7th Japan-Europe Petroleum Technology Meeting

Supply and Demand Balance in Asia

June 22, 2015

Kozo Morimitsu
Japan Petroleum Energy Center
Agenda

1. World Demand of Petroleum Products

2. Supply and Demand Balance in Asia

3. Status of Biofuels in Asia

2
Changes of Global Petroleum Product Demand

Demand for all petroleum products in 2030 is projected to be

28 percent above 2013 levels

M B/D
120
102.2
100 8.2
8
80.1 8.6
80 Residual Fuel
8.7 35.5
8.9 33.1 Diesel/Gas Oil
10.4
30.1
60 26.2 Kero/Jet Fuel
25 8.4
23.2 7.9 Gasoline
7.4
40 6.5 6.7 Naphtha
6.7 24.7 25.7
23.8 LPG
22.1 22.3
21.2
20 9.1 10.1
6.3 7.6
5 5.7
9.1 9.8 11.7 13 14.3
7.8
0
2005 2010 2013 2020 2025 2030

3
Incremental Global Petroleum Product Demand
Diesel/gas oil will dominate future demand growth, accounting
for 42 percent of the incremental demand increase

M B/D Incremental Global Petroleum Product Demand, 2013-2030

10
9.3

5
4.5
3.8 3.4
1.7
0
-0.5

-5
LPG Naphtha Gasoline Kero/Jet Diesel/Gas Residual
Fuel oil Fuel

4
Global Demand Growth by Region, 2013 & 2030
Asia will account for 49 percent of global product demand growth
The Middle East and South America also will have significant growth
Unit: M B/D

5
Agenda

1. World Demand of Petroleum Products

2. Supply and Demand Balance in Asia

3. Status of Biofuels in Asia

6
Demand Change of Petroleum Products by Country
Asian demand growth will account for 10.8 million B/D total during 2013 to 2030
Growth of China: 6.0 M B/D, India: 2.5 M B/D

M B/D
16

14

12

10

8
2013
6
2030
4

7
 Changes of Demand & Balance in China
Growth in Chinas refining production is projected to continue through the forecast
period on the back of capacity expansion (2020-2030: + 3.86 M B/D)
The product mix will shift towards light and middle distillates as additional
conversion units are commissioned

thousand B/D Change of Demand thousand B/D Change of Balance

6,000 800
600
5,000
400
4,000 200
3,000 0
-200
2,000
-400
1,000
-600
- -800

2005
2010

2014
2015
2016
2020
2025
2030
2013
LPG Naphtha Gasoline
Kero/Jet Fuel Diesel/Gas Oil Residual Fuel
8
 Changes of Demand & Balance in India
Oil demand growth remain subdued with economic growth slowing down and
expected increase in prices due to poor exchange rate and removal of fuel subsidies
Private refiners, Reliance and Essar will continue exporting refined products

thousand B/D Change of Demand thousand B/D Change of Balance

3,000 600

2,500 400

2,000 200

1,500 00

1,000 -200

500 -400

- -600

LPG Naphtha Gasoline

Kero/Jet Fuel Diesel/Gas Oil Residual Fuel 9
 Changes of Demand & Balance in Indonesia
Indonesia continues to maintain a net import position of gasoline, diesel with
strong domestic demand and the lack of investments in capacity additions
Most planned refinery projects (modernization, grassroots) remain on the drawing
board

thousand B/D Change of Demand thousand B/D Change of Balance

1,200 100

1,000 0
-100
800
-200
600
-300
400
-400
200
-500
- -600

LPG Naphtha Gasoline

Kero/Jet Fuel Diesel/Gas Oil Residual Fuel
10
 Changes of Demand & Balance in South Korea
South Korea is the net exporter of refined products leveraging on the scale and
complexity of its refineries and the growing demand of Asian market
It will increase LPG and naphtha imports, while exports of gasoline, kerosene,
and diesel are expected to rise

thousand B/D Change of Demand thousand B/D Change of Balance

1,200 600
500
1,000 400
300
800
200
100
600
0
400 -100
-200
200 -300
-400
- -500

LPG Naphtha Gasoline

Kero/Jet Fuel Diesel/Gas Oil Residual Fuel 11
 Changes of Demand & Balance in Singapore
With one of the worlds busiest ports, Singapores international bunker sales
continue to be robust on the back of increased vessel supply
Singapore remains a net exporter of gasoline (directed to Indonesia, Malaysia) and
gas oil (directed to Hong Kong)

thousand B/D Change of Demand thousand B/D Change of Balance

1,600 400

1,400 200
00
1,200
-200
1,000
-400
800
-600
600
-800
400 -1,000
200 -1,200
- -1,400
2005
2010
2013
2014
2015
2016
2020
2025
2030

LPG Naphtha Gasoline

Kero/Jet Fuel Diesel/Gas Oil Residual Fuel 12
Agenda

1. World Demand of Petroleum Products

2. Supply and Demand Balance in Asia

3. Status of Biofuels in Asia

13
Biofuel Usage in Asian Countries
Asian countries are increasing biofuel use to secure national energy,
improve industry, and agriculture sector.

China

India

Thailand

Malaysia

Bioethanol
Indonesia
Biodiesel
14
 Biofuels in China
Policy: 12th 5 year Plan Target for 2015
Objective: Bioenergy is viewed as one of the strategic emerging industries.
China will develop second generation biofuels such as cellulosic ethanol,
algae-based biodiesel
Ethanol Biodiesel
target 3 million ton (E10 in designated provinces) 1 million ton
feedstock corn, wheat, cassava, sweet sorghum used cooking oil
(Promoting non-food feedstock)
production 2.8 billion L (2.2 million ton) 1.13 billion L (1 million ton)
Billion L Billion L
160 Bioethanol 8.0% 160 Biodiesel 0.8%
140 140
120 6.0% 120 0.6%
100 100
80 4.0% 80 0.4%
60 60
40 2.0% 40 0.2%
20 20
0 0.0% 0 0.0%

2010
2006
2007
2008
2009

2011
2012
2013
2014
2015
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

Gasoline Ethanol Blend Rate(%) Diesel, on-road BDF Blend Rate(%)

Source: GAIN Report 15
 Biofuels in Thailand
Policy: 10-year Alternative Energy Development Plan (2012-2021)
Objective: to reduce the countrys dependence on fossil fuels, strengthen
domestic energy security, promote green energy consumption, etc.

Ethanol Biodiesel
target 9 million L/d (2021), E10, E20, E85 5.97 million L/d (2021)
feedstock molasses (60-70%), cassava crude palm oil
production 2.6 million L/D (2013) 2.9 million L/D (2013)

Billion L Billion L
10 Bioethanol 20% 14 Biodiesel 7%
9 18%
8 16% 12 6%
7 14% 10 5%
6 12%
5 10% 8 4%
4 8% 6 3%
3 6%
2 4% 4 2%
1 2% 2 1%
0 0%
0 0%
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Gasoline Ethanol Blend Rate(%)
Source: GAIN Report Diesel, on-road BDF Blend Rate(%) 16
Biofuels in India
Policy: National Biofuel Policy (December 24, 2009)
Objective: to use biofuel as a measure to provide a higher degree of
national energy security by supplementing conventional energy resources
and reducing dependence on imported fossil fuels
Ethanol Biodiesel
target E5 (B20)
feedstock molasses used cooking oil, animal fats, jatropha
production 182 million L (2013) 38 million L (2013)
Billion L Billion L
Bioethanol 60 Biodiesel 0.12
30 3.0
25 2.5 50 0.10
20 2.0 40 0.08
15 1.5 30 0.06
10 1.0
20 0.04
5 0.5
10 0.02
0 0.0
0 0.00
2008
2006
2007

2009
2010
2011
2012
2013
2014
2015

2010 2011 2012 2013 2014 2015

Gasoline Ethanol Blend Rate(%) Diesel, on-road BDF Blend Rate(%)
Source: GAIN Report 17
Biofuels in Indonesia
Policy: Ministry of Energy and Mineral Resources Regulation No. 32/2008
Objective: Enhancing consumption of locally-produced biofuels can help
maintaining fuel imports at manageable levels

Ethanol Biodiesel
target 15% (2025) 20% (2025)
feedstock molasses crude palm oil
production none for fuel (220 million L, 2014) 930 million L (2013)

Billion L
30 Biodiesel 12%
25 10%
20 8%
15 6%
10 4%
5 2%
0 0%
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

Diesel, on-road BDF Blend Rate(%) Source: GAIN Report 18

Biofuels in Malaysia
Policy: B7 Biodiesel Programme (2014), B10 Biodiesel Programme (2015)
Objective: increase demand for the local feedstock, crude palm oil
utilize waste materials from the palm oil sector
Ethanol Biodiesel
target --- B7 (end of 2014), B10 (2015)
feedstock --- crude palm oil
production --- 222 million L (2013)

Billion L Biodiesel
6 12.0%
5 10.0%
4 8.0%
3 6.0%
2 4.0%
1 2.0%
0 0.0%

Diesel, on-road BDF Blend Rate(%) Source: GAIN Report

19
Summary

1. World Demand of Petroleum Products

Demand for all petroleum products in 2030 is projected to be 28 percent above
2013 levels.
Diesel/gas oil will dominate future demand growth, accounting for 42 percent
of the incremental demand increase.

2. Supply and Demand Balance in Asia

Asia will account for 49 percent of global product demand growth.
Asian demand growth will account for 10.8 million B/D total during 2013 to
2030.

3. Status of Biofuels in Asia

Asian countries are increasing biofuel use to secure national energy, improve
industry, and agriculture sector.

20
Thank you for your attention.

21