Regional (MENA Region) Feedstock Availability and

Alternative Approaches to Chemicals Value chains

Abeer El-Sherbiny- Business Development Senior Engineer

13th - 15th November 2017 | Hilton Athens, Greece

Agenda

Egyptian Petrochemicals Holding Company Snapshot

Conventional and Non-Conventional Routes to Chemicals Value Chain

Regional Feedstock Availability

Implications of Lower Oil Prices

Implications of US shale Gas Booming

1

2

3

4

5

Success Strategies driven by challenges based Opportunities 7

Egyptian Petrochemicals Holding Company Snapshot

To be a major player in the petrochemicals industry through

transforming Egypt into a regional petrochemicals hub.

To Develop a competitive petrochemical industry based on local human and

natural resources using state-of-the-art technology.

Vision

Mission

Established in January 2002:

To manage and control the Petrochemicals Industry in Egypt.

Transform Egypt into a

regional petrochemicals hub

through the completion of

Seven plants

Total investment cost of 7.5

Billion Dollars achieving

revenues of 3.5 Billion Dollars

2002-2022

24 Projects

100,000

Job Opportunity

(direct & indirect)

Egyptian Petrochemicals Production

2017

2002

2000

1984

1980

Echem “ The Egyptian

Petrochemicals Holding Company

Sidpec “ Sidi-Kerir

Petrochemicals Company

Amerya Lab Unit

7 Successfully operated Plants

EPC “ Egyptian Petrochemicals Company)

15 million TPA of Intermediate & Final Products

LAB ( 50,000 tons/annum)

Polyethylene (220,000 tons/annum)

PVC ( 80,000 tons/annum)

Primary Petrochemicals

Butadiene Ethylene Benzene Xylene

Chemicals Value Chain Building Blocks

Crude Oil Natural Gas

Condensate Butanes Propane Ethane Methane

Steam Cracking

Olefins

Naphtha

Aromatics

Toluene Propylene Methanol Ammonia

Synthesis Pygas

Importance of Propylene as a Main Building Block

In the global propylene market, demand

has been increasingly driven by the PP

sector; this is highly influenced by the

packaging, automotive and construction

industries.

Global propylene demand is forecast to

grow at CAGR of 4.8% in 2013-2018,

and high-growth applications include

cumene, acrylic acid and PO.

Ice Breaker Question and Poll

Which region has the highest and which one with the lowest Propylene

Demand CAGR in 2013-2018?

1. China : Highest , Americas :Lowest

2. Middle East & Africa: Highest , Europe: Lowest

3. China : Highest , Europe :Lowest

4. Middle East & Africa: Highest , Americas: Lowest

Propylene Global Demand by Region 2013-2018

The Propylene Gap: How Can It Be Filled? On Purpose

Technologies for Producing Propylene

0%

Steam

Cracking

Refinery

PDH

MTO/MTP

Others 2%

33%

62%

3%

9%

4%

26%

47%

14%

2005 2035

"PDH requires modest capital

investment for olefin

production and can easily be

back-integrated for an existing

propylene consumer, lending

itself to project viability. Places

with propane at low cost, such

as the US and the Middle East,

or regions looking to lessen

propylene imports, like China,

[are] candidates for PDH.”

Peter Piotrowski, vice president and

general manager at UOP

72 Million Tons

165 Million Tons

Global Propylene Capacity

Production Cost of Propylene from Naphtha Cracker versus PDH

Propylene Cash

production cost

via naphtha

cracker at ratio

1 to ethylene

Propylene Cash

production cost via

propane

dehydrogenation

Naphtha $/ton

100 200 300 400 500 600 700 800 900 1000 1100 1200 1300

Assumption: Propane Price=

Naphtha Price x 0.9 ($/ton)

Natural Gas $/mmBtu

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Propylene Price CFR NE Asia

$940-980/ton

Naphtha Price should be lower

than $ 570 /ton to have profit

margin for propylene

Breakeven at 430

$/ton Naphtha

$/ ton

2,000

1,800

1,600

1,400

1,200

1,000

800

600

400

200

0

LNG Exports and Imports 2035 (Bcf/d)

22

5

9

7

17

17

44 2

North

America

S & C

America

Europe

Africa

Middle

East Other

Asia

Russia

Australia Exports

Imports

Regional Opportunities in Egypt, Lebanon, Israel and Cyprus

Global Naphtha: Key Trade Flows (2016, Million Tones)

2.7

18.5

40.7

8.6

8.7

54.8

7

North

America

S & C

America

Europe

Africa

Middle

East

Asia

F.USSR

Surplus

Deficit

Effect of Low oil Prices on Chemical Industry Competitiveness

Asia Europe USA

Negative Negative Very Negative Ethane Based ethylene

Slightly Negative Slightly Negative Slightly Negative Ethylene derivatives

Negative Negative Negative Propane/Butane based

Olefins

Slightly Negative Slightly Negative Slightly Negative Their derivatives

Very Positive Very Positive Positive Naphtha based BTX,

Butadiene

Positive Positive Slightly Positive Its derivatives

Very Positive Positive Slightly Negative Methane/LNG based

Shale Gas Shifts Regional Petrochemicals Profitability

Shale Gas shifts the scene for Middle East

Source: Nexant

Egyptian Petrochemicals Opportunities Considering Global Trends

Considering Specialty chemicals

beside commodities in future

portfolio projects to enhance

profitability and overcome high price

feedstock.

Considering the new on purpose

technologies like OCM, MTO, MTP

…etc to produce olefins and get use

of the available gas in the region.

Get use of the available assets and

facilities to import required feedstock

for prospected projects.

Success Strategies: Speed of Feedstock Prices Changes Pass Along the

Chemical Value Chain

Technology is the problem and the

solution at the same time accordingly

portfolio of technologies

Changes in the relative availability and

prices of feedstock are driving

transformation in the world

petrochemical industry.