Methodology Supply Demand
Tipping the Scale 1 Overview Latin America and the Caribbean, a major petroleum product importing region, provides an important counterbalance to surpluses in refined product markets in the rest of the world. Yet the ability of this region to continue to provide a vital sink for products through the end of this decade is uncertain. ESAI Energy s Tipping the Scale multi client study takes a deep dive into country level supply and demand forecasts for petroleum products in Latin America and the Caribbean, then aggregates data and organizes the region into the four petroleum sub regions as illustrated below. The four sub regions play key roles in the future demand for: US product exports associated with the boom in U.S. shale and Canadian heavy oil production NGL exports from North America used as petchem feedstocks and diluent Gasoline surpluses from Europe Naphtha deliveries from North Africa Diesel trades from Asia Changes in product balances in Latin America and the Caribbean will have a profound impact on global product flows, refining margins and prices. Sub Regions in Latin America and the Caribbean
Tipping the Scale 2 Questions that will be answered in this study: Region wide When and how will refinery expansion and upgrading projects impact supply? How will demand in large gasoline and diesel consumers tip product balances? How will policy changes influence sulfur specifications? Which countries will emerge as airline hubs with jet fuel market potential? Mexico Will Mexico remain a sink for gasoline exports from the U.S. Gulf Coast? How much fuel oil will Mexico place in international markets? Caribbean Basin What will be the import demand for naphtha based diluent needed for crude oil upgrading? Will LPG demand provide a big enough market for U.S. exports, or will surpluses move to Asia? Atlantic South America Will Brazil and Argentina reverse widening transportation fuel deficits? How will refinery projects and biofuels use change import demand? Pacific South America Will Chinese investment have an impact on refining capacity and product supply? How much jet fuel and diesel will be required to fill deficits in Chile, Ecuador and Peru? Study Organization Tipping the Scale provides projections of refined product balances in Latin American and the Caribbean. It examines changes and lack of change occurring in the region s product markets through an in depth analysis of supply developments in the refining sector and those factors that are most important in driving demand growth in the region. The study also examines the impact of Latin American and the Caribbean product balances on the global market for refined products through the end of. For market participants residing in these sub regions, this study demonstrates how balances and trade flows will evolve among their immediate neighbors relative to the rest of the region. For those outside Latin America and the Caribbean, it reveals where marketing opportunities will grow, shrink and remain near current volumes not only in the region as a whole, but in the Caribbean Basin, Atlantic South America, Pacific South America or Mexico. And for those with interest in global markets for refined petroleum products, this study presents a view on how international trade flows and prices will be affected by Latin America and the Caribbean s ability or inability to effectively offset balances elsewhere around the world. Deliverables Hard copy of the study PDF copy Appendix tables in Excel Direct access to analysts
Tipping the Scale 3 About ESAI ESAI Energy, LLC is an energy research and forecasting firm that focuses on global petroleum, alternative fuels and natural gas markets. The firm is an affiliate of Energy Security Analysis, Inc, which has conducted energy market analysis and price forecasting since the mid 1980s. ESAI Energy s petroleum, alternative fuel and natural gas analysis and forecasting is based on a dataheavy methodology that is designed to integrate available data with the expert judgment of regional specialists to determine supply and demand trends by product and country. Using actual data and estimates where data are unavailable, ESAI Energy s regional analysts maintain historical databases for a variety of industry attributes: consumption, production, quality and inventories for crude oil and each of the main petroleum products, refinery capacity and throughput, alternative fuels supply and demand, and petrochemical and midstream blending inputs. Using these data, information and understanding of language and political economy in each region, analysts forecast developments in these markets from one week to 25 years. The quantitative supply/demand analysis is complemented by detailed political, regulatory, and industrial analysis. ESAI Energy maintains a database of environmental specifications, taxes, tariffs and subsidies, and combines that information with ongoing political, financial, and regulatory research to determine future market trends in countries and regions. In addition, we study and interpret key geopolitical developments that impact the global energy markets. ESAI Energy produces multi client studies like Tipping the Scale several times per year. In addition, we provide our retainer clients, who include energy companies and national governments all over the world, with ongoing market analysis and forecasting. Please contact Tom Lovett at tlovett@esai.com or by phone at +1.781.245.2036 (x22) with questions, to order the study, or learn more about ESAI Energy Ordering information Order form in back of prospectus. Contact Tom Lovett at tlovett@esai.com or +1.781.245.2036 with any questions about ordering or the study content. 401 Edgewater Place, Suite 640, Wakefield, MA 01880 +1.781.245.2036 www.esai.com No parts of this publication may be duplicated, transmitted or stored without ESAI s written permission. The estimates, forecasts and analyses in this report are our judgment and are subject to change without notice. No warranty is made or implied.,.
Tipping the Scale 4 Table of Contents Introduction..... 1 Executive Summary.. 2 Contents.. 4 Figures 5 Part I. Introduction to Product Balances in Latin America and the Caribbean 7 A. Product Balances in Latin America and the Caribbean, 2008 7 B. Product Balances in Latin America and the Caribbean, 9 Part II. Outlook for the Refining Sector and Refined Product Supply 12 C. The Origins of Refined Product Deficits from the Supply Side 12 D. Refinery Construction and Expansion Projects,. 15 E. Refinery Upgrading Projects, 18 F. Proposed Refinery Projects in Latin America and the Caribbean. 20 G. Refined Product Supply in Latin America and the Caribbean,. 21 Part III. Outlook for Refined Product Demand and Balances.. 25 A. The Origins of Refined Product Deficits from the Demand Side 25 B. Five Factors Contributing to Demand Growth Trajectories,.. 29 C. Gasoline Demand and Balances Forecast. 38 D. Diesel Demand and Balances Forecast 44 E. Fuel Oil Demand and Balances Forecast 49 F. Naphtha Demand and Balances Forecast. 52 G. LPG Demand and Balances Forecast 53 H. Jet Fuel Demand and Balances Forecast 55 Part IV. Implications for Global Refined Product Markets. 58 A. Light Distillates Gasoline, Naphtha and LPG 59 B. Middle Distillates Diesel and Jet Fuel 61 C. Fuel Oil 63 Part V. Appendix Tables.... 65 A. Refined Product Balances. 65 B. Refined Product Demand. 71 C. Refined Product Supply. 77 D. Gasoline and Diesel Balances by Sulfur Content.. 83
Tipping the Scale 5 E. Percentage of Refined Product Balances by Sub Region 85 List of Figures: Figure 1. Refined Product Balances in Latin America and the Caribbean, 2008.. 8 Figure 2. Refined Product Balances in Latin America and the Caribbean,.. 10 Figure 3. Map of Refineries in Latin America and the Caribbean 12 Figure 4. Throughput in Latin America and the Caribbean, 2008.. 13 Figure 5. Yields in Latin America and the Caribbean and Other Regions in. 14 Figure 6. Refinery Expansion Projects in Latin America and the Caribbean,. 16 Figure 7: Refinery Upgrading Projects in Latin America and the Caribbean, 18 Figure 8. Throughput in Latin America and the Caribbean,.. 21 Figure 9. Select Fuel Oil, Gasoline and Diesel Yields,. 23 Figure 10. Refined Product Output in the Caribbean Basin,... 24 Figure 12. Refined Product Output in Pacific South America,.. 24 Figure 13. Chart: Refined Product Output in Mexico,.. 25 Figure 14. Economic Growth in Latin America and the Caribbean, 2004. 26 Figure 15. Refined Product Demand Growth by Sub Region, 2004. 27 Figure 16. Refined Product Balances by Sub Region and Fuel Type, 2008. 28 Figure 17. U.S. Exports to Latin America and the Caribbean, 2008.. 29 Figure 18. Refined Product Demand Growth by Sub Region,. 30 Figure 19. Regional Economic Groupings in Latin America and the Caribbean 31 Figure 20. Percent Change in New Light Duty Sales, 2008 32 Figure 21. Contributing Factors to Demand Growth 34 Figure 22. Biofuels Demand in Latin America, 36 Figure 23. Gasoline Demand in Latin America and the Caribbean,. 38 Figure 24. Gasoline Balances in Latin America and the Caribbean,. 40 Figure 25. Gasoline Balances by Sulfur Specification, 42 Figure 26. Diesel Demand in Latin America and the Caribbean,.. 44 Figure 27. Diesel Balances in Latin America and the Caribbean,.. 46
Tipping the Scale 6 Figure 28. Diesel Balances by Sulfur Specification,. 48 Figure 29. Fuel Oil Demand in Latin America and the Caribbean, 50 Figure 30. Fuel Oil Balances in Latin America and the Caribbean,.. 51 Figure 31. Naphtha Demand in Latin America and the Caribbean,. 52 Figure 32. Naphtha Balances in Latin America and the Caribbean,. 53 Figure 33. LPG Demand in Latin America and the Caribbean,. 54 Figure 34. LPG Balances in Latin America and the Caribbean, 55 Figure 35. Jet Fuel Demand in Latin America and the Caribbean, 56 Figure 36. Jet Fuel Balances in Latin America and the Caribbean, 56 Figure 37. Global Gasoline Balances 59 Figure 38. Global Naphtha Balances 60 Figure 39. Global LPG Balances 61 Figure 40. Global Diesel Balances.. 62 Figure 41.Global Jet Fuel Balances 63 Figure 42. Global Fuel Oil Balances.. 63 Figure 44. Sub Region Percentage of Regional Gasoline Deficit.. 85 Figure 45. Sub Region Percentage of Regional Diesel Deficit 85 Figure 46. Sub Region Percentage of Regional Fuel Oil Surplus.. 85 Figure 47. Sub Region Percentage of Regional Naphtha Deficit.. 86 Figure 48. Sub Region Percentage of Regional LPG Deficit. 86 Figure 49. Sub Region Percentage of Regional Jet Fuel Deficit. 86
Tipping the Scale 7 Appendix Tables Refined Product Balances Refined Product Supply Table 1: Gasoline Table 2: Diesel Table 3: Fuel Oil Table 4: Naphtha Table 5: LPG Table 6: Jet Fuel Refined Product Demand Table 1: Gasoline Table 2: Diesel Table 3: Fuel Oil Table 4: Naphtha Table 5: LPG Table 6: Jet Fuel Sulfur Content Balances Table 1: Gasoline Table 2: Diesel Table 3: Fuel Oil Table 4: Naphtha Table 5: LPG Table 6: Jet Fuel Table 1: Gasoline Table 2: Diesel Refined Product Balances GASOLINE BALANCES IN LATIN AMERICA AND THE CARIBBEAN ('000 b/d)
Tipping the Scale 8 DIESEL BALANCES IN LATIN AMERICA AND THE CARIBBEAN ('000 b/d) FUEL OIL BALANCES IN LATIN AMERICA AND THE CARIBBEAN ('000 b/d) NAPHTHA BALANCES IN LATIN AMERICA AND THE CARIBBEAN ('000 b/d) LPG BALANCES IN LATIN AMERICA AND THE CARIBBEAN ('000 b/d)
Tipping the Scale 9 JET FUEL BALANCES IN LATIN AMERICA AND THE CARIBBEAN ('000 b/d) Refined Product Demand GASOLINE DEMAND IN LATIN AMERICA AND THE CARIBBEAN ('000 b/d) DIESEL DEMAND IN LATIN AMERICA AND THE CARIBBEAN ('000 b/d) FUEL OIL DEMAND IN LATIN AMERICA AND THE CARIBBEAN ('000 b/d)
Tipping the Scale 10 NAPHTHA DEMAND IN LATIN AMERICA AND THE CARIBBEAN ('000 b/d) LPG DEMAND IN LATIN AMERICA AND THE CARIBBEAN ('000 b/d) JET FUEL DEMAND IN LATIN AMERICA AND THE CARIBBEAN ('000 b/d) Refined Product Supply
Tipping the Scale 11 DIESEL SUPPLY IN LATIN AMERICA AND THE CARIBBEAN ('000 b/d) FUEL OIL SUPPLY IN LATIN AMERICA AND THE CARIBBEAN ('000 b/d) NAPHTHA SUPPLY IN LATIN AMERICA AND THE CARIBBEAN ('000 b/d) LPG SUPPLY IN LATIN AMERICA AND THE CARIBBEAN ('000 b/d) JET FUEL SUPPLY IN LATIN AMERICA AND THE CARIBBEAN ('000 b/d)
Tipping the Scale 12 Gasoline and Diesel Balances by Sulfur Content GASOLINE SULFUR BALANCES IN LATIN AMERICA AND THE CARIBBEAN ('000 b/d) Caribbean Basin Atlantic South America >500ppm 150 500 50 150 10 +50 <10 >500ppm 150 500 50 150 10 +50 <10 Pacific South America Mexico >500ppm 150 500 50 150 10 +50 <10 >500ppm 150 500 50 150 10 +50 <10 Total >3,000 ppm 500 3,000 50 500 15 150 <15
Tipping the Scale 13 DIESEL SULFUR BALANCES IN LATIN AMERICA AND THE CARIBBEAN ('000 b/d) Caribbean Basin Atlantic South America >3,000 ppm 500 3,000 50 500 15 150 <15 >3,000 ppm 500 3,000 50 500 15 150 <15 Pacific South America Mexico >3,000 ppm 500 3,000 50 500 15 150 <15 >3,000 ppm 500 3,000 50 500 15 150 <15 Total >3,000 ppm 500 3,000 50 500 15 150 <15