Distrupol NIPA Presentation The Development & Supply Partner - - PowerPoint PPT Presentation

The ‘Development & Supply Partner’ to the Plastics Industry

Distrupol NIPA Presentation

Leading European Supply Partners

• Oil and Gas to Plastics
• Polymer Consumption Growth by Region
• Pricing Relationships and Trends
• Impact of Shale Gas Development
• The Changing World of Propylene
• Conclusions

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Pricing and Trends in Commodity Polymers

Polymers from Oil

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Transportation Domestic Power Generation Industry Other Petrochemicals Other Polymers - 4%

Petrochemical Feedstock Sources

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Crude Oil Gasolines (C5/C6) (70-140C) Naphtha- Heavy (C7/C9) (140-200C) Atmspheric Gas Oil Kerosene (C9/C16) (175-275C) Diesel Fuel (C15/C25) (200-370) Gases Methane (65-90%) Ethane, Propane, Butane Heavy Fractions Lubricating Oil Heavy Fuel Oil Asphalt

Crude Oil Distillation

<29 C >370 C 200 C 70 C 140 C 300 C Boiling Point

Yield from Crude Oil

Cracking Naphtha

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Quench Boiler Primary Fractionator Compressors Distillation Columns Boiler feed water Furnace Naphtha Steam Gasoline Fuel Oil Propylene Ethylene Hydrogen Methane Butadiene

Monomer Yield by Feedstock

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0% 25% 50% 75% 100%

Ethane Propane Butane Naphtha Gasoil

Other Hydrocarbons Butadiene Propylene Ethylene

Feedstock Source by Region

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0% 20% 40% 60% 80% 100%

Western Europe Japan USA

Ethane Propane Butane Naphtha Gasoil

Ethylene (C2) to Polyethylene

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C=C

H H H H

C=C

H H H H

C=C

H H H H

Ethylene

C C

H H H H

C C

H H H H

Polyethylene

Polymers from Monomers

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Petrochemical Feedstock

Propylene Benzene Paraxylene Ethylene Chlorine

EDC VCM

Ethylbenzene

Styrene GP Polystyrene

BR

HI Polystyrene

PTA PET MEG PVC LDPE LLDPE HDPE PP Co PP Homo

Other Feedstock Intermediate Polymer

EO

Global Polymer Demand

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Polymer Growth by Region 1983 - 2011

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Forecast Growth by Region to 2016

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Comments on Pricing

• Current pricing is predominantly influenced by Feedstock

prices

• Crude Oil Prices have remained high
• Supply issues with Crackers have meant high

monomer values

• Crude normally traded in $’s, so currency movements

affect feedstock values

• Overall global supply/demand balance strongly

influenced by Chinese growth rates

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Polyolefins Historic Pricing

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Shale Gas Development

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US Shale Gas Drilling Projects

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% of US Ethylene from different sources

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Gas Vs Oil Disconnect

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The Changing World of Propylene

• Shift to Ethane feedstock in North America – Shale Gas
• Emphasis on continued use of Ethane in Middle East
• Limited co-product supply
• Ethylene derivatives in surplus – propylene shortage
• Limited availability of propylene within refinery systems in

North America and Europe

• Forecast demand growth implies propylene must be

sourced elsewhere

• Propane Dehydrogenation in ME and US
• Refineries and Coal in Asia
• Higher investment costs imply higher propylene values

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PDH Projects across the world

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Conclusions

• Pricing in Commodity Polymer Markets are currently

driven by feedstock prices

• Main driver for Feedstock Prices are Oil/Gas prices and

Exchange Rates

• Shale Gas developments in North America will lead to a

significant cost advantage for C2 producers there

• North America will become a significant exporter of

Ethylene derivatives

• Move to Ethane from Shale Gas for Ethylene will lead to

shortage of Propylene, with oversupply of Ethylene

• Non-traditional routes to Propylene are more expensive,

so price differential between C2 and C3 will increase

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A Polymer for every Application