Trends in Refining Carlos A. Cabrera President & CEO UOP LLC Carlos A. Cabrera President & CEO UOP LLC © 2009 UOP LLC. All rights reserved. UOP 5033A_China-01 January 13, 2009 PetroTech, New Delhi, India

Refining & Petrochemical Industry CHALLENGES  Availability, price and declining quality of crude  Other feedstock availability  Changing product slates and quality specifications  Government mandates to meet CO2 challenge  New capacity needed to meet forecast demand growth  Increasing costs of capital projects UOP

Price of Oil Oil Price Forecast Each year for past 5 years – no one has predicted oil price accurately Low oil price and low demand will challenge/postpone some projects Spot price st quarter price 2004 projection 2005 projection 2007 projection 2006 projection 2008 Dollars per Barrel ‘70 ‘73‘76‘79 ‘82 ‘85‘88‘91‘94‘97‘00‘03 ‘06‘09‘12‘15 ‘18‘21 ‘24 ‘27 ‘30 Source: Energy Information Administration July 3 - $145 Oct 17 - $70 UOP 5019A-02 Sept 26 - $99 Nov 14 - $52 Dec 19 - $41

Decrease in Gasoline Demand

Crude Quality Changes Crude getting heavier and more sour Source: IFQC UOP 5033A_China-09

Ethanol Production from Sugars 300 Million BTU/acre Gallons per acre BarleyWheatCorn Sugar Beet Sugar Cane Source: Fulton et. al * Energy content basis Biodiesel Production from Oils 700 Million BTU/acre Gallons per acre Source: Fulton et. al Soybean Caster bean Sunflower seed Rape- seed Jatropha Palm % Substitution Equivalent to the Land Mass of ~CA, IN, NV, MI Targets RegionCurrentFuture Brazil E25/B2B5 by 2010 China E10, B58% by 2020 Europe 5.75%* by %* by 2020 India E10 in 2008E20/B20 by 2017 (proposed) Canada Provincial E5/B2 by 2012 ( Canadian Law, C33) USA 15 B gal B gal by 2022 (~20% of transport pool) Global Biofuel Targets UOP

Increases Availability, Reduces Feedstock Cost Technology Breakthroughs Required MBPD Global US CurrentPotential Liquid Transport Fuels Gasoline Diesel Cellulosic Waste MBPD Liquid Transport Fuels Gasoline Diesel Cellulosic Waste CurrentPotential Source: Purvin & Gertz / Eric Larsen: Energy for Sustainable Development, 2000 Oils Productivity Gallons per acre Source: Fulton et. al Soybean Caster bean Sun- flower seed Rape- seed Jatropha Palm Million BTU/acre  Cellulosic waste could make a significant contribution to liquid transportation pool.  Algal Oils could enable oils route to biodiesel, Green Diesel and Green Jet. ≈ 3500 ≈ Algae 455 Enablers for a Sustainable Biomass Infrastructure UOP

Worldwide Diesel Sulfur Levels UOP 5033A_China-10

IHS-CERA Upstream & Downstream Capital Cost Indices Source: Cambridge Energy Research Associates 70% downstream cost escalation over past 5 years Relief on the Horizon? UOP 5033A_China-12

Implications for Refiners  Globally, product balance shifts strongly towards diesel –Slowing global gasoline demand due to high prices and new fuel efficiency standards in the US and Europe –Ethanol replaces some gasoline  Configuration changes will be required to meet demand & handle wider supply of crudes –More heavy and sour crudes –More resid conversion & hydrocracking  New processing to upgrade fuel quality –Lower sulfur fuels –Higher octane gasoline Refining changes required Lower demand, how long? UOP 5033A_China-13

Basic Chemicals & Plastics Two-Year Rolling Average Demand Growth CurrentLog. Trend (Current) Million Metric Tons Two-Years Ending in… Petrochemicals is a Cyclic Market UOP 5033A_China-14

Propylene Supply & Demand Gap Gap is growing and needs to be filled by; refinery-produced propylene and on-purpose propylene Data Source CMAI 2008 UOP 5033A_China-17

Implication for Petrochemical Producers  Up cycle turning, lower demand accelerating  Propylene supply/demand gap increasing  Look for opportunistic feedstocks through refining integration  Energy and feedstock efficiency are key to long term profitability UOP 5033A_China-18

What’s New at UOP in Refining? Two technology extensions HF Alkylation SRC UniFlex™ process (slurry hydrocracking) Licensed first of kind technologies LCO Unicracking™ (startup in 2010) LCO-X™ processes (startup in 2011) Ecofining™ process (startup 2010) Maxene (project approved) New Technology Two-Stage TSS (1) operating RxCat (3) operating CCR Platforming™ Process Cyclemax II (7 in startup ) Enhanced Two Stage Unicracking process (2 in startup 2012) SelectFining™ process (1) operating New Equipment Ceramic Optimix™ distributors (1) operating FCC Spent Catalyst distributor for bubbling bed regenerators (1) operating Hydroprocessing reactor internals New Catalyst Installations Low Pt isom portfolio (8) HC-120 Unicracking catalyst for diesel production (1) S 200 catalyst for gasoline desulfurization (1) UOP 5033A_China-23

The Demographics Challenge  Graduate numbers need to increase to replace retiring baby boomers  The industry will face a hiring and training crunch Year Crude oil (2007$/bbl) ChE Graduates (100s) UOP

Thank You UOP 5033A_China-25