Question-and-Answer Session
Unidentified Participant
Jeff, with the golden nature of refining over as you mentioned in the US now, in your renewed focus internationally, are you – it seems to me a lot of these international projects in the Middle East and in China are done with some political desire to have it fully integrated downstream capabilities in the country. And some of them just don’t make any amount of sense on a global scale. Are you worried at all that they are going to wake up one morning and decide that this is coming to the stuff on hold, coming with extra capacity, (inaudible). There seems to me with this new reliance refinery, and there is a lot of products that go looking for a home in that part of the world, but that there is just too much capacity being built right now.
Jeff Glajch
Well certainly, for your first part on the US, the –
Unidentified Participant
Can you repeat the question –
Jeff Glajch
Sure, I am sorry. The question was really around looking at the capacity that is out there and both domestically the concept that will probably pass the high point of the domestic refining market and then internationally looking at the projects that are out there whether they’ll be in the Middle East, they’ll be in Asia and whether they are – these are projects that are maybe not economically justifiable and will someone at some point wake up and realize we have too much capacity and there is not an – there is not the need for this capacity going forward. Did I get that –
Unidentified Participant
Yes.
Jeffrey Glajch
Okay, thank you. A couple of things, first off, domestically we are certainly past the golden age in North America. Interestingly, we haven’t built a refinery in North America in 35 years and there is a lot fewer number of refineries today with a 149 of them compared to well over 200 15 years or 20 years ago.
What’s interesting though is through out that processing, there continues to be investment, reinvestment in existing refineries even if it’s replacement of existing equipment. There is also environmental regulations drive our business and when there is changes in environmental where there is need for a sulfur content that drives our business. Certainly last few years, the feedstock diversification has driven our business.
All that being said we believe certainly in the immediate term, the next couple of years, the US refining markets are going to be pretty slow. So, we are not too overly focused on the US refining market, although than obviously where there is replacements going on and there is either small upgrades or there is an improvement in the existing facility. Internationally, interestingly there is long-term demand expectation that are – whether it’s OPEC report or other reports that are out there, but there is a long-term need for additional power and additional refining capacity.
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