…with a major expansion of capacity bringing new players and regions to prominence

There is over 100 mb/d of refining capacity in operation or under construction today, 40% of which is in North America and Europe and another 40% in developing countries in Asia (where a host of new refining capacity is being built) and in the Middle East. Independents

(both integrated players and pure downstream companies) hold the largest share of around 40%, followed by NOCs (31%), INOCs (14%) and the Majors (13%). There is also a small contribution from major trading companies.

The trend varies widely by region. In North America, Europe and advanced economies in Asia (where refining activities have traditionally taken place), refineries are largely owned by private companies.

Independents and Majors own almost 90% of the refineries in this region, while NOCs have limited presence.

The picture is starkly different in the regions where a number of new refineries are being built. In the Middle East, 90% of the refineries are owned by NOCs. The participation of Independents and Majors has mostly taken place via joint ventures with NOCs. Similar trends are visible in Africa, where NOCs account for two-thirds of refinery ownership. NOCs and INOCs also have strong presence in developing countries in Asia, holding two-thirds of the region’s refining capacity, but there is also a sizeable contribution from private companies.

The share of NOCs (and INOCs) in global refinery ownership and petrochemical units is set to increase in the coming decades. This is because most of the new refinery capacities are planned to be built in the Middle East and in developing countries in Asia and because many

NOCs are pursuing a strategic expansion into the downstream.

Turning to LNG, there is currently some 570 bcm of liquefaction capacity in operation today and almost 200 bcm that is financially approved or under construction. The three largest LNG exporters – Australia, Qatar and the United States – account for around half of the world’s operational capacity. Over the next few years, these three countries are set to jostle for the position of largest exporter. Canada and Mozambique are the major pending new entrants to the club of LNG producers, taking the total number of exporting countries to 23.

The capital and technical risks associated with developing LNG liquefaction terminals favour a relatively diversified ownership; globally, there is roughly a 60/40 split between Majors/Independents and

NOC/INOCs. Independents hold the largest share of liquefaction capacity globally (35%) and dominate the picture in North America. NOCs are majority owners in the Middle East and Africa, frequently partnering with Majors to execute large, capital-intensive projects.

Majors have the largest presence in Australia, which has seen some of the highest levels of spending on LNG mega-projects. Russian LNG has a more diversified ownership structure than in pipeline gas supply, drawing IOCs, NOCs and other external partners into large-scale Arctic, Yamal and Siberian projects.

The growth of LNG supply in the last decade has underpinned the emergence of LNG “portfolio players”, large companies that hold a portfolio of LNG supply, liquefaction, shipping, storage and regasification assets in different regions. They can be Majors, NOCs or larger Independents and are distinguished by their size and presence across the value chain.