© 2016 UOP Ltd. A Honeywell Company All rights reserved. UOP 7200-0

The Key to Achieving High Returns for Propane Upgrading

OLEFLEXTM PROCESS

UOP Limited – Kevin WhiteheadDecember 2016

UOP Olefins Seminar; Efficient Monetization of

Natural Gas and LPG

© 2016 UOP Ltd. A Honeywell Company All rights reserved.

Contents

• Market fundamentals provide an attractive opportunity to upgrade propane to propylene

• Oleflex Process – the optimum route to produce high value olefins

• Why do customers choose the Oleflex Process?

1

© 2016 UOP Ltd. A Honeywell Company All rights reserved.

Propylene Market Remains Very Attractive

On purpose propylene technologies key to growth

• On a global basis, propylene markets are healthy–Demand growth, 4.5%–Current utilization ~82%–Demand growth begins to exceed capacity gains by 2019

• Steam cracking and refining generate the majority of propylene supply

• Increase in light cracker feedstocks reduces C3= from steam crackers

• On-purpose technology has grown rapidly and now has a significant share of the market (~20%)

• Natural Gas Liquids offer profitable route to on-purpose propylene Source: Independent Analysis

50%

60%

70%

80%

90%

100%

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40.0

80.0

120.0

160.0

200.0

10 11 12 13 14 15 16 17 18 19 20 25

Demand (4.0/4.1) Total Capacity (4.1/3.9) Operating Rate

World: PG/CG Propylene Supply & Demand

Source: IHS © 2015 IHS(% AAGR = 10-15/15-25)

Forecast

Ope

ratin

gR

ate

Mill

ion

Met

ric T

ons

0.0

50.0

100.0

150.0

10 11 12 13 14 15 16 17 18 19 20

Stm. Crackers Refinery On Purpose

World: PG/CG Propylene Production By Technology

Source: IHS © 2015 IHS(% AAGR = 10-15/15-25)

Forecast

Mill

ion

Met

ric T

ons

© 2016 UOP Ltd. A Honeywell Company All rights reserved.

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1,400.00

1,600.00

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Spread, $/M

T

$/MT

Source: IHS

Propane Propylene Price Spread

C3=/C3 Pricing Differential Creates Value

• Propylene commands an attractive premium over propane• Consistent financial incentive to upgrade propane• Cost position of Iran is ideal

3

UOP 7267-3

C3=/C3 spread remains attractive over time

© 2016 UOP Ltd. A Honeywell Company All rights reserved.

Create High Value Propylene direct from Propane with the Oleflex Process

4

Propane Propylene

Feedstock Products Uses

H2

Oleflex ProcessPropane Dehydrogenation (PDH)

High Performance Plastic

Fibers

Packaging

UOP 7267-4

© 2016 UOP Ltd. A Honeywell Company All rights reserved.

C3 Oleflex Complex

C3 Oleflex Process used for 67% of operating PDH units

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OleflexProcess

C3 LPG

C4+

By-product H2

C2-

Propylene

SHP

Propylene –Propane Splitter

Deethanizer

Depropanizer

UOP 7267-5

© 2016 UOP Ltd. A Honeywell Company All rights reserved.

Leverage UOP CCR Experience in PDH6

Heater Cells

Net Hydrogen

To FracSection

Dryer

Cold Box

Fresh& Recycle

Feed

H2 Recycle

CCR

Rx EffluentCompressor

Regeneration Section

Reactor Section

Product Recovery Section

Catalyst Flow

289 UOP CCR’s in Operation Today

289 UOP CCR’s in Operation Today

289 UOP CCR’s in Operation Today

UOP 7267-6

© 2016 UOP Ltd. A Honeywell Company All rights reserved.

Why Customers Choose UOP OleflexLowest Overall Cost of Production

Smaller Investment Required

One design gives lowest Capex and Opex

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Low feed consumption Lowest MT C3 / MT C3=Highest carbon efficiency <10% of competitor coke make

2wt% higher hydrocarbon yieldLowest energy usage <80% of competitor energy use

High efficiency product recovery, distillation & heat pump designLess compression

Lowest number of reactors 4 reactorsLow cost design No O2 plant required, no idle equipment

No large, hot isolation valvesSmallest plot space Minimizes bulks costOperates at low positive pressure Lower cost design than vacuum

Efficient continuous regeneration Smaller equipment required

Constant equipment count Best economy of scale

© 2016 UOP Ltd. A Honeywell Company All rights reserved.

Why Customers Choose UOP Oleflex (2)High Reliability / On-stream Availability

Smallest Environmental Footprint

Safest & most environmentally friendly technology

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Start of Run performance for the whole operating cycle

Continuous on-line regenerationmaintains yield over cycle

Proven regeneration technology 289 CCRs operating>100 CCRs in design/construction

More days on stream Catalyst can be changed withoutshutdown

Lowest CO2 emissions Lowest energy consumptionLow NOx & VOC emissions Low energy consumption and

efficient low pressure designNon-toxic catalyst system Pt active metal

© 2016 UOP Ltd. A Honeywell Company All rights reserved.

UOP Leads the Way in Dehydrogenation

• 8 repeat customers with two or more units• 3 customers who already have a competitor iC4 unit selected UOP for

their PDH project• 2 Oleflex units announced in Europe in 2016

Oleflex Process is a proven investment. UOP is the market leader

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0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

C3 Dehydro iC4 Dehydro C3/C4 Dehydro

Ole

fin C

apac

ity, K

MTA

Licensed, in Design or ConstructionOperating

16Units

14Units

9Units

7Units

3Units

3Units

UOP has been awarded 80% (36 of 45) of dehydrogenation

projects competitively bid since 2011

UOP has been awarded 80% (36 of 45) of dehydrogenation

projects competitively bid since 2011

© 2016 UOP Ltd. A Honeywell Company All rights reserved.

Technology Development Continues12

Significant R&D investment and Oleflex licensee interaction will continue to drive future innovation

1990 - 1995 1996- 2000 2001 - 2005 2011 – 20162006 - 2010

PDH/BDH Commercialized• UOP 1st to Market• 105 kmta C3= design• 425 kmta iC4= design• DeH-6

Key Advancements• DeH-8 & DeH-10• 165 kmta C3= design• 80/200 kmta C3=/iC4= design• Hot Residence Time

Reductions

Key Advancements• DeH-12 • 250-350 kmta C3=

design• MD Trays for

DeC3/DeC2

Key Advancements• DeH-14• 400-460 kmta C3= design• PP Splitter Energy Reduction• Fired Heater Optimization• Contact Cooler (C4)

Key Advancements• DeH-16• 510 kmta C3= design• New Reactor Internals• Online Solvent Wash (C3)• CCR Advancements

Key Advancements• Next Gen DeH catalyst • Larger Capacity C3= designs• Next Generation CCR• Yield Enhancements• Latest Energy Optimization• HPS Automation Package• C4 and C3/C4 Design Modernized

© 2016 UOP Ltd. A Honeywell Company All rights reserved.

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2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Spread, $/M

T

$/MT

Source: IHS

Propane Propylene Price Spread

C3 Oleflex Profitability – Resilient to Price Volatility13

UOP 7267-13

© 2016 UOP Ltd. A Honeywell Company All rights reserved.

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100.00

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1,600.00

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Spread, $/M

T

$/MT

Source: IHS

Propane Propylene Price Spread

C3 Oleflex Profitability – Resilient to Price Volatility

Propylene-Propane spread remains attractive even with volatility in feed and product pricing

Price spread is forecast to return to levels similar to 2007-14 by 2019

14

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High

Typical

Low

© 2016 UOP Ltd. A Honeywell Company All rights reserved.

C3 Oleflex- Profitable and Resilient to Price Volatility15

UOP 7267-15

Basis: 600 KMTA Oleflex, Propane priced at 630 $/MT, NE Asia Pricing, 100% equity

Attractive ROI across range of price spreads

Oleflex technology delivers high ROI even when prices are low

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

350 475 600

Pre‐Tax RO

I 

C3/C3= Spread ($/MT)

© 2016 UOP Ltd. A Honeywell Company All rights reserved.

C3 Oleflex- Profitable and Resilient to Price Volatility16

UOP 7267-16

Basis: 600 KMTA Oleflex, Propane priced at 630 $/MT, NE Asia Pricing, 100% equity

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

350 475 600

Pre‐Tax RO

I 

C3/C3= Spread ($/MT)

Oleflex technology delivers high ROI even when prices are low

Cost-advantaged propane provides potential for even higher return

© 2016 UOP Ltd. A Honeywell Company All rights reserved.

Summary

• Market fundamentals support attractive C3 upgrading projects- Propylene-Propane spread forecast to remain strong

• Oleflex process offers the optimum route from C3 to C3=- Lowest overall cost of production- Low capital cost- High on-stream availability- Proven technology with 14 operating C3 Oleflex units- Selected for 36 (80%) of the 45 dehydrogenation units competitively

bid since 2011• Economics of a PDH complex using the Oleflex Process are

compelling- Strong return on investment that is resilient to pricing volatility

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© 2016 UOP Ltd. A Honeywell Company All rights reserved.

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UOP 7368-18