This presentation has be prepared by PTT Aromatics and Refining Public Company Limited (the Company )

Transcription

1 1Q/ Q/2009 Analyst Meeting May 20, 2009 PTT Auditorium

2 Disclaimer This presentation has be prepared by PTT Aromatics and Refining Public Company Limited (the Company ) and the information contained in this presentation is intended solely for your personal reference only. In addition, such information contains projections and forward-looking statements that reflect our current views with respect to future events and financial performance. Furthermore, it contains information which are base on the Company s data collections and analysis with third parties references. These views are based on assumptions subject to various risks and uncertainties. No assurance is given that future events will occur, that projections will be achieved, or that our assumptions are corrects. The Company proscribes the redistribution, duplicate, and/or either disclosure of this presentation in whole or in part without the written permission of the Company and the Company accepts no liability whatsoever for the actions of third parties in this respect. The Company does not undertake to revise forward-looking statements to reflect future events or circumstances. 2

3 1Q/09 Operation and Financial Result 3

4 PTTAR s Operation Total Intake Early-Jan.09, Startup Aromatics Complex II (AR3) 221 KBD 140 KBD 251 KBD which increased condensate intake. Mid-Mar.09, Startup Upgrading Complex Phase I (CRS), which increased Jet Crude Intake (KBD) Condensate Intake (KBD) CDU Utilization Rate 105% 73% 103% and Diesel production Lower BTX utilization rate from compressor failure at AR2 leading to lower intake BTX Utilization Rate 93% 48% 71% 4

5 Oil and Products Price Movement $/BBL 1Q/08 4Q/08 End.08 1Q/09 Diesel Jet Oil Gasoline Dubai Fuel Oil Q/2009 Crude price re-stabilized in 1 st Q from better OPEC compliance and releasing of global stimulus plans Globally high diesel stock due to the economic slowdown continues to pressure middle distillate crack. Gasoline crack rebounded due to tightening supply in the US from lower gasoline yield and some refineries shutdown in the Asian region Stronger fuel oil demand in the middle east for power generations forced the crack to strengthen. The new upgrading capacities has also taken away the supply. 5

6 Feed and Aromatics Price Movement $/Ton 1Q/08 4Q/08 End.08 1Q/09 Paraxylene 1, Benzene 1, Naphtha Q/2009 PX demand significantly improved Condensate from China s economic stimulus package and restocking of PX from downstream petrochemical Recover of BZ spread since mid March due to demand resumed mainly from SM producer (OR% of SM increase from 70.1% in 1Q09 to 92.0% in 2Q09) PX and BZ prices considerably increased since mid-march from tight supply following low operation rate during low margin period 6

7 GRM GRM Mkt GRM Stock Gain/(Loss) Net of LCM Hedging Gain/(Loss) (33.80) (39.18) Unit : $/BBL Diesel and Jet crack spread hedging g contributed gain amounting to 2,416 MB (4.67 $/BBL) With crude inventory as of 31 Dec.08 of being marked down to 43.97US$/BBL and crude price for 1Q/09 average 47.79US$/BBL, a stock gain amounting to 581 MB or 1.13* US$/BBL was registered in 1Q/09 1Q/08 4Q/08 1Q/09 (*Different between market 47.79US$/BBL and cost 46.67US$/BBL) 7

8 Aromatics P2F P2F Mkt P2F Stock Gain/(Loss) Net of LCM Hedging Gain/(Loss) (18.55) Unit: $/BBL 1.46 PX spread increased from tight supply and high demand mainly from China With feedstock inventory as of 31 Dec.08 of being marked down to 46.07US$/BBL (0.03) 03) 0.27 (0.21) (0.09) (1.17) where as price of the feed stock of 1Q/09 average 48.32US$/BBL, a stock gain of 845 MB or 2.60* US$/BBL was registered in (28.59) 1Q/09 (8.39) (*Different between market 48.32US$/BBL and cost 45.72US$/BBL) 1Q/08 4Q/08 1Q/09 8

9 GIM GIM Mkt GIM Stock Gain/(Loss) Net of LCM Hedging g Gain/(Loss) Unit : $/BBL Hedging gain amounted to 2,425 MB or 3.02US$/BBL which is derived from: 5.53 (30.57) (0.47) (3.65) (32.51) Crack spread hedging settlement = 852MB 3Q and 4Q Crack spread hedging unwinding = 1,573MB Initially, we ve hedged 22% of our total hedgeable products in 09. Half of the portion has settled in 1Q 1Q/08 4Q/08 1Q/09 and the other half is still to be settled in the remaining quarters. 9

10 Cash Cost, EBITDA and Net Income Cash Cost Financing Cost Unit : $/BBL OPEX Q/08 4Q/08 1Q/09 OPEX reduce from no maintenance during the period Financing Cost increased mainly from higher loan outstanding of 39,594 MB Interest increased due to interest expense from loan financing of AR3 ~195 MB (Effective Interest Rate 1Q/ %) EBITDA* Unit : M.THB Net Income Unit : M.THB 2,742 4,754 1,488 1,742 (15,269) (10,679) 1Q/08 4Q/08 1Q/09 * Included LCM 1Q/08 4Q/08 1Q/09 10

11 Financial Position Balance Sheet Unit : M.THB Current Asset increased ~10,937 MB Current Assets Other Assets 137, ,203 Current Liabilities Other Liabilities due to higher sale from AR2 and AR3 Equity increase 1,743 MB from 1Q/09 Net Profit Fixed Assets Long Term Loan Financial Ratio 1Q/09 1Q/08 Gross Profit Margin 3.10% 2.60% Net Profit Margin 4.10% 2.10% Equities 31 Mar Dec.08 Current Ratio Non Current Liability to Equity Dec Mar

12 15,000 MB. Bond Issue Before Refinance After Refinance Term Loans Repayment Schedule Term, 50% Term, 71% Revolving, 28% WC, 22% Revolving, 19% WC, 10% Current Ratio Non CL/Equity Fix/Float 25/75 46/54 Loan Profile as of 30 April.09 PTTAR s Rating Credit Line 3,006 US$ MM Outstanding 2,320 US$ MM Available* 686 US$ MM FX: Baht/US$ Rating Baa2 Rating BBB Rating A- (Expected Effective Interest Rate after Refinance 4.37%) 12

13 Capex during Unit MUSD Synergy related projects will be gradually completed in 2009 and will pay back within 2-3 years Suspended Reformate splitter and Sulfolane project of 120 M. US$ due to weak BZ demand and economics crisis 13

14 PTTAR new Business Profile 14

15 Expansion Projects Completed 1. Aromatics Complex II (AR3) Commercial Completion run since January 09 Intake Nameplate Production Condensate 65 KBD PX 655 KTA BZ 355 KTA Investment 937 Million USD, Fully-Paid 2. Condensate Residue Splitter and Kero Merox Complex (Upgrading Phase I) Commercial Completion since March 09 Feedstock Nameplate Production Condensate Residue from AR2 and AR3 Diesel ~33 KBD Investment (350 ppm sulfer) Jet ~19 KBD 175 Million USD, Fully-Paid 15

16 Operation of the fully integrated plants Discontinued Alliance Operation of the refinery with SPRC since January 30, Still on negotiation for the stream exchange between PTTAR and SPRC HVGO from SPRC and Hydrowax from PTTAR exchange Jointly owned Assets SPM and Piping system for refined products supplies with Thappline Jointly operate LPG Jetty and Sulfur Palletizer AR1, AR2 and AR3 are physically connected by pipeline and operated under single production mode Global l LP was successfully develop by PTTAR and SGS and being effectively used for integrated production planning Enhance cooperation with IRPC to share synergy benefits Co-Load of crude to safe freight cost ~2 MM$/Yr (1-2 cargo per quarter, saving by 0.3$/bbl) Swap PTTAR s Light Naphtha vs. IRPC s Heavy Naphtha to achieve increased yield for both side ~5MM$/Yr Jointly review other potential for intermediate stream exchange including BZ derivative 16

17 Progress of Synergy Projects Profit Enhancement Projects Completion Benefit (M$/Yr) MRU Chemical injection and mercury removal facilities to enable AR1 to process high mercury crude approximately 500,000 barrel/month which prices are approximately 3 $/bbl lower than typical crude High TAN Crude crude Chemical injection to enable AR1 to process high acid crude approximately 0-500, barrel/month which prices are approximately 3 $/bbl lower than typical crude Transfer purified H2 of AR3 to be feed stock of HCU at AR1 which instead H2 from HMU (PSA) and / or being feed stock of AR2 July July Q /

18 Integrated Process Crude 145 KBD CDU REF3 MEROX Reformate Jet/ Kero 1 HVU HCU CRS HDS DHDS Diesel 50 ppm Condensate Residue Condensate 70 KBD Py Gas CS1 REF1 Reformate ARO1 OX PX BZ 2 Condensate Residue PSA1 H 2 CHX CHX Condensate 65 KBD Total 280 KBD Py Gas H 2 TO MX H 2 H2 rich gas 3 PSA2 Reformate CS2 REF2 ARO2 Condensate Residue PX BZ 18

19 Nameplate Production Yield 280 KBD Other Feed, 2,259 KTA Double PX and BZ capacity from AR3. Condensate 48% 228 KBD Paraxylene 1,195 KTA Completion of commercial run since Jan KBD LPG, 9% Reformate, 5% Benzene 662 KTA Upgrading Unit (CRS) will increase Jet Light Naphtha, 23% Cyclohexane 200 KTA Other 202 KTA and Diesel nameplate capacity from 86 KBD to 138 KBD since March 09 Crude 52% 145 KBD Jet and Diesel 43% Jet and Diesel, 53% Fuel Oil, 10% Reformate from the refinery will be mainly used as feedstock for aromatics production or alternatively sold as gasoline component Fuel Oil, 10% Feedstock Petroleum Product Aromatics Product 19

20 PTTAR s Solid Commercial Arrangement Feedstock Supplies Products Offtake Crude 100% Refined Products Products Min 70% of existing capacity 100% of expansion capacity PTT PTT Condensate 100% Feedstock Supply Agreement Refinery 18 years from PTT supplies 100% of crude and feedstock at market price Feedstock Supply Agreement Aromatics 20 years from PTT supplies Million ton/year of condensate requirements PTT supplied the feedstocks at arm-length basis Product Offtake Agreement Refinery 18 years from Feb-2006 PTT to minimum offtake 70% of PTTAR s existing 145 KBD capacity at domestic price with right to offtake remaining 30% products PTT to offtake 100% ofpttar s 55 KBD expansion capacity with minimum of 50% at domestic price Aromatics Products ~ 80% of total products PTT Sales and Purchase Agreements Aromatics PTT to purchase 80% of total production Aromatics products are sold through PTT (enhance trade receivable quality) End Users PPCL TPT Siam Mitsui PTA SSMC Indorama Petro chemical 20

21 Oil & Petrochemical Outlook 21

22 Consensus on GDP recovery by 2H09 IMF views Global GDP Growth (April 09) Some Economics data shows bottom out of recession in Most economists expected a gradual recovery in 2H China and India GDP growth forecast for 2009 are 8% and 5.1% respectively CMAI expects World GDP Trillion Constant U.S. Dollars Bank of America & ML expect GDP Country GDP growth,% F 2010F Global l US China India China s headline credit growth was at 29.7% YoY while car sales increased by 37% YoY in April. US job losses, in April were significantly less than expectation ti while consumer confidence index rose from 55 at the end of 2008 to 67.9 in May 09. US banks after the stress test require less capital than initially expected. 22

23 The investors confidence in global economy has begun to return Dow Jones vs. Oil WTI Dow Jones Dow Jones Industrial average has rebounded from 6,500 points to 8,500 points after G20 Meeting gave the new hope to the global economy. Oil index investment has also begun to rise. Investors begin to retrieve their money from the safe heaven and invest in equities and commodities. The USD/EUR has weakened from 1.25 to 1.35 range as investors trimmed demand for the greenback. 23

24 Global Oil Demand to rebound in the 2nd half of the year 24

25 Global Oil Demand Growth in Global Demand Growth Global Demand Growth Forecast (mbd) Many analysts have a different view on demand shortfall in 2009 but most of the analysts have a consensus view that global oil demand growth will rebound by at least 1 million barrel per day next year. This is in line with the current scenario where demand starts to pick up in 2Q09 Source : PTT OIM, JBC 25

26 Future Refining Capacities could be delayed The current economic crisis has caused some refinery projects to be delayed between About 2.9 million barrels per day of the new refining capacities initially planned to start up during will be postponed or canceled. Most of the delays will come from the Asia pacific and Middle East region. The negative scenario assumes the extreme case that all projects that have not reached a certain stage will be delayed to after 2013, or, to a lesser extent, scrapped altogether Source : PTT OIM, JBC 26

27 Global Refining Utilization Rate The current lower global refinery utilization rate should help relieve the high product inventories level in the near future. With the expected economic recovery, the refinery utilization rate in Asia should rebound to 90% level next year while the rate in the US and Europe should decline further to 80%. In the long term, utilization rate in Asia is expected to be healthily supported by the regional demand growth while some US and Europe refiners will face potential shutdowns Source : PTT OIM, JBC 27

28 OPEC Supply OPEC continuously cut production to support prices. The OPEC compliance rate which continued to increase throughout the 1Q/09 helped stabilize the oil price. Cooperation by Russia on production cut is expected by OPEC to help improve oil market. OPEC will meet again on 28 th May 2009 to decide whether or not they should further reduce the output quota. Source : PTT OIM, JBC 28

29 Non OPEC Supply Crude production in non-opec will decline further until Supply growth will only come from the liquids (Condensate, NGL). The lower oil price has given less incentive to invest in the upstream production, especially in the non-opec region where the marginal cost is higher. Russia production is expected to decline further from 9.5 mbpd this year to 8.6 mbpd in 2030 due to the taxing system. Source : PTT OIM, JBC 29

30 Global Supply Outlook Expected decline in global long term oil supply will give the oil price a very bullish outlook. Current crude oil production will be depleting at a high rate in the future. It would take about 49 mbpd of new crude oil production capacity in 2030 to maintain the current crude output level. The marginal cost of oil price is currently at 70$/bbl. Raising of oil price should further enhance the refining margins as it has been seen in the past. Source : PTT OIM, JBC 30

31 More impress PX situation Incremental Demand & Supply of world PX KTA %OR Many major projects delay Country Producers Capacity (KTA) Delay in 2009 CNOOC 840 Q1 --> Q2 China Fujia Dahua 700 Q1 --> Q2 Shanghai NO Q1 --> >Q2 Exxon Fujian 700 Q1 --> Q3 Kuwait KARO 820 Q2 --> Q3 Oman Oman Oil 820 Q2 --> Q4 Country Producers Capacity (KTA) Status China Dragon Aromatics Q2/2012 Source : PCI, PTTAR update as of May Korea S-Oil Q2/2012 S pore Jurong Aro

32 China Will be the Major PX Consumer China PX Pull Through China compare to rest of the world (RoW) Imp. PTA Imp. PX Global PX Consumption Global PX Production RoW Dom. PX China (Right Axis) Source : CMAI s 2009 world petrochemical conference, March 2009 Despite lot of new PX built up in China, China still need to import PX about 2 4 million ton per year for the next 5 years For year 2013, China will be the bigest player in PX market representing 46% of global PX trade When all PX derivatives are considered, China will consume roughly 55% of all PX produced globally. 32

33 Realize more supply BZ from many sources KTA %OR BZ demand is expected to improve along with global economics recovery. BZ capacity addition is associated with PX and Ethylene projects. PTT Phenol started up early of March 09 and use 176 Kton per BZ from PTTAR (27% of PTTAR BZ production) as feed stock. Source : CMAI, PTTAR update May PTTAR reduced BZ yield ~5% by adjusting conversion ratio and operating temperature. Under studying to develop BZ downstream derivative cooperation within PTT group 33

34 Conclusion for PTTAR 1. Financial result for 1Q/09 was supported by hedging activities and improvement of Aromatics margin in March Earning capability will improved as production capacity for both Aromatics and Petroleum products increased substantially starting in March Continue to concentrate on Risk Management - Oil crack spread including LPG - Aromatics spread - Energy cost - Foreign currency and interest rate 4. MRU and High Tan crude projects will commence in early of 3Q/09, PSA will commence in 1Q/10 5. Aromatics market is expected to received continue support from economics recovery in China and the country stimulus package directed toward textile and polyester market. 6. Diesel and Gasoline market will be supported by seasonal demand and economic recovery 7. Crude oil price is forecast ~ 50$-60$ / bbl for the remaining of 2009 (no stock loss) 8. Enhance cooperation with PTT group to achieve more synergy benefits 34

35 Thank You Investor Relations ir@pttar.com Tel : , Fax :