery Capacity ('000 b/d)
Estimated start date
Brazil Petrobras/PdV Abreu e Lima 230 Nov
2014/May2015
Petrobras Comperj (1) 165 Aug-16
Petrobras Comperj (2) 300 2018
Petrobras Premium 1 (1) 300 2018
Petrobras Premium 1 (2) 300 2021
Petrobras Premium 2 300 Post 2018
Colombia Llanopetrol Meta 40 2014/15
Cuba PdV-Cupet Matanzas 150 ?
Ecuador PetroEcuador/ CNPC/PdV
Pacific 300 2017
Mexico Pemex Bicentennial 250 2017
Nicaragua Albanisa (PdV-Petronic)
Supreme Dream of Bolivar
100 2021
Nearly 2.5mn b/d in greenfield plans
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illuminating the markets
Selected expansions and upgrades
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Country Company Refinery Expansion/Upgrade (‘000 b/d) Start-up
Uruguay Ancap La Teja Gasoline and diesel desulfurization units
2013
Colombia Ecopetrol Reficar 80 to 165 2014
Ecuador PetroEcuador Esmeraldas New FCC, crude, vacuum and visbreaking units
2014
Bolivia YPFB Cochabamba,
Santa Cruz New CDUs 2014
Costa Rica Recope/CNPC Limon 25 to 60 2015
Colombia Ecopetrol Barrancabermeja 245 to 300 2017
Trinidad Petrotrin Point Fortin 160 to 200 ?
Jamaica PCJ/PdV Kingston 30 to 50 ?
Peru Petroperu Talara 62 to 95 ?
Cuba PdV/Cupet Cienfuegos 65 to 150 ?
illuminating the markets
• Abreu e Lima, 230,000 b/d • PdV stake discarded?
• Nov 2014/May 2015
• Comperj 1, 165,000 b/d, 2016
• Comperj 2, 300,000 b/d, 2018
• Preliminary Asian partnerships for Premium refineries
◦ 600,000 b/d Premium 1 with
Sinopec, two stages , 1st 2017
◦ 300,000 b/d Premium 2 with GS Energy, 1st 2017
Petrobras refineries under construction, planned
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Abreu e Lima
Comperj 1-2
Brasilia
Premium 1
Premium 2
Planned refinery
Refinery under
construction
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Brazil refined product imports 2003-2012
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0
30
60
90
120
2003 2006 2009 2012
b/d
Source: ANP
Total refined products Gasoline Diesel
illuminating the markets
• 300,000 b/d in 2017
• PetroEcuador/PdV/CNPC
• Two phases
• ICBC financing
• Oil-backed loans
Ecuador: Pacific refinery
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Quito
Manta
Montecristi
Planned refinery
illuminating the markets
• 25,000 b/d to 65,000 b/d
• Soresco: Recope-CNPC
• Questions over costs,
contracting
• Chance for project revival
under new Recope
management?
• Elections loom
Costa Rica: Limon refinery
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San Jose Limon
Planned refinery
illuminating the markets
• 62,000 b/d to 95,000 b/d
• To be financed by PetroPeru
share sale
• “Restoration” of PetroPeru
• Vertical integration
• La Pampilla upgrade?
Peru: Talara refinery
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Lima
Talara
La Pampilla
Planned refinery
Refinery
illuminating the markets
• Cartagena (Reficar)
80,000 b/d to 165,000
b/d, +80pc complete
• Delayed on labor strife
• Barrancabermeja
upgrade
• Meta refinery?
Colombia
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Bogota
Barrancabermeja
Cartagena
Meta
Planned refinery
Refinery under
construction
illuminating the markets
Chinese downstream presence rising, with limits
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Costa Rica
Ecuador
Brazil
Venezuela
Cuba
Aruba?
illuminating the markets
Venezuelan presence receding
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Ecuador
Jamaica
Curacao?
Brazil
Nicaragua
Dominican
Republic
illuminating the markets
• Bicentennial Pemex
• Supreme Dream
Nicaragua
• Argentina, Cuba,
Paraguay, Uruguay
Refinery orphans?
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illuminating the markets
Latin America oil imports: upward bound
Copyright © 2013 Argus Media Ltd. All rights reserved.
2.0
2.5
3.0
3.5
4.0
4.5
2005 2010 2015 2020 2025 2030 2035 2040
mn b
/d
Source: www.eia.gov
Regional liquids consumption
Mexico/Chile Brazil Other Central and South America
illuminating the markets
Politics
Cost overruns
Financing Lack of
Commercial logic
Labor strife
Reflections
• Delays, downsizing, quiet
fading
• Brazil is an exception
• Venezuela’s withdrawal
accelerating refining deficit
• Chinese presence poised to
grow, with limits
• Financing challenges
• Biofuels
• LNG
• Product imports set to rise
• Brazil as products exporter?
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?
illuminating the markets
Argus Media
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Any questions?
Patricia Garip
Bureau Chief, Latin America
Email: [email protected]
Phone: +56 22 243 6239
Cel: +56 99 2890089
URL: www.argusmedia.com
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