Asia is expected to lead the global refinery hydrocracking units’ capacity growth, contributing about 49% of the total global capacity growth by 2024.

According to data and analytics company GlobalData, the region is likely to add 1.2 million barrels per day (mmbd) of hydrocracking units capacity by 2024.

The company’s report, Global Refinery Hydrocracking Units Outlook to 2024 – Capacity and Capital Expenditure Outlook with Details of All Operating and Planned Hydrocracking Units, reveals that the global hydrocracking units’ capacity is expected to increase by 2.4 mmbd, from 11.3 mmbd in 2019 to about 13.7 mmbd in 2024.

Out of the total global capacity additions, 1.6 mmbd is likely to come from the expansion of active projects while the remaining 0.8 mmbd is expected to come from new-build planned and announced projects.

“Out of the Asia’s total hydrocracking units capacity additions of 1.2 mmbd by 2024, 0.4 mmbd is likely to come from active expansion projects and new-build projects are expected to contribute the rest 0.8 mmbd by 2024,” said Adithya Rekha, Oil and Gas Analyst at GlobalData.

“In the region, China, India and Thailand account for most of the capacity additions with a combined total of 1.1 mmbd by 2024.”

GlobalData expects Former Soviet Union (FSU) to occupy the second place in terms of hydrocracking unit capacity additions by 2024.

The region is expected to contribute about 22% of the global hydrocracking units’ capacity growth, with total capacity additions of 540 mbd by 2024. In the FSU, Russia accounts for most of the capacity additions with 480 mbd.

“Middle East will be the third-highest region globally, with 325 mbd capacity addition by 2024. Kuwait, Bahrain and Oman will be the top three contributors in the region with a combined capacity of 270 mbd by 2024,” Rekha concluded.

Why could these developments in the Asia-Pacific region be of interest to the gases industry?

gasworld--Rob-Cockerill

Rob Cockerill, gasworld’s Global Manager Editor, explains here.

“First of all, let’s look at why hydrocracking is significant. We know that the oil and gas refining sectors consume huge amounts of industrial gases in their processes, particularly a gas like hydrogen that is considered the key enabler in cleaning up these ‘dirty’ products of extraction and helping to ensure the fossil fuel products that we are so dependent on today meet their required specifications and regulations requirements,” he said.

“When it comes to hydrocracking specifically, this is basically a two-stage process combining catalytic cracking and hydrogenation – hence, hydro-cracking. This process sees the heavier feedstocks cracked in the presence of hydrogen to produce those products we need and use today. The process relies upon high pressure, high temperature, the catalyst, and of course the significant volumes of hydrogen.”

“When it comes to these projections for the Asia-Pacific region, we know that the (petro)chemicals and refining sectors are traditionally one of the biggest end-users of industrial gases across so many regional economies, and this is certainly the case in two of the countries mentioned here, India and Thailand.”

Cockerill cited 2018 figures from gasworld Business Intelligence which described the chemical and refining sectors accounting for a combined 39% of the commercial industrial gases market in Thailand in 2018. In India, these sectors accounted for a combined market share of around 22% in 2018.

“The interesting factor in the Indian market in particular,” Cockerill added, “is that there’s a large captive market across the country. The Indian industrial gas sector has an unusually large onsite business for a developing country (22% approx.), with a large number of steel clients that have been ‘weaned’ off captive-owned and operated supply solutions in the last decade.”

“Whilst most gas production within the petrochemical and refining industries in India remains captive, our colleagues in gasworld Business Intelligence expect the trend to convert captive plants into onsite supply schemes to accelerate. And the captive operations in India are quite substantial too; combined with any major hydrocracking capacity additions expected in the years ahead, we could see strong industrial gas growth potential in the country, as well as boosts to the regional gas markets in China and Thailand, respectively.”