As the weather starts to turn a little colder in the northern hemisphere, much remains unknown about the months to come. As I write this, the UK government has just outlined ‘plan A’ and ‘plan B’ options for dealing with COVID-19 over the autumn and winter period, and similar flexible policies are likely to be seen the world over as the number of coronavirus cases are closely monitored.
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However, it is hoped that the worst is now behind us, and now seems like a good time to take stock of the impact that the pandemic has had on the oil and gas sector. In part one of StocExpo’s recently published ‘Industry Trends Report’, the Chairman of Channoil Consulting, Charles Daly, compares the impact of the pandemic on the world’s economies to the effects of pruning a plant at the end of summer.1 He writes: “It might sound brutal, but the strategic damage caused by pruning can refresh a plant and stimulate stronger growth in the future.” Daly points out that while individual companies (and even entire industries) that were weak before the pandemic may not have survived, there are a number of positive changes “seeded before the pandemic struck” that have now been accelerated. Looking at the refining industry specifically, Daly suggests that it was inevitable that smaller refineries would eventually close, given that new refineries in the Middle East, China and India are being built with larger capacities and more complexity. The impacts of the pandemic have merely accelerated this trend, as refineries were hit with reduced demand as well as the change to 0.5% sulfur fuel oil for the bunker market.
As for the storage sector, “the pandemic showed that storage rates can go down as well as up”. Daly explains that in a world driven by a push for sustainable fuels, biofuels are only likely to be an interim fuel and not the long-term answer for storage companies. “If wind or solar power is to be the main driver of power in the future, then a competitively priced storage system for this intermittent power must be found. Here the storage industry should look at how it can influence as well as compete for storing power. This can be in the form of liquid hydrogen and air, ammonia or methanol,” writes Daly, who also foresees an increased demand for naphtha, ethane and propane due to sustained growth in the plastics sector.
The report also looks at automation transformation following the pandemic, as well as the role that digitalisation will play in the future of the storage sector. For more information, visit: www.stocexpo.com.
This issue of Tanks & Terminals magazine is packed full of detailed technical articles and case studies examining how innovative technology is continuing to enhance productivity and efficiency, as well as improve health and safety in the storage sector. This month’s regional report looks at the current state of play in Asia and Australasia, as China dominates the region’s oil storage and stockpile decisions. We hope you enjoy.
1. ‘Industry Trends Report’, StocExpo, (2021).