IRPC Public Company Limited Opportunity Day 20 August 2014 • • • • Petroleum Business Petrochemical Business Port & Tank Business Asset Management Business Disclaimer This presentation material has been prepared solely for informational purposes only. IRPC is furnishing it solely for use by prospective investors / analysts in the proposed event. IRPC makes no representations or warranties as to the accuracy or completeness of such information. By accepting this material each recipient agrees that IRPC shall not have any liability for any representations (express or implied) contained in, or for any omissions from this presentation. The information contained herein does not purport to be all-inclusive or to contain all of the information that may be material to the recipient’s decision. Each recipient of the information and data contained herein should perform its own independent investigation and analysis of the transaction and the creditworthiness of IRPC . Reference in this Disclaimer to this shall include references to the Appendices (if any) hereto. 2 Agenda 1. 2Q14 Overview 2. Operation & Financial Performance 3. Industry Outlook 4. Fire Incident & Projects Update Appendix • Strategic Direction • Phoenix Project 3 2Q14 Overview Overview of Business 106.1 104.5 Dubai 105.3 104.5 Unit: USD/BBL QoQ YoY 0.3% 7% Revenue (net excise) 67,150 71,854 71,658 Unit: MB Accounting GIM Market GIM 7.1 8.0 QoQ 8% YoY 30% 8.5 0.7 HoH 5% 2) Net sales were 71,658 MB in 2Q14, decreasing by 0.3% from 71,854 MB in 1Q14 due to a 136,114 143,512 decrease of 0.4% in the product prices despite an increase of 0.1% in the sales volume. HoH 24% 8.8 9.2 7.1 3.8 7.7 7.8 2.2 6.6 5.4 Net stock gain/(loss) LCM & oil hedging (0.6) (0.9) Unit: USD/BBL Net income Unit: MB QoQ 48% YoY 115% 344 2Q13 HoH 152% 522 178 (1,159) (1,006) 1Q14 2Q14 1) In 2Q14, average Dubai price rose to $106.1/bbl from $104.5/bbl in 1Q14, driven by geopolitical tension in Iraq, Libya and Ukraine. 1H13 1H14 In 1H14, net sales were 143,512 MB, higher than net sales of 136,114 MB in 1H13. 3) Market GIM in 2Q14 was $5.4/bbl dropping by $2.4/bbl compared to $7.8/bbl in 1Q14 because of lower product spreads and VGOHT unit shutdown. However, the Accounting GIM was $9.2/bbl, rising from $8.5/bbl in 1Q14 mainly due to stock and hedging gains. 4) In 1H14, the Market GIM dropped to $6.6/bbl from $7.7/bbl in 1H13 while the Accounting GIM increased to $8.8/bbl from $7.1/bbl in 1H13. 5) Net profit was 178 MB in 2Q14, compared to 344 MB in 1Q14. In 1H14, net profit was 522 MB, compared to net losses of 1,006 MB in 1H13. 4 Agenda 1. 2Q14 Overview 2. Operation & Financial Performance 3. Industry Outlook 4. Fire Incident & Projects Update Appendix • Strategic Direction • Phoenix Project 5 Mixed performance of Petroleum Spreads $/BBL Dubai 200 180 AVG. 116.1 160 Price. 140 120 100 80 60 40 20 1Q12 0 10 ULG 95 106.4 GAS OIL 0.05% 106.3 0.04 1 3Q12 2Q12 107.5 0.7 1Q13 14.6 108.2 1Q13 4Q12 ULG95-Dubai 18.4 FUEL OIL ($/BBL) 12.4 2Q 3Q 14.6 16.1 16.5 15.3 1Q14 2Q 1H13 1H14 9.2 4Q Gasoil-Dubai ($/BBL) ($/BBL) 19.6 16.8 17.3 17.7 17.8 16.0 18.2 16.9 1Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14 4Q 1Q14 2Q 1H13 ($/BBL) 1H14 7 100.8 2Q13 5 106.3 3Q13 0.5 106.8 4Q13 2 104.5 1Q14 1.6 106.1 2Q14 • Average Dubai price increased in 2Q14, mainly driven by geopolitical tension in Ukraine and Iraq with prolonged supply disruption in Libya support price. • ULG spread improved due to US driving season, stockpiling demand from Muslim countries ahead of Ramadan, and tight supply driven by refinery turnaround. • Gas oil spread softened since regional demand Fuel oil -Dubai ($/BBL) 1Q13 (7.3) 2Q 3Q (3.6) (10.7) Source: Platts, IRPC Analysis Team (10.4) (8.5) (5.5) (10.6) (9.5) remained low while there was an increase in the supply from Jubail refinery. • A decline in fuel oil spread was due to weak bunker demand and an increase in the arbitrage from South America and Russia to the Asian market. 6 Divergence of Lube Base Oil Performance $/TON FO 180 3.5%S 500SN 150BS Asphalt 1,600 1,400 1,200 1,000 800 600 400 200 0 1Q12 2Q12 3Q12 4Q12 1Q13 500SN – FO 180 3.5%S Spread $/TON 2Q13 3Q13 4Q13 1Q14 2Q14 • Lube base oil spread rose due to stockpiling demand from China before monsoon seasons. 421 1Q13 494 2Q 518 3Q 509 4Q 486 1Q14 501 2Q 458 1H13 Asphalt – FO 180 3.5%S Spread 1Q13 2Q 3Q 4Q 494 1H14 $/TON 1Q14 2Q 1H13 • Asphalt spread continued to decline since the demand from China and Vietnam softened and there was a rise in the supply from Korea. Market GRM 1H14 3.5 2.4 (19) (7) (3) (13) (27) (68) Source: Platts, ICIS, IRPC Analysis Team (77) 1.5 1.4 1.0 2.0 1Q13 2Q (73) 3.0 3.1 1.6 1.4 0.2 3Q 1.6 1.2 0.3 4Q 1.8 1.3 1Q14 1.7 1.1 0.6 2Q 1.4 2.4 $/BBL 1.4 Lube Base 1.5 1.0 Refinery 1H13 1H14 7 Relatively Stable Olefin Spreads Naphtha $/TON Ethylene Propylene HDPE PP 1,700 1,500 1,300 1,100 900 700 1Q12 500 2Q12 3Q12 4Q12 HDPE-Ethylene –Naphtha Spread 585 568 590 620 618 87 179 171 110 113 121 507 496 1Q14 2Q 434 405 397 1Q13 2Q 3Q 4Q 2Q13 3Q13 2Q14 1Q14 4Q13 PP-Propylene –Naphtha Spread 521 480 1Q13 553 619 133 117 420 501 $/TON HDPE-Ethylene Ethylene - NP 1H13 1H14 581 614 596 597 627 632 597 629 $/TON 236 175 177 193 304 205 248 PP-Propylene 328 392 381 Propylene - NP 2Q 1H13 1H14 184 345 439 412 420 434 1Q13 2Q 3Q 4Q 1Q14 • Polyolefin spread maintained at high level because of stockpiling demand before the Ramadan period and tight regional supply due to ongoing turnaround. Source: Platts, ICIS, IRPC Analysis Team 8 Weaker Aromatics Spreads $/TON Naphtha Benzene Toluene Mixed Xylene 1,500 1,400 1,300 1,200 1,100 1,000 900 800 700 600 500 1Q12 2Q12 3Q12 Benzene – Naphtha Spread 1Q13 4Q12 3Q13 2Q13 Toluene – Naphtha Spread 1Q13 2Q 336 338 364 341 3Q 4Q 1Q14 2Q 427 352 1H13 1H14 2Q14 1Q14 MX – Naphtha Spread $/TON $/TON $/TON 426 428 4Q13 305 260 1Q13 2Q 205 192 161 134 3Q 4Q 1Q14 2Q 366 334 349 269 283 169 148 1H13 1H14 350 1Q13 2Q 3Q 115 4Q 1Q14 2Q 142 1H13 1H14 • Mixed xylene and toluene spreads continued to drop. Mixed-xylene was adversely affected by ongoing poor performance of Paraxylene while toluene faced a downward pressure from Chinese economic slowdown resulting in a drop in the demand for solvents and gasoline in China. Source: Platts, ICIS, IRPC Analysis Team 9 Sliding Styrenics Spreads $/TON 2,500 2,300 2,100 1,900 1,700 1,500 1,300 1,100 900 700 500 Naphtha SM 2Q12 1Q12 3Q12 ABS PS SM - Naphtha Spread 3Q13 2Q13 1Q13 4Q12 4Q13 1Q14 2Q14 $/TON • ABS and PS spreads dropped amid weak demand largely caused by a slowdown in Chinese economy. PS price was also adversely affected by falling price of its feedstock. 773 851 895 759 724 673 812 699 1Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14 PS –Naphtha Spread $/TON 922 976 995 891 863 804 949 834 1Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14 140 ABS –Naphtha Spread $/TON 1,051 1Q13 1,057 2Q 1,015 3Q Market PTF* 960 4Q Source: Platts, ICIS, IRPC Analysis Team 980 1Q14 974 2Q 1,054 1H13 151 157 129 132 135 141 977 1H14 126 133 168 1Q13 2Q 148 116 123 125 3Q 4Q 66 156 1Q14 94 146 2Q * Exclude Intermediate Stream Margin 105 53 39 137 $/Ton 149 147 Aromatic &Styrenics Olefins 1H13 1H14 10 Increased Domestic Crude Intake Crude Intake • Crude intake slightly increased in 2Q14 relative to 1Q14, amounting to 173 KBD. Unit: KBD 186 Domestic Crude Sweet Crude Sour Crude 173 3% 32% 189 179 174 172 173 4% 5% 11% 14% 18% 33% 28% 22% 23% 21% 16% • Domestic crude intake in 2Q14 was 31 KBD or 18% 22% of total intake increasing from 23 KBD or 14% of total intake in 1Q14. 65% 62% • Utilization rates of olefins, styrenics, and aromatics were 90%, 84%, and 75%, down 7%, 2%, and 11% respectively due to schedule turnaround and unplanned shutdown from fire incident. 63% 67% 67% 63% 61% 2Q13 3Q 4Q 1Q14 2Q 1H13 1H14 17.2 16.5 16.0 15.5 15.7 33.6 31.3 0% Mbbl Utilization Petroleum Refinery Lube Petrochemical 92% 88% 95% 83% 82% 81% 3Q 4Q 80% 1Q14 80% 86% 80% 79% 2Q 81% 1H13 1H14 89% 78% 2Q13 95% 87% 81% 89% 85% 78% 3Q Aromatic Styrenic 111% 104% 97% 100% 86% 83% 2Q13 107% Olefins 90% 88% 94% 85% 84% 85% 80% 75% 4Q 1Q14 2Q 1H13 1H14 11 Focus on Domestic Market Sales Volume Structure Unit: Mbbl Unit: Mbbl 34.8 Petroleum 15% 17.7 17.6 17.8 16.7 16.7 14% 16% 17% 16% 16% 2Q13 84% 3Q 83% 4Q 84% 1Q14 Export 33% Wholesale 29% Article 7 32% Petroleum 84% Export 41% 16% Domestic 84% 29.5 15.3 14.9 14.8 14.0 14.0 42% 42% 38% 35% 35% 28.0 39% 35% 61% 65% 1H13 1H14 84% 2Q 2Q14 Sale volume By Sales Channels Direct 6% Export 1H13 1H14 Direct 24% Agent 35% Petrochemical 16% Export 35% Domestic 65% 58% 58% 62% 65% 65% 2Q13 3Q 4Q 1Q14 2Q Unit: KTon 2Q14 Sale volume By Destinations Export Petrochemical 86% 85% 33.4 Petroleum Petchem 656 690 Domestic 311 37% 344 38% 373 45% 343 347 42% 41% 63% 62% 55% 58% 59% 2Q13 3Q 4Q 1Q14 2Q 38% 41% 62% 59% 1H13 1H14 12 GIM in 2Q14 Market GIM • The Market GIM in 2Q14 was 88% 83% 81% 8.0 0.8 3.8 3.5 2Q13 6.0 6.5 1.1 0.8 3.3 4.1 1.6 1.6 3Q 4Q 80% 80% 7.8 86% 7.7 1.3 5.4 0.9 3.4 1.2 2.5 3.9 3.1 1.7 1Q14 2Q 80% Utilization rate Unit: $/bbl 6.6 1.2 Power & Utility 3.0 Petrochemical 3.0 2.4 1H13 1H14 Petroleum Accounting GIM 7.1 0.1 8.0 10.4 0.4 4.0 6.0 8.9 8.5 due to the shutdown of VGOHT unit and lower product spreads, particularly petroleum and styrenics products. • The Accounting GIM in 2Q14 2.3 0.1 1.1 6.5 7.8 9.2 7.1 1.9 1.9 0.3 5.4 (0.4) 3Q • A decline in the Market GIM was was $9.2/bbl, rising by $0.7/bbl, compared to 1Q14. (1.0) 2Q13 $5.4/bbl, compared to $7.8/bbl in 1Q14. 4Q 1Q14 7.7 8.8 1.5 0.7 6.6 (1.0) 2Q 1H13 Unit: $/bbl Hedging Stock gain/loss Net LCM Market GIM • In 2Q14, stock gains and reversal of provision for LCM were $1.9/bbl, compared to $0.4/bbl from stock losses and provision for LCM. • Hedging gains were $1.9/bbl, 1H14 rising by $0.8/bbl from 1Q14 at $1.1/bbl. 13 Financial Highlight Quarter Unit: MB Foriegn Exchange Rate Avg. Net Sales Market GIM 2Q14 2Q13 32.59 Change 1Q14 YoY QoQ 1H14 1H13 30.03 32.80 2.56 (0.21) 32.70 29.99 71,658 67,150 71,854 4,508 (196) 143,512 136,114 2,773 4,141 3,970 (1,368) (1,197) 6,743 7,783 1,468 1,190 734 Stock Gain/(Loss) net LCM 962 (506) (228) Oil Hedging Gain/(Loss) 975 10 580 965 395 1,555 322 4,710 3,645 4,322 1,065 388 9,032 7,127 (3,113) (2,763) (2,760) 350 353 (5,873) (5,234) Accounting GIM OPEX Other Income EBITDA Gain/(Loss) from Fx Gain/(Loss) from Impairment Investment Gain/(Loss) Net Profit (978) 364 298 306 66 58 670 552 1,961 1,180 1,868 781 93 3,829 2,445 156 755 (161) 151 - (36) (51) (51) (1) (15) (28) 42 (10) (166) 522 (1,006) (5) (760) (51) (15) 7 178 22 (1,159) 35 344 1,337 (200) 14 2Q14 Debt Portfolio Debt Profile Unit: MB 37,838 45,381 56,902 177 5,620 Net Debt = 40,758 MB LT Loan 25% Bond (THB) 61% 48,355 66 As of June 30, 2014 ST Loan 0.3% Net Debt 40,758 43,246 Debt Structure Debt (MB) Bond (USD) 14% 56,725 43,180 16,144 42,735 5,408 2,974 2Q13 Interest Rate (%) 1Q14 Long term Short term USD/THB = 32.60 Cash & S/T investment Bond (USD) 7,746 Bond (THB) 34,611 Total 56,902 Currency (%) 27 THB 49 Fixed 73 USD 51 2Q13 1Q14 2Q14 4.04% 3.90% 3.97% Credit Ratings 1.68 1.16 Agencies 1.26 > 1.05x < 1.0x 0.55 March 2014 April 2014 1Q14 14,368 CA/CL Net D/E 2Q13 LT Loan Float Cost of Debt 0.60 177 2Q14 Financial Ratios 0.51 ST Loan 2Q14 2Q13 1Q14 2Q14 February 2014 Annual Review “Ba1” (Negative outlook) “BB+” (Stable outlook) “A-(tha)” (Negative outlook) / F2 (tha) 15 Agenda 1. 2Q14 Overview 2. Operation & Financial Performance 3. Industry Outlook 4. Fire Incident & Projects Update Appendix • Strategic Direction • Phoenix Project 16 Crude Oil and Petroleum Products Outlook Key Products Price Spread (2Q14) (2Q14) Refinery ($/bbl) ($/bbl) Dubai 106.1 - ULG95 122.2 16.1 GAS OIL 0.05% 122.2 16.0 FO 95.5 -10.6 Lube Base Oil ($/T) ($/T) 500 SN 150 BS 1,108 1,245 501 627 3Q14 Outlook Driving Determinants • • • • • Dubai price faces downward pressure from resumption of oil production in Libya and absence of supply disruption from geopolitical tension in Iraq and Ukraine. Peak maintenance of oil field in North Sea is expected to support the crude oil price. Gasoline spread may soften seasonally. Gas oil spread improves because of winter demand in North Asia and power generation consumption in ME. Fuel oil is also expected to be supported by lower arbitrage from Europe. 2014 Shutdown Schedule • Lube base oil spread is sustained due to lower feedstock prices but lack luster demand during regional monsoon season limits gain. Company Capacity (KT/Year) Timing Jinan Petrochemical 150 Q4 2014 Shandong Qisheng Industry & Trade 70 Q4 2014 Source: ICIS, 1 August 2014 17 Petrochemical Products Outlook Key Products Price (2Q14) Spread (2Q14) Olefins ($/T) ($/T) Ethylene 1,447 496 HDPE 1,569 618 Propylene 1,279 328 PP 1,583 632 Styrenics ($/T) ($/T) PS 1,755 804 ABS 1,925 974 3Q14 Outlook Driving Determinants • • • • Polyethylene is supported by demand from agriculture sector during winter season and high scheduled turnaround during 3Q14. Polypropylene spread can be improved further due to reversal of demand from western country in Polypropylene derivatives. PS spreads is supported by higher demand from manufacturing activities before year end. However, with the absence of sustainable global economic recovery, ABS spread improvement is underway. 18 Agenda 1. 2Q14 Overview 2. Operation & Financial Performance 3. Industry Outlook 4. Fire Incident & Projects Update Appendix • Strategic Direction • Phoenix Project 19 Fire Incident Update Mitigation Action VGOHT and DCC Operation Update • Procure additional propylene to fulfill polypropylene capacity Run 70% • Propylene • Gasoline • High Speed Diesel DCC Refinery Plant Import LS ATB • Successfully negotiate with customers on shortage of gasoline and gas oil • Re-commission of Deep Catalytic Cracking (DCC), running at 60%-70%, since 29 June 2014 • Successfully arrange for imports of HTVGO, HTVGO resulting in DCC higher utilization Anticipated Shutdown Period • VGOHT unit is now expected to shut down for VGOHT about 10 months due to purchases of long-lead machinery. Claim Amount VGO Export • Property damage (PD) USD 40 m USD 35 m (Less deductible USD 5 m) LR Lube • Business Interruption (BI) Shutdown USD 56 m (Losses of 10 months, less deductible 2 months) Total USD 91 m 20 Delta Project Update Achieving EXCELLENCE across all 3 strategic pillars ensures that IRPC will meet its vision by 2020. Operational Excellence Value chain optimization Overall plant effectiveness Energy efficiency improvement Reliability & asset integrity As of 31/12/14 As of 30/6/14 Target Benefit (USD M) (USD M) 37 7.0 Product portfolio optimization Salesforce effectiveness Transportation optimization upgraded LP model • Optimized steam consumption • Usage of alternative steam with lower costs • Shortened time required for turnaround Commercial Excellence • Quality giveaway reduced by • Reallocation of spot/term contracts for petroleum products 20 8.8 • Focus on higher margin and high potential customers, and maintain customer royalty for petrochemical products Human Resource Excellence Labor cost productivity Corporate overhead reduction Sourcing optimization 10 1.7 67 17.5 • Budget saving • Reduced non-moving inventory of spare parts 21 UHV Project Update UHV (Upstream Project for Hygiene & Value Added Products) • Project Description: Upgrade bottom refinery products to be high-value feedstock for petrochemicals • Capacity Expansion: Increase the capacity of propylene from 412 KTA to 732 KTA. • EIA approved in January 2013 • COD: September 2015 Progress HYVAHL reactor Atmospheric tank erection C3 rectifier & C3 stripper erection Reactor and regenerator Main control room building Stream reformer package • As of 25 July 2014, 75.9%: now EPC phase II stage II (construction) Concrete pouring work for API pond 22 UHV Project Progress : Video Presentation UHV Project: Video Presentation 23 Strategic Initiatives: Post-Phoenix 2015 Crude Run 215 KBD 100% 8.6 Nelson Complexity Index More stable portfolio of Revenue: Petroleum/Petrochemical & Others 2013 Crude Run 181 KBD 84% Nelson Complexity Index 6.6 Portfolio of Revenue: Petroleum/Petrochemical & Others 76% / 24% 59% / 41% Super Absorbent Polymer Acrylic Acid (SAP) Para-Xylene (AA) (PX) • PP Expansion 160 KTA • PP Compounding 140 KTA 3 PP Derivatives 2017 2 2015 1 2014 STS 2014: Strengthening Core Business Quick Win Initiatives New investments through JV • Specialty focus and Moving away from heavy-asset company UHV Completion • Increase product value by converting fuel oil to petrochemical products • Running at full capacity of 215 KBD • DELTA Initiative Implementation • Assets Management (Bankai/EIZ) 2013 Completed Project during 2011-13 • • • • • • CHP I: Electricity +220MW, Steam +420T/hr PRP +100KTA of Propylene EURO IV: Gasoline 15KBD, Diesel 10KBD, Jet 15KBD TDAE +28KTA, 150BS +25KTA Lube Blending +60m.Ltrs./year EBSM +60KTA, ABS/SAN +60KTA 24 Q & A Environment Social Education & Sports Labor & Human Rights Religion Public Health The future begins now creating shared value 25 Thank You Investor Relations Contact: [email protected] Tel. 02-649-7380, Fax. 02-649-7379 Presentation is available at www.irpc.co.th Click “Presentations” This presentation material has been prepared solely for informational purposes only. IRPC is furnishing it solely for use by prospective investors / analysts in the proposed event. IRPC makes no representations or warranties as to the accuracy or completeness of such information. By accepting this material each recipient agrees that IRPC shall not have any liability for any representations (express or implied) contained in, or for any omissions from this presentation. The information contained herein does not purport to be all-inclusive or to contain all of the Information that may be material to the recipient’s decision. Each recipient of the information and data contained herein should perform its own independent investigation and analysis of the transaction and the creditworthiness of IRPC . Reference in this Disclaimer to this shall include references to the Appendices (if any) hereto. Agenda 1. 2Q14 Overview 2. Operation & Financial Performance 3. Industry Outlook 4. Fire Incident & Projects Update Appendix • Strategic Direction • Phoenix Project 27 Strategic Initiatives: Overview Post-Phoenix: 2015 Onwards Delta: 2014 Onwards Phoenix + : 2010 Onwards 3 2 1 • • Transformation to support high value added product growth – – – – • CHP I PRP EBSM UHV • TDAE ABS6/SAN3 HDPE-Pipe Grade UHMWPE Structural changes for specialty growth • – Operational Excellence – Commercial Excellence – HR Excellence Adding more value to petrochemical feedstock from UHV project • Shifting product portfolio to be specialty player through PTT Group Partnership strategy Acceleration of Assets Utilization – EIZ – Bankai – Dry port Quick specialty capacity expansion/ Grade shifts – – – – Margin Improvement Initiatives • Domestic crude use up to 35,000 Barrels per day Quick win initiatives for cost reduction and margin enhancement – – – – – PP compound Polyol AA/ SAP PX SM Specialty focus and moving away from heavy-asset company by investing through JV 28 Strategic Initiatives: Phoenix + Phoenix + Current Projects Completed Projects CHP I Post-Phoenix Delta Structural Changes for Specialty Growth Margin Improvement Initiatives PRP EBSM Specialty Growth through JV TDAE/BS ABS/SAN Combined Heat and Power Electricity +220 MW Steam +420 T/h Propylene +100KTA HDPE-Pipe UHMW EBSM +60 KTA TDAE +28 KTA 150BS +25 KTA ABS SAN +30 KTA +30 KTA UHV Increase product value by converting fuel oil to petrochemical products Running at full capacity of 215 KBD 2-3 USD/BBL margins improvement HDPE-Pipe grade +140 KTA UHMW +16 KTA Propylene +320 KTA 29 Strategic Initiatives: Delta Phoenix + Structural Changes for Specialty Growth Delta Delta Margin Improvement Initiatives Post-Phoenix Specialty Growth through JV USD 67 M DELTA HR EXcellence Organisation OPerational EXcellence USD 37 M 7 Workstreams COMmercial EXcellence USD 20 M 2 Workstreams HR EXcellence USD 10 M 5 Workstreams 30 Agenda 1. 2Q14 Overview 2. Operation & Financial Performance 3. Industry Outlook 4. Fire Incident & Projects Update Appendix • Strategic Direction • Phoenix Project 31 Phoenix Initiatives & Roadmap Operational Efficiency Improvement Asset Utilization Enhancement Product & Services Improvement Capacity&&Products Product Capacity Expansion 1. Petrochem Operation & Energy Efficiency 9 . New Value Added for Port and Tank Business 3. Ethylene Specialty Development 2. Capacity Development for Propylene Growth 5. Petroleum Operation & Energy Efficiency 11. Build and sustain land for green industrial complex 7. Lube Group 1 Specialty Products Focus 4. EBSM Upgrading for ABS Specialty 6. Supply Chain Optimization (Griffin and Trading) 8. Petroleum quality improvement to clean fuel and green growth development 14. Performance Chemical Business Development Project 19: Hydrocarbon Management 12. I'M ACE: IRPC Service Solutions 15. Utilities for Sustainability 13. Petrochem Catalyst Commercialization 16: Oil Depot and Lube Blending Business Improvement 17: Analytical Lab 20: Intellectual Property Stewardship Petrochem Petroleum Port & Tank Real Estate & Services 32 Additional Capacity in Phoenix Projects Project PRP+ Propylene Growth (UHV) 2012 2013 Oct. Propylene +100 KTA EBSM Upgrading for ABS Apr. +60 KTA Lube Group1 Sep. TDAE +28 KTA 150BS +25 KTA Petroleum Quality Improvement Feb. GHU 15 KBD 2015 Sep. Propylene +320 KTA Sep. +60 KTA SAN3/ABS6 2014 Total Capacity Old/New Propylene 312/732 KTA SM 200/260 KTA ABS/SAN 117/177 KTA TDAE 22/50 KTA 150BS 95/120 KTA Mar. Co-Invest Diesel 10KBD Kerosene 15KBD EURO IV Gasoline 15KBD Diesel 10KBD Kerosene 15KBD 33 Phoenix by Business Unit Refinery & Lube Products ADU Initiative 7 CDU Lube Base 150BS Asphalt TDAE 2011 2012 2013 2014 2015 215 KBD 95 KTA 22 KTA 2016 215 KBD +25 KTA 120 KTA 120 KTA +28 KTA 50 KTA 50 KTA Lube Group 1 Specialty Products: Increase high value added lube specialty products: TDAE & Bright Stock Products 2011 Gasoline 75 M.Ltrs 75 M.Ltrs Diesel 180 M.Ltrs 180 M.Ltrs Initiative 8 2012 2013 2014 2015 2016 Petroleum Quality Improvement to Clean Fuel & Green Growth Development: Upgrading HSD / Gasoline to be EURO IV standard 34 Phoenix by Business Unit (Con’t) Aromatics Styrene Products 2011 Benzene 114 KTA 114 KTA Toluene 132 KTA 132 KTA Mixed Xylene 121 KTA 121 KTA Products 2011 SM 200 KTA ABS/SAN 117 KTA PS 100 KTA 100 KTA EPS 30 KTA 30 KTA Initiative 4 2012 2012 2013 2013 2014 2014 2015 2015 +60 KTA 260 KTA +60 KTA 177 KTA 2016 2016 260 KTA 177 KTA Performance Chemical Business Development Project: Increase 60 KTA EBSM for feeding ABS specialty. To satisfy local demand for ABS/SAN expansion and to produce Nano additive. ABS/SAN Expansion 6 Increase ABS/SAN from 117 KTA to 177 KTA to support ABS specialties production and Nano additive production. 35 Phoenix by Business Unit (Con’t) Olefins Initiative 2 Products 2011 Ethylene 360 KTA 2012 2013 2014 2015 +73 KTA +100 KTA 2016 433 KTA 433 KTA 732 KTA 732 KTA +320 KTA Propylene 312 KTA Butadiene 56 KTA 56 KTA Acetylene 4 KTA 4 KTA 412 KTA Upstream Project for Hygiene & Value Added Products (UHV): Upgrading low value product (HS-ATB) to be high value added product for petrochemical feedstock: Propylene 320 KTA, Ethylene 73 KTA, and Heavy Aromatic Naphtha 250 KTA, etc. Polyolefins Products 2011 PP 475 KTA 475 KTA HDPE 140 KTA 140 KTA Initiative 3 2012 2013 2014 2015 2016 Ethylene Specialty Development High Value Added Product of HDPE Specialty & PE Wax . 36 Benefits of UHV Project Production Yield 100% 4% 2% 19% 20% 2% 6% 5% 80% 21% 11% 10% 35% 60% 35% 38% 11% 43% LPG Naphtha 0% +40 KBD Currently running at full capacity is not optimal. FO Crude Run with UHV at 175 KBD (As of 2012) Diesel/Jet Lube Base 10% 8% 20% Current Run Propylene Gasoline 40% 20% Ethylene • • • • After completion of UHV Running at full capacity of 215 KBD Propylene 320 KTA Light Distillate yield Crude Selection Flexibility Sweet : Sour = 30:70 20:80 37
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