India Chem 2018: Competitive Feed stocks and Integration in Petrochemical Crackers 5 th Oct 2018
Forward Looking Statement This presentation contains forward-looking statements which may be identified by their use of words like “plans,” “expects,” “will,” “anticipates,” “believes,” “intends,” “projects,” “estimates” or other words of similar meaning. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, product development, market position, expenditures, and financial results, are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The companies referred to in this presentation cannot guarantee that these assumptions and expectations are accurate or will be realised. The actual results, performance or achievements, could thus differ materially from those projected in any such forward-looking statements. These companies assume no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events, or otherwise. 2
Reliance at a glance R&M Largest single refinery site with robust configuration Global Rankings Petchem Integrated petrochemicals with presence in 2 nd PX fastest growing markets E&P Developing deep water resources in Oil & Gas PTA 4 th Retail Growing presence in retail & supply chain Polyester 2 nd Jio Fastest growing mobile data network (4G) Media Wide mass reach with media and entertainment PP 5 th MEG 8 th US$ 48.4 Billion Annual Revenue US$ 7.0 Billion Cash Profit US$ 5.2 Billion Net Profit 3 FY 2017-18 Annual Report
Agenda 1. Petrochemical Cracker Feed Options 2. Cracker Feedstock across globe 3. Feedstock price trends 4. Feed Economics 5. Reliance’s Ethane Project 4
Cracker Feedstock - Options Gas Cracker feed • Ethane ( C2H6) • Propane ( C3H8) • Butane ( C4H10 – Normal/iso Butane) • Refinery Off Gas Liquid Cracker feed • Condensates • Paraffinic Naphtha (Paraffin content > 65 %) • Can be mixed with other naphtha like Aromatic / High Paraffinic Naphtha • Gas Oil : Diesel can be cracked to produce Olefins • Heavier hydrocarbons 5
Typical yields from different feeds Feedstock Type Ethylene Propylene Crude C4's Pygas Hydrogen Fuel Gas Fuel Oil TOTAL Ethane 80.4% 1.7% 2.8% 2.5% 6.2% 6.2% 0.3% 100.0% Propane 42.0% 17.0% 4.0% 7.0% 2.0% 27.0% 1.0% 100.0% N-Butane 40.0% 17.0% 10.0% 7.0% 2.0% 22.0% 2.0% 100.0% LT Naphtha 31.0% 16.0% 9.0% 19.0% 2.0% 19.0% 4.0% 100.0% Gasoil 21.0% 15.0% 9.0% 19.0% 1.0% 10.0% 25.0% 100.0% 6
Cracker Feedstocks by regions Mn MT Asia 70 Europe Ethylene Americas 30 50 60 20 40 50 10 30 40 - 20 2012 2017 2022 30 10 ME / Africa 20 30 - 10 2012 2017 2022 20 Ethane Propane - 10 2012 2017 2022 Butane Naphtha - Gas Oil MTO/CTO 2012 2017 2022 Source: IHS Markit 7 Feedstock extractability & availability affects Cracking feed mix
Feedstock changes 2022 Ethylene Forecast = 186 Mn MT/yr 2017 Ethylene Production = 153 Mn MT/yr Butane 47% in 2012 5% Naphtha Naphtha Butane 39% 5% 42% 71 MMTPA 64 MMTPA Propane Propane 8% 9% Gas Oil Gas Oil 3% 3% Methanol to Olefins Methanol to 1% Olefins 1% Methanol to 35% in 2012 Propylene Ethane Methanol to Coal to 0.00% Ethane Others 38% Propylene Olefins 40% 1% Others 0.03% 1% Coal to 57 MMTPA 2% Olefins 74 MMTPA 2% Source: IHS Markit Source: IHS Markit 8
Feedstock changes- India 2017 Ethylene Production = 5.9 Mn MT/yr 2022 Ethylene Forecast = 7.7 Mn MT/yr Other Other 1% 2% Ethane Naphtha Ethane 46% 43% Naphtha 51% 44% Butane 1% Butane Propane Propane 1% 4% 7% Source: IHS Markit Source: IHS Markit Additional Naphtha based capacity required to absorb national surplus. Propane (LPG) share expected to reduce. Additional Ethane capacity expected given its competitiveness at higher crude levels 9
US Cracker Startup (First wave) Sr No Plant Feed Location Capacity (KTA) Startup 1 Oxychem /Mexichem JV Ethane Ingleside 550 Mar-17 2 Dow Ethane Freeport 1,500* Sep-17 3 Chevron Phillips Ethane Cedar Bayou 1,500 Mar-18 4 ExxonMobil Ethane Baytown 1,500 July- 18 5 Indorama Ventures PCL Ethane Lake Charles 420 Q4 2018 6 FPC USA (Formosa) Ethane Point Comfort 1,252 Q4 18/Q1 19 7 Shin Etsu Ethane Plaquemine 500 Q4 18/Q1 19 8 SASOL Ethane Lake Charles, LA 1550 Q4 18/Q1 19 Source: ICIS Dow has started construction to expand new cracker to 2000 KTA 10
US Cracker Startup (Second wave) Sr No Plant Feed Location Capacity (KTA) Startup 1 Lotte-Westlake Ethane Lake Charles, Louisiana 1000 H2 2019 Bayport Polymers (Total- 2 Ethane Port Arthur 1000 H2 2020 Borealis-Nova JV) Ethane 3 Shell Monaca 1500 H2 2021 4 Ethane PTTGC* Belmont, OH 1000 2022+ 5 Ethane Formosa* Louisiana 1200 2022+ * Investment decision/approvals pending Source: ICIS, IHS 11
Crackers in Other Regions Company Region Country City Process Capacity Startup Nova Chemical North America Canada Sarnia EPB (Ethane,Propane,Butane) 408 2021 Fujian Gu Lei Petro Northeast Asia China Zhangzhou EPB/Naphtha/Gas Oil/Residues 800 2022 Hengli Petrochemical Northeast Asia China Dalian EPB/Naphtha/Gas Oil/Residues 1500 2021 Huatai Shengfu Northeast Asia China Ningbo EPB (Ethane,Propane,Butane) 600 2021 Liaoning Bora PC Northeast Asia China Liaoning EPB/Naphtha 800 2020 Shandong Yuhuang Northeast Asia China Dongming EPB/Naphtha/Gas Oil/Residues 400 2021 Shouguang Luqing PC Northeast Asia China Shouguang EPB/Naphtha 750 2022 Sinochem Quanzhou Northeast Asia China Quanzhou EPB/Naphtha 1000 2021 Sinopec Hainan R&C Northeast Asia China Hainan Naphtha/Gas Oil/Residues 1000 2024 Sinopec-KPC PC JV Northeast Asia China Zhanjiang EPB/Naphtha 800 2021 SP Chemicals Northeast Asia China Taixing Ethane/Propane 650 2020 Wanhua Chemical Northeast Asia China Yantai EPB (Ethane,Propane,Butane) 1000 2021 Zhejiang PC Northeast Asia China Zhoushan EPB/Naphtha 1400 2020 HPCL Mittal Energy Indian Subcontinent India Bhatinda Naphtha 1200 2022 Gachsaran PC Middle East Iran Gachsaran Ethane 1000 2023 Ilam PC Middle East Iran Ilam EPB/Naphtha 458 2018 GS Caltex Northeast Asia Korea (South) Yeosu EPB/Naphtha/Gas Oil/Residues 700 2022 Hyundai Chemical Northeast Asia Korea (South) Daesan EPB/Naphtha/Gas Oil/Residues 750 2022 LG Chem Northeast Asia Korea (South) Yeosu Naphtha 800 2022 PRPC RC (Petronas Rapid) Southeast Asia Malaysia Pengerang EPB/Naphtha 1260 2019 ORPIC Middle East Oman Sohar EPB/Naphtha 880 2021 KPI CIS & Baltic States Other CIS & Baltic States Karabatan Ethane 800 2023 Turkmengas CIS & Baltic States Other CIS & Baltic States Kiyanly EPB (Ethane,Propane,Butane) 400 2018 NKNK CIS & Baltic States Russia Nizhnekamsk Naphtha 600 2021 Novy Urengoy GCC CIS & Baltic States Russia Novy Urengoy Ethane 420 2020 ZapSibNeftekhim CIS & Baltic States Russia Tobolsk EPB/Naphtha 1500 2021 PTTGC Southeast Asia Thailand Map Ta Phut Naphtha 500 2021 Source: IHS Nova/SABIC North America United States Geismar Ethane/Propane 442 2018 Long Son PC Co. Southeast Asia Viet Nam Ba Ria-Vung Tau EPB/Naphtha 1000 2023 12 * Some projects, especially in China may be delayed/ scrapped
Cracker Feedstock Prices $ / MT Naphtha MOP-S ($/MT) Propane CP ($/MT) US Ethane- Mt Belvieu ($/MT Converted) Crude Brent ($/bbl) 1400 140 Cost Control through Feed flexibility 1200 120 New Chemistries – MTO/CTO, PDH Crude ($/bbl) 1000 100 800 80 600 60 400 40 200 20 0 0 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Feedstock price variability - impacts Cracker Margins 13
Asia Cracker Margins Integrated Ethane Cracker Integrated Propane Cracker Integrated Naphtha Cracker 1000 High Butadiene co-product credit Gap Between Ethane & Naphtha/LPG SEA Ethylene Margins ($ / MT) large at higher crude levels 800 600 400 US Ethane Export Terminal 200 Margins Squeezed as feed Start-up cost rises Seasonal Propane Winter Spike 0 Fluctuations in global crude prices lead to volatility in Naphtha & Propane feedstock prices. US Ethane prices firm up when start of new cracker adds to demand/ supply constraints prevail in US NGL market 14
Ethylene Cash Cost curve 1600 $/MT Apr-13 Aug-15 May-18 Brent Crude $/bbl 102 47 77 CTO & JKT & Smaller European 1400 MTO Naphtha Crackers 1200 Asia & European Naphtha Crackers 1000 800 US Gas Crackers Middle East 1000 Gas Crackers 600 500 400 200 @ 50 $/bbl Crude 0 @ 100 $/bbl Million MT 1 21 41 61 81 101 121 141 161 Crude 15 Source: RIL Internal Analysis
Reliance’s Ethane Project Only company to move Ethane from US to Asia 16
Reliance’s Ethane Project GCPTCL Jetty at Dahej Ethane Terminal at US Gulf Coast Ethane VLEC (46 KT) DMD Ethane Tank (90KT) Dahej Nagothane Pipeline (DNEPL) – 480 Km NMD DMD Cracker Cracker HMD JMD Cracker 17
Thank you 18
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