Honeywell UOP Natural Gas and Honeywell

8/20/2019 Honeywell UOP Natural Gas and Honeywell

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2013 Honeywell Users Group Americas

1

Natural Gas and Honeywell HUG 2013Phoenix, June 19, 2013

Guy Lewis

HONEYWELL CONFIDENTIAL


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2

Natural Gas

Welcome to the Golden Age of Gas

The Shale Revolution

UOP/Honeywell Offers for Shale Development

One Honeywell Integration Opportunities


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3

The Golden ge of Gas


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4

Why Natural Gas?

Internat ional Energy Agency (IEA) Forecasts th e Golden Age of Gas

2. Environmental Benefits Gas produces:

50% fewer greenhouse gas emissions vs. coal for power

20% fewer greenhouse gas emissions vs. diesel for transportation

Nuclear share in OECD in decline post Fukishima, Gas-fired turbine most likely replacement

3. Geopolitical Drivers Energy security: gas reserves more distributed than oil (particularly unconventional gas)

Local gas price provides partial hedge vs. global oil price dynamics

State mandates for increased gas production

1. Economic Incentive Gas vs oil price

Unconventional gas revolution has vastly expanded accessible global reserve base

Exploration and production (E&P) costs per shale well in decline with efficiency gains

Clean power demand rapid growth in high growth regions.

Capital Cost: gas cheaper than nuclear/coal; new power plants quicker to market

Operating Cost: global cost advantage of gas vs. crude and liquid products


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5

27% 24%

32%27%

22%25%

6%6%

2%3%

11% 15%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2035

Global Primary Energy Demand by Source

Renewables

Hydro

Nuclear

Gas

Oil

Coal

~2.5% global growth CAGR

Nuclear continues to grow in Asia& Mid East


Supply more regionally distributed than oil


Limited growth due to fuel switchingand vehicle efficiency gains

~1% global growth CAGR

Limited growth due to greenhouseemissions & high power plant capitalcost

Total: 541 TCF 728 TCF

Source: IEA 2012 “Golden Rules for a Golden Age of Gas” special report, Golden Rules Case

Energy Demand Comments

(173 TCF)(195TCF)

(116 TCF)

(180 TCF)

Natural Gas Fastest Grow ing Hyd rocarbon Fuel


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6

Global Gas Supply and Demand

Emerging Gas Sources, Clean Energy and Changing Regional Flows

Require Technolo gy and Innov ation to Maxim ize Gas Monetization

North America remains

separate from global

markets but export projects

gaining in credibility

Strong demand growth

across Asia

South America: Imports

ramping up again; potential

new regional supply

Strong European Demand

Japanese crisis – strong

incremental LNG demand

China-world’s largest

shale gas potentialEmerging

New Supply

Large Gas Reserves

Ready for Harvest

Signi f icant Resources

Liquefact ionSupply Surge

Abund ant Shale Supply


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$0

$5

$10

$15

$20

$25

2010 2015F 2020F 2025F 2030F 2035F

Customers: Energy Price Dynamics

Gas Arbi t rage Oppor tuni t ies Encouraging Fuel Switch ing & NGL Recovery

D I E S E L

S W I T C H I N G T O

G A S

OECD Crude Oil

Japan LNG

UK NBP Gas

US HH Gas

OECD Coal

Sources: IEA 2012 World Energy Outlook, CME Futures, & IHS 2011 World LPG Market Outlook

China Gas Proxy

• Oil: 1 barrel = 5.8MMBTU; Coal: 1 metric ton coal = 27.8MMBTU;

Propane:1 metric ton = 43.5MMBTU

G A S T R A D E

A R B I T R A G E ( L N G )

C O A L V S

.

G A S

P O W E R &

C H I N A S N G

Price Spread Encourages:

1

2 3

Global Propane (LPG)

N G L

R E C O V E R Y

4

E n e r g y E q u

i v a

l e n

t B a s

i s , $ / m m

B T U

( C

o n s t a n t 2 0 1 1 D o l l a r s )


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The Shale Revolution


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Natural Gas Resource Overview

Convent ional Gas: Harder to Find, Easier to ProduceUnconv ent ional Gas: Easier to Find, Harder to Produce


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US Shale Plays


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-20%

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

$80 WTI$70 WTI

$60 WTI

High Rates of Return in Liquids-Rich Plays Driving Activity

A ll Wet Gas Plays Drive >20% Return at Curr ent Prices

DRY

HH Dry Gas Price = $3.00/MMBTU

NGL Price = 40% WTI

WET

Liquid rich field plays are forecasted to generate over 75%

of incremental gas in USA (+4 TCF) over next 6 years

I R

R

GPM 4-9 4-9 4-7 8-13 4-9 3-9 4-9 3-9 1-2 1-2 1-2


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Reason for value-added optimization

Typical example of revenue associated with NGL recovery

180 MMSCFD of 3 GPM gas (~1,100 BTU/SCF)

Monthly revenue: 14 MM$

200 MMSCFD cryogenic NGL recovery plant cost: 20 MM$

Potential benefit of full optimization is offset by loss in revenue due to

schedule increase

Methane

Ethane

Propane

n-Butane

i-Butane

NaturalGasoline

Shale Gas

178 million

cubic feet per

day (MMcf/d)

Barrel

Comp

45%

29%

10%

5%

11%

ExamplePrice

Basis1

Henry Hub

41% WTI

77% WTI

81% WTI

92% WTI

64% WTI

Value over fuel

$M/month

$0.0

$4.3

$1.9

$1.0

$2.5

$4.4

1. Henry Hub = $3.00/mmBTU; WTI = $80/bbl

@ 3GPM

NGL’s

$14.1

Need for value-added op t imizat ion w ithout schedule im pact


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Overall NGL Barrel & Cryo Plants Projected

Source(s): Bentek Energy & Ponderosa Advisors

Cont inued Growth in US NGL Product ion Forecasted

CAGR = 8%

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2013 2014 2015 2016 2017 2018

US Total NGL Supply from Gas Plants (MMSCFD)


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14

U.S. C2/C3 Supply

Widening of the Panama Canal will allowUS LPG to enter the growing Pacific

Basin market LPG exports adding more than ~400 kb/d

by 2015

PDH will grow to fill propylene gap (4 unitssold and total 9 units announced)

C3 pricing to vary between $500-$700 / MTthrough 2017

Low cost ethane replacing heavierfeedstocks (Naphtha, Gas Oil)

Adding 9,700 kMTA ethylene by 2017 (adds 28% to US Capacity)

One additional cracker/year expected

thereafter

C2 pricing to vary between ~$6-$10 /mmbtu through 2018

US Ethane Indu stry Dyn amics

US Propane Indus try Dynamics

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

0

200

400

600

800

1000

1200

1400

1600

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

US Ethane Supply Forecast

US Propane Supply Forecast

Source: Bentek; *Does not include US imports; domestic supply only

K b / d

K b / d

US NGL supply surge to d r ive olef in expansions


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15

US Shale Development: Natural Gas

TCF

Shale gas to reach ~40% share of US supply by 2015

Natural gas liquids (NGLs) economics driving continued shale drilling despite reduced US gas price

Increased E&P efficiencies resulting in continued robust production with fewer active rigs

Significant incremental US gas supply available for new demand (petrochemicals, power, industry)

3%6%

7%11%

15%

26% 26%

30%

35%37%

39%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

-

5

10

15

20

25

30

2005 2007 2009 2011 2013E 2015E

B

C

F

D

Production % of US Total

Sources: EIA, Bentek

US Shale NG Product ion US Gas Produ ct ion b y Source

Shale Has Become Largest Sou rce of New US Gas Produ ct ion


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Increasing Natural Gas Value Chain Complexity

GP&H Bui ld ing Capabi l i ty to Capture & Manage all Major Gas Processing Needs

Conventional Gas, Shale Gas, CBM, Offshore (FPSO)*

Gas ProcessingPlant *

LNG Loading

LNG Shipping

LNG Terminal:

downloading

Storage,

re-gasification *

P i p e l i n e G a s T r a n s p o r t a t i

o n

Power Plant

Big Industrial Plant(e.g. Cement orFertilizers Plants)

City GateStation

IndustrialUser

CommercialUser

ResidentialUser

Commercial & Industrial User

Underground

Storage *

Bio Gas

Producer *

CNG /LNGStation *

SNG Generation *

Extraction

Processing

Transportation(Pipeline + LNG)

Storage

Distribution

Gas Processing& LNG (Liquefaction)Plant *

*GP&H GrowthAreas

Power Plant

OR

OR

NGL ExtractionOpportunities

http://en.wikipedia.org/wiki/File:Posto_GNV_01_2009_485_CWB.jpg


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17

Lessons from U.S. Shale Gas Variability

Well C 1 C 2 C 3 CO 2 N 2

1 80.3 8.1 2.3 1.4 7.9

2 81.2 11.8 5.2 0.3 1.5

3 91.8 4.4 0.4 2.3 1.1

4 93.7 2.6 0.0 2.7 1.0

Well C 1 C 2 C 3 CO2 N 2

1 79.4 16.1 4.0 0.1 0.4

2 82.1 14.0 3.5 0.1 0.3

3 83.8 12.0 3.0 0.9 0.3

4 95.5 3.0 1.0 0.3 0.2

Barnet t Shale Gas Compos i t ion Marcel lus Shale Gas Composi t ion

Well C 1 C 2 C 3 CO 2

1 87.7 1.7 2.5 8.1

2 88.0 0.8 0.8 10.4

3 91.0 1.0 0.6 7.4

4 92.8 1.0 0.6 5.6

Well C 1 C 2 C 3 CO 2 N 2

1 27.5 3.5 1.0 3.0 65.0

2 57.3 4.9 1.9 0.0 35.9

3 77.5 4.0 0.9 3.3 14.3

4 85.6 4.3 0.4 9.0 0.7

New Albany Shale Gas Com pos i t ion Antr im Shale Gas Compos i t ion

“Microbial production and modification of gases in sedimentarybasins: A geochemical case study from a Devonian shale gas play”,

AAPG Bulletin, Vol 87, No. 8 (August 2003)

“Oil and gas geochemistry and petroleum systems of the Fort Worth

basin”, AAPG Bulletin, Vol. 91, No. 4 (April 2007)

“Compositional variety complicates processing plans for US shalegas”, Oil & Gas Journal, March 9, 2009

“Identification of microbial and thermogenic gas componentsfrom Upper Devonian black shale cores, Illinois and Michiganbasins”, AAPG Bulletin, Vol 92, No. 3 (March 2003)

Variat ion s in C2, C3, CO2, Nitrog en, and Oth er Comp onent s

in Shale Gas Impact Interchangeabi l i ty with Other Gas Suppl ies


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Distributed Global Gas Reserves

Unconventional Conventional

World total = 790

CIS

Sources: IEA, BP, PFC Energy, EIA

AFRICA

W. EUROPE

OAP

NORTH AMERICA(ex. Mexico)

LATIN AMERICA

INDIA

462328

MIDDLE EAST

CHINA

No circle within a region indicates minimal known Acid Gas or NGL Content |

Oppo rtunit ies for GP&H in Med-to High Acid Gas or NGL Areas

Remaining Recoverable Natural Gas Resources

HON regions, 2012, tm cubic metres (tcm)

High Med Low

NGL Content

High Med Low

Acid Gas


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Honeywell Offers for Shale Resource

Monetization


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UOP Offers to the Oil and Gas Industry

Upstream Midstream DownstreamExploring for, drilling for and

producing crude oiland natural gas

Processing, storageand transportation

Refining and converting oil /gas into end products such as

fuels and chemicals

UOP technology, materials andservices enable monetization of

natural gas resources

UOP processing technology,equipment, materials and

services

http://www.photos.com/en/search/close-up?eqvc=108831&oid=3649136&a=&pt=&k_mode=all&k_exc=&cid=&date=&ct_search=&k_var=gasoline&bl=/en/search/index?f_h=1&f_i=1&f_o=1&f_v=1&f_b=1&f_c=1&k_var=gasoline&k_mode=all&big=1&ppage=2&srch=Searching...&first=21&&ofirst=&srch=Y&hoid=f635b3d5ef807448f15c4ed5d6b2d5bf


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Maximize Value of Gas Projects with Speed ofImplementation

Monetize Methane and Natural Gas Liquids

Imperatives

1

2


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SulfurAcid Gas

MercuryRemoval

Acid GasRemoval

(CO2, H2S)

Dehydration

HUR Equipment

Separex™MembraneSystems

Amine Guard™ FS Process

Selexol™ Process

HUR Equipment

MOLSIV™

Adsorbents

HUR Equipment

Twister ™ SupersonicSeparator

Ortloff Processes

Natural GasExtraction

Fractionation

LiquidsRecovery

Sulfur

RecoveryUOP Offerings

Dry Sweet Gas

LNG

Raw Natural

Gas Liquids

Ethane

Propane

Mixed Butanes

NaturalGasoline

UOP Petrochemical technology to further convert / upgrade NGLs

Liquefaction

UOP Natural Gas Solutions

HUR and UOP : Many solu t ions to m aximize gas monet izat ion

1


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History:

Private company founded in 2002. Headquarters and operations in Tulsa, OK

Second Company Founded by Thomas Russell in Gas Plant Design

First Company sold to Hanover and later merged into Exterran

70% ownership acquired by Honeywell UOP in October 2012

Business Description:

Design, engineer, manufacture & install skid mounted natural gas conditioning

plants

Emphasis on NGL extraction and processing

Pre-engineered designs & significant know-how in plant designs

Corporate Office:

Tulsa, OK. HUR base for Engineering, Project Management, Sales and Admin,

within 15 miles of our Manufacturing Shop

Employees: ~115

~10 in New Products Development / Sales Support

~40 Engineering Group

~15 Projects Group

~50 Manufacturing

HUR: The Gas Processing ExpertsTM- Company Overv iew

Manufacturing Shop:

Port Of Catoosa location

Enclosed 32,000 sq ft Fabrication site

Fully Equipped for lifting and welding

120,000 sq ft parts storage facility

12 acres of secure lay-down area


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UOP Russell ProductsNat Gas Conditioning

Dehydration• Mol Sieve Adsorption• Glycol (TEG, DEG) Absorption

Acid Gas Treatment• Amine Units (200, 400, 700, & 1000

gpm1

sizes)

Rich Gas Conditioner Fractionation• Deethanizer, Depropanizer, Debutanizer

2GPM

= gallons of NGL per thousand scf of

natural gas

1gpm

= gallons of amine per minute

S e g m e n t

O

f f e r i n g

NGL Recovery NGL Upgrading

9

4

2 G A S N G L C O N T E N T ( G P M

2 )

Mechanical

Refrigeration

Cryogenic Turboexpander

Complete Modular Equipment Solution

6

3


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UOP Russell Cryogenic plant Skids

UOP Russell’s Skids are Factory Tuned and Ready for Installation


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UOP Russell Packaged NGL Plant

Modular Design

Rapid Gas Monetizat ion

19 weeks later …


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UOP Russell Packaged Plant Capabilities

Package process technology as skid-mounted, shop-fabricated packages for

Lower cost fabrication versus on-site construction

Faster installation

Trusted process and mechanical performance

High on-stream efficiency

Ideal candidates for packaged units

Units sized for 200 MMSCFD or less

Remote locations

Plants with multiple trains

27UOP Russel l technolog y so lut ions (CO2 removal, dew point ing and NGL recovery) del ivered as pre- fabr icated mo dules


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UOP Russell: Packaged Plants Benefits

UOP Russ ell Pack aged Plants deliver faster on-stream tim e,

lower ins ta lled cos t and h i hest feed as f lex ib i li t

FastGas

ProcurementBegins at

Order Date

Flexibility inFeed

Reduction inEngineering

SubvendorDeliveryOptimization

ReducedField

Construction

In-ParallelField / SkidConstruction

Skid MountMobility

Quick Startup


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Headquarters

U.S. Plant Locations

4-9 GPM

Cryo, Refrigeration

Enogex, ETP

4-7 GPM

Cryo, Refrigeration

Atlas, Crosstex,

ETP, Kinder-Morgan 5.5 GPMCryo

Pecan

Amine

Chesapeake

3-7 GPM

Cryo, RefrigerationScissortail,

Wilson

1-9 GPM

Cryo, Refrigeration

MarkWest,

Wilson

4-9 GPM

Cryo

Atlas

4-9 GPM

Cryo

DCP

HUR NGL Recovery Packaged Plants

250 Executed Projects>100 Operating Plants

>10BSCFD Gas Treated

HUR is the #1 supp l ier of pre-fabr icated, modu lar NGL recovery plants


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Methane and NGL Monetization Options

Methane

D e e t h a n i z e r

D

e p r o p a n i z e r

D

e b u t a n i z e r

Ethane

Propane

Butane

NaturalGasoline

Shale Gas

Upgrade to h igher value produ cts

D e m e t h a n i z e r

2

Gas Field


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Monetize Methane to Olefins

Methano l-to -Olefins (MTO) is now a reali ty in China

>20 MTO projects in various s tages of D&C

UOP’s work in MTO dates back to 1980’s

UOP has 4 UOP licensed p lants in China

First UOP Advanced MTO Process Unit to s/u in 2013

MTOEthylene &Propylene($1300/MT)

Natural Gas – $3-6/MMBtu ($140-240/MT)

Synthesis GasProduction

MethanolSynthesis

Coal ($25-100/MT)

Picture of UOP Advanced MTO Process at Wison Clean Energy


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0

20

40

60

80

100

120

140

2001 2006 2011 2016 2021

Supply from Refinery FCCs

Supply from Steam Crackers

Demand (Polymer/Chemical Gr.)

“Propylene Gap” is growing Propylene demand growing at

~4% CAGR

Crackers shifting to lighterfeedstocks, with less propylene

“On-Purpose Propylene” to fillthe gap; MTO and PDH

“Propylene Gap”

Data Source: IHS Chemical

Propy lene Supply / Demand

(MMTPA)

Global Propylene Gap PDH - Propane Dehydro

Monetize Propane to Propylene

C3

Hydrogen

C3=

“Single Feed – Single Product”enables simple project execution

Excellent forward or back integration

14 operating PDH plants world-wide(9 utilize UOP’s Oleflex Process)

New unit activity focused in Chinaand North America

UOP has 16 PDH awards since 2011

UOP OleflexTM Process

Oleflex ™ - A Key Techno logy fo r Fi l l ing Propy lene Gap

$500/MT – $800/MT

$1300/MT


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Alternate

Products

ETBE

HPIB

MMA

Isoprene

FreshMethanol

Net Gas

MTBE

C4 LPG

C5+

DIBColumn

ButamerTMUnit

DeC3Column

C3-

EthermaxTMUnit

CSP ORU

OleflexUnit

nC4 → iC4

iC4 → iC4=

Monetize Butanes to Fuels & Petrochemicals

6 Comm issioned MTBE Com plexes with UOP Olef lex Process

7 New C4 Oleflex Award s s inc e 2011

4 mix ed C3/C4 Oleflex Units – “Best of Both Worlds”

$800-900/MT

$375/MT

$1150/MT


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One Honeywell Integration

Opportunities


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One Honeywell Approach: Integrated Value

OffshoreFPSO / FLNG

Oil & Gas Platform

Onshore

Oil & Gas ReservesShale Oil & Gas

Offloading & Storage

Chemical PlantRefinery

Gas Treatment

Storage

PipelineTransfer

LiquefactionLNG CNG

Oil & Gas Value Chain AreasHoneywell Business Units Honeywell Technology Offerings

Gas To Liquids NGL Separation

Acid Gas Removal

Gasification

Dehydrogenation

Gas Purification

High Purity Hydrogen H2

UOP GP&H

UOP PT&E Flare Stack

BurnersOxidizers

Honeywell Process

HPS

DCS Control Systems

Gas Measurement & Metering

Sensors & Wireless Transmitters

Honeywell Life Safety

HFSHA

HSP

Fire & Smoke Detection Systems

Gas & Flame Detectors

Personal Protective Equipment

PPE

Honeywell Security

Integrated Security/CIP Access & Monitoring

Control Systems

Sensors & Controls Sensors, Actuators


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GP&H / HPS Integration Opportunities

Honeywell UOP Russell

Aligning HPS with UOP PSA Projects

Integrated FPSO Solutions

Small scale LNG

Natural Gas Vehicles Value Chain

Account Management / Sales Alignment


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UOP is the Market Leader in Acid Gas Removal Membranes: 6,000MMSCFD Installed Capacity

Australia

34 MMSCFD

North America549 MMSCFD China and FSU43 MMSCFD

Africa

791 MMSCFD

Latin America

472 MMSCFD

S.E. Asia

2,277 MMSCFD

Europe

981 MMSCFD

Pakistan

897 MMSCFD


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Well/Reservoir Monitoring & Control

• Production Well Monitoring

& Choke Control

• Gas Lift Control • Gas/Water Injection Well Monitor

& Choke Control

• Down-hole Monitoring

Advanced Applications

• Production Optimization

• Power Management

• Gas Lift Optimization

Acid Gas Treating and Dehydration

• Membrane CO2 Removal Systems• Bulk, selective or trace acid gas removal

• Gas Dehydration Systems

• Mercury Removal

Safety Systems

• Process Shutdown

• Security

• Emergency Shutdown

• Fire and Gas detection

• Heating, Ventilation and Ai

Conditioning

Topside Process Control

• Gas Processing Control

• Flow Control & Metering

• Compressor Control

• Gas/Oil Pipeline Monitor &

Control

• Turbo Generator Control

• Gas/Oil/Water Separation Control

• Well Test Control

• Water Treatment Control Marine Systems

• Propulsion & Dynamic Positioning

• Loading Computer

• Cargo & Ballast Control

Power Applications

• Power management

• Load Shedding

• Turbo Generator Control

Other Systems

• Personnel Address

• Drilling

• Communications

Business and Other Applications

• Well Test Accounting

• Production Accounting

• Data Warehousing

• Equipment Health Management

• Operator Training

Honeywell

FPSO Solutions Honeywell is uniquely situated to

provide a full suite of

technology solutions for the FPSO vessel. Our Technology

employed can provide

significant increase In yield

and operational efficiency to

the owners/ operators.

“Input from Honeywell during the

design phase of our FPSO resulted

in a

significant reduction of labor

costs.”

– Mike Baker

Project C&I Lead Texaco Captain

FPSO

Successful Proj ects

Captain FPSO

Laminaria

Esso Norge Jotun FPSO

FPSO Cidade de Angra dos Reis

(MODEC)

FPSO Cidade de Sao Paulo

(MODEC)

FPSO Replicants (Petrobras)

FPSO Cessao Onerosa (Petrobras)

UOP has been selected for 100%

of Petrobras pre salt FPSOs

tendered (Cidade de Angra dos

Reis, São Paulo, Replicants and

Cessão Onerosa)

Others

Integrated sub-sea controls

Simulator

RMG Controls Enraf Tankage

Scope

• Design

• Engineering

• Fabrication

Staging

Commissioning

Helipad Applications & Others

• Guidance and obstruction lighting• (Condition-based Maintenance)

Source: Honeywell

• Aero• UOP

• Automation & Control

Solutions

Documents

Honeywell UOP Natural Gas and Honeywell