Hong Kong has no domestic energy resources and will be required to meet growing oil and gas demand through imports alone, BMI has said. As a positive development for the country’s market, the decline in crude and refined product prices and the weaker oil price environment will see Hong Kong’s net oil import bill substantially reduce over the short and medium term. BMI has commented that Hong Kong can fall back on China in order to fulfil its energy needs, however there is some resistance on an over reliance on its parent state from both private and public entities. Still however, as Hong Kong becomes increasingly politically intertwined with Beijing, so too will its energy policy, and the city state is increasingly likely to turn to the mainland to achieve its goal of curbing its reliance on thermal energy over the coming years.
When it comes to refined oil products, demand growth and imports are expected to match underlying GDP trends closely, and BMI anticipate expansion to be moderate over the coming years in line with Hong Kong’s states as a mature economy. However, a drive towards energy conservation may lead to a moderation in market expansion. This apparently implies that demand will rise from a predicted 352 400 bpd in 2014 to 428 200 bpd in 2018 and a possible 543 300 bpd by 2023. This oil will all be imported.
BMI has reported that new legislation intended to streamline the refining sector saw approximately 400 000 bpd of Japan’s refining capacity taken offline. Favourable terms for joint ventures will see the downstream sector consolidate further. BMI forecast weak refined product demand to offer limited future prospects for the sector. However, in the long term, BMI forecast up to 50% of nuclear plants to return to the grid, the demand for LNG will remain elevated. The increase in LNG purchases also reflects higher consumption by the power sector. In the short term, BMI has said that demand for LNG will remain steady as Japan continues to fill in the nuclear void.
Japan’s theoretical oil import requirement is forecast to be 4.32 million bpd for last year and will fall over the forecast period, particularly when nuclear generation returns.
Myanmar is expected to benefit from growing private sector involvement, and BMI forecast a strong hike in exploration to 2023. Gas output is likely to continue to drive the country’s production growth, and BMI expend output to exceed 20 billion m3 as early as 2016. In light of the country’s prospective acreage, the increasing diversity of the competitive landscape and an improving business environment, BMI believe that the risks to this view lie firmly to the upside.
Domestic oil and gas demand are expected to remain flat to 2023, with field redevelopments and improved recovery projects helping sustain production over the period. New Zealand’s sole refinery is due to undertake a considerable refit of the catalytic reforming unit. This will result in greater ability to produce gasoline and will reduce net import requirements. The upgrade is expected to be complete by this year.
Edited from report briefs by Claira Lloyd