The growth of sweet, light crude offers a bright spot for storage operators as international demand increases
Storage is increasingly becoming an even more integral part of the international oil equation as more than half of the global oil demand is met by international trade.
Asia is one of the regions reaping the benefits of increasing imports for crude oil, petroleum and feedstocks and according to Tri-Zen’s lead consultant Moe Merican, this trend naturally translates to a growth in demand for storage capacity.
In an interview with Tank Storage Magazine, Merican says that the refining of heavy crude oil will be displaced by sweet, light crude (shale oil) which satisfies the growing international demand for cleaner fuels.
This demand offers a significant and prosperous opportunity for storage operators.
‘Storage is increasingly becoming a very important and integral part of the oil trade equation,’ says Merican.
‘China has the third largest reserves of shale oil after the US and Russia and currently, China is the world’s largest importer of crude oil.
‘Naturally, the country will want to develop its domestic supply and reduce its reliance on imports while also improving energy security.’
Examining the impact that the shale oil revolution is having on global trade flows, Merican explains that the most significant change to trade flows in Asia has been in petrochemical feedstocks of naphtha and LPG. Exports of both naphtha and LPG are forecast to increase in the US, most of which is destined for Asia.
By 2020, US shale oil production is expected to reach up to five million barrels per day, which will significantly reduce imports of crude oil to the US which will have a knock on effect on Asia’s
‘Looking ahead the key region for shale oil developments is the US, Russia and China but also Argentina and Libya.’
- Merican will chair the first day of Tank Storage Asia’s conference at the Marina Bay Sands on September 29 and 30. He will also discuss shale oil and its impact on oil trade flows. For more information, visit www.tankstorageasia.com.