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©2015 KBR, Inc. All Rights Reserved  1 KBR Olefins Technology – Technology options to meet uncertain market conditions Shaping Growth of Petrochemicals.

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Presentation on theme: "©2015 KBR, Inc. All Rights Reserved  1 KBR Olefins Technology – Technology options to meet uncertain market conditions Shaping Growth of Petrochemicals."— Presentation transcript:

1 ©2015 KBR, Inc. All Rights Reserved  1 KBR Olefins Technology – Technology options to meet uncertain market conditions Shaping Growth of Petrochemicals in India Delhi, 16 th February 2015 Sourabh Mukherjee

2 ©2015 KBR, Inc. All Rights Reserved  2 Agenda  World Olefins market trends  Olefins technology combinations targeting improved flexibility and economics  The Indian perspective

3 ©2015 KBR, Inc. All Rights Reserved  3 Change We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don't let yourself be lulled into inaction. - Bill Gates

4 ©2015 KBR, Inc. All Rights Reserved  4 Underestimating 10 Year Change 2004 View USA Petrochemicals  High Cost of Ethylene: USA vs Asia: 150%  Feedstock Disadvantaged & Least Competitive in the World  Gas/Oil Price Ratio: 109%  Bad Place to Invest  Rapidly Declining Exports; Expected to Import  Europe is 2 nd Most Competitive Early 2014 View USA Petrochemicals  Low Cost of Ethylene: USA vs Asia: 70%  Cheap & Abundant Feedstock & 2 nd Most Competitive in the World  Gas/Oil Price Ratio: 29%  $120 Billion Invested in Chemicals (IHS Estimate 2014)  Rapidly Growing Export  Europe is Least Competitive = UNCERTAINTY

5 ©2015 KBR, Inc. All Rights Reserved  5 Underestimating Sudden Change 2014 View USA Petrochemicals  Low Cost of Ethylene: USA vs Asia: 70%  Cheap & Abundant Feedstock & 2 nd Most Competitive in the World  Gas/Oil Price Ratio: 29%  $120 Billion Invested in Chemicals (IHS Estimate 2014)  Rapidly Growing Export  Europe is Least Competitive Late 2014 View Petrochemicals  Crude prices drop from $100/bbl range to $50/bbl range – within four- six month span  Consequential reduction in naphtha price means the cost of Ethylene from liquid becomes more competitive (almost on par with ethane)  Investment plans for ethane crackers being reconsidered  Europe and Asia competitiveness improves = UNCERTAINTY

6 ©2015 KBR, Inc. All Rights Reserved  6 Uncertainty in the market cannot be avoided To overcome market uncertainty producers need to – Produce the right products from their assets & – Be flexible towards feed

7 ©2015 KBR, Inc. All Rights Reserved  7 Producing the right products from an Ethylene Complex

8 ©2015 KBR, Inc. All Rights Reserved  8 Ethylene Complex Steam Cracker Hydrocarbon Feed Ethylene Co-Products Hydrogen Methane Propylene C4’s PFO Etc.. UtilitiesWaste Operations & Maintenance Traditional focus Potential to drive Technology Selection

9 ©2015 KBR, Inc. All Rights Reserved  9 Ethylene Complex Economics (Ethane) Steam Cracker Ethane Feed Ethylene Co-Products Utilities Waste Operations & Maintenance Hydrogen Methane Propylene C4’s PFO Etc.. Cost Ethane Feed380$/MT Utilities98$/MT Ethylene Operations & Maintenance 53$/MT Ethylene Depreciation + ROC250$/MT Ethylene Revenue Ethylene1000$/MT Co-ProductsNote 1$/MT Note 1: Dependent upon co-product recovery

10 ©2015 KBR, Inc. All Rights Reserved  10 Example 1: US Gulf Coast Cracker Grassroots Cracker Location: US Gulf Coast Feedstock: Ethane (US Shale Gas) Products: KTA Ethylene -C3+ Stream (Sell) -Fuel Oil -Fuel Gas Overall Material Balance Feed / Product 77% Yield (KTA) 80% Yield (KTA) Ethane Ethylene1000 Fuel Gas Mix C Fuel Oil52 C3+ Ethane Feed Tail Gas Ethylene Fuel Oil

11 ©2015 KBR, Inc. All Rights Reserved  11 Example 1: US Gulf Coast Economics Lower selectivity = ~$5.6 MM USD/yr Advantage Revenue ($MM USD) Products77% Yield80% Yield Ethylene1,000 Fuel Gas2724 Mix C Fuel Oil10.4 Sub-Total1,1311,111.4 Cost ($MM USD) Category77% Yield80% Yield Ethane Feed Utilities98 O&M53 Depreciation + ROC250 Sub-Total Margin ($MM USD) Category77% Yield80% Yield Revenue1,1311,111.4 Cost Total Margin

12 ©2015 KBR, Inc. All Rights Reserved  12 Example 2: CIS Region Cracker Grassroots Cracker Location: CIS Region Feedstock: Ethane (Gas Plant) Products: KTA Ethylene -C3+ Stream (Fuel) -Fuel Oil -Fuel Gas Overall Material Balance Feed / Product 77% Yield (KTA) 80% Yield (KTA) Ethane Ethylene1000 Fuel Gas Mix C Fuel Oil52 C3+ Ethane Feed Tail Gas Ethylene Fuel Oil

13 ©2015 KBR, Inc. All Rights Reserved  13 Example 2: CIS Region Economics Higher selectivity = ~$6.3 MM USD/yr Advantage Revenue ($MM USD) Products77% Yield80% Yield Ethylene1,000 Fuel Gas2724 Mix C Fuel Oil10.4 Sub-Total1,0511,043.4 Cost ($MM USD) Category77% Yield80% Yield Ethane Feed Utilities98 O&M53 Depreciation + ROC250 Sub-Total Margin ($MM USD) Category77% Yield80% Yield Revenue1,0511,043.3 Cost Total Margin

14 ©2015 KBR, Inc. All Rights Reserved  14 Example 3: CIS Region Cracker (Fixed Feed) Overall Material Balance Feed / Product 77% Yield (KTA) 80% Yield (KTA) Ethane1200 Ethylene Fuel Gas Mix C Fuel Oil42 Grassroots Cracker Location: CIS Region Feedstock: KTA Ethane (Gas Plant) Products: -Ethylene -C3+ Stream (Use for Fuel) -Fuel Oil -Fuel Gas C3+ Ethane Feed Tail Gas Ethylene Fuel Oil

15 ©2015 KBR, Inc. All Rights Reserved  15 Example 3: CIS Region Economics (Fixed FEED) Higher selectivity = ~$22.3 MM USD/yr Advantage Revenue ($MM USD) Products77% Yield80% Yield Ethylene Fuel Gas2523 Mix C Fuel Oil10.3 Sub-Total9791,001.3 Cost ($MM USD) Category77% Yield80% Yield Ethane Feed456 Utilities91 O&M49 Depreciation + ROC233 Sub-Total829 Margin ($MM USD) Category77% Yield80% Yield Revenue9791,001.3 Cost829 Total Margin

16 ©2015 KBR, Inc. All Rights Reserved  16 How can Technology Impact Selectivity? Residence Time (sec)) GAS OIL NAPHTHA BUTANE PROPANE ETHANE Relative Percent Yield Improvement Residence Time Effect on Ethylene Yields More Ethylene More Co-Products

17 ©2015 KBR, Inc. All Rights Reserved  17 How does KBR Address Residence Time? SC-1 SC-2 SC-4 Furnace Coil Portfolio Residence Time (sec)) GAS OIL NAPHTHA BUTANE PROPANE ETHANE Relative Percent Yield Improvement

18 ©2015 KBR, Inc. All Rights Reserved  18 KBR Furnace Portfolio & Experience SC-1SC-4 Serpentine-Type E.g., “W-Coil” (~ sec) Single Pass Straight Tube (~ sec) Two-Pass “U-Coil” (~ sec) SC-2 # of Furnaces

19 ©2015 KBR, Inc. All Rights Reserved  19 KBR & Competitors KBR has BROADEST Technology Portfolio Coil TypeResidence Time (sec) KBRCompetitors W type0.4SC-4Yes U Type0.2SC-2Yes One pass0.1SC-1No

20 ©2015 KBR, Inc. All Rights Reserved  20 Steam Cracking Around the World North America: Shale Gas Russia/CIS: Ethane Refinery Integration Naphtha Asia: Naphtha Heavy Liquids Middle East: Ethane Refinery Integration Liquids The Heavier the Hydrocarbon Feed the more complicated the economics KBR Collaborates with client to determine best configuration

21 ©2015 KBR, Inc. All Rights Reserved  21 Flexibility towards feed

22 ©2015 KBR, Inc. All Rights Reserved  22 SCORE Feed Flexibility SCORE Furnaces Large Capacity Single Cabin Firebox 8 individually flow controlled passes Number of Feeds only limited by inlet piping arrangement Each Feed can be cracked at optimum conditions: -Temperature -S:HC Ratio Flexibility of 8 mini furnaces within a single firebox Multi-Feed (Hybrid) Cracking

23 ©2015 KBR, Inc. All Rights Reserved  23 Hybrid Cracking Example LPG/C3R LPG Naphtha B Naphtha  Naphtha & HCR  Off Line B Ethane 103-B 104-B 105-B 106-B  Naphtha, LPG/C3R & Ethane 

24 ©2015 KBR, Inc. All Rights Reserved  24 KBR Olefins Technology Offering – Adding further feed flexibility WhatFeedsFeatures SCORE (Steam Cracking) Ethane thru Gas Oil Residence time ~0.08 – 1.0 sec Low CAPEX Superior Performance Offered via Agreement with ExxonMobil K-COT TM (Catalytic Olefins) Olefinic C4-C10 P/E ratio ~ 2/1 Gasoline by-product >50% aromatics Recycle C4-C6 NA to extinction without additional treating Paraffinic naphtha, light distillates P/E ratio ~ 1/1 Recycle C4s/C5s without additional treating Non-traditional High olefin yields from methanol, ethanol and other oxygenates and MTO/MTP and FT by-products

25 ©2015 KBR, Inc. All Rights Reserved  25 K-COT TM Overview  Catalytic cracking of light olefinic and/or paraffinic feeds  High propylene yields, with ethylene and aromatic- rich gasoline byproducts – Typical P/E ratio = 2:1 for olefin-rich feed – Typical P/E ratio = 1:1 for straight run naphtha  Use of custom formulation of ZSM-5 catalysts  Utilizes fluidized reactors (FCC) – Over 60 years of KBR experience in FCC  Product separation similar to ethylene plants with trace impurity removal to produce polymer grade products – Over 60 years of KBR experience in Ethylene

26 ©2015 KBR, Inc. All Rights Reserved  26 Typical Refinery and Steam Cracker Crude Oil Naphtha Gasoline Distillate Jet / Kero Fuel Oil Ethylene Propylene Butadiene PyGas FCC Isom Hydrotreaters CDU De- asphalting De- asphalting Coker Others Hot Section Cold Section

27 ©2015 KBR, Inc. All Rights Reserved  27 Typical Refinery and Steam Cracker FCC Isom Hydrotreaters CDU De- asphalting De- asphalting Coker Others Hot Section Cold Section Crude Oil Naphtha LPG Gasoline Distillate Jet / Kero Fuel Oil Ethylene  Propylene  Butadiene PyGas Catalytic Olefins Recovery

28 ©2015 KBR, Inc. All Rights Reserved  28 Typical Refinery and Steam Cracker FCC Isom Hydrotreaters CDU De- asphalting De- asphalting Coker Others Hot Section Cold Section Crude Oil Naphtha LPG Gasoline Distillate Jet / Kero Fuel Oil Ethylene  Propylene  Butadiene PyGas Catalytic Olefins Recovery Non-traditional: Oxygenates (MeOH, EthOH) MTO/MTP by- products FT by-products

29 ©2015 KBR, Inc. All Rights Reserved  29 K-COT™ for Steam Cracker Retrofit Typical liquid crackers produce several low- value C4+ streams (about 20% of the fresh feed)

30 ©2015 KBR, Inc. All Rights Reserved  30 Recycle with K-COT™  K-COT allows recycle of mixed, low value streams without the need for pre-treatment. K-COT™  Based on historical prices, K-COT provides better margin than either traditional option

31 ©2015 KBR, Inc. All Rights Reserved  31 Naphtha Cracker: Recycle vs. Sell Based on historical worldwide price data

32 ©2015 KBR, Inc. All Rights Reserved  32 Combined Olefins Process Tail gas Ethylene Propylene Raw C4s BTX-gasoline Fuel oil Fresh Feeds Recycles Pyrolysis K-COT TM

33 ©2015 KBR, Inc. All Rights Reserved  33 Technology Flexibility  Technology flexibility has become a necessity – Feeds/products  SCORE olefins technology range of furnace options and superior feed flexibility  K-COT TM technology provides feed/product flexibility, especially for non- traditional feeds for olefins  Combination allows operators to respond to an increasingly dynamic market Sasol Catalytic Olefins Unit, Secunda, South Africa 2006 Startup

34 ©2015 KBR, Inc. All Rights Reserved  34 The Indian Perspective  Indian per capita polymer 8kg/yr compared to global average consumption of >25kg/yr – Double digit yearly growth in plastic demand – 1 kg/yr increase corresponds to 1.2 MMTPA demand increase; size of a world class Ethylene complex  Indian refining 215 MMTPA (5 th largest in the world); 2014 Ethylene production in India 4 MMTPA – Enormous opportunity to integrate with Refineries  Naphtha production in 2014 : 19MMTPA  Naphtha demand in 2014 : 12 MMTPA – 7MMTPA of excess Naphtha available.  Regional imbalance – Eastern India with 26% of national population takes 11% of demand – Northern India 31% of national population takes 21% of demand – Development of Northern and eastern India in line with Western India

35 ©2015 KBR, Inc. All Rights Reserved  35 Conclusions  Impossible to predict feed/product prices  Selectivity is important and should be a key decision criteria in investment decisions  “Duplicate” /” Conventional” grassroots designs might miss economic opportunity  Ability to be feed flexible keeps you on track in an uncertain market place.  Latest technology offerings provide unprecedented opportunities to integrate and beat market uncertainties.

36 ©2015 KBR, Inc. All Rights Reserved  36 Thank you for your kind attention! Questions?


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