In Inte tegra grated ted Ref efin inery ery an and P d Pet etroc rochemical hemical Com ompl plex ex Pakistan stan Economi omic c Forum um 1
Why y an integr egrate ated d petrol roleum eum comple lex in Pakista istan? n? Crude - $4Bn Pakistan's ~$ 11Bn ~$ 2.3Bn Refined: $7Bn biggest Petroleum Thermo- Import by Imports plastics category in FY18 Imports in FY18 Focus cus needed ded to subst bstitut ute e refined ned Lack ck of an integrat egrated ed import ports to crude de import ports refinery nery THE OPPORTUNITY TO MAKE AN IMPACT Growing Population and Booming automotive industry Growing Economy emerging middle class 2
Growin ing g defic icit it of oil l produc ucts ts provide e an opport ortunity unity for investme tment nt in a world d scale ale refine inery ry LPG Naphtha htha Gasol soline ne Jet/Keros erosen ene Diesel el/Gaso asoil Fuel Oil 60 60 60 61 56 47 47 47 41 38 35 32 22 22 22 12 (4) (7) (13) (14) (20) (21) (26) (27) (37) (37) (22) (42) (36) (48) (49) (29) (54) (42) (32) (69) (58) (44) (76) (79) (83) (96) (93) (106) (111) (133) (129) (149) (161) (191) (202) (228) 2022 2027 2035 2022 2027 2035 2022 2027 2035 2022 2027 2035 2022 2027 2035 2022 2027 2035 Product oduct balanc ances es in kbpd pd No refinery 300 kb/d 460 kb/d • Fuel oil consumption expected to go down due to change in the power generation fuel mix • LPG demand is expected to continue growing, driven by RCA* sector • Pakistan can make value added products with the excess Naphtha Sector-wise demand Source: Wood Mackenzie Product Markets Service ; Wood Mackenzie Analysis. * RCA: Residential, Commercial & Agriculture 3
nd – Pakista Upsid ide e for olefin fins s demand istan n per capita ita plas astic tic consu nsumpt mption n of 7kgs gs vs Gl Global bal average of 45kgs gs 5 Import Value in USD Mn FY18 Ethylene Derivative Butadiene Deivative Propylene Derivative Polyethelyne 705 4 PP PP AA AA PE PE Polypropylene 615 MEG 3 PO PO Polyacetals 153 LAO SBR SBR Cumene Vinyls yls Polymers of vinyl chloride 77 2 PBR PBR ACN ABS ABS Oxo xo Polymers of vinyl acetate 36 EB EB 1 ADN Others 725 Bubble size represent size of the market 0 Total Plastic Materials 2,311 0 1 2 3 4 5 Histo tori rica cal l CAGR R (2010 to 2017) 7
Pakis istan tan Curren entl tly does not have a Petro roche hemic ical al Complex ex - Opportuni rtunity ty t to Set Up an Integ tegrated rated Crack cker er to me meet dome mesti tic c needs Demand in kt kt 3,000 HDPE LDPE LLDPE PP MEG 768 2,500 725 683 2,000 637 588 542 1,169 1,500 490 1,071 979 439 891 388 808 1,000 732 319 649 248 570 445 408 257 491 373 339 422 243 308 312 500 279 181 268 247 168 217 156 144 216 187 133 161 122 147 69 110 122 99 87 381 76 349 85 74 319 54 290 263 238 211 185 160 128 137 117 120 - 2010 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 Pakistan’s growing demand for Petchem derivatives supports the establishment of a cracker complex 8
A cracker cker will ll add value to excess s Naphtha tha availabl able e in the country ntry According to Oil Companies Advisory Council (OCAC), Pakistan exported 470k Tons of Naphtha in 2017 400 500 400 500 600 600 300 300 700 700 200 200 800 800 Petchem complex 100 900 100 900 USD USD 0 1000 0 1000 1,000 466 Olefin fins s price e per ton Naphtha tha price e per ton (WoodMa dMac) (WoodMa dMac) 9
Import t Bill ll savings gs throug ough an integr egrate ated d refiner nery 2018 2025 USD 13.3 BN USD 21.4 BN Import bill without the Project A world scale complex will lead to (USD 2.7 BN) Saving on Import Bill economic activity & job creation coupled with securing the country’s requirements of petroleum products and USD 18.7 BN Import bill with the derivatives Project 10
Suppor port t needed ded for an an an integr egrate ated d comple lex 1 2 3 Feedstock: Waive import duty on crude oil / Naphtha import Deep Conversion Refinery : Maintain 20 year 3,000 acres coastal land tax holiday with related infrastructure Refined Oil: Maintain the current import duty structure and pipeline support Petchem Complex : Allow 20 year tax holiday Petchem Derivatives : Minimum 10% duty as provided for deep conversion refineries Machinery : Waive import taxes on import of machinery 4 Facilitate a consortium composing of a feedstock supplier(s) preferably Middle Eastern players and potential Chinese partner to leverage CPEC connectivity 11
lex – The Right Integr egrate ated d Petroleum oleum Comple ht Time With h huge relian ance ce on import rts s to meet t the growing petrol oleum um demand nd in the country try, this s is the right t time to set up a state te-of of-the the-art rt integra grated ted petrol oleum um comple lex x in Pakistan stan The estima imate ted d invest stme ment nt for a suita tabl ble scale e comple lex x would be: • USD 6 – 7 BN Refine nery ry: • Petrochemical rochemical Comple lex: x: USD 4.5 - 5 BN • x: USD 10 – 12 BN Integ egrate rated d Comple lex: 12
Thank You 13
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