Petrochemical Industry Fundamentals Workshop · Petrochemical Industry Fundamentals Agenda ... •Petrochemicals forecasts to grow at a multiple above GDP, as economies expand and

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Petrochemical Industry

Fundamentals WorkshopLatin American NGLs and Petrochemicals Workshop

Buenos Aires, Argentina

Friday October 12, 2018

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Our global operations serve industry leaders worldwide

We provide both international

perspective and firsthand

regional insights with over 120

offices across six continents

and a workforce that speaks

more than 50 languages.

IHS Markit also supports local

communities worldwide. Our

colleagues volunteered more

than 35,000 hours and

supported over 600

organizations in 2016.

14,000+ colleagues in 34 countries including…

6,000+Americas

(60+ offices)

3,500+Europe, Middle

East & Africa (30+ offices)

4,500+Asia Pacific

(20+ offices)

2


Addressing strategic challenges

with interconnected areas of

expertise

3

Resources

Financial Markets

Consolidated

Markets & Solutions

Transportation


Best-in-Class BrandsBrought together to form the most comprehensive source for chemical market

research and expertise in the world – IHS Chemical.

IHS Energy IHS Chemical

4


IHS and Markit complete merger to form global information

powerhouse

July 13, 2016

5


Petrochemical Industry Fundamentals Agenda

8:00 – 8:30 Registration

8:30 – 10:30 Introduction and Petrochemical

Feedstocks

10:30 – 10:45 Morning Coffee Break

10:45 – 11:45 Fundamentals behind the

Petrochemical Industry.

11:45 – 12:45 Introduction to Olefins and Derivatives

12:45 – 2:00 Lunch and Networking

2:00 – 3:00 Heavy Olefin-C4- production and

derivatives

3:00 – 3:15 Afternoon coffee break

3:15 – 5:15 Global Integration: Refineries to

Petrochemicals.

5:15 – 6:00 Workshop Break Out Session

6:00 – 6:15 Concluding remarks from Presenters

6


➢ Based on molecules with carbon & hydrogen atoms

(and sometimes oxygen/chlorine/nitrogen)

➢ Derived primarily from petroleum (crude oil) and gas

“Petrochemical” term started in 1920-30s as

demand for oil ramped up & chemical

production from coal couldn’t keep up

➢ Demand driven by plastics, elastomers and fibers

➢ The good news for us today is:

There is a relatively small number

of basic petrochemical building blocks

What Is a Petrochemical?

7


Automotive /

transportation

Consumer products

Packaging

Building /

construction

Recreation / sport

Industrial

Medical

Pharmaceutical

Personal care

Textiles

Electrical /

electronics

Aircraft / aerospace

Business equipment

Petrochemical Demand Stimulated By Macro-economic Growth While Energy Markets Drive Supply

Decisions CUSTOMERSFormulated products /

performance materials

Plastics and engineering

resins

• Extruded films, pipe,

profiles, coatings, sheet,

foams

• Blow-molded parts

• Composites

Synthetic fibers

Rubber products

Paints and coatings

Adhesives and sealants

Lubricants

Water treatment products

Cleaning products

Industrial chemicals

Flame retardants

Others

Commodities

Differentiated

commodities

Technical

specialties

ChemicalIntermediates

BaseChemicals

Olefins

(Ethylene,

propylene,

butylene)

Aromatics

(benzene,

toluene, xylenes)

Chlor-akali

(chorine, caustic

soda)

Others

(ammonia,

phosphorous)

CHEMICAL INDUSTRY VALUE CHAINNATURAL

RESOURCES

Mining, drilling,

refining,

gas processing

Oil

Gas

Coal

Minerals

Renewables

8


7 Petrochemical Building Blocks

Crude Oil, Natural Gas, NGLs, Coal and Bio

Be

nze

ne

To

lue

ne

Xyle

ne

s

Syn

ga

s

C4

Ole

fin

s

Eth

yle

ne

Pro

pyle

ne

Olefins

C1 C2 C3 C4 C6 C7 C8

AromaticsIntermediates,

Plastics, Fibers, Elastomers

This morning we will be focusing on feedstocks

and ethylene and propylene

9


The First Step:

A Primer on Feedstocks

• What are the raw materials for

petrochemical production?

• How are petrochemical feedstocks

produced?

• How are feedstocks valued?

10


Petrochemical Feedstock Palette

Butanes

Renewables

Natural Gas

NGL’s Petroleum

Time and Pressure

CHO to CH to C

C4

11


Higher fuel efficiency and increased

use of EVs create a forecast for a

declining growth rate in the demand

for refined products.

Current assets being built in China and

other countries, currently in the planning

stages, seek to enter the petrochemical

market with significant scale.

Forecast is causing many refining

companies to re-think their

petrochemical strategy.

Petrochemicals market demand continues

to rise based on numerous demographic,

economic, and durable and non-durable

goods consumption trends.

Options range from continued but

growing feedstock supply

relationships to major direct

investments in the chemicals and

derivatives sector.

Recent public scrutiny of plastics

sustainability has raised the question of

the future for continued strong growth of

commodity plastics markets.

Refinery and petrochemical market dynamics

12


Refinery-petrochemical integration trends: Assessing the value of

integrated refinery and petrochemical operations• Long term forecasts for refined products are predicting

flat-to-declining demand growth, causing refiners in all

regions to seek alternative solutions for growth

• Petrochemicals forecasts to grow at a multiple above

GDP, as economies expand and urbanization

increases. Refined products growth is forecast to

flatten by 2030

• Impact of declining growth in the refinery sector will be

a period of lower earnings, forcing older high-cost

assets to be shut down, and making room for new,

mega-scale refining capacity across Asia-Pacific

• Petrochemicals market demand continues to rise due

to numerous demographic, economic, and

consumption trends

000

300

600

900

1200

2010 2015 2020 2025 2030 2035 2040

Petrochemicals products Refined products

Index of base chemicals and refined products growth

Source: IHS Markit ©2018 IHS Markit

Petrochemicals and refined products markets,

cumulative growth

Millio

n T

on

s

13


Refinery-petrochemical integration trends: Assessing the value of

integrated refinery and petrochemical operations• Long term forecasts for refined products are predicting

flat-to-declining demand growth, causing refiners in all

regions to seek alternative solutions for growth

• Petrochemicals forecasts to grow at a multiple above

GDP, as economies expand and urbanization

increases. Refined products growth is forecast to

flatten by 2030

• Impact of declining growth in the refinery sector will be

a period of lower earnings, forcing older high-cost

assets to be shut down, and making room for new,

mega-scale refining capacity across Asia-Pacific

• Petrochemicals market demand continues to rise due

to numerous demographic, economic, and

consumption trends

000

300

600

900

1200

2010 2015 2020 2025 2030 2035 2040

Petrochemicals products Refined products

Index of base chemicals and refined products growth

Source: IHS Markit ©2018 IHS Markit

Petrochemicals and refined products markets,

cumulative growth

Millio

n T

on

s

14


Question & Answer

Session

Detailed Forecasts are found in our

Insight Services and in tomorrow’s

Conference.

15


Terms & Conditions

The Workshop Training performed by IHS Chemical is

solely for the benefit of the individual Attendee and

his/her company. There are to be no third party

beneficiaries of the data and instructional materials

provided. Reproduction of any part of this work by

any process whatsoever without written permission

of IHS Chemical is expressly forbidden.

16


How Do I Get Additional Workshop Materials?

• Due to the proprietary nature of this Intellectual

Property, additional copies of the workbook are 90%

of the actual workshop fee.

• The fee for non-attendees to receive the workbook is

the full workshop fee.

• We do not provide an electronic copy of the

workbook.

17

Documents

Petrochemical Industry Fundamentals Workshop · Petrochemical Industry Fundamentals Agenda ... •Petrochemicals forecasts to grow at a multiple above GDP, as economies expand and