Meeting Domestic Gasoline Demand While Maximizing Integrated Value By: Charlie Hamlin, Global Business Director-Petrochemicals, Honeywell UOP Date: Monday, April 25, 2016
www.mpgc.cc
THE 24TH ANNUAL MIDDLE EAST
PETROLEUM & GAS CONFERENCE 2016
Overview • Creating value through R&P integration • Middle East gasoline situation -- the region needs more gasoline • Capturing petrochemical integrated value is another imperative • Managing molecules to maximize feedstock efficiency is the enabler to meet both needs • An example of an integrated complex delivering superior returns
To drive profitability • Maximize yield of high value products • Maximize flexibility to respond to market changes • Minimize production costs Note * ~$350/MT is equivalent to ~$50/bbl
R&P integration is key to driving profitability www.mpgc.cc
THE 24TH ANNUAL MIDDLE EAST
PETROLEUM & GAS CONFERENCE 2016
Considerations for Successful Integrated Projects Non-traditional Feedstock
• Subsidy reductions mean operators need to be more competitive • Minimal ethane for traditional PC developments • Long naphtha and LPG positions create potential PC growth
Cyclical Market Conditions
• Volatile market conditions impact fuels and PC prices • Threat of substitution given evolving market needs • Technology enabling flexibility critical to long-term success
Technology and Configuration Advantage
• Technology pivotal in effective conversion of new feedstock slate • Optimal configuration provides flexibility to provide both needed gasoline and enable PC growth
Selecting the right feedstock and technology are the keys to success www.mpgc.cc
THE 24TH ANNUAL MIDDLE EAST
PETROLEUM & GAS CONFERENCE 2016
ME Refining Overview Refined Product Supply / Demand M barrels / day
7.6
8.3
8.4
5.4
5.7
6.8 4.6
4.9
Net Product Balance M barrels / day
1.0 8.8 6.1
0.8 0.6 0.4 0.2 0.0
Demand Supply
2013
2015
2017
2019
Source: FGE, Honeywell UOP analysis
2021
-0.2
2015
2018
2021
Gasoline
LPG
Fuel Oil
Diesel
Naphtha
Jet/Kero
ME refining capacity expected to grow by ~2.2M b/d (~25% of global adds) by 2021 driven by global fuels shortages and PC demand Refiners need to consider flexibility to meet domestic gasoline demand and quality while maximizing value retention through PC integration
Surplus of refined products…except for gasoline www.mpgc.cc
THE 24TH ANNUAL MIDDLE EAST
PETROLEUM & GAS CONFERENCE 2016
Two Other Growth Opportunities Para-Xylene Global Demand MTPA
Ethylene Global Demand MTPA +3-5% 177
+5-7%
71
148 123
51 35
2010
2015
2020
2010
2015
2020
Source: FGE, Honeywell UOP analysis
Key intermediate in the production of polyester Most para-xylene is produced by catalytic reforming naphtha and associated technologies
Key intermediate in the production of polyethylene and other chemicals Most ethylene is produced by steam cracking of various hydrocarbon feedstocks
Attractive pX and olefins demand growth --- Another opportunity www.mpgc.cc
THE 24TH ANNUAL MIDDLE EAST
PETROLEUM & GAS CONFERENCE 2016
Cost of Production Breakdown (Illustrative) Para-Xylene Cost of Production % Cost of Production
Ethylene Cost of Production % Cost of Production
Net Feedstock Utilities Fixed
Feed Stock Efficiency is Key to Profitability www.mpgc.cc
THE 24TH ANNUAL MIDDLE EAST
PETROLEUM & GAS CONFERENCE 2016
How to Maximize Feed Stock Efficiency?
Refinery
Other Refined Products
Paraffins
Other Refined Products
Olefins Complex
Aromatics
Naphtha LPG
Gasoline
Fuel Oil Aromatics Complex
Fuel Oil
Gasoline / Reformate
Key is to maximize PetChem and preserve gasoline production www.mpgc.cc
THE 24TH ANNUAL MIDDLE EAST
PETROLEUM & GAS CONFERENCE 2016
Naphtha Pool Optimization Iso-paraffins
Gasoline Blend Stock
Naphtha Pool n-paraffins Iso-paraffins
Olefins
n-paraffins
Naphthenes Naphthenes
Aromatics
Reformer Feed
Aromatics
para-Xylene
All naphtha is not created equal; molecule management is key www.mpgc.cc
THE 24TH ANNUAL MIDDLE EAST
PETROLEUM & GAS CONFERENCE 2016
MaxEne™ Unit – A Tool for Molecule Management Light Naphtha Full Range Naphtha
Naphtha Cracker
Naphtha Cracker Light Naphtha + Full Range Naphtha
– Increased yield of light olefins (C2= + C3=) – up to 40% – Extend de-coking cycles – up to 50%
• Benefits to the catalytic reformer include: – Increased yield; gasoline – up to 7%; total aromatics – up to 12% – Reduced light ends and reduced coke on catalyst
• Produce high octane light naphtha for gasoline blending
Increases project NPV by ~$400M on $80M incremental investment www.mpgc.cc
THE 24TH ANNUAL MIDDLE EAST
PETROLEUM & GAS CONFERENCE 2016
Enhancing Value-Added ME Region Production • Gasoline shortages in ME need to be addressed • Long ME naphtha position provides opportunity for downstream integration to target aromatics and olefins markets • Feedstock is a critical component in driving integration
• Technology selection is key in managing molecules to ensure a balanced and efficient production of both high octane gasoline and value added petrochemicals
Just one example of superior returns via molecule management www.mpgc.cc
