Reconfiguring refining: Drivers and risks Decarbonisation efforts and commitments to transition to ‘net zero’ imply peak petroleum demand is not far off. The first sector to be impacted by this energy transition will be terrestrial mobility. For sure, the peaking will vary from one part of the world to another. In India, stakeholders believe the transition is much further in the future. While that may well be the case, bear in mind that e-mobility is unfolding at a pace that has surpassed the most optimistic growth estimates. In contrast, demand for petrochemicals is expected to continue to grow. Forward-looking refiners are already gearing up for the change and eyeing opportunities to adjust operation modes to increase the share of petrochemicals. There are three ways to go about this: change individual process units; change the mix of process units; or build direct crude oil to chemicals (COTC) plants. But, as my Point of View in the December 13 issue of Chemical Weekly points out, the change is not without risks. As the chemical conversion percentages go up, so will capital costs. A massive shift from fuels to petrochemicals could also result in over-investment into the latter, and erode petrochemicals margins in the future. The backlash against single-use plastics could reduce or cause peak petrochemical demand at some point in the future. COTC will usher in a new era characterised by unprecedented production scale and a few dominant players. It could cause a major change in the landscape of global competition in petrochemicals. #chemical #petrochemical #india #growth #investment #oil #energytransition #opportunities #oilrefinery
