Unstable demand impedes refining projects

Persistent volatility in demand, fluctuating construction costs and some other factors are obstructing refining projects in the Arab region despite their importance in economic diversification, according to an official study.

Many Arab nations have approved plans to build new refineries or expand existing units to meet domestic and external consumption and at the same time to cope with the changes in the structure of demand for oil products, said the study, published in the monthly magazine of the 10-nation Organisation of Arab Petroleum Exporting Countries (Oapec).
The study said such changes include cutting the use of high-sulfur heavy fuel for environmental reasons, the availability of natural gas in some Arab countries, and the application of energy-saving measures in industry. In response, several refineries have announced projects to change the structure of their output in keeping with the change in demand, it said.
"Several Arab countries are now building new units to convert fuel oil and heavy products to light derivatives, as well as new high-tech refining facilities.
“However, projects for building new refineries and developing existing refineries in many Arab countries are facing hurdles that may impede, delay, or even jeopardise their implementation," Oapec said.

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