Analyst Meeting February The future begins now creating shared value

Transcription

1 Analyst Meeting February 2014 The future begins now creating shared value

2 Disclaimer This presentation material has been prepared solely for informational purposes only. IRPC is furnishing it solely for use by prospective investors / analysts in the proposed event. IRPC makes no representations or warranties as to the accuracy or completeness of such information. By accepting this material each recipient agrees that IRPC shall not have any liability for any representations (express or implied) contained in, or for any omissions from this presentation. The information contained herein does not purport to be all-inclusive or to contain all of the information that may be material to the recipient s decision. Each recipient of the information and data contained herein should perform its own independent investigation and analysis of the transaction and the creditworthiness of IRPC. Reference in this Disclaimer to this shall include references to the Appendices (if any) hereto. 2

3 Agenda I Highlights II. Operation & Financial Performance III. Industry Outlook IV. Strategic Direction V. Appendix 3

4 2013 Overview Overview of Business Dubai Unit: USD/BBL Revenue (net Excise) % 66,418 74, % 283, , In 2013, average Dubai price dropped to $106/bbl from $109/bbl in 2012 largely influenced by US budget and debt ceiling battle, Shale Oil production, and easing of geopolitical tensions. Unit: MB Market GIM 4Q12 4Q % 21% Net sales were 282,649 MB, slightly declining from 2012, by 0.4%, due to a decrease of 6.7% in the product prices and an increase of 6.3% in the sales volume. Unit:USD/BBL Accounting GIM 4Q12 4Q % 33% The Market GIM was $7.0/bbl increasing from $5.8/bbl in 2012 caused by the use of domestic crude and better petrochemical product spreads. Unit: USD/BBL Net Income Unit: MB 4Q12 4Q ,713% 206% (30) (777) 4Q12 4Q The Accounting GIM in 2013 rose to $8.4/bbl from $6.3/bbl in Net profit was 826 MB in 2013, compared to net losses of 777 MB in

5 2013 Highlights Asset Utilization Enhancement Wang Chan 3,312 Rai 1. In November 2013, ~ 3,312 Rai of land located in Wang Chan Wang Chan district, Rayong province district, Rayong province was sold for 596 MB. 2. In December 2013, 51% of total share in IRPC Clean Power Company Limited was purchased by Global Power Synergy Company Limited for 709 MB. Projects UHV Project Progress: 52% Under construction, piling and foundation Concrete Foundation work 1. As of 31 December 2013, 59% overall progress of Phoenix Projects 2. UHV: 52%; Construction phase started; COD expected in 3Q15 Concrete Pedestal work Control room building U/G piping installation work Rx/Rg structure foundation 5

6 Outstanding Achievement in 2013 Operation Continuously implemented Zero Unplanned Shutdown & Operational Excellence program with collaboration in PTT Group Increased plants efficiency & no serious injures throughout the year 2013 Developed BHD, a premium-grade bio-diesel Installed Mercury Removal Unit, enable IRPC to process higher mercury crude Managed Hydrocarbon Loss: Save 594 MB per year from hydrocarbon loss dropping from 0.86% to 0.53% Marketing Penetrated into ASEAN market to get ready for AEC Increased sales to ASEAN countries from 15% in 2012 to 20% in 2013 Expanded IRON System to more than 80% of customers to improve customer ordering system Collaborated with financial institutions to implement E-Supply Chain, reducing risk of payment error from customers 6

7 Outstanding Achievement in 2013 Investment Multi Product Pipeline (Diesel 10KBD, Jet 15KBD) between PTTGC and IRPC allowed the two companies to exchange streams to create more synergy. EBSM Upgrading for ABS Specialties project increased production capacity of styrene monomer (SM) from 200 KTA to 260 KTA. Oil Depot and Lube Blending expansion increased lube blending capacity from 1 million litres/month to 6 million litres/month. Innovation More than 160 of innovation works in Here is just few examples of our unlimited creativities. 1) PE Compound for Geo-membrane 2) PP for High Speed Raffia 3) PP Compound for Synthetic Rattan Fire Retardant 4) Low Gas Emission Reinforcement PP 5) Halogen Free HIPS/PP for Electronic Application 6) Polyethylene Catalyst Development 7) Wood Plastic Composite (WPC) 8) Advanced HA2PO Catalyst for Ultra High Molecular Weight Polyethylene (UHMWPE) Production 9) Anti-dripping genx (non PFOA) graft latex 10) High gloss stability by using EBS in HG730 to increase process ability and gloss stability 11) High stiffness and high clarify PP Extrusion PP 1150H 12) High flow high clarify Random Polypropylene 3342S 7

8 Agenda I Highlights II. Operation & Financial Performance III. Industry Outlook IV. Strategic Direction V. Appendix 8

9 Mixed Performance of Petroleum Spread $/BBL Dec 11 AVG. Dubai Price. 116 Dubai ULG 95 GAS OIL 0.05% FUEL OIL 10 Mar 12 Dubai Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 Jun Sep 12 Dec 12 Mar 13 Jun 13 Sep 13 Dec 13 ULG95-DB $/BBL Crude oil price was relatively elevated in 4Q13 supported by decline in the US crude inventory, extended political turmoil, but faced downward pressure from QE3 tapering. 1Q12 2Q 3Q 4Q 1Q13 2Q 3Q 4Q Y12 Y13 Gasoil-DB $/BBL Q12 2Q 3Q 4Q 1Q13 2Q 3Q 4Q Y12 Y13 HSFO-DB $/BBL 1Q12 2Q 3Q 4Q 1Q13 2Q 3Q 4Q Y12 Y'13 (0.5) (1.3) (2.4) (3.6) (3.3) (9.0) (7.3) (10.7) (10.4) (8.0) Source: Platts, IRPC Analysis Team ULG spread declined because of weaker demand from Indonesia and Vietnam, and an increase in the supply from refineries in Taiwan and China. Gasoil spread rose from the previous quarter due to a rise in the seasonal demand from Asia, ME and Africa combined with a decline in the exports from India due to the unplanned shutdown. FO spread remained unfavorable since the demand from marine logistic sector continued to be weak. Note: Starting Jan-13 onward Gas oil 0.05%s is used instead of Gas oil 0.5%s. For comparison purpose, historical data is re-stated based on Gas oil 0.05% 9

10 Sliding Lube Base Oil Spreads $/TON 1,800 FO %S 500SN 150BS Asphalt 1,600 1,400 1,200 1, Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 0 Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 500SN FO %S Spread $/TON Q12 2Q 3Q 4Q 1Q13 2Q 3Q 4Q Y12 Y13 Asphalt FO %S Spread $/TON 1Q12 2Q 3Q Q4 1Q13 2Q 3Q 4Q Y12 Y13 15 (7) (3) (19) (27) (14) (32) (40) (39) (99) Source: Platts, ICIS, IRPC Analysis Team $/BBL Market GRM Lube Base Refinery Q12 1Q13 2Q 3Q 4Q Y12 Y13 Lube base oil spread was stable as the demand was seasonally sluggish towards the end of year. Moreover, there was an increase in the export of from Russia to Asia. Asphalt spread declined significantly because of a demand decrease from Indonesia, Malaysia, and Vietnam. 10

11 Weaker Aromatics Spread $/TON Naphtha Benzene Toluene Mixed Xylene 1,500 1,400 1,300 1,200 1,100 1, Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 $/TON Benzene Naphtha Spread $/TON Toluene Naphtha Spread $/TON MX Naphtha Spread Q12 2Q 3Q 4Q 1Q13 2Q 3Q 4Q Y12 Y13 1Q12 2Q 3Q 4Q 1Q13 2Q 3Q 4Q Y12 Y13 1Q12 2Q 3Q 4Q 1Q13 2Q 3Q 4Q Y12 Y13 Toluene spread weakened as the demand from gasoline blending remained weak. Moreover, the demand for toluene as a feedstock in China and India also dropped. Mixed-xylene significantly deteriorated due to a decrease in the demand for polyester, thereby adversely affecting the demand for paraxylene and mixed-xylene. Source: Platts, ICIS, IRPC Analysis Team 11

12 Rising Olefin Spread $/TON Naphtha Ethylene Propylene HDPE PP 1,700 1,500 1,300 1, Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 $/TON HDPE-Ethylene Naphtha Spread HDPE-Ethylene Ethylene - NP $/TON PP-Propylene Naphtha Spread PP-Propylene Propylene - NP Q12 2Q 3Q 4Q 1Q13 2Q 3Q 4Q Y12 Y Q12 2Q 3Q 4Q 1Q13 2Q 3Q 4Q Y12 Y13 Polyolefin spreads were solid. The prices of HDPE and PP continued to surge on cost push pressure. Moreover, supply from ME to Asia decreased due to disrupted production. Source: Platts, ICIS, IRPC Analysis Team 12

13 Declining Styrenics Spread $/TON Naphtha SM ABS PS 2,500 2,300 2,100 1,900 1,700 1,500 1,300 1, Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 $/TON SM - Naphtha Spread $/TON ABS Naphtha Spread ,058 1,081 1, ,051 1,057 1, ,043 1,021 1Q12 2Q 3Q 4Q 1Q13 2Q 3Q 4Q Y12 Y13 $/TON PS Naphtha Spread Q12 2Q 3Q 4Q 1Q13 2Q 3Q 4Q Y12 Y13 1Q12 2Q 3Q 4Q 1Q13 2Q 3Q 4Q Y12 Y13 Market PTF $/TON Aromatic &Styrenics Olefins Q12 1Q13 2Q 3Q 4Q Y12 Y13 PS spread retreated since PS price declined in line with the styrene monomer, driven by SM plants returning from unplanned shutdown. Moreover, the PS demand also declined seasonally. ABS spread fell because of a drop in the ABS price, which was in turn caused by its weak demand, while naphtha price rose. Source: Platts, ICIS, IRPC Analysis Team 13

14 Petroleum Petrochemical Increased Domestic Crude Intake Unit: KBD Crude Intake Domestic Crude Sweet Crude Sour Crude Crude intake rose to 181 KBD, up 3% % 4% 5% 11% 6% 26% 28% 34% 30% 31% 33% 28% 30% 22% 29% 74% 72% 66% 70% 66% 63% 67% 67% 70% 66% 1Q12 2Q 3Q 4Q 1Q13 2Q 3Q 4Q Unit: Mbbl Domestic crude intake amounted to 10 KBD or 6%. Lube utilization rate was 90%, down 3% due to maintenance shutdown in 2Q13. Aromatic utilization rate was 86%, up 7%. Styrenic utilization rate was 87%, down 5% because of a shutdown in the EBSM unit due to tie-in of expanded plant facility in 3Q13. Utilization Refinery Lube Olefins Aromatic Styrenic 93% 87% 86% 80% 97% 83% 92% 78% 88% 85% 88% 83% 95% 83% 92% 93% 81% 82% 90% 84% 101% 98% 83% 89% 88% 63% 97% 88% 85% 107% 102% 100% 107% 111% 95% 93% 92% 89% 81% 89% 89% 85% 78% 78% 107% 97% 92% 87% 80% 86% 1Q12 2Q 3Q 4Q 1Q13 2Q 3Q 4Q Q12 2Q 3Q 4Q 1Q13 2Q 3Q 4Q

15 Petrochemical Petroleum Focus on Domestic Market Sales Volume Structure % 16% 14% 16% 17% 13% 16% Unit: Mbbl Petrochem Petroleum % 35% 42% 42% 38% 41% 39% Unit: Mbbl Sales Qty Export Domestic 86% 84% 86% 84% 83% 87% 84% 54% 65% 58% 58% 62% 59% 61% 4Q12 1Q13 2Q 3Q 4Q Q12 1Q13 2Q 3Q 4Q Sale volume 70.2 Mbbl Export by Destination ,283 1,372 36% 40% 37% 38% 45% 36% 40% Unit: KTon Sales Qty Domestic 61% Export 39% Singapore, 51% Others, 1% Asia Ex Singapore, 48% Others, 1% America, 1% Australia, 3% China, 32% Europe, 4% Asia Ex China, 59% 64% 60% 63% 62% 55% 64% 60% Export Domestic Petroleum 85% Petrochemical 15% 4Q12 1Q13 2Q 3Q 4Q

16 Maintain Efficient Inventory Turnover in 2013 Volume (Mbbl) Unit Price ($/bbl) * % 14% 13% 40% 41% 37% 46% 46% 50% % 42% QoQ 10% YoY 6% % 40% 43% 46% Total Petrochem Petroleum Crude Q12 1Q13 2Q 3Q 4Q 4Q12 1Q13 2Q 3Q 4Q *End-month unit price Value (MB) QoQ 11% YoY 13% Inventory Day (Days) 27,764 28,497 29,476 28,223 24% 24% 24% 25% 36% 37% 33% 37% 31,397 25% 34% Petrochem Petroleum Crude % 39% 44% 38% 41% 4Q12 1Q13 2Q 3Q 4Q 4Q12 1Q13 2Q 3Q 4Q 16

17 GIM in 2013 Market GIM Unit: $/bbl Power & Utility Petrochemical Petroleum 78% 85% 88% 83% 81% 82% 84% Utilization rate Q12 1Q13 2Q 3Q 4Q In 2013, the Market GIM was $7.0/bbl or 14,206 MB increasing from $5.8/bbl or 11,699 MB in An increase in the Market GIM was mainly driven by better spread of petrochemical products. Accounting GIM Unit: $/bbl Market GIM Stock G/(L) net LCM Hedging (0.3) (1.0) (1.0) (0.03) 4Q12 1Q13 2Q 3Q 4Q Compared to 2012, the Accounting GIM rose by $2.1/bbl or 4,563 MB. Hedging gains of $0.8/bbl in 2013 compared to hedging losses of $0.03/bbl in Q13 hedging at maximum volumes of 50% contributing to FY13 hedging volume at 31% of production. 17

18 Financial Highlight Unit: MB Quarter Year 4Q13 4Q12* Change * Change Foriegn Exchange Rate % % Net Sales 74,769 66,418 13% 282, , % Market GIM 3,302 3,202 3% 14,206 11,699 21% Stock Gain/(Loss) 73 (159) 146% 1, % Oil Hedging Gain/(Loss) 1, % 1,721 (55) 3,229% Accounting GIM 4,563 3,352 36% 17,107 12,544 36% OPEX (3,307) (3,179) 4% (11,599) (10,252) 13% Other Income 1, % 1,981 1,833 8% EBITDA 2, % 7,489 4,125 82% Gain/(Loss) from Fx (597) % (909) % Gain/(Loss) from Impairment % % Investment Gain/(Loss) ,723% % Net Profit 784 (30) 2,713% 826 (777) 206% * Restated from effective TAS 12 Income Taxes 18

19 4Q13 Debt Portfolio Debt Profile Debt Structure As of December 31, ,683 36,074 37,907 44,207 43,654 43, Unit: MB Bond (THB) 46% ST Loan 0.3% LT Loan 36% Bond (USD) 18% Net Debt = 37,907 MB Debt (MB) ST Loan 148 LT Loan 15,426 Bond (USD) 7,827 43,969 43,294 42,883 Bond (THB) 19,630 USD/THB = Total 43,031 6,524 7,580 5,124 4Q12 3Q13 4Q13 Long term Cash & S/T investment Short term Net Debt Interest Rate (%) Currency (%) Float 33 THB 41 Fixed 67 USD 59 Financial Ratios 4Q12 3Q13 4Q13 Y12 Y13 Cost of Debt 4.20% 4.04% 4.12% 4.45% 4.09% Net D/E CA/CL Credit Ratings < 1.0x Ba1 Negative outlook > 1.05x BB+ Stable outlook 4Q12* 3Q13 4Q13 4Q12 3Q13 4Q13 A- (tha) Negative outlook *4Q12 Change Effect from Deferred Tax 19

20 Cash Flow Projection 2013A 2014F 2015F 2016F 2017F 2018F ,849 20,727 26,188 23,080 23,645 20,437 Use of Cash 2,889 10,231 2,699 CAPEX 13,910 Loan Repayment 14,838 3,793 13,519 11,033 Dividend 9,000 7,685 3,370 1,066 1,921 2,240 2,000 2,153 Financial Expenses 2,043 1,635 2,888 2,976 2,882 2,594 2,221 2,422 1, ,850 2,116 1,958 Income Tax 120,920 45,799 44,606 9,423 13,762 7,330 (13,238) (7,966) 5,328 (5,482) (2,110) Shortfall (40,290) (30,060) 20

21 Agenda I Highlights II. Operation & Financial Performance III. Industry Outlook IV. Strategic Direction V. Appendix 21

22 Crude Oil and Petroleum Products Outlook Key Products Price (2013) Spread (2013) 2014 Outlook Driving Determinants Refinery ($/bbl) ($/bbl) Dubai 106 ULG GAS OIL 0.05% FO 97.5 (8.0) Global oil demand grows by 1.31 MBD but supply disruption in ME may be eased but by no means certain. The crude oil price is expected to be above $100 per barrel. Slightly Petroleum product cracks improve, led by middle distillate and fuel oil driven by the demand from transportation activities. Lube Base Oil ($/T) ($/T) 500 SN 1, BS 1, Stable lube base oil market is expected in 2014 as the additional supply will be alleviated by scheduled shutdown throughout the year Shutdown Schedule Company Capacity (KT/Year) Timing ADNOC 100 H Chevron 1,200 Q Sinopec 240 Mar-14 SK Lubricant 660 H

23 Petrochemical Products Outlook Key Products Price (2013) Spread (2013) 2014 Outlook Driving Determinants Olefins ($/T) ($/T) Ethylene 1, HDPE 1, Propylene 1, PP 1, There is optimistic outlook for PE. Demand growth continues while at the same time tight supply is expected caused by heavy scheduled turnaround this year. Propylene supply is expected to be tight. The price is expected to be elevated since supply from onpurpose propylene is costly. Styrenics ($/T) ($/T) PS 1, ABS 1,942 1,021 High PS price is expected. Global demand outpaces supply growth. Improving market for ABS, as the economic recovery in EU and US will increase the demand of automobile and electronics. 23

24 Agenda I Highlights II. Operation & Financial Performance III. Industry Outlook IV. Strategic Direction V. Appendix 24

25 Strategic Initiatives: Overview Phoenix + : 2010 Onwards 1 Delta: 2014 Onwards 2 Post-Phoenix: 2015 Onwards 3 Transformation to support high value added product growth CHP I PRP EBSM UHV Quick specialty capacity expansion/ Grade shifts TDAE ABS6/SAN3 HDPE-Pipe Grade UHMWPE Structural Changes for Specialty Growth Margin Improvement Initiatives Operational Excellence Commercial Excellence HR Excellence Acceleration of Assets Utilization EIZ Bankai Dry port Domestic crude use up to 35,000 Barrel per day Quick Win Initiatives for Cost Reduction Margin Enhancement Adding up more value to petrochemical feedstock from UHV project Shifting product portfolio to be specialty player through PTT Group Partnership strategy PP compound Polyol AA/ SAP PX SM Specialty Growth and Move away from heavy - asset company by investing through JV 25

26 Strategic Initiatives: UHV Phoenix + Structural Changes for Specialty Growth Delta Margin Improvement Initiatives Post-Phoenix Specialty Growth through JV UHV Project 100% 2% 16% 80% 5% 60% 40% 40% 14% 20% Product Yield 2% 6% 5% 21% 10% 38% Ethylene Propylene LPG Naphtha + Reformate Gasoline Diesel/ Jet Fuel Lube Oil Benefit Market GIM ($/BBL) Increase propylene yield 320 KTA Heavy and cheaper crude processing COD : 3Q15 BAU Stock G/(L) Dom.Crude UHV Delta Prog. $/bbl A 2013A 2014B 2015B 2016B 2017B 2018B Progress 52% as of Dec % 23% IRPC 10% 8% IRPC+UHV Fuel Oil 26

27 RDO Strategic Initiatives: Delta Phoenix + Structural Changes for Specialty Growth Delta Margin Improvement Initiatives Post-Phoenix Specialty Growth through JV Delta is a strategic enabler for IRPC to meet 2020 vision Three pillars of the Delta program: Operational, Commercial & Human Resource Excellence DELTA Organisation HR EXcellence Results delivery OEMS Framework Continuous improvement Achieving EXCELLENCE across all 3 strategic pillars will ensure that IRPC will meet its vision by

28 Strategic Initiatives: Delta Phoenix + Structural Changes for Specialty Growth Delta Margin Improvement Initiatives Post-Phoenix Specialty Growth through JV PTT Group Operational Excellence Management System (OEMS) Embedment Value Chain Management LP Upgrading, Production Planning & Schedule Optimization Yield Process & Energy Optimization Utility System Optimization Reliability & Asset Integrity improvement QSHE DELTA Marketing & Sales Excellence Procurement Excellence Price Volatility Management Accounting & Financial Excellence HR EXcellence Organisation HR EXcellence Talent Management Career Path Development Succession Plan 28

29 Strategic Initiatives: Delta Phoenix + Structural Changes for Specialty Growth Delta Margin Improvement Initiatives Post-Phoenix Specialty Growth through JV

30 Post Phoenix Phoenix + Strategic Initiatives: Post-Phoenix Phoenix + Structural Changes for Specialty Growth Delta Margin Improvement Initiatives Post-Phoenix Specialty Growth through JV On-going & Approved Project Study Project UHV 320 KTA HDPE Pipe UHMWPE ACB 120 KTA 16 KTA 4 KTA 38,400 MB CC & C KTA PP Expansion +160 KTA PX PX 1,214 KTA BZ 372 KTA SM PPC Polyol 120 KTA 100 KTA 350 KTA 65,000 MB AA/ SAP AA 100KTA, SAP 80KTA BHD +2 mil.l/m 30

31 Strategic Initiatives: Post-Phoenix 2013 Crude Run 181 KBD 84% Nelson Complexity Index 6.6 Portfolio of Revenue: Petroleum/Petrochemical & Others % / 24% Crude Run 215 KBD 100% Nelson Complexity Index 8.6 More stable portfolio of Revenue: Petroleum/Petrochemical & Others % / 41% Super Absorbent PP Polymer Compound Acrylic Acid (SAP) Para-Xylene (AA) (PX) New investments through JV Specialty focus and Moving away UHV Completion from heavy-asset company Increase product value by converting fuel oil to petrochemical products Quick Win Initiatives Running at full capacity of 215 KBD DELTA Initiative Implementation Domestic crude usage up to 35KBD Assets Management (Bankai/EIZ) Completed Project during CHP I: Electricity +220MW, Steam +430T/h PRP +100KTA of Propylene EURO IV: Gasoline 15KBD, Diesel 10KBD, Jet 15KBD TDAE +28KTA, 150BS +25KTA Lube Blending +60m.Ltrs./year EBSM +60KTA, ABS/SAN +60KTA 31

32 Thank You Investor Relations Contact: Tel , Fax Presentation is available at Click Presentations This presentation material has been prepared solely for informational purposes only. IRPC is furnishing it solely for use by prospective investors / analysts in the proposed event. IRPC makes no representations or warranties as to the accuracy or completeness of such information. By accepting this material each recipient agrees that IRPC shall not have any liability for any representations (express or implied) contained in, or for any omissions from this presentation. The information contained herein does not purport to be all-inclusive or to contain all of the Information that may be material to the recipient s decision. Each recipient of the information and data contained herein should perform its own independent investigation and analysis of the transaction and the creditworthiness of IRPC. Reference in this Disclaimer to this shall include references to the Appendices (if any) hereto.

33 Agenda I Highlights II. Operation & Financial Performance III. Industry Outlook IV. Strategic Direction V. Appendix 33

34 Phoenix Initiatives & Roadmap Operational Efficiency Improvement Asset Utilization Enhancement Product & Services Improvement Capacity & Products Expansion 1. Petrochem Operation & Energy Efficiency 9. New Value Added for Port and Tank Business 3. Ethylene Specialty Development 2. Capacity Development for Propylene Growth 5. Petroleum Operation & Energy Efficiency 6. Supply Chain Optimization (Griffin and Trading) 11. Build and sustain land for green industrial complex 7. Lube Group 1 Specialty Products Focus 8. Petroleum quality improvement to clean fuel and green growth development 4. EBSM Upgrading for ABS Specialty 14. Performance Chemical Business Development Project 19: Hydrocarbon Management 12. I'M ACE: IRPC Service Solutions 15. Utilities for Sustainability 13. Petrochem Catalyst Commercialization 16: Oil Depot and Lube Blending Business Improvement 17: Analytical Lab 20: Intellectual Property Stewardship Petrochem Petroleum Port & Tank Real Estate & Services 34

35 Additional Capacity in Phoenix Projects Project Total Capacity Old/New PRP+ Propylene Growth (UHV) Oct. Propylene +100 KTA Sep. Propylene +320 KTA Propylene 312/732 KTA EBSM Upgrading for ABS Sep. +60 KTA SM 200/260 KTA SAN3/ABS6 Apr. +60 KTA ABS/SAN 117/177 KTA Lube Group1 Sep. TDAE +28 KTA 150BS +25 KTA TDAE 22/50 KTA 150BS 95/120 KTA Petroleum Quality Improvement Feb. GHU 15 KBD Mar. Co-Invest Diesel 10KBD Kerosene 15KBD EURO IV Gasoline 15KBD Diesel 10KBD Kerosene 15KBD 35

36 Phoenix by Business Unit Refinery & Lube Products ADU Initiative 7 CDU 215 KBD 215 KBD Lube Base +25 KTA 150BS 95 KTA 120 KTA 120 KTA Asphalt +28 KTA TDAE 22 KTA 50 KTA 50 KTA Lube Group 1 Specialty Products: Increase high value added lube specialty products: TDAE & Bright Stock Initiative 8 Products Gasoline 75 M.Ltrs 75 M.Ltrs Diesel 180 M.Ltrs 180 M.Ltrs Petroleum Quality Improvement to Clean Fuel & Green Growth Development: Upgrading HSD / Gasoline to be EURO IV standard 36

37 Phoenix by Business Unit (Con t) Olefins Products Initiative 2 Ethylene 360 KTA 433 KTA 433 KTA Propylene 312 KTA +100 KTA +320 KTA 412 KTA 732 KTA 732 KTA Butadiene 56 KTA 56 KTA Acetylene 4 KTA 4 KTA Upstream Project for Hygiene & Value Added Products (UHV): +73 KTA Upgrading low value product (HS-ATB) to be high value added product for petrochemical feedstock: Propylene 320 KTA, Ethylene 73 KTA, and Heavy Aromatic Naphtha 250 KTA, etc. Polyolefins Products Initiative 3 PP 475 KTA 475 KTA HDPE 140 KTA 140 KTA Ethylene Specialty Development High Value Added Product of HDPE Specialty & PE Wax. 37

38 Phoenix by Business Unit (Con t) Aromatics Products Benzene 114 KTA 114 KTA Toluene 132 KTA 132 KTA Mixed Xylene 121 KTA 121 KTA Styrene Initiative 4 Products KTA SM 200 KTA 260 KTA 260 KTA +60 KTA ABS/SAN 117 KTA 177 KTA 177 KTA PS 100 KTA 100 KTA EPS 30 KTA 30 KTA Performance Chemical Business Development Project: Increase 60 KTA EBSM for feeding ABS specialty. To satisfy local demand for ABS/SAN expansion and to produce Nano additive. ABS/SAN Expansion 6 Increase ABS/SAN from 117 KTA to 177 KTA to support ABS specialties production and Nano additive production. 38

39 Phoenix Project: #2 UHV Project Description: Upgrading bottom refinery product to high value added for Petrochem feedstock Capacity Expansion: Increase propylene from 412 KTA to 732 KTA. Progress : 52%*, now Under construction, piling and foundation. 1. EIA approved in Jan MC: 1Q15 3. COD: 3Q15 Concrete Foundation work Concrete Pedestal work Concrete pre-casting pipe rack Control room building U/G piping installation work Rx/Rg structure foundation *As of 31 December

40 Benefits of UHV Project Production Yield 100% 80% 4% 2% 19% 20% 11% 2% Ethylene 6% 5% Propylene 21% LPG 60% 35% 10% Naphtha 40% 20% 0% 35% 38% 11% 43% 20% 10% 8% Current Run +40 KBD Crude Run with UHV Gasoline Diesel/Jet Lube Base FO at 175 KBD (As of 2012) Currently running at full capacity is not optimal. After completion of UHV Running at full capacity of 215 KBD Propylene 320 KTA Light Distillate yield Crude Selection Flexibility Sweet : Sour = 30:70 20:80 40

41 Phoenix Project: #3 Ethylene Specialty Development Project Description: High Value Added Product of HDPE Specialty & PE Wax Expected EBIT: USD 5 million/year Progress: 83%* Under Construction 1. HDU I: Completed 2. HDU II & Convert Plant: Completion in 1Q14 Commodity Product HDPE High Value Product HDPE *As of 31 December