Achieving Best-in-Class Performance for Light … Best-in-Class Performance for Light Olefins Technology ... Maximize Profit Across the Plant Life Cycle Ethylene ... Achieving Best

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Achieving Best-in-Class Performance for Light Olefins Technology

CB&I

Martin F. Bentham

Presented at

5th Indian Oil Petrochemical Conclave, 4th February 2016


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This presentation contains forward-looking statements regarding CB&I and represents our expectations and beliefs concerning future events. These forward-looking statements are intended to be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties. When considering any statements that are predictive in nature, depend upon or refer to future events or conditions, or use or contain words, terms, phrases, or expressions such as “achieve”, “forecast”, “plan”, “propose”, “strategy”, “envision”, “hope”, “will”, “continue”, “potential”, “expect”, “believe”, “anticipate”, “project”, “estimate”, “predict”, “intend”, “should”, “could”, “may”, “might”, or similar forward-looking statements, we refer you to the cautionary statements concerning risk factors and “Forward-Looking Statements” described under “Risk Factors” in Item 1A of our Annual Report filed on Form 10-K filed with the SEC for the year ended December 31, 2014, and any updates to those risk factors or “Forward-Looking Statements” included in our subsequent Quarterly Reports on Form 10-Q filed with the SEC, which cautionary statements are incorporated herein by reference.

Safe Harbor Statement

Achieving Best in Class Performance

Process Performance

Low investment cost

By-product Flexibility

Enhanced Safety and Environmental Performance

Highest Reliability

Lower cost plant expansions

State-of-the-Art Light Olefins Technology

Maximum plant size for economy of scale


Process Performance

Low investment cost



Highest Reliability





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The SRT VII and quick quench Transfer Line Exchanger

Maximum selectivity

Maintains long run length and high operability

2% to 6% reduction in feedstock consumption

Process Performance - High Selectivity Furnace


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C4/C5 Metathesis Chemistry converts lower value butene and pentene to propylene

Applying the OCT Process increases ethylene and propylene yield by up to 2.5 times over recycle cracking while reducing energy consumption

Process Performance – OCT Process

+

Pentene Ethylene Propylene

+

Butene Ethylene Propylene


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Uses gas turbine exhaust as a source of furnace combustion air

Gas turbine cracking heater integration lowers energy consumption by up to 20%

Process Performance – Gas Turbine Integration

0

1,000

2,000

3,000

4,000

5,000

6,000

Ambient Air Gas Turbine Integration

Specific

Energ

y, M

Mkcal/kg C

2-

5,400 4,300


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Process Performance

Low investment cost



Highest Reliability





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Discharge pressure reduced by 50%

Lower Investment with Compressor Reconfiguration

Low Pressure Chilling Train

In successful operation since

2006

Eliminates 15 pieces of equipment

and one casing of the CG

Compressor

Lower operating pressures

inherently increases plant safety


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-101ºC

-40ºC

40ºC

Conventional

System Binary

System

C1/C2-R

C3-R C3-R

C2-R

C1R/Exp

C1/C2-/C3-R

from a single

machine

-135ºC

Tertiary

System

Binary and Tertiary Refrigeration

In operation or under design in plants producing over 12 million tons per year of ethylene


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Lower CAPEX

7% reduction in ISBL investment

37 equipment pieces eliminated

40% reduction in compressor/turbine casing

Conventional Latest Technology

CG compressor & driver 4 3

C3- refrig compressor & driver 2 ―

C2- refrig compressor & driver 2 ―

C1 refrig or expander 2 to8 ―

Tertiary refrig compressor & driver ― 3

Total 10 to 16 6

Low Pressure Chill Train and Tertiary Refrigeration

Improved reliability and lower

maintenance cost


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Process Performance

Low investment cost



Highest Reliability





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Ethane 27%

Propane 7%

Butane 4%

Naphtha 55%

Gas Oil 5%

Others 2%

2005

Ethane 33%

Propane 8%

Butane 4%

Naphtha 50%

Gas Oil 3%

Others 2%

2010

By-product Flexibility – Changing Feedstock Slate

Lower cost ethane feed is replacing naphtha as source of feed to steam crackers

Worldwide shale gas reserves will increase this shift

This will reduce the supply of C3 and heavier products opening up the need for greater by-product flexibility in both new and existing plants

Ethane 35%

Propane

9% Butane 5%

Naphtha

45%

Gas Oil 3%

2015

Other 3%


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By-product Flexibility – Propylene Shortfall

The 10% shift from naphtha to ethane feed reduces available propylene production by 7.5 million MTA

Propylene demand is expected to increase by 25 million MTA by 2019

New range of feeds for Olefins Conversion Technology

+

Butene Ethylene Propylene

Refinery, MTO and steam cracker C5s

Ethylene to propylene


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By-product Flexibility – Ethylene to Propylene

Ethylene Dimerization plus OCT can offset propylene shortfall economically since propylene is of higher value than ethylene

Propylene can be produced by ethane crackers using this ethane to propylene route

Ethane and naphtha crackers can produce any P/E ratio all the way to 100% propylene

Average value 1.21

North America – Propylene/Ethylene Price Ratio

Price data USGC Spot by ICIS


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By-product Flexibility – C4/C5 Metathesis

C4 raffinate and C5s are typically recycle cracked

OCT/cracker integration using C4 raffinate will:

Constant Propylene

120

140

160

180

200

Be

nze

ne

, kta

Cra

ck

er

Cra

ck

er

& O

CT

400

500

600

700

800

Pyg

as, k

ta

Cra

ck

er

Cra

ck

er

& O

CT

-38%

+25%

500

600

700

800

900

Pro

pyl

en

e, k

ta

Increased Propylene

Cra

ck

er

Cra

ck

er

& O

CT

+25%

Increase propylene

Increase benzene and decrease pygas at constant propylene


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By-product Flexibility – C4/C5 Metathesis

Steam cracker C5s can feed the OCT to produce additional propylene

Ethylene + propylene yield increases by 2.5 times when compared to recycle cracking the C5s

Refinery C5s can also be used to supplement C5s from cracker

500

600

700

800

900

1000

Pro

pyl

en

e ,k

ta

Cra

cke

r

Cra

cke

r +

C4 O

CT

Cra

cke

r +

C4 /

C5

Propylene Production

+25%

+35%

1000

3000

5000

Kca

l/kg

C2-+

C3-

Cra

cke

r

OC

T

Lower Energy Consumption for C5s

-55%


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Process Performance

Low investment cost



Highest Reliability





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Safety is our culture

Focus is on safety from design to operation

Internal and external systems in place to facilitate safety across the life cycle of plant Safety bulletins

Ongoing training programs

Extensive data base available to all licensee

Enhanced Safety


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Environmental Performance – NOx Reduction

Reduces burner NOx by 90%

NH3 distribution insured by CFD modeling

Experience in five locations

Successful experience with firebox decoking

Allows fireside and process side modeling

Ensures proper burner placement and configuration

NOx reduction is a key criteria in securing the necessary permits to expand existing or build new plants

• Delayed combustion

• Flue gas recirculation

• Reduces NOx from 100ppm to 30ppm

NOx Reduction

Improved Burners

Virtual Furnace Using CFD

Selective Catalytic Reduction


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Producing propylene via OCT reduces green house gas commissions

OCT reactions are exothermic

Only route to propylene that does not require energy input to the reaction step

Separation costs are low since product recovery is not energy intensive

No H2 or methane is present

Separation is between carbon numbers and not between olefin and paraffin

Gas turbine/heater integration reduces energy consumption by 20% and reduces NOx by 15%

Environmental Performance – Lower CO2


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Process Performance

Low investment cost



Highest Reliability





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Increasing Operating Margin with High Reliability

Licensee Survey results constantly show high on stream factor & extended time between turnarounds

Year Total Survey Ethylene Capacity MTA

2002 21 Million

2007 20 Million

2012 30 Million

Time Between Turnaround Months

Average Maximum

36 96

42 84

48 120

On Stream Time

97.7%

98.0%

98.9%

Multiple plants have no shutdown during

survey periods

Steadily improving performance due to skilled

operations, strong maintenance, new technology and

continuing technical service


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Process Performance

Low investment cost



Highest Reliability





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Economy of Scale

First >1000 kta plant awarded to

CB&I in 1993

Largest volumetric cracker on USGC, a 950 kta liquid cracker

awarded to CB&I

CB&I currently designing a 1420 kta naphtha cracker – largest volumetric cracker licensed to

date, equivalent to a 2150 ethane cracker

Plants designed by CB&I have historically lead the growth

in maximum capacity


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Economy of Scale

Today’s limit is 2300 kta for ethane feed and 2000 kta for naphtha feed


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Process Performance

Low investment cost


Enhanced Environmental Performance

Highest Reliability





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Lower Cost Expansion

8 million kta of

ethylene capacity

Mixed

Refrigeration OCT Integration

Average expansion 44% above

nameplate with maximum 132%

above nameplate

43 projects

Maximize Profit Across the Plant Life Cycle

Ethylene Plant Expansions

New technology features reduce investment and shutdown time while increasing reliability


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Lower Cost Expansion – Mixed Refrigeration

Expansions using conventional technology typically re-rotor or replace all existing refrigeration compressors

Using binary or tertiary refrigeration system, adds only a single new compressor

Binary

System Tertiary

System

C1/C2-R

C3-R

C1/C2-/C3-R

from a single

machine

-101ºC

-40ºC

40ºC

Conventional

System

C3-R

C2-R

C1R/Exp -135ºC

Results in lower investment cost

Downtime decreases since new refrigeration system can be

added during plant operation and only tied in at shutdown


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Lower Plant Investment at Increased Severity

Integration of ethylene plant and OCT can decrease investment for the expansion while holding the propylene-ethylene product ratio constant

Steam cracker without OCT at moderate or low severity


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0.84

0.96 0.99 0.94

1.04

0.62 0.71

0.99 1.07

0.49

Steam cracker at increased severity with OCT

Lower throughput in ethylene plant lowers

expansion investment enough to more than offset

investment in OCT

Lower Plant Investment at Increased Severity

Integration of ethylene plant and OCT can decrease investment for the expansion


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Achieving Best in Class Performance – Summary

Process Performance

Low investment cost



Highest Reliability


Lower cost plant

expansions

• High yield

• Low energy consumption

• Low pressure chilling train

• Mixed refrigeration

• OCT/Cracker integration

• C4/C5 OCT

• C2- Dimerization

• Inherently safer design

• Super-low NOx burner

• SCR

• Energy-neutral propylene

production

• Gas turbine integration

• 98.9% on stream factor

• 4-5 years between turnaround


• OCT Integration

• 2300 kta for C2 feed

• 2000 kta for liquid feed



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Achieving Best in Class Performance – Summary

Process Performance

Low investment cost



Highest Reliability



• High yield

• Low energy consumption

• Low pressure chilling train


• OCT/Cracker integration

• 98.9% on stream factor

• 4-5 years between turnaround


• OCT Integration

• 2300 kta for C2 feed

• 2000 kta for liquid feed


Maximizing Profitability Across

Plant Life Cycle

• C4/C5 OCT

• C2- Dimerization

• Inherently safer design

• Super-low NOx burner

• SCR

• Energy-neutral propylene

production

• Gas turbine integration


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Copyright 2016, CB&I Inc. All Rights Reserved.

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Achieving Best-in-Class Performance for Light … Best-in-Class Performance for Light Olefins Technology ... Maximize Profit Across the Plant Life Cycle Ethylene ... Achieving Best