Southeast Asia's net crude oil imports will more than double by 2040 as the region adds new refining capacity to meet rising demand while oil output falls, according to the International Energy Agency (IEA).
The region, together with China and India, will account for about two-thirds of global oil demand growth over the next 20 years.
Southeast Asia's net crude imports will grow to 5.5 million barrels per day (bbl/d) by 2040 from 2.1 million bbl/d now, as refining capacity grows by 60% to 7.7 million bbl/d, the IEA said in a report this week.
"A number of risks exist, not least the reliance on a small number of Middle East suppliers, while pressure on the Strait of Malacca intensifies due to the lack of viable alternatives," the agency said, referring to the busy shipping route through which the majority of Asia's crude imports pass.
Oil production in the region could drop by 30% to 1.7 million bbl/d in 2040, led by declines in Indonesia, Malaysia and Thailand, the IEA said, against demand of 8.8 million bbl/d.
While regional refinery additions have lagged demand growth in the past 15 years, new builds will add about 870,000 bbl/d of crude processing capacity within the next five years, data from IEA and Reuters showed.
These include Petronas-Saudi Aramco's 300,000-bbl/d complex in Malaysia, the 200,000-bbl/d Nghi Son refinery in Vietnam, and a 175,000-bbl/d refinery being built by a Chinese firm in Brunei.
Construction at Cambodia's first refinery also began this year.
Expansions are also planned in Balikpapan and Cilacap in Indonesia, Asia's top gasoline importer, and in Thailand and Vietnam.
"Our refineries are very old. That's why we need new investments, new projects to fill the gap," said Yan Bastian of Pertamina's upstream project investment, adding that the country's fuel market is huge.
Indonesia's gasoline imports have averaged between 8 million and 10 million bbl a month this year, equivalent to about 8.2% of China's total gasoline output in September.
Despite the new refining capacity, Southeast Asia will continue to import 1.3 million bbl/d of oil products in 2040, stable from today, to meet growing demand in transportation and petrochemicals, the IEA said.
The fastest import growth will be for LPG and kerosene, it added.
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