Oil and gas
Due to a lack of indigenous reserves, BMI has said that Belgium’s oil and gas sector offers little upside for growth. However, ExxonMobil’s plans for the Antwerp refinery is reportedly making Belgium one of the most attractive downstream investment destinations in Europe’s struggling refining sector.
Basically, BMI has said that similarly to the rest of Europe, Belgium is registering slow growth in oil consumption and by 2017 expects demand to rise to 655 800 bps, which will require imports of 711 100 bpd. By 2023, BMI expects demand to have hit 703 700 bpd, with imports of 719 700 bpd. BMI has forecast the cost of crude exports at US$26.4 billion for 2014, easing it to US$24.4 billion by 2017. This represents a drop compared to previous estimates by BMI due to a deterioration in the overall eurozone economic outlook. The cost of gas imports is expected to be US$8.4 billion for last year and is forecast to hit US$10 billion by 2023. At the time that BMI made these forecasts it was assuming an OPEC basket price for 2014 of US$102/bbl, dropping to US$97/bbl in 2023.
BMI has reported that the Belgian petrochemicals industry is attracting investment at the moment due to strong infrastructure advantages. However, BMI has said it could still feel the effects of a downturn in the eurozone that would threaten profit margins. Belgium is however, according to BMI, the host to leading petrochemicals companies who have a strong and well integrated value chain. This is particularly true of Antwerp’s status in terms of both high quality and cost effective production, as well as extensive access to markets and its infrastructure which sit along with an open economy and foreign trade representing over 80% of GDP.
However, the Belgian petrochemicals sector does suffer from a lack of domestic markets and this exposes it to strong external risk. Belgium is reportedly specialised in only a few segments and risks being outflanked by high volume producers in the Middle East, which have indigenous hydrocarbons resources and there is limited growth potential in a mature market.
In 2014, Belgium had an ethylene capacity of 2.54 million tpy with intermediate aromatics capacities of 870 000 tpy of benzene, 890 00 tpy of ethylbenzene, 1.94 million tpy of ethylene dichloride, 810 000 tpy of vinyl chloride monomer and 600 000 tpy of xylenes. When it comes to polymers, Belgium has capacities of 1.64 million tpy in high density polyethylene, 930 000 tpy low density polyethylene, 2.1 million tpy polypropylene, 475 000 tpy of PVC and 654 000 tpy of polystyrene.
Edited from report briefs by Claira Lloyd