Information on SPRC ’ s 2019 Turnaround and Inspection (T&I), Capacity Increase Event and Reliability Projects “ One family … Fueling the future of Thailand ”
DISCLAIMER The information contained in this presentation is intended solely for your reference. This presentation contains “forward - looking” statements that relate to future events, which are, by their nature, subject to sig nificant risks and uncertainties. All statements, other than statements of historical fact contained in this presentation including, without limitation, those regardi ng SPRC’s future financial position and results of operations, strategy, plans, objectives, goals and targets, future developments in the markets where SPRC participates or is seeking to participate and any statements preceded by, followed by or that include the words “believe”, “expect”, “aim”, “intend”, “will”, “may”, “project”, “estimate”, “anticipate”, “predict”, “seek”, “should” or similar words or expressions, are forward -looking statements. The future events referred to in these forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond our control, which may cause the actual results, performance or achievements, or industry results to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These forward-looking statements are based on numerous assumptions regarding our present and future business strategies and the environment in which SPRC will operate in the future and are not a guarantee of future performance. Such forward-looking statements speak only as of the date on which they are made. SPRC does not undertake any obligation to update or revise any of them, whether as a result of new information, future events or otherwise. The information set out herein is subject to change without notice, its accuracy is not guaranteed, has not been independently verified and it may not contain all material information concerning the Company. SPRC makes no representation, warranty or prediction that the results anticipated by such forward-looking statements will be achieved, and such forward-looking statements represent, in each case, only one if many possible scenarios and should not be viewed as the most likely or standard scenario. No assurance given that future events will occur or our assumptions are correct. Actual results may materially differ from those provided in the forward-looking statements and indications of past performance are not indications of future performance. In no event shall SPRC be responsible or liable for the correctness of any such material or for any damage or lost opportunities resulting from use of this material. SPRC makes no representation whatsoever about the opinion or statements of any analyst or other third party. SPRC does not monitor or control the content of third party opinions or statements and does not endorse or accept any responsibility for the content or use of any such opinion or statement. SPRC’s securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or the securiti es laws of any state of the United States, and may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of such act or such laws. This presentation does not constitute an offer to sell or a solicitation of an offer to buy or sell SPRC’s securities in any jurisdiction. 2
Objectives • To provide information on the 2019 Turnaround and Inspection (T&I), Capacity Increase, Reliability Investment, and duration extension projects. • To clarify regularly excepted Capital and Operating expense guidelines for project cost allocation widely used by industry 3
CONTENTS Overview 2014 T&I and 01 CAPEX Guideline 2019 T&I and Related 02 Projects Supply and Financial 03 Strategy 4
CONTENTS 01 Overview 2014 T&I and CAPEX Guideline 2019 T&I and Related 02 Projects Supply and Financial 03 Strategy 5
Overview of CAPEX Guideline SPRC CAPEX and OPEX Criteria The CAPEX Guideline is in line with international standards. 6
Overview summary of 2014 2014 Event Project ($18 5 M) Turnaround & Inspection FCC Revamp PGP Recovery Air PreHeater (T&I) 7
CONTENTS Overview 2014 T&I and 01 CAPEX Guideline 02 2019 T&I and Related Projects Supply and Financial 03 Strategy 8
Estimated Cost of 2019 Event Project 2019 Event Project ($25 6 M) Turnaround & Inspection (T&I) Reliability Projects Increase Capacity to 175 KBD 9
Turnaround & Inspection (T&I) Key Highlights: ➢ T&I is refinery wide to perform compulsory compliance inspections and equipment maintenance to reliably run during next cycle ➢ Working to extend the run cycle between T&I’s ➢ Investments and enhancements will be installed to increase safety, reliability and efficiency ➢ The duration of the shutdown will be in line with the previous shut down proportionate to the shutdown scope ➢ Contractors around 7-8,000 people ➢ Pre-Turnaround works are going on as plan ➢ 80% of Contract have been awarded and will be completed by April ➢ 90% of Materials have been ordered and will be completed by April 10
Increase Capacity to 175 KBD Project Objective : Enhance SPRC bottom line margin by incrementally increasing crude processing and downstream unit capacity through economic investment. Scope : The project will expand refinery capacity from 165 KBD to 175 KBD, through eliminating existing hydraulic and heat transfer constraints in the CDU and other downstream units. The 6% increasing is in line with Thailand’s GDP. Product Yields: The product yields will spread out to all products but primary favorable to high value products. 11
Increase Capacity to 175 KBD Project Economics : Overall SPRC economics are quite strong, with sensitivity IRR as below. Total investment is US$80M GRM (US$/Bbl) Margin increase %IRR (US$M) 5.0 18.25 22.7% 6.0 21.90 27.8% 7.0 25.55 32.3% 12
Other Projects Project Benefit 1. FCC Fixed Equipment Extend equipment life to enhance the reliability 2. New FO tanks Fuel oil grade and freight optimization and increased flexibility to reduce IMO impacts. 3. Critical equipment Safety Instrumented Systems Enhance key equipment safety systems to increase (SIS) Process Safety Management 4. Upgrades to prevent Sulfidation Corrosion Increase crude flexibility to be able to run different 5. Increase Mercaptan Crude Processing capability types of crudes. 6. Desalter Project 7. CDU Overhead Reliability Improvement Enhance reliability 8. Others Extend life and enhance crude and product flexibility to increase margin capture (BLIP) Total The estimated benefit is 15% of total investment. 13
1. FCC Fixed Equipment Project Objective : Using the FCC Life Cycle plan as a guide, Renew aging-fixed equipment in R2R and Flue Gas system which lead to overall improvement of FCC unit reliability, and sustain 1st quartile MA/OA in Solomon Study. Background : • Most of fixed equipment in R2R (Regen & Reactor) system have been replaced during T&I 2014 • Refractory failure in R2R and flue gas system is the major cause of SPRC FCC down time. • Long term reliability plan and actions, through the Life Cycle Plan, are required to maintain SPRC MA/OA 1st quartile 14
2. New FO tanks Project Objective : Provide strategic storage post IMO when the higher sulfur FO market is expected to be volatile with potential reduce freight costs. Scope : Provide 2 x 25 kT FO tanks which combined with existing tanks allows 65 kT ton cargo from 30kT cargo for FO exports Project Economics : Good Project Returns Provides additional FO product and tank flexibility. Major benefit is freight savings 15
3. SIS Improvement Project Objective : SIS (Safety Instrument System) Improvement to make SPRC reaching fully compliance of SIS life cycle management. Project Economics : This is a compliance project and in line with company strategy regarding Process Safety Management. 16
4. Sulfidation Corrosion Project Objective : To improve plant safety and reliability. No Loss of Containment, business interruption from leak (unplanned unit S/D) and preventing Sulfidation in critical area. Scope : To upgrade piping material at VHVGO & VR sections where operating temperature above 230 C to get better resistance to Sulfidation corrosion. 17
5. Increase Mercaptan Crude Processing Project Objective : To improve crude benefit by processing more high Mercaptan crude. This will increase crude flexibility to be able to run different types of crudes. Scope : Increasing mercaptan treating capacity in JMU and upgrading material. 18
6. Desalter Project Project Objective : To increase ability to meet Crude unit overhead corrosion control best practice and maximize refining margin by maintain/increase high chloride crude flexibility. Scope : The 2 nd desalter with associated electrical, instruments, piping, pump and sampling point. 19
7. CDU Overhead Reliability Improvement Project Objective : To extend T&I cycle without CDU Overhead equipment failure. Scope : • Re-design CDU wash water injection system, Overhead heat exchanger and wash water pumps. • Re-design system to cover 175 KBD. 20
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