Opportunity Day Presentation | 1Q/15 The Stock Exchange of Thailand May 25, 2015
DISCLAIMER This presentation includes forward-looking statements that are subject to risks and uncertainties, including those pertaining to the anticipated benefits to be realized from the proposals described herein. This presentation contains a number of forward-looking statements including, in particular, statements about future events, future financial performance, plans, strategies, expectations, prospects, competitive environment, regulation and supply and demand. PTTGC has based these forward-looking statements on its views with respect to future events and financial performance. Actual financial performance of the entities described herein could differ materially from that projected in the forward-looking statements due to the inherent uncertainty of estimates, forecasts and projections, and financial performance may be better or worse than anticipated. Given these uncertainties, readers should not put undue reliance on any forward-looking statements. Forward-looking statements represent estimates and assumptions only as of the date that they were made. The information contained in this presentation is subject to change without notice and PTTGC does not undertake any duty to update the forward-looking statements, and the estimates and assumptions associated with them, except to the extent required by applicable laws and regulations. 2
AGENDA • Overview • Strategic Actions Progress • Financial Performance • Market Outlook 3
Crude Oil Price : Continue being cautious Crude Oil price has rebounded, ACTIVELY ONGOING MONITORING Production Optimization and Inventory Management while extraordinarily high net long Feedstock Management Expense Budgeting Hedging Crack Spread and Stock Gain/Loss: Engaged 1/3 of target volume Uncertain Economies Morning War Room 4
AGENDA • Overview • Strategic Actions Progress • Financial Performance • Market Outlook 5
MORE CLARITY ON STRATEGIES WITH PRUDENT ROADMAP 6
PTTGC Project Timeline 2015 US HDI Monomer France Petrochemical Complex TOCGC Improvement mLLDPE Aromatics II Debott. PO/Polyol HDI Derivative Thailand Indonesia Phenol II Petrochemical Complex 3Q/15 4Q/15 2016 2017 2018 2019 2020 2021 2022 Short Term Mid Term Long Term Asset Reconfiguration DOWNSTREAM OPPORTUNITIES REFINERY Reformate 970 KTA mLLDPE Upstream Product Available PU PO/Polyol Ethylene 425 KTA* ABS Propylene PP 180 KTA 880-1,320 SBR Naphtha OLEFINS KTA Mixed C4 70 KTA PS Pygas SM PC Phenol/ Benzene 70 KTA Acetone PMMA AROMATICS Potential Products * 425 KTA of which 230 KTA contract expiring in 2016 Excess volume available for asset reconfiguration 7
CORE UPLIFTS Operational Excellence Marketing Excellence Synergy Excellence Additional Synergy Debottleneck Total 2015 COMPLETING PROJECTS 414 378 357 356 108 75 * 108 108 SYNERGY PROJECT PROGRESS 231 211 149 149 21 0.3 35 38 Off Gas Upgrading 149 149 99% at Olefins 74 86 129 156 Delay to 2Q/15 14 13 86 86 83 68 45 19 2015 2016 2017 2018 * 2013A 2014A DEBOTTLENECKING CAPACITY/ PROGRESS & EXPANSION CAPEX Core Uplift 2015 1Q/15 FY2015 Phenol +250 KTA Programs Target Actual Estimate Phenol 2 Project Acetone +155 KTA 97% (MUSD) (MUSD) (MUSD) Target COD: 4Q/15 CAPEX 345 M$ Synergy Excellence 149 11 35 EOE +90 KTA TOCGC Plant Improvement Project 85% Marketing Excellence 86 26 112 CAPEX 94.2 M$ Target COD: 3Q/15 Operational Aromatics 2 PX +115 KTA 68 18 76 BZ +35 KTA Excellence Debottlenecking OX +20 KTA 76% Project CAPEX 128.8 M$ Target COD: 4Q/15 Total 303 55 223 *Updated as of March 2015 8
1-STEP ADJACENCIES: US Petrochemical Complex Petrochemical Complex Key Criteria for FID World Scale Ethane Cracker • Investment cost justify investment return • Utilize ethane from shale gas as feedstock • Enough ethane capacity with capped price • Capacity : 1 MTA Ethylene • Partner can distribute products in N. America • Derivatives • HDPE : 700 KTA • MEG : 500 KTA • EO : 100 KTA • Location : Dilles Bottom, Ohio • Capex: Approx. US$ 5.7 Billion Timeline BOD approved FID CHECK POINTS COD FEED Study 3Q/16 4Q/20 Mar, 2015 FEED Contractor Dual-FEED Selection Selection Construction 9
1-STEP ADJACENCIES: US Petrochemical Complex Site Location: Ohio’s Key Advantages : organization promoting job Close to feedstock supply creation and economic development of Ohio Site location is in the center of ethane • JobsOhio offers an aggressive incentive package • network with nearby fractionation units for the Project i.e. state job creation tax credits, • Allowing the project to utilize existing workforce training grants, infrastructure pipelines and provide flexibility for ethane improvement grants, and local tax credits delivery Accessible by railway/ highway/ waterway Pipelines in this region are mostly newly • Readiness of infrastructure and utility built with less than 2 years of use. Close to demand: (% of total US & Canada) • HDPE: 55% (4,500 KTA) • MEG: 65% (1,400 KTA) Availability and Quality of Workforce • 90,000 local skilled workers in Ohio JobsOhio with the construction trades and • educational system will deliver the required workforce. 10
1-STEP ADJACENCIES: US Petrochemical Complex Partner Feedstock Partner Selection Criteria • Discussed with 9 potential upstream and midstream • Trader / Marketing Expertize suppliers with volume of 2.3-3.4 MTA of ethane Product Offtaker • which exceeds required volume of 1.25 MTA Local connection & Practice • • Expected ethane supply contract tenor of 10-20 PTTGC is working with 6 selected potential partners years. Funding • Aim to cap ethane price with ceiling PTTGC is talking to potential lenders in Thailand Marketing and study funding scheme in the US in parallel Technology As a result of 73 customer visits in 2014, all customers are willing to buy from us. Cracker : Stone & Webster PE visits covered > 30% of US demand • Stone & Webster has the highest number of (42 visits) • projects and capacity share for the new project • EOEG visits covered > 80% of US demand in US. (31 visits) Product suppliers in NE America HDPE : INEOS Group Limited (INEOS) INEOS technology can produce products that • HDPE MEG fit to US market and has market share in N.America. PTTGC, Shell, Braskem PTTGC EOEG : Scientific Design (SD) Combined Capacity 2,450 KTA • PTTGC has long experience in SD technology (60% of NE demand) in Thailand. 11
1-STEP ADJACENCIES: Petrochemical Complex in Indonesia Refinery Upgrading Project Petrochemical Complex Project Potential Partner Feedstock from Balongan Refinery HDPE 300 KTA Preliminary Configuration Refinery Capacity LDPE 400 KTA 125 KBD Naphtha Feedstock based EO/EG 460 KTA Existing Capacity Required cracker PP 544 KTA 1.5 MTA Naphtha : 2.25 MTA Pygas 373 KTA LPG : 0.6 MTA BD 125 KTA Expanding Capacity MTBE 116 KTA Balongan Refinery Expansion + Petrochemical Complex Updates • Consider collaboration to integrate Balongan Refinery with PERTAMINA and partner is determining size and petrochemical complex configuration of Refinery upgrade/expansion • PERTAMINA and a partner is looking to upgrade/expand its • Availability of petrochemical feedstock from Balongan refinery refinery expansion • Configuration and product yield of the expansion 2015 2016 2017 2022 • Domestic demand of refined product PID by end FID by COD of 2015 2Q/17 12
1-STEP ADJACENCIES PU Chain: PO/Polyols Formulation TDI Major Applications PO Polyols (Propylene Oxide) (Polyether System EO Polyols) House (Ethylene Oxide) HDI Major Applications HDI TDI PO / POLYOL Project Update: PO/Polyol • Location : Rayong, Thailand • Finalizing HOA agreement with partner • Capacities • Feasibility study • PO : 200 KTA • Polyols & System house : 100-150 KTA 2015 2016 2019 • CAPEX ~ 1 billion USD Set up End 2016 COD 4Q/19 • Target COD : 4Q/19 Approve for JV company Construction 13
1-STEP ADJACENCIES PU Chain: Vencorex VENCOREX Thailand HDI Derivatives HDI derivatives plant in Thailand • Capacity: 12 KTA • CAPEX : 40 M.Euro • Target COD : 4Q/15 • Construction Status : 71.6% Marketing • Existing customers of Vencorex France in Asia approx. 8% of Asia Pacific Market • Seek new customers through premarketing by increasing direct sales especially with key accounts • HDI in Asia growth at 6% per annum VENCOREX USA : Exploring the possibility of HDI derivatives expansion in the US Update: VENCOREX France HDI Monomer • • TDI conversion to world-scale HDI monomer Ordered long lead item • Capacity: 70 KTA 2015 2016 • CAPEX : 17 M.Euro • Target COD : 2Q/16 End 1Q/16 COD 2Q/16 S/D to tie in Sustaining strong TDI customer base in Europe • Maximize special grade TDI (raffinate) TDI • Application development i.e. TDI for Coating/ Adhesives/ Sealants/ Elastomers market • Target on direct customers while keeping good connection with worldwide traders Continue R&D for TDI Process Improvement 14
GREEN: Bio-Hub Concept Palm-Base B i o h u b C o n c e p t Palm Oil Palm Kernel Palm Oil Bio Diesel Methyl Ester Fatty Alcohol Plant Palm Oil Utility Crushing mill Waste water Plantation Biomass Electrical, Glycerine Steam Bioplastics Biochemicals Waste Biofuels Biogas water Utility and Waste Cogeneration Fatty Alcohols System Electrical, Steam Fertilizer 15
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