1 / 35

ASPHALT SUPPLY IN A VOLATILE OIL WORLD

ASPHALT SUPPLY IN A VOLATILE OIL WORLD. Bill Haverland ConocoPhillips Company. Issues to be Discussed. Crude Oil Supply Crude Oil Pricing Refining Capacity Products Supply Products Pricing Future of the Industry. CRUDE OIL SUPPLY. A WORLD LOOK. Crude Oil Supply (2006).

shubha
Download Presentation

ASPHALT SUPPLY IN A VOLATILE OIL WORLD

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. ASPHALT SUPPLY IN A VOLATILE OIL WORLD Bill Haverland ConocoPhillips Company

  2. Issues to be Discussed • Crude Oil Supply • Crude Oil Pricing • Refining Capacity • Products Supply • Products Pricing • Future of the Industry

  3. CRUDE OIL SUPPLY A WORLD LOOK

  4. Crude Oil Supply (2006) World Proven Crude Oil Reserves Billions of Barrels World Crude Oil Production Millions of Barrels Per Day W. Europe 15 FSU/E. Europe W. Europe Latin America FSU/E. Europe 79 Latin America 116 6.3 12.6 US/Canada 10.6 201 11.3 36 Asia /Pacific US/Canada 26.0 743 102 8.4 Africa 9.8 Asia/Pacific Middle East Asia/Pacific Africa Middle East Africa Middle East Total: 85MMB/D Total: 1,292 BB

  5. Crude Oil Demand Demand has risen by 7 MMBD (9%) since 2002. Demand at 85 MMBD or 98% of world daily delivery capacity. Vulnerable to supply disruptions caused by storms, accidents, breakdowns, political unrest. 65% of proven reserves within national oil companies and 16% held by Russia. Traditional companies have full access to 7% of reserves and 12% through partners (if allowed).

  6. CRUDE OIL PRICING

  7. WTI Price by Year

  8. WTI Price by Quarter

  9. Current Crude Pricing

  10. REFINING CAPACITY

  11. Topping Refinery GASES NAPHTHA AND 650- GASOIL FEEDSTOCKS “Tea Pot” Not A Refinery Really Just A Crude Distiller CRUDE OIL DU 6OIL or ASPHALT (if heavy crude) 650+

  12. Simple Refinery TO MOGAS GASES 650- NHT CRU JET/KERO KHT TO NO.2 DHT CRUDE OIL DU “Hydroskimming” Refinery, many exist all over the world 6OIL or ASPHALT (if heavy crude) 650+

  13. CCU - “Complex” Refinery GASES TO MOGAS 650- TO MOGAS NHT CRU JET/KERO KHT TO 2OIL DHT CRUDE OIL DU GASES TO MOGAS ALKY 650-1050 GASOLINE TO MOGAS CCU GASOIL TO 2OIL 650+ VAC 6OIL 1050+ ASPHALT

  14. TO MOGAS TO MOGAS JET/KERO TO 2OIL TO MOGAS TO MOGAS TO MOGAS CCU/HCU/Coker - “Very Complex” Refinery ISOM GASES NHT CRU KHT DHT H2 PLANT GASES 650-750 HCU MTBE CRUDE OIL DU GASES ALKY 750-1050 CCU VAC GASES COKER TCU/VIS DEASPHALTER COKE

  15. Refinery Yield (% of Crude Intake)

  16. U. S. Refining Capacity 319 175 158 131 Last New U. S. Refinery Built in 1976 Source: Oil & Gas Journal

  17. U. S. Asphalt Refining Capacity Production Range: 600 B/D to 60,000 B/D Source: Oil & Gas Journal

  18. U. S. Refining Coking Capacity

  19. U.S. Coker Construction Projects 2005 - 2011 • Planning, Engineering, or Construction Phase • Total Refineries: 360 MB per day • Asphalt Refineries: 197 MB per day * Source: Argus Asphalt Report

  20. PRODUCTS SUPPLY/DEMAND

  21. Supply Source for U. S. Demand

  22. U. S. Product Demand, MB/D

  23. Historical Asphalt Supply/DemandMillions Tons - Liquid Source: Oil & Gas Journal

  24. PRODUCTS PRICING

  25. Prices by Quarter

  26. Gasoline Price Components

  27. Prices by Quarter

  28. Asphalt vs Coker Feed Value

  29. Gasoline/Diesel Pricing Aug., 07 Price: $95.00/BBL Less Distribution: 6.00/BBL Net to Refinery: $89.00/BBL Kansas City Asphalt Pricing Aug 07: $54.50/BBL* ($40/Ton): $7.15/BBL $47.35/BBL Lost Value: $41.65/BBL *Source – Poten & Partners Current Coking Economics

  30. Current Coking Economics • 30,000 BBLS/Day Asphalt Production • X 70% Gasoil Production • 21,000 BBLS Gasoil for Gasoline/Diesel • X $41.65/BBL Gasoline/Diesel diff. To Asphalt • $874,650 per day added margin • $1 Billion / $874,650 = 1,143 days (3.1 years payoff)

  31. FUTURE OF THE INDUSTRY

  32. Current Realities Crude production at maximum rates based on existing infrastructure U.S. refining running at maximum capacity (less turnaround activity) No new refineries in the near term Existing refinery expansions must fill gap Increase crude capacity and conversion capabilities to meet light product demand Asphalt must keep pace with conversion feed values to encourage production

  33. Factors Influencing Asphalt Price Absolute price of crude (WTI benchmark) Light/Heavy crude price differential Light product “crack spread” Coking economics Impact of clean fuels (sweet crudes) Heavy crude availability (Venezuela/Canadian) Transportation costs Supply/Demand

  34. Future For Asphalt • More heavy crude being run (availability and price) • Clean fuels capital behind refiners, up-graders next? • Asphalt is more expensive in a $70.00 crude world • Asphalt has to trend faster with crude oil prices • Asphalt has to be more competitive with light products • Transportation costs rising – Rail, Barge, Terminalling • State asphalt price indexes reduce supplier/contractor risk

  35. QUESTIONS

More Related