Analyst Meeting 2Q August 2014

Transcription

1 Analyst Meeting 2Q14 14 August 2014

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 1. 2Q14 Overview 2. Highlight Update Fire Incident Delta & UHV Project 3. Operation & Financial Performance 4. Industry Outlook 5. UHV Project & Post Phoenix Appendix Strategic Direction Phoenix Project 3

4 2Q14 Overview Overview of Business Dubai Unit: USD/BBL Revenue (net excise) Unit: MB QoQ 0.3% HoH 5% YoY 7% 136, ,512 67,150 71,854 71,658 1) In 2Q14, average Dubai price rose to $106.1/bbl from $104.5/bbl in 1Q14, driven by geopolitical tension in Iraq, Libya and Ukraine. 2) Net sales were 71,658 MB in 2Q14, decreasing by 0.3% from 71,854 MB in 1Q14 due to a decrease of 0.4% in the product prices despite an increase of 0.1% in the sales volume. Accounting GIM 7.1 Market GIM Net stock gain/(loss) LCM & oil hedging Unit: USD/BBL (0.9) QoQ 8% YoY 30% QoQ 48% YoY 115% HoH 24% (0.6) HoH 152% In 1H14, net sales were 143,512 MB, higher than net sales of 136,114 MB in 1H13. 3) Market GIM in 2Q14 was $5.4/bbl dropping by $2.4/bbl compared to $7.8/bbl in 1Q14 because of lower product spreads and VGOHT unit shutdown. However, the Accounting GIM was $9.2/bbl, rising from $8.5/bbl in 1Q14 mainly due to stock and hedging gains. 4) In 1H14, the Market GIM dropped to $6.6/bbl from $7.7/bbl in 1H13 while the Accounting GIM increased to $8.8/bbl from $7.1/bbl in 1H13. Net income Unit: MB (1,159) (1,006) 2Q13 1Q14 2Q14 1H13 1H14 5) Net profit was 178 MB in 2Q14, compared to 344 MB in 1Q14. In 1H14, net profit was 522 MB, compared to net losses of 1,006 MB in 1H13. 4

5 Agenda 1. 2Q14 Overview 2. Highlight Update Fire Incident Delta & UHV Project 3. Operation & Financial Performance 4. Industry Outlook 5. UHV Project & Post Phoenix Appendix Strategic Direction Phoenix Project 5

6 Refinery Plant Import Highlight: Fire Incident Update VGOHT and DCC Operation Update Mitigation Action LS ATB Run 70% DCC HTVGO Propylene Gasoline High Speed Diesel Procure additional propylene to fulfill polypropylene capacity Successfully negotiate with customers on shortage of gasoline and gas oil Re-commission of Deep Catalytic Cracking (DCC), running at 60%-70%, since 29 June 2014 Successfully arrange for imports of HTVGO, resulting in DCC higher utilization Anticipated Shutdown Period VGOHT VGOHT unit is now expected to shut down for about 10 months due to purchases of long-lead machinery. VGO Export Claim Amount Property damage (PD) USD 40 m (Less deductible USD 5 m) USD 35 m LR Lube Shutdown Business Interruption (BI) USD 56 m (Losses of 10 months, less deductible 2 months) Total USD 91 m 6

7 Agenda 1. 2Q14 Overview 2. Highlight Update Fire Incident Delta & UHV Project 3. Operation & Financial Performance 4. Industry Outlook 5. UHV Project & Post Phoenix Appendix Strategic Direction Phoenix Project 7

8 Highlight: Delta Project Update Achieving EXCELLENCE across all 3 strategic pillars ensures that IRPC will meet its vision by As of 31/12/14 As of 30/6/14 Operational Excellence Value chain optimization Overall plant effectiveness Energy efficiency improvement Target (USD M) 37 Benefit (USD M) 7.0 Quality giveaway reduced by upgraded LP model Optimized steam consumption Usage of alternative steam with lower costs Reliability & asset integrity Shortened time required for turnaround Commercial Excellence Product portfolio optimization Salesforce effectiveness Transportation optimization Reallocation of spot/term contracts for petroleum products Focus on higher margin and high potential customers, and maintain customer royalty for petrochemical products Human Resource Excellence Labor cost productivity Corporate overhead reduction Budget saving Reduced non-moving inventory of spare parts Sourcing optimization

9 Highlight: UHV Project Update UHV (Upstream Project for Hygiene & Value Added Products) Project Description: Upgrade bottom refinery products to be high-value feedstock for petrochemicals Capacity Expansion: Increase the capacity of propylene from 412 KTA to 732 KTA. EIA approved in January 2013 COD: September 2015 Progress HYVAHL reactor C3 rectifier & C3 stripper erection Reactor and regenerator As of 25 July 2014, 75.9%: now EPC phase II stage II (construction) Atmospheric tank erection Main control room building Stream reformer package Concrete pouring work for API pond 9

10 Agenda 1. 2Q14 Overview 2. Highlight Update Fire Incident Delta & UHV Project 3. Operation & Financial Performance 4. Industry Outlook 5. UHV Project & Post Phoenix Appendix Strategic Direction Phoenix Project 10

11 Mixed performance of Petroleum Spreads $/BBL Dubai ULG 95 GAS OIL 0.05% FUEL OIL AVG Price Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q Q Q14 ULG95-Dubai ($/BBL) Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14 Gasoil-Dubai ($/BBL) ($/BBL) Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14 Fuel oil -Dubai ($/BBL) ($/BBL) 1Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14 (7.3) (3.6) (5.5) (10.7) (10.4) (8.5) (10.6) (9.5) Average Dubai price increased in 2Q14, mainly driven by geopolitical tension in Ukraine and Iraq with prolonged supply disruption in Libya support price. ULG spread improved due to US driving season, stockpiling demand from Muslim countries ahead of Ramadan, and tight supply driven by refinery turnaround. Gas oil spread softened since regional demand remained low while there was an increase in the supply from Jubail refinery. A decline in fuel oil spread was due to weak bunker demand and an increase in the arbitrage from South America and Russia to the Asian market. Source: Platts, IRPC Analysis Team 11

12 Divergence of Lube Base Oil Performance $/TON FO %S 500SN 150BS Asphalt 1,600 1,400 1,200 1, Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 500SN FO %S Spread $/TON Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14 Lube base oil spread rose due to stockpiling demand from China before monsoon seasons. Asphalt spread continued to decline since the demand from China and Vietnam softened and there was a rise in the supply from Korea. Asphalt FO %S Spread $/TON 1Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14 (19) (7) (3) (27) (13) (68) (77) (73) Source: Platts, ICIS, IRPC Analysis Team Market GRM Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14 $/BBL Lube Base Refinery 12

13 Relatively Stable Olefin Spreads $/TON Naphtha Ethylene Propylene HDPE PP 1,700 1,500 1,300 1, Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 HDPE-Ethylene Naphtha Spread PP-Propylene Naphtha Spread Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14 $/TON HDPE-Ethylene Ethylene - NP Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14 $/TON PP-Propylene Propylene - NP Polyolefin spread maintained at high level because of stockpiling demand before the Ramadan period and tight regional supply due to ongoing turnaround. Source: Platts, ICIS, IRPC Analysis Team 13

14 Weaker Aromatics Spreads $/TON Naphtha Benzene Toluene Mixed Xylene 1,500 1,400 1,300 1,200 1,100 1, Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 Benzene Naphtha Spread $/TON Toluene Naphtha Spread $/TON MX Naphtha Spread $/TON Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14 1Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14 1Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14 Mixed xylene and toluene spreads continued to drop. Mixed-xylene was adversely affected by ongoing poor performance of Paraxylene while toluene faced a downward pressure from Chinese economic slowdown resulting in a drop in the demand for solvents and gasoline in China. Source: Platts, ICIS, IRPC Analysis Team 14

15 Sliding Styrenics Spreads $/TON Naphtha SM ABS PS 2,500 2,300 2,100 1,900 1,700 1,500 1,300 1, Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 SM - Naphtha Spread $/TON ABS and PS spreads dropped amid weak demand largely caused by a slowdown in Chinese economy. PS price was also adversely affected by falling price of its feedstock. 1Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14 PS Naphtha Spread $/TON Market PTF* 1Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14 ABS Naphtha Spread $/TON 1,051 1,057 1, , $/Ton Aromatic &Styrenics Olefins 1Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14 Source: Platts, ICIS, IRPC Analysis Team 1Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14 * Exclude Intermediate Stream Margin 15

16 Increased Domestic Crude Intake Crude Intake Unit: KBD Domestic Crude Sweet Crude Sour Crude % 32% % 22% Crude intake slightly increased in 2Q14 relative to 1Q14, amounting to 173 KBD. Domestic crude intake in 2Q14 was 31 KBD or 18% of total intake increasing from 23 KBD or 14% of total intake in 1Q14. 4% 5% 11% 14% 18% 33% 28% 22% 23% 21% 65% 62% 63% 67% 67% 63% 61% 0% 2Q13 3Q 4Q 1Q14 2Q 1H13 1H Mbbl Utilization rates of olefins, styrenics, and aromatics were 90%, 84%, and 75%, down 7%, 2%, and 11% respectively due to schedule turnaround and unplanned shutdown from fire incident. Utilization Petroleum Refinery Lube Petrochemical Olefins Aromatic Styrenic 88% 83% 95% 83% 92% 82% 81% 80% 80% 79% 86% 86% 81% 80% 100% 89% 78% 107% 81% 78% 111% 95% 89% 97% 87% 85% 104% 90% 88% 84% 85% 75% 94% 85% 80% 2Q13 3Q 4Q 1Q14 2Q 1H13 1H14 2Q13 3Q 4Q 1Q14 2Q 1H13 1H14 16

17 Petrochemical Petroleum Focus on Domestic Market Sales Volume Structure Unit: Mbbl Unit: Mbbl Petchem Petroleum % 16% Export Domestic % 35% % 16% 17% 16% 16% 86% 84% 83% 84% 84% 85% 84% 42% 42% 38% 35% 35% 61% 65% 58% 58% 62% 65% 65% 2Q13 3Q 4Q 1Q14 2Q 1H13 1H14 2Q13 3Q 4Q 1Q14 2Q 1H13 1H14 2Q14 Sale volume By Sales Channels Direct 6% Export 33% Wholesale 29% Article 7 32% Export 41% Direct 24% Agent 35% 2Q14 Sale volume By Destinations Domestic 65% Export 35% Unit: KTon Export Domestic % 38% 45% 42% 41% % 41% 62% 59% Petroleum 84% Petrochemical 16% 63% 62% 55% 58% 59% 2Q13 3Q 4Q 1Q14 2Q 1H13 1H14 17

18 GIM in 2Q14 Market GIM 88% 83% 81% 80% 80% 86% 80% Utilization rate The Market GIM in 2Q14 was $5.4/bbl, compared to $7.8/bbl in 1Q Unit: $/bbl Power & Utility Petrochemical Petroleum A decline in the Market GIM was due to the shutdown of VGOHT unit and lower product spreads, particularly petroleum and styrenics products. 2Q13 3Q 4Q 1Q14 2Q 1H13 1H14 Accounting GIM (1.0) (0.4) (1.0) 2Q13 3Q 4Q 1Q14 2Q 1H13 1H14 Unit: $/bbl Hedging Stock gain/loss Net LCM Market GIM The Accounting GIM in 2Q14 was $9.2/bbl, rising by $0.7/bbl, compared to 1Q14. In 2Q14, stock gains and reversal of provision for LCM were $1.9/bbl, compared to $0.4/bbl from stock losses and provision for LCM. Hedging gains were $1.9/bbl, rising by $0.8/bbl from 1Q14 at $1.1/bbl. 18

19 Financial Highlight Unit: MB Quarter Change 2Q14 2Q13 1Q14 YoY QoQ 1H14 1H13 Foriegn Exchange Rate Avg (0.21) Net Sales 71,658 67,150 71,854 4,508 (196) 143, ,114 Market GIM 2,773 4,141 3,970 (1,368) (1,197) 6,743 7,783 Stock Gain/(Loss) net LCM 962 (506) (228) 1,468 1, (978) Oil Hedging Gain/(Loss) , Accounting GIM 4,710 3,645 4,322 1, ,032 7,127 OPEX (3,113) (2,763) (2,760) (5,873) (5,234) Other Income EBITDA 1,961 1,180 1, ,829 2,445 Gain/(Loss) from Fx (5) (760) (161) 151 (200) Gain/(Loss) from Impairment (51) (15) - (36) (51) (51) (1) Investment Gain/(Loss) (15) (28) 42 (10) Net Profit 178 (1,159) 344 1,337 (166) 522 (1,006) 19

20 2Q14 Debt Portfolio Debt Profile Unit: MB Debt Structure As of June 30, ,838 45,381 40,758 Net Debt 56,902 48,355 43, ,620 56,725 43,180 42,735 16,144 5,408 2,974 2Q13 1Q14 2Q14 Long term Short term Cash & S/T investment Bond (THB) 61% ST Loan 0.3% USD/THB = Interest Rate (%) LT Loan 25% Bond (USD) 14% Net Debt = 40,758 MB Debt (MB) ST Loan 177 LT Loan 14,368 Bond (USD) 7,746 Bond (THB) 34,611 Total 56,902 Currency (%) Float 27 THB 49 Fixed 73 USD 51 Financial Ratios Net D/E CA/CL 2Q13 1Q14 2Q14 Cost of Debt 4.04% 3.90% 3.97% Credit Ratings Agencies Annual Review < 1.0x > 1.05x March 2014 April 2014 Ba1 (Negative outlook) BB+ (Stable outlook) 2Q13 1Q14 2Q14 2Q13 1Q14 2Q14 February 2014 A-(tha) (Negative outlook) / F2 (tha) 20

21 Agenda 1. 2Q14 Overview 2. Highlight Update Fire Incident Delta & UHV Project 3. Operation & Financial Performance 4. Industry Outlook 5. UHV Project & Post Phoenix Appendix Strategic Direction Phoenix Project 21

22 Crude Oil and Petroleum Products Outlook Key Products Price (2Q14) Spread (2Q14) 3Q14 Outlook Driving Determinants Refinery ($/bbl) ($/bbl) Dubai ULG GAS OIL 0.05% FO Dubai price faces downward pressure from resumption of oil production in Libya and absence of supply disruption from geopolitical tension in Iraq and Ukraine. Peak maintenance of oil field in North Sea is expected to support the crude oil price. Gasoline spread may soften seasonally. Gas oil spread improves because of winter demand in North Asia and power generation consumption in ME. Fuel oil is also expected to be supported by lower arbitrage from Europe. Lube Base Oil ($/T) ($/T) 500 SN 1, BS 1, Lube base oil spread is sustained due to lower feedstock prices but lack luster demand during regional monsoon season limits gain Shutdown Schedule Company Jinan Petrochemical Shandong Qisheng Industry & Trade Capacity (KT/Year) Source: ICIS, 1 August 2014 Timing 150 Q Q

23 Petrochemical Products Outlook Key Products Price (2Q14) Spread (2Q14) 3Q14 Outlook Driving Determinants Olefins ($/T) ($/T) Ethylene 1, HDPE 1, Propylene 1, PP 1, Polyethylene is supported by demand from agriculture sector during winter season and high scheduled turnaround during 3Q14. Polypropylene spread can be improved further due to reversal of demand from western country in Polypropylene derivatives. Styrenics ($/T) ($/T) PS 1, ABS 1, PS spreads is supported by higher demand from manufacturing activities before year end. However, with the absence of sustainable global economic recovery, ABS spread improvement is underway. 23

24 Agenda 1. 2Q14 Overview 2. Highlight Update Fire Incident Delta & UHV Project 3. Operation & Financial Performance 4. Industry Outlook 5. UHV Project & Post Phoenix Appendix Strategic Direction Phoenix Project 24

25 UHV Project Progress : Video Presentation UHV Project: Video Presentation 25

26 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 2015 PP Expansion 160 KTA PP Compounding 140 KTA PP Derivatives 59% / 41% 2017 Super Absorbent Polymer Acrylic Acid (SAP) Para-Xylene (AA) (PX) STS 2014: Strengthening Core Business Quick Win Initiatives DELTA Initiative Implementation Assets Management (Bankai/EIZ) UHV Completion Increase product value by converting fuel oil to petrochemical products Running at full capacity of 215 KBD New investments through JV Specialty focus and Moving away from heavy-asset company Completed Project during CHP I: Electricity +220MW, Steam +420T/hr 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 26

27 Q & A Environment Social Education & Sports Labor & Human Rights Religion Public Health The future begins now creating shared value 27

28 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.

29 Agenda 1. 2Q14 Overview 2. Highlight Update Fire Incident Delta & UHV Project 3. Operation & Financial Performance 4. Industry Outlook 5. UHV Project & Post Phoenix Appendix Strategic Direction Phoenix Project 29

30 Strategic Initiatives: Overview Phoenix + : 2010 Onwards Delta: 2014 Onwards Post-Phoenix: 2015 Onwards 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 Barrels per day Quick win initiatives for cost reduction and margin enhancement Adding 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 focus and moving away from heavy-asset company by investing through JV 30

31 Current Projects Completed Projects Strategic Initiatives: Phoenix + Phoenix + Structural Changes for Specialty Growth Delta Margin Improvement Initiatives Post-Phoenix Specialty Growth through JV CHP I PRP EBSM TDAE/BS ABS/SAN Combined Heat and Power Electricity +220 MW Steam +420 T/h Propylene +100KTA EBSM +60 KTA TDAE +28 KTA 150BS +25 KTA ABS SAN +30 KTA +30 KTA HDPE-Pipe UHMW UHV Increase product value by converting fuel oil to petrochemical products HDPE-Pipe grade +140 KTA UHMW +16 KTA Propylene +320 KTA Running at full capacity of 215 KBD 2-3 USD/BBL margins improvement 31

32 Strategic Initiatives: Delta Delta Phoenix + Structural Changes for Specialty Growth Delta Margin Improvement Initiatives Post-Phoenix Specialty Growth through JV USD 67 M DELTA HR EXcellence Organisation OPerational EXcellence COMmercial EXcellence HR EXcellence USD 37 M USD 20 M USD 10 M 7 Workstreams 2 Workstreams 5 Workstreams 32

33 Agenda 1. 2Q14 Overview 2. Highlight Update Fire Incident Delta & UHV Project 3. Operation & Financial Performance 4. Industry Outlook 5. UHV Project & Post Phoenix Appendix Strategic Direction Phoenix Project 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) 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. 37

38 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. 38

39 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 39