Presentation is loading. Please wait.

Presentation is loading. Please wait.

1 CLEAN FUELS UPGRADE at PETROTRIN’S POINTE- A-PIERRE REFINERY Mendoza, Argentina October 31, 2006 Steve Hilaire.

Similar presentations

Presentation on theme: "1 CLEAN FUELS UPGRADE at PETROTRIN’S POINTE- A-PIERRE REFINERY Mendoza, Argentina October 31, 2006 Steve Hilaire."— Presentation transcript:


2 1 CLEAN FUELS UPGRADE at PETROTRIN’S POINTE- A-PIERRE REFINERY Mendoza, Argentina October 31, 2006 Steve Hilaire

3 2 OUTLINE Introduction Business Background Scope Economics Capital Expenditure Results & Benefits Project Risks Status Financing Template

4 3

5 4 Introduction – About Trinidad & Tobago Access to emerging & developed markets Highly skilled and trained workforce Stable economic/political environment Global leader in Export of Methanol Export of Ammonia Export of LNG to USA

6 5 Introduction – PETROTRIN History 1917: Commence Operations of P-a-P Refinery 1940/41:Eastern Refinery Established 1952:FCCU Installed 1956:Acquisition by Texaco 1958:No 1 CRU – Gasoline Upgrade & BTX 1960/62:No 8 CDU, No 1 HTU, No 2 CRU 1964/66:Lube Oil & Normal Paraffins 1972:No 4 VDU & No 2 HTU –Fuel Oil Desulf 1985: Acquisition by State 1992/96:Refinery Upgrade – Phase 1 Increased Conversion & Full Refining Capacity Partial Revamp of FCCU Rehab of No 2 HTU, No 2 CRU, New Units: VBU, Hydrogen, Sulfur, MTBE DCS Controls

7 6 Introduction – PETROTRIN OVERVIEW Fully State-owned Commercially operated Integrated Exploration Production Refining Marketing

8 7 Introduction – Crude Oil Supply Crude capacity – 168 MBPCD Current conversion capacity 150 MBPD Local crude 40 – 45 % (low cetane gas oil) Imported crudes Venezuela Brazil Columbia Ecuador West Africa (high cetane)

9 8 Introduction – Product Supply Markets Local 100 % - 18% of Volume Regional 75 % - 30% of Volume Extra regional 5 % - 20% of Volume International - 32% of Volume Approx 10 % volume- unfinished/low value products CRU naphtha Low octane mogas FCCU feed (VGO)

10 9 Introduction: Operational Performance – R&M Financial Performance Profitability Cash Flow ROACE Market Price Mix + Volumes Direct Cost Other Sustaining Growth Sales Revenue OPEX CAPEX There are multiple areas where changes could improve future financial performance Performance Factors Petrotrin is highly sensitive to market price because it is a merchant refiner High fuel oil cut & low value products reduces profits Lacks clean fuels capacity High unit operating costs compared to peers Indigenous crude only supplies 40% of needs High spend on maintaining competitiveness of old infrastructure Project delays / deferrals have led to missed opportunities

11 10 Introduction: Operational Performance – R&M Performance Profitability Cash Flow ROACE Market Price Mix + Volumes Direct Cost Other Sustaining Growth Sales Revenue OPEX CAPEX Current and Planned R&M Improvement Initiatives A mixture of upgrades and operational changes to improve performance Clean fuels upgrade – in progress Refinery business improvement project (SGSI) E&P oil winning projects (halt production decline) Infrastructure upgrade (planning stage) Bottom of Barrel Upgrade (conceptual stage) Gasoline upgrade (implementation stage)

12 11 BUSINESS BACKGROUND – Driving Forces Gasoline Optimisation Program Equipment Integrity No 1 CRU: 3 of 4 Rxs Changed – Expect 3 years Max No 2 CRU: Remaining Life Estimated at 6 – 8 years Sale of Unfinished Low Value Product Reformer Feed Low Octane Gasoline VGO as FCCU Feed Tighter Specifications Elimination of Lead & MTBE– Octane & Volume Loss Lower Benzene, Sulfur, Olefins and RVP Increased Octane Demand Shortfall of Premium Gasoline to some markets

13 12 BUSINESS BACKGROUND – Driving Forces (Cont’d) Tighter Diesel Specifications Sulfur Reduction Cetane Increase Decrease in aromatics Phase II - BOB Upgrade High Fuel percent of Product Sales Shrinking Fuel Oil Market

14 13 BUSINESS BACKGROUND – Options 1. Discontinue Refining Operations Huge economic impact on country and South in particular. 2. New refinery Grassroots facility US$3-4 Bn 3. Upgrade Current refinery Performance and Technology

15 14 Scope Identified Gasoline Optimisation Program FCCU: Upgrade Capacity from 26,000 BPSD to 35,000 BPSD Product Octane from 81 MON to 83 MON Pre-Fractionation Remove Benzene from CRU feed Provide feed for Isomerisation Isomerisation New 7,400 BPSD using C 5 /C 6 Naphtha Feed Improve Octane from 70 MON to 80 MON

16 15 PROGRAM SCOPE (Cont’d) CCR Platformer Replace Fixed Bed Platformers Improve product Octane from 86 MON to 90 MON Alkylation New using C 3 /C 4 ex FCCU New Acid Regen Plant Optimize LPG Production Offsites & Utilities New Boiler & Water Treating Tanks, Transfer Systems Power Supply Control equipment Flare System

17 16 PROGRAM SCOPE (Cont’d) New ULSD Hydrogenator 35,000 BPSD unit 8 – 9 point cetane lift < 25% aromatics 8 ppm S

18 17 Economics & Approval LP model Runs Delta economics Base case vs enhanced Price/markets scenario forecast Optimum configuration determined Capex Estimates Published/licensor data Inflated for time/location/experience Economics developed Increased margin DCFROR NPV Payback

19 18 Economics & Approval Income statement/Cash Flows generated Sensitivity/ Risk Analyses developed Approval Process Executive management Board Shareholder - Cabinet

20 19 CAPITAL EXPENDITURE New Units ISBL 630 MM OSBL, Project Mgmt Other 170 MM TOTAL(2006) 800 MM ORIGINAL ESTIMATE650 MM (2005)

21 20 PROGRAM BENEFITS Gasoline Optimisation Program Increase Gasoline Quantity Total from 24% to 30% Eliminate Unfinished Products (Naphtha & VGO) Improve Gasoline Quality Increase MON from 83 to 86 Reduce Benzene from 1.6% to 0.7% Reduce sulphur fron 41 ppm to 8 ppm Customer Satisfaction Lower Olefins in LPG Ability to eliminate MTBE

22 21 PROGRAM BENEFITS (Cont’d) ULSD HTU Improve Gas Oil Quality Increase Pool Cetane Reduce Aromatics/ Pool Sulfur Improved Operations of the P-a-P Refinery Energy Efficiency & Environmental Compliance Increase full refining capacity to 168 MBPCD Ability to process sour, low cetane crudes Petrocaribe (New) Products displaced from regional market Improved Quality can be marketed elsewhere

23 22 COUNTRY BENEFITS Local Content:20% or US$ 160 million Maximize local sub contractors Offsite Works by Petrotrin Construction Labor:14million hours Peak Site Labor:2,800 Corp Tax / UL:US$ 375 million Sustained Operations of P-a-P Refinery Security of Fuel Supply / Prices Economic Activity

24 23 PROJECT RISKS Market / Product Pricing Delay in Tighter Specs / Conservative Prices Used Capital Cost Overrun Scope of Work EPC Contracts – Hybrid vs Lump Sum Schedule Delays Statutory Approval Experienced EPC Contractors Industrial relations problems Skilled sub-contractor labour

25 24 PROJECT RISKS Technology: Well Proven / State-of –the Art Environmental: No new type of effluent Refinery systems (current and proposed) adequate Funding: Current Market Conditions Ideal for Loan

26 25 Status Pre Frac/Isomerization EPC awarded Piling commenced Commercial production Dec 2007 FCCU upgrade Discussions on EPC award – Hybrid contract Project completion date April 2008 CCR Platformer EPC Negotiations complete ETC December 2008 Alky / Acid Hybrid contract Lump sum for services Re imbursable for Equipment/materials

27 26 Status – Points to Note Get Project Manager on board early. Licensor estimates normally low. Don’t forget infrastructure and services Industry quite busy – Innovative bid requests required. Fast track procurement on long lead items Monitoring and control essential

28 27 GAS OPT PROGRAM- FINANCING PLAN MAJOR FINANCING OPTIONS MAJOR OPTIONCOMMENTS Bank Loan Corporate Bond Structured Commodity Finance Pre-export loan Note: Fixed Rate funding with minimum 10 Year tenor and minimum 2 Year moratorium is preferred.

29 28 FINANCING SCHEDULE TASKSTART DATE END DATE Approvals from Government Credit Rating Review by Moody’s and Standard & Poors Approvals from IADB, JBIC, EIB, CDB, MBIA Engagement of Financial Advisor Expressions of Interest from, and short-listing of financial institutions Tendering, Selection & engagement of placement institution Engagement of Lawyer Loan Sourcing, Negotiation and Conclusion

30 29 Muchas Gracias

Download ppt "1 CLEAN FUELS UPGRADE at PETROTRIN’S POINTE- A-PIERRE REFINERY Mendoza, Argentina October 31, 2006 Steve Hilaire."

Similar presentations

Ads by Google