Oil will retain a significant share of supply in Southeast Asia even as refineries in the region embrace energy efficiency and a greener future, according to panelists at the Asian Downstream Summit in Singapore Oct. 25.
Although there is a lack of sufficient refining capacity in Southeast Asia, consumption of oil products in the region is expected to continue rising at least until 2030 due to high economic growth.
In 2019, consumption of oil products amounted to 6.3 million b/d whereas refining capacity was 5.1 million b/d, with Indonesia, the Philippines and Vietnam being net oil importers, according to data presented at the summit.
Vietnam, which is currently discussing setting up a new mega refinery and petrochemical complex in the country, has a total refining capacity of about 350,000 b/d, only enough to cover just about half the country's oil products and chemicals demand, according to S&P Global Commodity Insights data.
While Southeast Asia would benefit from increased refining capacity, securing financing for new fossil fuel-related projects faces hurdles, panelists at the Asian Downstream Summit said.
This has led many of the region's refineries, including Indonesia's Pertamina, to increasingly look into projects, involving carbon capture and storage, ammonia, hydrogen and algae to produce biofuels, as part of their drive to increase their business resilience.
They have also started the production of sustainable aviation fuel as part of their various energy efficiency projects, in addition to maximizing hydrogen and coprocessing of used cooking oil, which is in plentiful supply.
While increased processing of bio feedstocks was seen as one of the paths towards meeting new requirements, procuring renewable feedstocks, including used cooking oil and biomass, will become a challenge, due to the huge uptake of renewable projects, panelists at the Asian Downstream Summit said.
As one of the options suggested at the summit was for refiners to set joint ventures with feedstock manufacturers.
Some refiners have also opted to establish a completely renewable refinery, such as Neste's Singapore facility.