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  • We're delighted to announce YPF as Host Partner this year
  • LARTC 2017 is taking place in Buenos Aires with YPF as Host Partner
  • The first look agenda is now out!
  • LARTC 2017 is officially supported by the Ministerio de Energía y Minería de la Nación
  • 2 new speakers from International Finance Corporation confirmed

LARTC Advisory Board Meeting

Here are the last key takeaways from the LARTC Advisory Board Meeting that took place in Buenos Aires, in February.

Read the first key takeaway on the region’s dependence on imports here.

Read the second key takeaway on Latin America’s petrochemical industry here.

Read the third key takeaway on regional and overseas expertise here.

Read the fourth key takeaway on Energy Efficiency here.

 


Key Takeaway 5: The region struggles to attract investment and finance projects

 

In a low oil price context, project approval is even more challenging and sourcing the capital necessary for these projects is even more so. The advisory board members stated financing is certainly a big concern when it comes to the development of the regional refining and petrochemical sectors. There is a lot of potential for this industry, but if significant investments can’t be secured, its development is severely compromised.

 

Importance of engaging with local communities to change local perceptions

With local perceptions of oil companies generally on the negative side, the need for companies to engage with local communities and encourage an open dialogue between parties is increasingly important. Transparency is essential to maintaining a healthy relationship and any actions a company can take to encourage this will have positive knock-on effects. Involving the local community in the decision-making process and keeping them informed of the status and objectives of projects will facilitate a friendlier and welcoming operating environment. An example of open communication can be seen through the use of social media. Shell and Statoil are among the companies enabling open communication with the general public through social media platforms, an essential tool in today’s digital age. Interaction with local communities could also be used to promote the development of local content, with support programmes for local universities and training institutes.

Download the full report here

Daniel Monzón Partner at Arthur D. Little shares his insights with us on the Latin American Refining Industry

 

daniel Monzon partner at Arthur D littleThe Latin America Refining Technology Conference (LARTC), hosted by YPF and with the support of the Ministry of Energy and Mining, will take place in Buenos Aires, from the 5-7 September. Daniel Monzón, a partner at Arthur D. Little and author of this paper will be chairing the event.

The Latin American refining industry, with its almost 70 refineries, faces a challenging and changing environment that forces them to review strategy to maintain profitability.

Short on refining and conversion capacity

Latin America as a whole will experience strong deficits both in diesel and gasoline by the year 2020 since it is expected a 860 kbd and 910 kbd net importing position for diesel and gasoline respectively. The main deficits in diesel take place in Brazil, Central America, Chile and Argentina, while Mexico and Central America lead deficits in gasoline, followed by Brazil.

The overall demand of diesel and gasoline is to hit 5.3 million barrels per day by 2020 in Latin America, growing at a 2.4% CAGR pace over 2016-2020 period, with the largest markets being Brazil and Mexico. Even though some production increases are forecasted in Mexico and Colombia, Latin America will continue to fall short on refining capacity.

 

Despite this shortage, there are several refineries in Latin America operating below optimal utilization rates. The reason behind this phenomenon relies on a mismatch between refinery configuration and domestic demand product mix.

More than half of Latin American refineries are classified under “topping” or “hydroskimming” configuration type and only about 20% of them present a “deep conversion” configuration. Latin American refineries are well behind US & Canada reference in terms of upgrading, gasoline quality and desulphurization capacity.

Particularly in upgrading processes, Latin American refineries need to improve in coking, hydrocracking and catalytic cracking capacity. For every barrel per day of atmospheric distillation capacity, there is an average of only one third barrel per day of upgrading capacity, while the US and Canada’s average is 70% higher.

 

Read the rest by downloading it here

LARTC Advisory Board Meeting

Here are the following key takeaways from the LARTC Advisory Board Meeting that took place in Buenos Aires, in February. The industry experts present at the meeting and sharing their insights include:

  • Hector Godoy, Conversion Manager, Pampa Energía
  • Pablo Baravalle, Senior Optimization & Control Process Engineer, YPF
  • Adrián Guzmán, Head of Products Downstream Division, Y-TEC
  • Ignacio Millán, Chemical Commercial General Manager, YPF

 

Key Takeaway 4: Taking on a stronger Energy Efficiency mentality – what’s next?

 

The whole region needs to become more efficient in their operations, including their energy consumption. With increased awareness of the impact and severity of climate change, efforts to reduce emissions and improve energy efficiency are key to the region’s refining and petrochemical industrial future. NOCs across Latin America need to be looking into incentives and projects encouraging a stronger focus on energy efficiency and sustainable practices. Actions need to be taken to mitigate the environmental impact of refining and petrochemical activities, and focus on becoming more sustainable in an ever-changing market.

The Chilean downstream industry was discussed as an interesting case study in this context as it is clearly taking a stronger stance on the importance of moving towards more sustainable practices, with environmental regulators recently sanctioning refineries not complying with environmental standards and the increasing reliance on the development of renewables.

“Today’s challenges call for increased levels of

production flexibility within plants

so as to maximise their utilisation and

adjust to ever-changing market demand”

 

The electrification of the transport sector needs to be taken into account

The electrification of the transport industry is picking up momentum. Europe has seen electric vehicles take increasingly significant market share. Looking at the long-term, they offer a more sustainable and competitive cost alternative to fuel powertrain vehicles.

Latin America needs to prepare for similar market changes and assess when and what impact this trend will have on the regional industry. Some countries are already making steps towards these changes. The city of Bogota has pledged to convert 50% of its taxi fleet to electric vehicles in the next 10 years and hopes to substitute all of its bus fleet with hybrid and electric vehicles by 2024. Chile’s “E-mobility Readiness Plan” aims to grow the electrical vehicle (EV) market to 70,000 cars by 2020.

While electric transport is in initial stages in Latin American countries, the industry needs to take this market trend into account in its industrial refining and fuel distribution network strategy.

Read the first key takeaway here.

Read the second key takeaway here.

Read the third key takeaway here.

Download the full report here

LARTC Advisory Board Meeting

Here are the following key takeaways from the LARTC (Latin America Refining Technology Conference) Advisory Board Meeting that took place in February in Buenos Aires. The industry experts present at the meeting and sharing their insights include:

  • Mauricio Martin, Planning and Technical Downstream Director, YPF
  • Arturo Bettati, Managing Director Latin America, Haldor Topsoe America Latina S.A
  • Mariano Bertaina, Refining Technical Executive Manager, Axion
  • Ana Patroni, General Manager for Products, Processes and Analytics, YPF Tecnología S.A.

 

Key Takeaway 3: Refiners and petrochemical producers will benefit from regional and overseas expertise

 

There is a clear interest in learning more about the challenges, experience and expertise of refineries overseas. Europe is home to some of the best refineries in the world, with strong operational systems. The US usually leads the show with the most innovative technology developments. Africa and Latin America’s petroleum industries present many similarities, as net exporters of crude and importers of refined products, but both regions need to seriously reconsider their refining strategies, and this relies to some extent on a change in way of thinking. In many cases there’s a lack of focus on performance and energy efficiency culture and this will need to change for the refining segment to compete with other regions.

Not only will refiners benefit from overseas expertise, but lessons learnt from other industry players, refiners and petrochemical producers across the Latin American region are also of great value, as many of the challenges they need to overcome have already been dealt with by other players. By sharing experiences, the industry can pool together the necessary tools, knowledge and systemic thinking to ensure the competitiveness and secure the future of the region’s downstream industry.

 

Incentives must be put in place to develop new innovative technological solutions

The Latin American downstream industry is in need of new technologies. While the new technologies are readily available in the market, because of the lack of recent activity in many countries, with many projects being held at a standstill, and with the lack of investment, Latin American refineries find themselves lagging behind. Many complexes across the region are operating with outdated technology, incapable of handling the combination of poorer feedstock and higher product specifications. The advisors discussed what technological solutions are needed to support efficiency and to meet these new product specifications. Today’s challenges, including the increasing need to optimise feedstock supply and mitigate the impact of diminishing feedstock quality, call for increased levels of production flexibility within plants, so as to maximise their utilisation and adjust to ever-changing market demand.

New product specifications, notably the recent changes in sulphur specifications for marine bunker fuels, will require unit upgrades across the refineries and probably investing in hydro processing upgrades would be essential. Other technologies, including catalysts, FCC, hydro-treatment, and delayed cokers, will also need to be looked at. These continuous changes in regulations are challenging for the region’s industry development and investing in new technology or technology upgrades to efficiently meet the criteria will be essential to its survival.

Read the first key takeaway here.

Read the second key takeaway here.

Download the full report here

LARTC Advisory Board Meeting

Following the first key takeaway on the need for clear strategies to be put in place in order to decrease the region’s dependence on imports, here are the following key takeaways from the LARTC Advisory Board Meeting that took place in Buenos Aires, in February.

Key Takeaway 2: LATIN AMERICA NEEDS TO FURTHER DEVELOP ITS PETROCHEMICAL INDUSTRY

 

Many petrochemical producers across the world are now trying to diversify their product portfolio and adapt to new market conditions, but Latin America is still grappling with a lack of investment in their petrochemical industry and the region is a net importer of both feedstock and petrochemical products. One of the many difficulties comes from competing with the US market, which benefits from gas as a more competitive feedstock. However, there have been some interesting developments, with the new world-class scale Mexican petrochemical plant Etileno XXI showing positive outcomes since the update we heard at the last LARTC event in Mexico, and other countries also looking into expanding into petrochemical production.

“Strong competition from the US

was highlightedas one of the biggest challenges

for the region’s industry”

 

The region is juggling both fierce competition and higher quality standards

Refineries and petrochemical plants across the Latin American region need to concentrate efforts into increasing their operational efficiency and rethink what critical changes in the industrial configuration, supply, market and operational sides need to be made so as to remain profitable, competitive and above all sustainable in the long-term. Strong competition, mainly arising from the US and in some cases from Middle East and Asia, was highlighted as one of the biggest challenges for the region’s industry. US products flood the Latin American market as, in general, they are both of higher quality and lower production cost. The technology already in place in many Latin American refineries is inadequate and outdated and considering crude quality and demand product mix the industry needs to heavily invest in new capacity, new units and innovative technologies. This is especially true with today’s stronger environmental regulations and higher quality product specifications.

There are definitely many incentives for technology providers to target the Latin American market, as demand for processing capacity and innovative and efficient technology is high. For instance, if we look at the Argentinian market there is a positive outlook for investment, since it’s one of the few markets not operating under a NOC refining monopoly and with Vaca Muerta’s vast reserves, it’s clear that the full hydrocarbon processing potential of the country is yet to be reached.

Download the full report here

LARTC Advisory Board Meeting

 

It is clear that the Latin American downstream industry has huge potential, but the region is currently facing an array of challenges, both technical and strategic. With the heavy and sour available feedstock and some underused refining capacity, the region remains a net importer of refined products and petrochemicals. Nonetheless, the number of countries investing in their downstream sectors is on the rise and opportunities for industry players to work on new refining and petrochemical projects are plentiful.

The Latin American Refining Technology Conference (LARTC) with the support from our host partner YPF will provide updates from the region’s key stakeholders on new refining and petrochemical projects and address key challenges in realising the full potential of Latin America’s downstream industry including: responding to new regulations and product specifications, feedstock availability, attracting investment and managing project financing, improving  energy efficiency, petrochemical market dynamics and trading hubs.

To ensure the event brings real value to the region’s refining and petrochemical industry and acts as a platform to support the key players and stakeholders, the World Refining Association hosted the LARTC Advisory Board Meeting in Buenos Aires on the 14th of February 2017.

The insights shared by the all the Advisory Board members were invaluable and fundamental for the development of the programme and we are thankful for their commitment and input.


Key Takeaway 1: Strategies must be put in place to decrease the region’s dependence on imports

One of the main industry challenges discussed at the meeting was the regional refineries’ struggle to efficiently process the heavy and sour crude readily available across the region. Latin America is a net exporter of crude, and yet some of its refineries are not operating at full capacity. The downstream sector lacks the technical-operational capacity to efficiently refine this crude into compliant products, especially with the stricter specifications and low sulphur products today’s market requires.

This challenge of securing optimal feedstock and the demand mix challenge have a knock-on effect, leaving a large number of the region’s refineries operating below their maximum capacity. There’s a real lack of refining and conversion capacity across the region, and projects are continuously being cancelled or delayed. We can see this currently with the Brazilian industry, one of the biggest markets in the region, which is currently at a complete stand-still. Clear visions and plans need to be discussed by regional governments and NOCs so as to highlight how each country plans on tackling this issue so as to assure the competitiveness of their downstream sectors and to decrease the dependence on imports.

Download the full report here

LARTC Call for Papers - Advisory Board meeting
Call for papers
Deadline extended to Thursday 13th April