Engineers India Limited Value Addition through Refinery and Petrochemical Integration

AGENDA Engineers India Ltd: Company Profile Challenges – Refinery / Petrochem Drivers for Refinery Petrochemical Integration Integration Opportunities Case Study

AGENDA Engineers India Ltd: Company Profile Challenges – Refinery / Petrochem Drivers for Refinery Petrochemical Integration Integration Opportunities Case Study

Engineers India Limited: Concept to Commissioning Significant track record across entire Oil & Gas value chain including 10 greenfield refineries, 37 Oil & Gas processing plants, 40 offshore process platforms, 42 pipelines and 7 petrochemical complexes

AGENDA Engineers India Ltd: Company Profile Challenges – Refinery / Petrochem Drivers for Refinery Petrochemical Integration Integration Opportunities Case Study

Challenges – Refinery & Petrochem Low Refinery Margins Old Refineries Getting Inefficient Product quality: Ultra low sulfur fuels, Aromatic content, RVP, Cetane etc. Minimization/ Elimination of Fuel oil Surplus low value Naphtha from Refinery Petrochemical Feedstock cost and availability Increasing Fuel & utility cost Volatility in Crude / Product / Petrochemical Prices Environmental Regulations

Naphtha Export –‘Make In India’ Source: Petroleum Planning & Analysis Cell

Recent Trends in Refinery Petrochem Impact of Shale : Falling ethylene Production cost putting Naphtha crackers under pressure C3+ material production is dropping in the region , emergence of On purpose olefin production technologies esp. for C3= Deficit of Aromatics to be made up by naphtha reforming and naphtha cracking in the Middle East and Asia . Coal To Olefins model adoption in China due to advantageously priced coal Substantial demand & growth rate of downstream specialty petrochemicals Petroleum Chemicals & Petrochemical Investment region (PCPIR)/ cluster concept Refiners opting for integrated aromatic and Olefin complex Total Petrochemical Refinery - Concept

AGENDA Engineers India Ltd: Company Profile Challenges – Refinery / Petrochem Drivers for Refinery Petrochemical Integration Integration Opportunities Case Study

Drivers for Refinery Petrochemical Integration Premium available in olefins vis-à-vis transportation fuels Stability over Value chain Flexibility to the dynamic market demand and Prices Feedstock and product flexibility Assured Feedstock's Availability Absorption of return streams Upgrade low value refinery streams to high value products Capital, OPEX and Resource Optimization Shared Infrastructure, storage & Utilities Lower logistic & Energy cost Minimize overhead and waste FUEL PETCHEM Essence of any Integration is to work out synergies between them in order to achieve opportunities for more profitability

AGENDA Engineers India Ltd: Company Profile Challenges – Refinery / Petrochem Drivers for Refinery Petrochemical Integration Integration Opportunities Case Study

INTEGRATED COMPLEX - SCHEMATIC REFINERY LIGHT NAPHTHA ETHYLENE , PROPYLENE OLEFIN CRACKER (DUAL) FCC Off Gas HYDROGEN COKER Off Gas C4 Raffinate Py Gasoline PFO FERTILIZER PLANT PY GASOLINE OFF GAS HEAVY NAPHTHA AROMATIC COMPLEX HYDROGEN C3-C5 Cut LPG LIGHT NAPHTHA C5 / C7 RAFFINATE HYDROGEN C9 + AROMATICS PARA XYLENE , BENZENE , TOLUENE HEAVY AROMATICS

Value Addition Through Integration Complex Refinery (1) Aromatics Integration (2) Petrochemical Integration (3) (deficit feed for Cracker is made up by import) Basis: 15 MMTPA refinery 3 yr avg. prices Integration of refinery & Petrochemicals also improve ROI significantly by ~ 4-5%.

Opportunity ladder : step wise approach (3 year avg price basis) Polymer Price: $1600/T Steam Cracker C2=:$1250/T C3=: $1380/T Butadiene: $2000-2500/ T ($1470 1 year avg) Refining Naphtha: $850/T Exploration crude: $750/ T Aromatics Benzene:$1250 -1300/T Toulene: $1100/T PX: $1400-1600/T

AGENDA Engineers India Ltd: Company Profile Challenges - Refinery/ Petrochem Drivers for Refinery Petrochemical Integration Integration Opportunities Case Study

Case Study Sanjay Gupta - Convener , Director- Commercial, sanjay.gupta@eil.co.in  Vinay Gupta, Dy. Manager – Business and Development, vinay.gupta@eil.co.in  Vineet Bakshi, Sr. Engineer –Business and Development, vineet.bakshi@eil.co.in  Manoj Kumar, Sr. Manager – Cost Engineering, manoj.kr@eil.co.in

AREA LAYOUT SEZ AREA Existing Proposed AROMATIC COMPLEX Upcoming PTA / PET Import Terminal PROPOSED PROJECT SEZ AREA REFINERY Existing Proposed

PROPOSED OLEFIN PROJECT- OVERVIEW Propylene demand continues to soar. Recent trend of Lighter feed stocks for crackers. Refiners limited by flat gasoline growth LPG & Propane are traded as surplus, Low LPG price Price differential of $450 - $350/ton : C3 & C3= On-Purpose Propylene will supply 20% of global Propylene by 2020 “On- Purpose Propylene” is filling the gap.

POINTERS Technologies best suited to exploit above opportunities are: Potential Opportunities: Opportunity in global propylene production on account of displacement of liquid feed to Crackers by natural gas, which produces less Propylene. Surplus LPG / Propane traded internationally – essentially from Middle East & shortly from United States Surplus Naphtha available in nearby refinery for value add Ethylene rich Refinery Off Gases (ROG) available in nearby refinery Technologies best suited to exploit above opportunities are: On- Purpose Propylene Naphtha to Olefins conversions with higher P/E ratio (catalytic route)

Proposed Complex at SEZ H2 To Refinery DOWNSTREAM BLOCK PROPANE TERMINAL PDH PROPANE FEED PROPYLENE CRYO RECOVERY EXISTING PROJECT OPTION OTHERS

PROJECT ECONOMICS- Stand Alone PDH

Stand Alone PDH- Issues Risks High risk with interfaces both on feed stock & product- take off and prices. Standalone PDH Facility justified only when a commensurate Propylene commitment for evacuation is in place. Production of non impact Polypropylene grade in India may exceed demand in view of foreseen PP Plants Opportunities to minimize risk via Refinery Integration Surplus Cracked Naphtha - Low Octane, High in Olefins, unstable Di-Olefins & High Sulphur content make it unsuitable for direct blending into gasoline pool. Available for Ethylene Production Refinery Off Gases (ROG) from cracking units (typ. FCC & Coker) carry potential ethylene – can be integrated with petrochem unit for value add. With Ethylene as a product, possibility of producing different grades of Polypropylene etc. - demand significantly higher. Limited production as of now in India. MEG produced from ethylene, could be used for captive consumption in the PTA/PET facility. Lesser dependency on single feedstock.

Proposed Integrated Scheme PDH UNIT (REACTION SECTION) NAPHTHA TO OLEFINS (REACTION SECTION) FRAC SECTION DE PROPANIZER DEMETHANIZER DEETHANIZER C3 / C3= SPLITTER C2 / C2= SPLITTER DEHEXANIZER FRESH PROPANE FEED (Port) OLEFINIC NAPHTHA (REFINERY) PARAFFINIC FCC OFF GASES (Refinery) ETHYLENE BTX + GASOLINE TO Arom. CPLX COKE + ACID GAS FUEL GAS PROPYLENE HYDROGEN PROPANE RECYCLE CONSUMPTION NET FUEL GAS TO REFINERY FG PROPANE + PROPYLENE FEED (Refinery)

Further Optimization Opportunities Existing C4/C3 Storage terminal. Propane to be imported in Cryogenic state. Double wall storage tanks and associated systems considered at storage terminal. Chilled Propane (@~ -40 DegC) feed to the unit. Propane will be first routed through the PDH chilling / separation section to reduce the chilling load of the unit. Additional chill expected from integrated common refrigeration system and expanders in the Naphtha to Olefins unit (Demathanizer Overhead). This may eliminate Cold Box in PDH unit. BOG from the storage terminal to PDH unit directly as feed. Common Propylene splitter & refrigeration systems. significant CAPEX savings. Common Hydrogen recovery systems (PSA) for both units

FEED / PRODUCT SLATE COMPARISON STAND ALONE PDH INTEGRATED COMPLEX REFINERY PROPANE PROPANE FUEL CDU SRN FG RETURN 922 55 FCC DCU AROMATIC COMPLEX OFF GAS CRN PDH HYDROGEN 615 19 220 585 273 271 C3+C3= PROPYLENE HYDROGEN NAPHTA TO OLEFINS PDH 358 BTX 750 28 MEG LOSS PROPYLENE 17 MEG 710 358

Case Economic Comparison

DERIVATIVE COMPLEX PHASES ‘KTPA Phase – 2 (BY OTHERS) Phase-1 BTX + Olefin Unit MEG 358 ETHYLENE PDH SALES 710 PROPYLENE OR Demand 160 100% Import ACRYLIC ACID -200 POLYPROPYLENE -440 Demand 200 70% Import CUMENE / PHENOL- 135 -200 Benzene

Thank you The information upon which this presentation is based comes from our own experience, knowledge and databases, supplemented by reference to primary sources and published industry data. Any opinions expressed are those of the author as of this date. They have been arrived at following careful consideration and enquiry but we do not guarantee their fairness , completeness or accuracy. We do not accept any liability for your reliance upon them.