Summary of Key Points from the Investor Presentation on the Future of Energy Industry Overview - The presentation focuses on the energy and power markets, highlighting four key themes driving current debates in the sector [1][8]. Core Themes Identified 1. **Golden Age of Refining** - Fuel demand is outpacing new refining capacity growth, indicating a significant opportunity for refiners [15]. - The refining capacity is expected to see delays, with only 0.5 million barrels per day (mbpd) of net new capacity added annually until 2028 [17]. - Global fuel demand remains steady, with India, Europe, ASEAN, and the Americas being key drivers of incremental demand [19][20]. 2. **China's Anti-Involution** - China's policy actions are focused on rationalizing older, inefficient refining capacities, with a target to phase out 60 million tons per annum (Mtpa) of outdated refining capacity by 2025 [25][29]. - Approximately 0.8 mbpd of teapot capacity has been rationalized in the past five years, with a further 3 mbpd (16% of China's capacity) at risk due to these policies [29][31]. - China's fuel exports have been declining since 2024 amid lower operating rates and reducing export quotas [34]. 3. **Natural Gas: Fueling the Decade** - Gas consumption expectations are being revised higher, particularly in Asia, driven by economics, infrastructure, and policy support [49]. - Asia is projected to absorb a significant portion of US natural gas exports by 2030, with the region consuming one-third of global gas and two-thirds of global LNG [52]. - The US shale revolution is reshaping energy markets, with a similar dynamic expected in Asia due to increased LNG export capacity [58]. 4. **Powering AI** - Global power demand is expected to grow significantly, driven by data centers and electrification of industries, with expectations revised up by over 100 basis points globally [78]. - The demand for power in data centers is projected to nearly triple by 2030, indicating a substantial increase in energy requirements [85]. - Natural gas is expected to play a crucial role in meeting this growing power demand, particularly in Southeast Asia and Japan [91]. Additional Insights - The refining sector is experiencing the slowest supply growth since 2003, with strong demand recovery expected above pre-COVID levels in 2023 [15][19]. - Transport fuel margins have rebounded, and rising OPEC supply is anticipated to support lower crude premiums [22]. - The chemicals sector is facing a deep downcycle, with Asian chemical companies expected to regain market share lost to Chinese peers since 2022 [37][40]. - The focus on free cash flow (FCF) is increasing in the chemicals sector, with capital expenditure intensity cut nearly in half [43]. This summary encapsulates the critical insights and data points from the investor presentation, providing a comprehensive overview of the current trends and future outlook in the energy and power markets.