Synergies between Refining and Petrochemicals : Today and Tomorrow Contribution to the work of the High Level Group for the European Commission by Total Raffinaderij Antwerpen, February 29th 2008
Synergies between Refining and Petrochemicals Refining / Petrochemicals integration : Background Within the Total Group The Antwerp example New developments : Market trends Longer term strategy and developments 1 2
Refining / Petrochemicals Integration
Refining / Petrochemicals process links Condensate splitter Naphtha Distillates Ethylene Naphtha Butane Fuel Gas, PFO Steamcracker Propylene Refinery Propylene Hydrogen Butenes Gasolines Benzene fraction C 7 / C 8 Aromatics Aromatics Butadiene Py Gas Benzene Toluene P-Xylene O-Xylene 4
Refining - Petrochemicals integration within TOTAL Vlissingen Port Arthur Dunkirk Antwerp Leuna Gonfreville Grandpuits Carling TOTAL Refinery Donges TOTAL Petrochemicals Steamcracker Feyzin 100 % third party Steamcracker Lavera 5
Benefits of integration Single site integration of refining and petrochemical capacity : Availability of product Reduction in transport (costs and risks) Working capital savings Synergies from joint infrastructures and logistics Reduction in variable costs (steam, utilities) Size effect on support services: maintenance, HR, HSEQ management, F&A, etc. Strategic advantage : Less recourse to trading market Independence and supply security Long-term exchanges Common business and investment strategy Commingled footprint of activities 1 6
Consolidation of production for both sectors Chemicals percentage in Refining sales Naphtha percentage from TOTAL refineries used as feedstock in TPA steamcrackers 3.1% 1997 36 % 6.4 % 2001 60 % 7.2 % 2003 67 % 7 2
A common approach 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 90% 74% 39% 24% BP Shell Total Exxon Mobil* Level of integration between Refining and Petrochemicals in Europe Source: Morgan Stanley (% of ethylene capacity integrated with refinery owned by same company) * Exxon Mobil including ethane and LPG steamcracker from Mosmorran 19 20 8
The Antwerp example
Total in Antwerp 10
Total Raffinaderij Antwerpen (TRA) Key figures Crude + condensate capacity 18 Mt/y Staff (incl. NC3) 1,026 Shift Personnel 48 % Contractors (outside Projects & TA) 450 m/d EDCI (Solomon) Refinery 3.84 Mb/d NC3 Naphtha throughput (in 2006) 1.4 Mt/y Surface area 220 ha Storage tanks & capacity 162-2.1 Mm3 31 process units - 1 central control room Power station + cogeneration 11
Total Raffinaderij Antwerpen Production scheme Separation / Distillation Reaction / Conversion Purification Blending LPG Ethylene Naphtha Cracker Propylene Benzene Crude Oil Catalytic Reforming 60.000 bpsd Aromatic Extraction Xylene Jet Fuel RAPL Crude Oil Atmospheric Distillation CDU3 & 4: 360.000 bpsd Kero Merox 27.000 bpsd Gas Oil Catalytic Desulphurisation HDS1-4: 120.000 bpsd ETBE unit (Ethyl Tertiary Butyl Ether) Alkylation 16.500 bpsd Gasoline Atmospheric Residue Desulphurisation ARDS: 96.000 bpsd Catalytic Cracking FCCU1 & 2: 100.000 bspd Clean Gasoline 57.000 bpsd Fuel Oil Vacuum Distillation Visbreaker Bitumen 12
Total Petrochemicals Antwerp Site : FAO NC1: 1967 Cracker Capacity 240 kt/y High Butane Flexibility NC2: 1968 Cracker 2003 Revamp Capacity 470 kt/y NC3: 1991 Cracker 1998 Revamp Capacity 600 kt/y Operated by TRA Extra terminalling capacity: 700 kt Olefins in 2006 Joint venture with ExxonMobil (35 %) Number of personnel: 640 own personnel + 350 contractors 13
Antwerp logistics integration Rotterdam Duinkerken North Sea Terneuzen (Dow) TRN Gent Oleochemicals Lubricants Moerdijk (Shell) Antwerpen TRA, FAO, TPA Brussels THE NETHERLANDS Beringen Liège Geleen (DSM) Rijin Marl GERMANY Gelsenkirchen (Veba) Keulen (Erdoelchemie) Frankfurt Feluy TPF, TPR Jemeppe (Solvay) FRANCE Ethylene Propylene Oil products Crude oil NATO Cambrai LUXEMBURG Ludwigshafen (BASF) 14
Antwerp: Refinery and Petrochemicals Complex butane, naphtha, Antwerp Refinery propylene from FCC, aromatics from reformer hydrogen, steamcracker gasoline, PFO, C 4 raffinate, hydrogen, fuel gas, utilities Antwerp Petrochemicals Plant 15
Total Antwerp Sites Synergies Synergies : Common Shared Services: IT, Purchasing, Finance Close cooperation: HSE-Fire department, External Relations Mutual technical support: Naphthacrackers Waste water treatment NC3 Operations by Refinery Opportunities further integration Energy optimisation Feed optimisation Market adaptation 16
New developments
Growth in Petrochemicals 8 6 ETHYLENE 7,9 7 8 6 PROPYLENE 8,3 7,1 4,7 4,7 4 4,0 4,3 4 2,6 2,9 2,9 3,0 2 1,8 1,9 1,5 1,6 2 0 W.EUR. N.AMER. ASIA+ME WORLD 0 W.EUR. N.AMER. ASIA+ME WORLD % yagr 1997-2002 % yagr 2003-2008 Olefins : - Growing markets: 1.5 to 2 x GDP - Mixed evolution depending on geographic region Propylene : - Growth higher than for ethylene - Increased recourse to refinery productions in Europe and USA 18
Growth in Petrochemicals 8 6 4 2 8 BENZENE 6,5 5,7 6 4,5 3,9 3,5 4 2,7 1,8 2 1,1 2 5,0 P XYLENE 4,2 7,8 6,7 6,2 6,2 0 W.EUR. N.AMER. ASIA+ME WORLD 0 0,1 W.EUR. N.AMER. ASIA+ME WORLD % yagr 1997-2002 % yagr 2003-2008 Aromatics : mixed growth depending on the products Paraxylene : strong demand requiring recovery from refining flows 19
European demand for petroleum products Technological progress of motor engines Tax advantage maintained for diesel CO 2 issue favourable to development of diesel motor engines MT / year 210 190 170 150 130 110 90 70 50 2000 2005 2010 Gasoline Diesel Heating oil Heavy Fuel 20
Common strategy and objectives : To fulfil the latest product and environmental specifications To adapt productions to market trends Gasolines Olefins Distillates Aromatics Refinery Petrochemical site Stringent capital expenditure policy Minimising production costs: Utilities, logistics 21
Consolidating integration : Gasoline Olefins Extraction of aromatics Common desulphurisation of gasolines from FCC and steamcracker Alternative feedstocks New catalysts and processes FCC operation Naphtha and feedstocks Cracking of FCC gasoline Maximum production of naphtha Hydrogen Joint management of hydrogen productions 22
Conclusion : Refining / Petrochemicals Synergies : Integration already significant Competitive & strategic advantage Ongoing strategy over next few years : Implementing new operational synergies Capital & research expenditure synergies to adapt to the markets Consolidating integration (capex, exchanges, new projects) ð ð 1 23 ð