Crude Oil and Petroleum Product Flows and Related Important Statistics

Crude oil and petroleum product flows and related important statistics

Stève Gervais Joint APEC-JODI Workshop on Oil and Gas Statistics June 11-13, 2019, Tokyo

Key oil trends

Key concepts

Key points for reporting monthly oil

Largest source of A changing production landscape… primary energy in 2016 2016 2017

Most of the growth in refining has taken place in the Output of fuel oil and diesel is Middle East and Asia Oceania. declining…

Refinery throughput growth in 2016

Growth in oil demand is driven by non-OECD Key demand trends countries Oil product demand by geographical region

• By the end of 2019 it is expected that 13 MT/y of petrochemical capacity will come online. - This will impact demand for petrochemical feedstocks of oil origin, traditionally: naphtha, LPG, ethane and other oil products.

Refinery output of petrochemical feedstocks Global consumption of oil in industry growth between 2015 and 2016

Primary oil products Finished secondary oil products Crude oil Refinery gas Gas/diesel oil Condensates Ethane Fuel oil Natural gas liquids LPG White spirit + SBP Naphtha Lubricants Synthetic crude oil, shale oil… Aviation gasoline Bitumen Secondary products inputs to refinery Gasoline type jet fuel Paraffin waxes Additives/blending components Motor gasoline Petroleum coke Kerosene type jet fuel Other products Refinery feedstocks Other kerosene

Refinery

• World Most oil is lighter than water, but Water average extra heavy oils have higher density than water. Oil sands Heavy Medium Light Condensates (extra heavy)

10 API 25 API 33 API 50 API Brent WTI • The specific gravity or density of the liquid is needed to convert Heavier Lighter from mass to volume and vice products products versa. - The API gravity is commonly used to express the specific gravity of Petroleum coke Fuel oil Diesel Kerosene Refinery petroleum. gas Bitumen LPG

• Condensate is a high-quality light oil recovered from associated or non- associated gas reservoirs. • In comparison to normal crude oil, condensate needs to undergo fewer refining processes and is therefore versatile and in high demand. - Condensate used directly (petrochemicals) or further processed to produce secondary oil products.

Field condensate Plant condensate

Recovered from associated Recovered in natural gas and non-associated gas fields processing plants or and is normally intermixed separation facilities. with the crude oil stream.

• Sulphur content is another key World average characteristic of oil that serves to differentiate between products. Sweet Mid-sour Sour

• 0 % 0.5% 1% 1.3% 4 -6% From an average crude oil barrel, Brent 70-80% of Sulphur has to be WTI removed to meet product specifications.

Sulphur pyramids in Alberta, Canada

• Because oil products can vary greatly in Example net calorific values of United States crude oil.

their characteristics it is key to collect Flow kj/kg net calorific values information. NCV Production 42 679 - Production NCV Imports 43 604 - Imports - Exports NCV Exports 42 694

Average NCV 42 871 Weighted • This information is essential to compile average! the energy balance and to derive CO2 emissions.

Example of inherent yields from different crude oil types • Crude oils have a wide range of physical and chemical properties. Light Heavy Sweet sour

• Refinery specifications determine the As a result refinery yields are consistent over time… type of input and output (refinery yield) - Reconfiguring a refinery is expensive, so refinery yields tend to remain stable over time

Exports Stock build

From other sources Direct use

Indigenous Refinery Production

Products Imports Petrochemical Primary oil products transferred industry Crude oil Backflows Stock draw Natural gas liquids Other hydrocarbons Secondary products Refinery intake is inputs to refinery mostly crude oil but Additives/blending they also process other components primary and unfinished Refinery feedstocks secondary oil products. IEA 2019. All rights reserved Oil balance – Indigenous production

• Production should include both onshore and offshore production and exclude amounts returned to formation.

• It is important to determine the point of measurement of production.

• As well as oil products, receipts from other fuel sources can enter the refinery process.

For example liquids produced from coal liquefaction plants. Solid fuels

Natural gas can be used to : Natural gas - upgrade synthetic crude oil and petroleum products. - manufacture of synthetic gasoline in the petrochemical sector.

Amounts of biofuels for blending with transport fuels (bio Biofuels gasoline, bio diesel, bio jet kerosene)

• Stocks are held for three main reasons: logistics, security and business.

• Stocks can be divided into three categories:

Primary stocks Secondary stocks Tertiary stocks

Held in the supply chain Held in small bulk plants (marketing Held by final end-consumers (producers, importers, refiners, (power plants, industrial entities, or etc.) and for strategic purposes facilities below a certain capacity) and retail establishments. consumers in the by government or stock holding residential/commercial sector) organizations.

• They can be further divided based on the stockholding structure: industry stocks, government stocks and agency stocks.

Oil Oil products Refinery gas Crude oil Lightest Ethane Natural gas liquids LPG Other Hydrocarbons Refinery Naphtha Aviation gasoline Additives/Blending Gasoline type jet fuel components Motor gasoline Refinery feedstocks Kerosene type jet fuel Other kerosene Refinery intake Gas/diesel oil Fuel oil White spirit + SBP Lubricants Bitumen Refinery fuel Paraffin waxes Petroleum coke Other products Heaviest

Refinery gross output

Primary oil products Secondary finished oil Secondary oil products (input Refinery products to refinery)

Refinery intake Refinery gross output

Losses can occur during the refining process due to The units matter! evaporation. Mass units – small losses with no gains. When refinery intake > refinery gross output = Volume units – gains are likely because refinery losses. lighter products are produced. When refinery intake < refinery gross output = Energy units – small losses with no gains. refinery gains.

Refinery yield < 100% = Losses Refinery Yield = Refinery Output of Total Secondary Products x 100 (%) Refinery Intake of Total Primary Products Refinery yield > 100% = Gains

• Reclassification of products within a refinery is common. Possible - Change in specification Kerosene to gasoil Naphtha to Jet kerosene to gasoline - into other products. Blended diesel Diesel to fuel oil Possible but not very likely • We refer to these as inter-product transfers, this does not involve further processing. Fuel oil to gasoil Kerosene to LPG Not likely • The density and value of the oil products will impact the reclassifications. Gasoline to naphtha Diesel to jet LPG to fuel oil kerosene • When products are reprocessed in a refinery we More generally heavy to light products consider these “products transferred”, these products are not delivered to the market.

Products transferred Stock build Refinery fuel

International Exports Marine Bunkers Transformation

Gross Refinery inland deliveries Refinery gross Finished secondary oil products output Interproduct Final Refinery gas Gas/diesel oil Imports transfers Consumption Ethane Fuel oil

LPG White spirit + SBP Stock draw Naphtha Lubricants Primary product receipts Aviation gasoline Bitumen

Gasoline type jet fuel Paraffin waxes Recycled Motor gasoline Petroleum coke products

Kerosene type jet fuel Other products

Other kerosene Primary products used directly

• This flow covers the deliveries of oil to: The domestic/international split should be determined on the basis of - Ships of all flags undertaking an international port of departure and port of voyages. arrival.

• Domestic navigation and consumption by fishing vessels are covered elsewhere in the balance.

Why it matters:

• Important outlet for the refining industry. • Important part of demand for oil in a country. • 80% of global trade in physical goods is done by sea – key to track policy impact. • The distinction between national and international navigation matters for emissions calculations (they are excluded from national inventories). IEA 2019. All rights reserved Oil balance - Final consumption

• Due to their specific properties, different oil products have specific uses.

Examples of the types of oil products one can expect to find in different consumption sectors

Electricity Chemical and Aviation Road Navigation Residential Non-energy plants Petrochemical transport use Crude oil Naphtha Diesel Jet kerosene Gasoline Heating oil* Naphtha Bitumen Diesel LPG Ethane Diesel Fuel oil Kerosene Paraffin waxes Kerosene Heating oil Other products

• The petrochemical industry is a special case as it is not only a large consumer of oil but also a producer of oil products. As such it is an integral part of the oil balance.

Gross Oil Balance Refinery inland deliveries Include: Not include:

All oil inputs Energy Non-energy (for energy and use use Non-energy use non-energy use) Petrochemical industry output Energy use Energy output Non-energy output output Oil products Fertilizers e.g. pyrolysis Plastics gasoline Synthetic fibers …

Supply Data

Producers, oil terminals, importers/exporters or customs data, refiners. Surveys, company reports, etc. Demand Data

Energy Consumers, wholesalers. End-use survey for households and enterprises, sales data, etc.

Integrated Approach

Using existing surveys, direct measurement, estimation and modelling

Surveys

Enterprise Household

Administration data

Energy regulator, custom office, excise tax records etc. Industry associations, chamber of commerce etc.

Estimation/modelling

e.g. NGL production-> LPG exports/refinery output

Annual and quarterly Publications Data support Fuel Information books, World energy statistics & balances, CO emissions… 2 Oil Market Report, World energy outlook…

IEA website Booklet Mobile App Electronic data files Atlas, Sankey flows… Key World Energy Statistics Android, apple and windows Online data service

Transparency in the oil market

Improved analysis and policies

Energy security

• Improved analysis and policies - Preliminary source of information - Basis for comparison with annual data

• Energy security purposes - Recent/quick assessment of markets - Size of a supply disruption - Ad-hoc assessment - Monitoring of a country’s ability to face a disruption

Short term – Trend indicators

OECD - Total Product Demand OECD - Total Oil Stocks 50 2,550

2,500 49 2,450 48 2,400 47 2,350

46 2,300

Thousand Barrels 2,250 45 2,200 Million Barrels per Day 44 2,150 43 2,100

42 2,050

2014 - 2018 Range 5-year average 2017 2018 2014 - 2018 Range 5-year average 2018 2019

Seasonality

Greece – Jet Kerosene Demand UK – Other Kerosene Demand

Impact of events - Scheduled maintenance

Austria – Crude, NGL + Feedstocks Austria – Total Products Refinery Intake Refinery Gross Output

Impact of events - Detailed visualization of the effects of unplanned events • Example: France 2016 - Impact of strike on oil markets / oil industry

Gasoline demand Refinery outputs

1600 208 1400 198 1200 188

178 1000

168 800 158 600 148 400

Thousand Barrels per Day 138 Refinery Output by Product 128 200

118 0 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16

LPG Naphtha Motor Gasoline Jet Kero Other Kero

2011 - 2016 Range 2016 2017 Gas/Diesel Oil Fuel Oil (Residual) Petroleum Coke Other Products Total Products

Data validation - Detailed visualization of possible data issues

Refinery Losses (Annual data) 9 000

8 000

7 000

6 000

5 000 kt 4 000

3 000

2 000

1 000

-- 2013 2014 2015 2016

% - Refinery losses as a percentage of refinery intake A negative refinery loss implies a refinery gain Source: IEA, Monthly oil data service, Oil Information 2017IEA 2019. All rights reserved Why collect monthly oil data – Improved analysis and policies Preliminary source of information

https://www.iea.org/newsroom/news/2019/april/key-oil-trends-2018.html

• LPG (Gross Inland Deliveries Observed) Timeliness can be a factor 12 000

• The data collection system of a 10 000 country also matters (voluntary v.

mandatory) 8 000

• Confidentiality issues 6 000 In this example,

4 000 monthly deliveries data does not cover private 2 000 operators

-- 2013 2014 2015 2016

Monthly Annual