Page 5 - MEOG Week 13 2021

MEOG COMMENTARY MEOG

Aramco’s stated desire to expand its down- In order to meet hydrogen demand, CNPC
stream presence and focus on petrochemical announced on March 16 the start-up of its first
opportunities make sense, given past interest in ever refuelling station, located in Hebei Prov-
the country’s refineries. ince, which will be the first of a planned network
While the Saudi oil giant last year pulled out of 50 such facilities.
of state-run Norinco’s planned 300,000 barrel The country’s installation of renewable power
per day complex in Liaoning Province, Aramco capacity, meanwhile, continues to race ahead of
already owns 25% of the Sinopec-led 280,000 an anticipated surge in power demand driven by
bpd Fujian refinery and agreed in 2018 to buy the swelling number of new EVs on the road.
9% stake of the privately owned 800,000 bpd The National Energy Administration (NEA)
ZPC refinery. announced in January that 48.2 GW of solar had
Such ambitions are not without their hur- been added to the national total in 2020, up from
dles, however. Not only has state-owned China 30.1 GW added in 2019 and 44.3 GW installed
National Petroleum Corp (CNPC) projected in 2018. The country added 71.67 GW of wind
that oil demand will peak within the next four power capacity in 2020, up from around 26 GW
years, but the country is witnessing an ongoing installed in 2019.
push for downstream consolidation amid surg-
ing overcapacity that could limit investment What next
opportunities. Aramco understands that Chinese oil demand
is set to dwindle in line with the Asian country’s
Peak demand pursuit of carbon emission curbs and an expan-
CNPC’s oil research arm predicted in Decem- sion of renewable energy capacity.
ber 2020 that the country’s annual oil demand It has, therefore, sought to target opportu-
would peak at 730mn tonnes (14.66mn bpd) nities in the petrochemical space while billing
by around 2025. It expects total primary energy itself as a reliable hydrocarbons supplier capable
consumption to peak at 5.6bn tonnes of standard of supporting the country as it transitions away
coal equivalent by around 2035. from oil and gas.
CNPC has projected that natural gas demand Aramco will also be eager to further develop
will climb by around 2.8% per year over the next its blue ammonia and hydrogen capacity, after
two decades, peaking at 550bn cubic metres by having become the first company to successfully
around 2040. produce and ship the fuel in September 2020.
The shift to improve energy efficiency and Aramco, in partnership with SABIC and the
boost supply of clean energy sources will likely Institute of Energy Economics, Japan (IEEJ),
see coal consumption begin to fall from 2025 to shipped 40 tonnes of blue ammonia to Japan for
2.9bn tonnes in 2035 and just 900mn tonnes in use in zero-carbon power generation.
2050. Hydrogen demand from Asia in general, and
China’s largest oil and gas producer has also China in particular, is widely expected to boom
predicted that new energy vehicles (NEVs) will in the coming years as pressure mounts on gov-
account for more than 30% of the country’s ernments to do more to reduce their national
active vehicles by 2035, 50% by 2040 and nearly carbon footprints.
80% in 2050. NEVs include electric vehicles And it is just another potential growth sector
(EVs), plug-in hybrid and hydrogen vehicles. Aramco stands to capitalise upon.™

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