The Challenge
Oil producing and refining companies needed to know how the shale boom would affect global naphtha production and its impact on its two main markets: gasoline for transport and feedstocks for petrochemical manufacturing.
Naphtha is a by-product of crude distillation at refineries and condensate processing at splitting facilities that serves mostly as an intermediate component in the production of other products. Because refining and petrochemical production at the same location is common, naphtha that feeds nearby petrochemical units is invisible to data collection. Transparent, accurate data just don’t exist.
The Solution
To get a more comprehensive forecast of overall naphtha production, we needed a way to estimate volumes expected to be produced inside the refinery gate, both now and into the future. This would allow us to develop a comprehensive view of naphtha supply, not available in any published statistics, and compare that supply to the reported demand from gasoline and petrochemical markets. By using our existing modeling of crude production and processing by quality, refinery distillation and secondary unit capacity, downstream investment, throughput, and global product demand, we were able to model the yield of naphtha production inside the refinery gate for every refinery in every country.
The Outcome
The market insight derived from this exercise allowed our clients to understand not only the potential impact of shale on global naphtha supply, but also the potential demand for naphtha-rich shale around the world, a critically important perspective for U.S shale producers.
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