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Raza Jawad
Regional Director, Business DevelopmentUOP Middle East Company, Dubai
Refining & Petrochemicals
IntegrationBusiness Drivers & Enabling Technologies
2006 UOP LLC. All rights reserved.UOP 4698-01
SAS-AIChE MeetingFebruary 27, 2007Al-Khobar, KSA
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Refining & Petrochemicals IntegrationBusiness Drivers & Enabling Technologies
Refining & petrochemicals markets
Investment strategies
Enabling technologies
Concluding remarks
UOP 4698-02
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70%
75%
80%
85%
90%
1980
1985
1990
1995
2000
2005
Average
GlobalUtilisation,%
Source: BP Statistical Review 2006
Refining Situation
Refining investments potentially attractive
Refining utilisation significantly higher in 2004 - 06Margins currently above re-investment threshold
0
2
4
6
8
1990
1994
1998
2002
2006
AverageCr
ackingMargin,$/bbl
Sources: BP Statistical Review 2006IEA 2005 / 6
Investment
threshold
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Refining Investment Imperative
~ 1.5 Mb / d incrementalrefined fuels annually
- ~ 45% in M. East + China
- Clean transport fuel growth
Refining investmentsessential
- Capacity
- Conversion
- Upgrading
Global Demand Growth
0
0.5
1
1.5
2
1996
-200
1
2001
-06
2006
-11
Mb/day,a
verage
0
0.5
1
1.5
2
2.5
%p
eryear,
average
Source: IEA, J uly, 2006
$30 40billion
per year
Substantial investments essential UOP 4698-04
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Investment Remuneration
Escalating fabrication and constructioncosts affecting investment returns
Investment Risk Remains Challenging
10% Internal Rate
of Return
New 200 kb/dCracking refinery
$4bn investment~ $6+/bbl average margin
for 20+ years required
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Risk Mitigation
Feedstock and product flexibility
- Opportunity feedstocks
- Optimal upgrading & conversion
- Maximize value addition
- Prosper from cyclical markets
Operational efficiency
- Economies of scale
- Energy- Control & optimization
Flexibility, Efficiency, Integration
Leading-EdgeTechnology
UOP 4698-06
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Advantages Of Integration
UOP 4698-07
Integrated refinery and petrochemical operationsminimize costs and optimize product distribution
Optimized integration of hydrocarbon processes,
energy, hydrogen, and water
Feedstock flexibility to capitalize on available low
cost crude oils and intermediates
Supply chain optimization provides faster delivery
of products
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Adding Value to Crude
$perTo
n
0100200300400500600700800
Crude
90010001200
Fuels
Gasoline
J / K
Diesel
Fuel Oil
Petrochemicals
Benzene
PropylenePP
Styrene
Petrochemicals Can Add Significant Value
p-X
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0
5
10
15
20
25
30
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Demand
Increase
over1999
-MMM
T
Other BZ BZ to CyclohexaneBZ to Phenolics BZ to Styrenics
p-Xylene6.8%
3.6%
Sources: CMAI & UOP
Aromatics Markets
AnnualGrowth
Strong Aromatics & Derivatives Growth UOP 4698-09
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Refineries are main
source of xylenes supply
Future p-X demand
growth expected to
average 1.8M MTA/Yr
3 To 4 World Scale p-X Complexes Annually
p-Xylene Capacity & Demand(Committed Projects Only)
0
5
10
15
20
25
30
35
40
45
50
1992
1996
2000
2004
2008
2012
2016
p-Xylene,
MMTA
Global Demand
ProductionCapacity
Futuresupplydeficit
Sources: PCI & UOP
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Propylene Market
MT Propylene / MT Ethylene
0.59
2004 2006 2008 2010 2012 2014
Supply fromsteam crackers
~18MM
T
A
0.40
0.35
0.45
S
team
Cracker
Production
0.54
0.64
Demand
Source: CMAI 2005
Demand
0.62
0.36
Propylenedemand
increasing
faster thansupply fromconventional
sources
Growing Demand For On-Purpose PropyleneUOP 4698-11
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BTX & Olefins: Integration Potential
Strong growth potential
Attractive value addition
Assured feedstock supply
- Potential for low cost & distressed refinery
intermediates High value return streams to refinery, e.g.,
hydrogen, high octane gasoline
Potential To Raise Returns & Mitigate Risk
+ PetrochemicalsRefining
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Integration Strategies
LightOlefins
BTX
Detergents
Chemicals
Hydrogen
Power
Technology Provides Link
Crude
Oil
Naphtha
Reformate
FCC Intermediates LPG Cracked Naphtha
Light Cycle Oil
Residues
Kerosene
Refinery
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Crude
Oil
Naphtha
Reformate
FCC Intermediates LPG Cracked Naphtha
Light Cycle Oil
Residues
Kerosene
Refinery
Integration Strategies
LightOlefins
BTX
Detergents
Chemicals
Hydrogen
Power
Technology Provides Link UOP 4698-14
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AGO / VGO
Refinery Light Olefins Integration
Gasoline
Fuel oil
C3=
FCC
PropyleneRecovery
OlefinCracking
UOP 4698-15
Olefin Cracking: Developed by Total Petrochemicals & UOPDoubles Propylene Production & Reduces C4/C5 Olefins
LPG
AGO / VGO
Fuel oil
Gasoline
C3=
Lt. OlefinRecovery
FCC
C2=Lt. Olefin
Recovery
FCC
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Olefin Cracking EnhancesGas To Olefins
Ethylene &Propylene
Gas UOP / HydroMTO Process
MethanolSynthesis
OlefinCracking
20% increase in light olefin yields
Nearly 80% reduction in C4+ by-products
2:1 propylene/ethylene productionratio
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PetroFCCTM Process: BTX + Olefins
Naphtha
DistillateFuel OilCoke
53.5
14
75
28
9.5
5.55
C4s
11
1914C4
=
Traditional FCC PetroFCC Process Light Olefins
C3s6.5
24
22C3=
C2-
9
6C2
=
3
18
Aromatics
BTX
The
Petrochemicals Refinery
Enabler UOP 4698-17
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Tatorayprocess
Aromatics Processing
p-Xylene
XyleneFractionation
Parexprocess
Benzene
CCRPlatforming
process
Naphtha
Conversion
Ring Adjustment
Separation
UOP 4585C-11
Proven performance track record
State of the art technology continuous innovation
Cost effective designs; high on-stream efficiency
90% ofp-X capacity since 1970 uses Parex process
BTFractionation
Sulfolane
process
Isomarprocess
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BTX Innovation: LCO-XTM Process
FCC light cycle oil (LCO)
- Distillate range intermediate product
- High sulfur, high density, highly aromatic
- Difficult to blend to clean transport fuel
High content of multi-ring aromatics
- Unlock benzene and xylenes
Low value asfuel blendstock
Low cost,high
value BTXfeedstock
$0.75/Bbl crude increase in operating margin
LCO-X process for converting LCO to BTX recentlyannounced
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Refining
Gasification
Syn Gas Production
HydrogenCarbon monoxideFertilizerSNGOlefinsMethanol/Ethanol
Acetic acid
NaphthaDieselJet fuelWax
Electricity
Separation
O2, N2, CO2, S, sulfuric acid
TransportationFuels
Resid
Natural Gas Reforming
Electricity
Hydrogen
A Future Scenario
Chemicals
GasConversion
Power
CrudeOil
Resid
Technology Developments Key To Deeper IntegrationUOP 4698-20
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Innovation, Research, Development
Broaden the knowledgebase
Leverage academic andindustrial experts
Keys to success: Collaboration / alliances
Commercialize
Technology ImperativeA Key Enabler
UOP Awarded National Medal of Technology in 2005
over 85 years of sustained technical leadership and innovationfor the worldwide petroleum refining and petrochemical
industriesbenefited quality of life throughout the world.
Universities
GovernmentLabs
Startups
TechnologyLeaders
Customers
Suppliers
uop
A Honeywell Company
UOP 4698-21
Ref: National Medal of Technology Award to UOP, 2005
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Summary
Strong growth of refining and petrochemicalsmarkets, healthy margins
- Investment in additional capacity essential
Integrating petrochemicals with refining canmitigate investment risk
Continuing technology innovation key enablerfor successful integration
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Thank You
UOP 4698-23