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UOP Olefins Seminar;

Efficient Monetization of OLEFLEXTM PROCESS


Natural Gas and LPG
The Key to Achieving High Returns for Propane Upgrading
UOP Limited – Kevin Whitehead
December 2016
© 2016 UOP Ltd. A Honeywell Company All rights reserved. UOP 7200-0
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Contents
• Market fundamentals provide an attractive opportunity to upgrade
propane to propylene

• Oleflex Process – the optimum route to produce high value olefins

• Why do customers choose the Oleflex Process?

© 2016 UOP Ltd. A Honeywell Company All rights reserved.

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Propylene Market Remains Very Attractive
World: PG/CG Propylene Supply & Demand
• On a global basis, propylene 200.0
Forecast
100%

markets are healthy

Million Metric Tons


160.0 90%

–Demand growth, 4.5%

Operating Rate
120.0 80%

–Current utilization ~82% 80.0 70%

–Demand growth begins to 40.0 60%

0.0 50%
exceed capacity gains by 2019 10 11 12 13 14 15 16 17 18 19 20 25

Demand (4.0/4.1) Total Capacity (4.1/3.9) Operating Rate


• Steam cracking and refining (% AAGR = 10-15/15-25)

generate the majority of propylene


Source: IHS © 2015 IHS

supply World: PG/CG Propylene Production By Technology


150.0

• Increase in light cracker feedstocks


Forecast

Million Metric Tons


reduces C3= from steam crackers 100.0

• On-purpose technology has


50.0
grown rapidly and now has a
significant share of the market 0.0

(~20%) 10 11 12 13 14 15 16 17 18 19 20

Stm. Crackers Refinery On Purpose

• Natural Gas Liquids offer profitable (% AAGR = 10-15/15-25)


Source: IHS © 2015 IHS

route to on-purpose propylene Source: Independent Analysis

On purpose propylene technologies key to growth


© 2016 UOP Ltd. A Honeywell Company All rights reserved.

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C3=/C3 Pricing Differential Creates Value


1,600.00 700.00

1,400.00 600.00

1,200.00
500.00

1,000.00

Spread, $/MT
400.00
$/MT

800.00
300.00
600.00

200.00
400.00

200.00 100.00

0.00 0.00
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Source: IHS

Propane Propylene Price Spread

• Propylene commands an attractive premium over propane


• Consistent financial incentive to upgrade propane
• Cost position of Iran is ideal

C3=/C3 spread remains attractive over time


UOP 7267-3 © 2016 UOP Ltd. A Honeywell Company All rights reserved.

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Create High Value Propylene direct from Propane


with the Oleflex Process

Feedstock Products Uses


H2
Fibers

Propane Propylene
Packaging

High Performance
Plastic
Oleflex Process
Propane Dehydrogenation (PDH)
UOP 7267-4 © 2016 UOP Ltd. A Honeywell Company All rights reserved.

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C3 Oleflex Complex
C 2-
By-product H2
Propylene
Deethanizer

Oleflex
Process Propylene –
Propane
Splitter

Depropanizer

SHP
C3 LPG

C 4+

UOP 7267-5
C3 Oleflex Process used for 67% of operating PDH units
© 2016 UOP Ltd. A Honeywell Company All rights reserved.

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Leverage UOP CCR Experience in PDH


Reactor Regeneration
Section Section Catalyst Flow

289 UOP CCR’s in


C Operation Today
C
R

Product Recovery
Section
Rx Effluent
Compressor
Heater Cells Dryer

Cold Box
To Frac
H2 Recycle Section
Fresh
& Recycle
Feed Net
Hydrogen

UOP 7267-6 © 2016 UOP Ltd. A Honeywell Company All rights reserved.

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Why Customers Choose UOP Oleflex


Lowest Overall Cost of Production
Low feed consumption Lowest MT C3 / MT C3=
Highest carbon efficiency <10% of competitor coke make
2wt% higher hydrocarbon yield
Lowest energy usage <80% of competitor energy use
High efficiency product recovery,
distillation & heat pump design
Less compression

Smaller Investment Required


Lowest number of reactors 4 reactors
Low cost design No O2 plant required, no idle equipment
No large, hot isolation valves
Smallest plot space Minimizes bulks cost
Operates at low positive pressure Lower cost design than vacuum
Efficient continuous regeneration Smaller equipment required
Constant equipment count Best economy of scale

UOP 7368-7 One design gives lowest Capex and Opex


© 2016 UOP Ltd. A Honeywell Company All rights reserved.

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Why Customers Choose UOP Oleflex (2)


High Reliability / On-stream Availability
Start of Run performance for the
VCMStudy.ir Continuous on-line regeneration
whole operating cycle maintains yield over cycle
Proven regeneration technology 289 CCRs operating
>100 CCRs in design/construction
More days on stream Catalyst can be changed without
shutdown

Smallest Environmental Footprint


Lowest CO2 emissions Lowest energy consumption
Low NOx & VOC emissions Low energy consumption and
efficient low pressure design
Non-toxic catalyst system Pt active metal

UOP 7368-8 Safest & most environmentally friendly technology


© 2016 UOP Ltd. A Honeywell Company All rights reserved.

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UOP Leads the Way in Dehydrogenation


16,000
Licensed, in Design or Construction
14,000 Operating

12,000
Olefin Capacity, KMTA

16 UOP has been awarded 80%


10,000 Units
(36 of 45) of dehydrogenation
8,000
projects competitively bid
since 2011
6,000

4,000 9
14 Units
Units 3
2,000 7 Units
Units 3
Units
0
C3 Dehydro iC4 Dehydro C3/C4 Dehydro

• 8 repeat customers with two or more units


• 3 customers who already have a competitor iC4 unit selected UOP for
their PDH project
• 2 Oleflex units announced in Europe in 2016
Oleflex Process is a proven investment. UOP is the market leader
© 2016 UOP Ltd. A Honeywell Company All rights reserved.

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Technology Development Continues


Key Advancements
Key Advancements • Next Gen DeH catalyst
• DeH-14
• Larger Capacity C3= designs
Key Advancements • 400-460 kmta C3= design
• Next Generation CCR
• DeH-8 & DeH-10 • PP Splitter Energy Reduction
• Yield Enhancements
• 165 kmta C3= design • Fired Heater Optimization
• Latest Energy Optimization
• 80/200 kmta C3=/iC4= design • Contact Cooler (C4)
• HPS Automation Package
• Hot Residence Time
• C4 and C3/C4 Design Modernized
Reductions

Key Advancements
PDH/BDH Commercialized • DeH-16
Key Advancements • 510 kmta C3= design
• UOP 1st to Market
• 105 kmta C3= design • DeH-12 • New Reactor Internals
• 425 kmta iC4= design • 250-350 kmta C3= • Online Solvent Wash (C3)
• DeH-6 design • CCR Advancements
• MD Trays for
DeC3/DeC2

1990 - 1995 1996- 2000 2001 - 2005 2006 - 2010 2011 – 2016

Significant R&D investment and Oleflex licensee


interaction will continue to drive future innovation
© 2016 UOP Ltd. A Honeywell Company All rights reserved.

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C3 Oleflex Profitability – Resilient to Price Volatility


1,600.00 700.00

1,400.00 600.00

1,200.00
500.00

1,000.00

Spread, $/MT
400.00
$/MT

800.00
300.00
600.00

200.00
400.00

200.00 100.00

0.00 0.00
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Source: IHS

Propane Propylene Price Spread

UOP 7267-13 © 2016 UOP Ltd. A Honeywell Company All rights reserved.

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C3 Oleflex Profitability – Resilient to Price Volatility


1,600.00 700.00

High1,400.00 600.00

1,200.00
500.00
Typical
1,000.00

Spread, $/MT
400.00
$/MT

Low 800.00
300.00
600.00

200.00
400.00

200.00 100.00

0.00 0.00
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Source: IHS

Propane Propylene Price Spread

 Propylene-Propane spread remains attractive even with


volatility in feed and product pricing
 Price spread is forecast to return to levels similar to 2007-14
by 2019

UOP 7267-14 © 2016 UOP Ltd. A Honeywell Company All rights reserved.

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C3 Oleflex- Profitable and Resilient to Price Volatility


70.0%

60.0%

50.0%
Pre‐Tax ROI 
40.0%

30.0%

20.0%

10.0%

0.0%
350 475 600
C3/C3= Spread ($/MT)

Basis: 600 KMTA Oleflex, Propane priced at 630 $/MT, NE Asia Pricing, 100% equity

 Oleflex technology delivers high ROI even when


prices are low

Attractive ROI across range of price spreads


UOP 7267-15 © 2016 UOP Ltd. A Honeywell Company All rights reserved.

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C3 Oleflex- Profitable and Resilient to Price Volatility


70.0%

60.0%

50.0%
Pre‐Tax ROI 
40.0%

30.0%

20.0%

10.0%

0.0%
350 475 600
C3/C3= Spread ($/MT)

Basis: 600 KMTA Oleflex, Propane priced at 630 $/MT, NE Asia Pricing, 100% equity

 Oleflex technology delivers high ROI even when


prices are low

 Cost-advantaged propane provides potential for


even higher return
UOP 7267-16 © 2016 UOP Ltd. A Honeywell Company All rights reserved.

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Summary
• Market fundamentals support attractive C3 upgrading projects
- Propylene-Propane spread forecast to remain strong
• Oleflex process offers the optimum route from C3 to C3=
- Lowest overall cost of production
- Low capital cost
- High on-stream availability
- Proven technology with 14 operating C3 Oleflex units
- Selected for 36 (80%) of the 45 dehydrogenation units competitively
bid since 2011
• Economics of a PDH complex using the Oleflex Process are
compelling
- Strong return on investment that is resilient to pricing volatility

© 2016 UOP Ltd. A Honeywell Company All rights reserved.

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UOP 7368-18 © 2016 UOP Ltd. A Honeywell Company All rights reserved.

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