NPRA 2007 Annual Meeting
OECD Europe’s Growth in Distillate Production Fallen Short of Demand Increase
+784
6,251
5,467
Distillate Demand (MB/D)
+2.8%
41.1%
38.3%
Distillate Yield
-0.6%
25.8%
26.4%
Gasoline Yield
-55
846
901
KeroJet Output (MB/D)
+472
5,624
5,152
Distillate Output (MB/D)
-24
3,523
3,547
Gasoline Output (MB/D)
+224
13,672
13,448
Crude Input (MB/D)
Change
2006
1999
Note: 2006 is based on January-October data.                                                                                                                                        Source: IEA
STo meet the increase in distillate demand of 784 thousand barrels per day between 1999 and 2006:
–OECD European refineries shifted production to maximize distillate production and made some investments in hydrocracking.
–They also did not increase kerojet production to keep up with rising demand for that product.
–The result was an increase in distillate fuel imports of 403 thousand barrels per day and kerojet imports of 271 thousand barrels per day, for a total distillate and kerojet import increase of 674 thousand barrels per day.

SAs can be seen, the increase in distillate yield was 2.8%, while gasoline yield only declined 0.6%, indicating that the increase in distillate yield did not come primarily from a shift from gasoline production.

SFrom a review of European refinery projects in the planning stages, most of those projects with increased distillate yield are achieving that increase from improved conversion – reducing residual fuel oil production and showing little change in gasoline production.  Thus, the gasoline excess in Europe will grow as gasoline demand declines.