A Structural and Strategic Evaluation · and the Middle East’s indigenous advantage of low...

Strategic Assessment of Middle East Impacton the Asian Petrochemical IndustryA Structural and Strategic Evaluation

A Multi-Client Study designed to deliver real competitive advantage to

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Prospectus

Prospectus

Strategic Assessment of Middle East Impact on the

Asian Petrochemical Industry A Structural and Strategic Evaluation

A multiclient study designed to deliver

real competitive advantage to subscribing organisations

September 2006

Griffin House, 1st Floor South, 161 Hammersmith Road, London W6 8BS, UK Tel: +44 20 7950 1600 Fax: +44 20 7950 1550

Strategic Assessment of the Middle East Impact on the Asian Petrochemical Industry

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Contents Section Page 1 Introduction.............................................................................................................. 1

2 Report Objectives .................................................................................................... 4

3 Report Scope and Coverage.................................................................................... 5

3.1 OBJECTIVES................................................................................................ 5

3.2 PRODUCT COVERAGE.............................................................................. 7

3.3 GEOGRAPHICAL COVERAGE.................................................................. 8

4 Table of Contents ..................................................................................................... 9

5 Methodology ............................................................................................................. 15

6 Nexant’s Experience ................................................................................................ 16

6.1 BACKGROUND ........................................................................................... 16

6.2 DESCRIPTION OF SERVICES ................................................................... 16

6.3 ASSIGNMENTS UNDERTAKEN WHICH COVER THE MIDDLE EAST AND GCC STATES...................................................................................... 18

7 Subscription Form ................................................................................................... 23

7.1 THE SUBSCRIPTION FORM...................................................................... 23

Strategic Assessment of Middle East Impact on the Asian Petrochemical Industry

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Section 1 Introduction

The Middle East Petrochemical Industry stands on the verge of yet another period of massive expansion, the largest so far. About 19 million tons per year of ethylene capacity and a similar amount of ethylene derivative capacity is expected to come on stream over the next five years as illustrated in Figure 1.1.

Figure 1.1 Ethylene Capacity Growth in the Middle East

3rd Phase2nd Phase1st Phase 4th Phase3rd Phase2nd Phase1st Phase 4th Phase

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1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010

Total

Insta

lled C

apac

ity

(Milli

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r yea

r)

Saudi Arabia Iran Qatar Abu Dhabi KuwaitOman Egypt T urkey Israel Iraq

PP: P&M Prospectus AIS1 With the inherent economies of scale (associated with Middle East petrochemical investments) and the Middle East’s indigenous advantage of low feedstock costs, these factors combine to create a compelling story for the Middle East to take the lion’s share of new global growth. Figure 1.2 presents Nexant’s views on the expected capacity increase during 2005-2010 for major commodity chemicals.

Figure 1.2 Planned Capacity Increase by Region, 2005-2010

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Middle East Asia WesternEurope

EasternEurope

CentralEurope

Millio

n ton

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PE MEGEDC PPStyrene

PP: P&M Prospectus AIS1



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It is most likely that the key destination for the export build up from the Middle East will remain targeted towards the fastest growing region of the global petrochemicals industry – ASIA. Figure 1.3 shows the general trend expected in respect to the growing inter-dependence of the regions for trade in selected petrochemicals.

Figure 1.3 Net Trade for Selected Petrochemicals

(10 000)

(5 000)

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Asia MiddleEast

Asia MiddleEast

Asia MiddleEast

Asia MiddleEast

Thou

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2000 2005 2010 2015

LLDPE HDPE MEG Methanol

XL: P&M Prospectus

With the level of supplies (exports) increasing by such a magnitude, there is overwhelming concern in the Asian petrochemical industry that the significant build up in petrochemical capacity in the Middle East will preclude further investment in Asia for the medium and longer term. In fact, with the general trend in declining tariffs in many Asian countries coupled with advantaged Middle East competitiveness, the concern is that in addition to the lack of new project development, certain existing petrochemical producers/operations may be driven to exit.

Therefore, the Asian petrochemical industry is at a critical point in its development. Players in the industry will need to make major decisions, which will have lasting ramifications, and these decisions will need to be taken in the near term. Some of the questions they may ask are:

Asian regional demand growth provides compelling rationale to invest - but are such investments financially beneficial and competitively sustainable against the onslaught of Middle East capacity and Middle East feedstock advantages?

Energy policies are driving a number of countries in Asia to pursue gas-based strategies - will this yield potential opportunities for gas-based petrochemical development as well as taking possible advantage of increased naphtha availability in selected countries?

A significant number of sub-optimal petrochemical operations continue to exist. Middle East supply will bring further pressure to restructure, consolidate or exit/shutdown operations in Asia: how will this unravel?



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Inaction - will this create opportunities for others and set the stage for fundamental shifts in industry structure in Asia?

The Middle East appears to be poised to take advantage of the major opportunities in the Asian petrochemical industry. How far is the Asian industry planning for the repercussions?

This study was designed to provide a strategic evaluation not only of the Middle Eastern industry structure (current and future), but more importantly the structure, competitiveness and the future direction of the Asian petrochemical industry with a view towards identifying opportunities and the threats for existing and potential Asian producers.


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Section 2 Report Objectives

The overall objective of this report was to provide a strategic evaluation of the impact of the substantial increase in Middle Eastern capacity/exports on the Asian Petrochemical Industry. The report provides a rigorous examination of a number of key dimensions of this complex and competitively driven industry, with the principal objective to assess the future structure and strategic direction for the Asian petrochemical industry.

The results of the report provide the basis for companies to establish market, investment, and business strategies to achieve effective future participation in the Asian petrochemical industry. As such, this report addresses the following critical questions:

How competitive will Middle East supply to Asia be in the future, considering such key factors as Middle East feedstocks (availability and cost), evolving demand growth and trade patterns for Middle East petrochemicals, evolving and increasing logistical costs, and other key cost structure considerations?

How competitive is the existing Asian petrochemical industry? How competitive are the already committed new Asian investments?

Are there opportunities for additional Asian investment in petrochemicals? What are the drivers to make such investments financially sound and competitively sustainable?

How will investment in the Middle East and China ultimately unfold? Will China be able to close the trade gap? What are the risks of an increasing dependence on imports?

Will the Middle East onslaught be restricted to commodity grade materials, and therefore provide some respite to the Asian producers involved in specialties production? Will these Asian producers be able to maintain a specialties niche?

With the direction of reduced Asian tariffs for imports (as driven by WTO entry and various bi-lateral trade pacts within Asia) how will the Asian petrochemical industry evolve and achieve the ability to be sustainably competitive?

What will be the future shape of the Asian industry structure considering Middle East evolution and the Asian opportunities? How should the Asian industry evolve and what are the measures needed to push the industry in that direction? (Strategic Alliance or joint investment in the Middle East and Asia, others)?

The report provides a valuable resource for strategic planning purposes at a critical time in the development and evolution of both the Middle East and Asian petrochemical industries. As such, it provides the necessary insights required by existing petrochemical producers in Asia and the Middle East for establishing company strategies, as well as providing a guide for organisations considering major investments or new entry into this dynamic and competitive industry.


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Section 3 Report Scope and Coverage

3.1 OBJECTIVES Growth in the Middle Eastern petrochemical industry will impact Asian petrochemical development in two major respects:

Inexpensive exports from the Middle East will put Asian regional producers under pressure, which in certain cases will prohibit further expansions.

The attraction of capital from multinational companies who have the option to invest either in Asia or the Middle East.

The main focus of the study, therefore, was to consider the likely developments in the Middle East, assess the fundamentals of the Asian petrochemical industry and develop a strategic evaluation of the likely reactions, evolution and direction of the Asian petrochemical industry.

Although the overall interdependence is quite clear, both the Asian and the Middle Eastern regions are expected to have their own set of challenges/issues. Some of the pertinent issues that have been considered are presented in the following paragraphs.

3.1.1 Issues/Concerns for Asia Well established players in Asia are looking to grow, driven by need to both increase

shareholder wealth and take advantage of being located in the fastest growing petrochemical market globally. Which products to invest in, where in the value chain to invest, where to strategically locate such investments and most importantly, how to achieve sustainable competitiveness are some the key fundamental concerns?

The Chinese petrochemical industry is characterized by a high degree of fragmentation and low scale –will such a structure be able to survive against producers with global scale and advantaged (or strong) feedstock positions in the Middle East and/or other parts of Asia? Will there be consolidation, restructuring, exit or fundamental shifts in industry structure in China?

Many players in established Asian exporting countries like Singapore, Korea and Thailand are considering new major investments – are these viable and competitive?

Malaysia has a well developed petrochemical industry built principally on gas and largely focused on its domestic market. With such a strong foundation, will new investments emerge in Malaysia targeting China?

Is the Japanese petrochemical industry capable of sustainability or will it be driven to evolve its structure?

Over time the Indian petrochemical industry has emerged as a major international player. There are many investment initiatives by both private and public sector groups under consideration with levels of feedstock integration providing potential for high levels of competitiveness. How will these initiatives evolve and how will India impact the rest of Asia?



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Indonesia is a massive potential market and has significant gas reserves. Will Indonesia push for a larger share in the Asian petrochemical industry?

Other Asian countries are looking to develop or enhance their petrochemical positions including Philippines, Brunei and others. Some have feedstock positions and/or emerging domestic markets to provide a basis for investment. How will these developments evolve?

What will be the long term impact on the Asian petrochemical industry from the wave of new capacity coming up in the Middle East?

Is investing in the Middle East to take advantage of feedstock positions the correct strategy for Asian petrochemical producers looking for sustained corporate growth?

3.1.2 Issues/Concerns for the Middle East Regarding the Middle East region’s ability to continue providing attractive feedstock

pricing, what is likely to happen and what will be the implications of any such changes?

The Middle Eastern industry has enjoyed unprecedented access to capital at highly favourable rates. While this has been due in part to fortuitous market timing, banks have also taken a benign view of market risk given the low production cost in the region and ever rising Asian import demand. With all projects looking to target Asia as their key market, how will these risks be viewed in future and will this affect the ability to finance future mega – projects?

The private sector is keen to invest in certain countries but limitations on feedstock supply and their costs or access to indigenous markets are concerns that need to be clarified. What is the current status, what are the government policies, how is private sector involvement likely to develop, and what are the implications for petrochemical development?

The Middle Eastern players have started to “buy” markets by participating in or buyout of overseas companies – is there an opportunity for the Asian producers to invest in the Middle East to secure some of the feedstock advantage and hence become at-least somewhat on a par in costs with the exports expected from the other producers?

How important will security concerns be? Will risk profiles play an even more important role in overseas companies looking to invest in the Middle East? Can the Asian players capitalise on this weakness?

Multinationals aiming at globalisation are all looking at the growing market in Asia. What is the best way to access this and achieve added value? Should one be investing in the Middle East for attractive feedstock pricing or closer to/within the marketplace in Asia, where other benefits can be achieved?

New technology has been under development to utilise methane, ethane and LPG feedstocks, an example being ethane to VCM. Such technologies can provide the greatest economic benefit in the Middle East. What is the status of these technologies and are they likely to impact developments in the region over the study period?

New capacity addition in Europe has slowed down substantially, which will result in the region becoming a net importer in the future. How will this impact global trade patterns?



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Middle Eastern national oil companies have been looking to secure outlets for crude oil in Asia through refinery investment, e.g. Saudi Aramco in Petron, Ssangyang and Fujian. Is this expected to increase? What is the strategy of the national oil companies? In addition, the offshore investment interest of the likes of SABIC needs to be considered.

As a result of the above considerations, what is likely to be the future investment direction for the Middle East and Asian petrochemical industries?

3.2 PRODUCT COVERAGE 3.2.1 Derivatives Product coverage focused on products of key competitive threat from the Middle East. The main petrochemical building blocks covered are:

Intermediates Primary Derivatives Ethylene LDPE

Propylene LLDPE Butadiene HDPE Benzene MEG para-Xylene Methanol

EDC VCM Polypropylene Styrene PTA

As the commodity petrochemicals dominate business in the region, the primary focus is on this sector. However, based on the ambitions recently expressed by a number of private and State companies in the region, opportunities for further forward integration into more value- added applications like bimodal polyethylene, copolymers and acetyls are also discussed.

3.2.2 Feedstocks It can be expected that feedstock availability and pricing will continue to remain the key driver for capacity addition in the Middle East. The availability of feedstocks in Asia was also reviewed. Key petrochemical feedstocks were included and a supply/demand outlook was provided by country covering natural gas, ethane, LPG and naphtha/condensate. Views on the outlook were presented to 2015. The current and future development of the refining industry was reviewed to consider the availability of streams for petrochemical development. Opportunities for refinery-petrochemical integration were also highlighted.

Although feedstock pricing strategies adopted in the Middle East to date have little or no relevance to crude oil prices, the overall competitiveness of the region is inherently affected by the crude oil price environment. Low crude oil prices reduce the region’s competitive advantage, and thus impact any new investment decisions. Conversely, a high oil price improves the prospects for new investment. The impact of high and low crude scenarios was examined, especially on the relative competitiveness of supply into major markets such as China.



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3.3 GEOGRAPHICAL COVERAGE Geographical coverage included all countries that are expected to play a role or are likely to be impacted by the developments outlined earlier. Countries to be covered in depth are:

Middle Eastern Countries Asian Countries Saudi Arabia Japan

Iran China Qatar South Korea Kuwait Thailand United Arab Emirates India Oman Turkey

Singapore Philippines Taiwan Malaysia Indonesia Brunei

The Middle Eastern countries considered in the study are those that already have substantial petrochemical capacity or are looking to establish their presence in this business, while the Asian countries shortlisted above represent key consumption markets, countries with existing (and committed new investments) “important” production facilities, and countries which have emergent possibilities (exploiting feedstocks not previously exploited).

The study period for all considerations will be recent history with forecasts to 2015.

The table of contents from the report follows in Section 4.


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Section 4 Table of Contents

Section Page 1 Executive Summary ............................................................................................................. 1-1

1.1 OVERVIEW ............................................................................................................. 1-1 1.2 INTRODUCTION..................................................................................................... 1-2 1.3 MACROECONOMIC OVERVIEW......................................................................... 1-3

1.3.1 Key Findings/Issues ..................................................................................... 1-3 1.3.2 Recommendations ........................................................................................ 1-4

1.4 FEEDSTOCK ISSUES ............................................................................................. 1-5 1.4.1 Key Findings/Issues ..................................................................................... 1-5 1.4.2 Recommendations ........................................................................................ 1-7

1.5 PETROCHEMICAL REFINERY INTEGRATION OPPORTUNITIES ................. 1-8 1.5.1 Key Findings/Issues ..................................................................................... 1-8 1.5.2 Recommendations ........................................................................................ 1-11

1.6 SUPPLY/DEMAND BALANCE AND IMPACT ON GLOBAL TRADE.............. 1-12 1.6.1 Key Findings/Issues ..................................................................................... 1-12 1.6.2 Recommendations ........................................................................................ 1-16

1.7 TECHNOLOGY AND OIL PRICE DEVELOPMENTS ......................................... 1-18 1.7.1 Key Findings/Issues ..................................................................................... 1-18 1.7.2 Recommendations ........................................................................................ 1-19

1.8 COMPETITIVENESS OF PRODUCTION.............................................................. 1-20 1.8.1 Key Findings/Issues ..................................................................................... 1-20 1.8.2 Recommendations ........................................................................................ 1-26

1.9 OTHER STRATEGIC ISSUES ................................................................................ 1-28 1.9.1 Key Findings/Issues ..................................................................................... 1-28 1.9.2 Recommendations ........................................................................................ 1-34

1.10 OVERALL CONCLUSIONS ................................................................................... 1-35 2 Macroeconomic Overview ................................................................................................... 2-1

2.1 HISTORICAL REVIEW........................................................................................... 2-1 2.2 FORECASTING METHODOLOGY/ASSUMPTIONS........................................... 2-2 2.3 PROJECTIONS OF ECONOMIC GROWTH (MEDIUM CRUDE OIL SCENARIO) 2-3 2.4 ASIA ECONOMIC PERFORMANCE..................................................................... 2-5

2.4.1 Asia Excluding Japan and China.................................................................. 2-5 2.5 MIDDLE EAST ECONOMIC PERFORMANCE.................................................... 2-11

2.5.1 Middle East (including Turkey) ................................................................... 2-11 2.6 INFLATION ............................................................................................................. 2-15 2.7 CRUDE OIL SCENARIOS ...................................................................................... 2-16

3 Feedstock Analysis ............................................................................................................... 3-1 3.1 OVERVIEW ............................................................................................................. 3-1 3.2 OIL AND GAS RESERVES AND PRODUCTION ................................................ 3-2

3.2.1 Middle East .................................................................................................. 3-2 3.2.2 Asia Pacific .................................................................................................. 3-4



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3.3 ETHANE................................................................................................................... 3-7 3.3.1 Middle East .................................................................................................. 3-7 3.3.2 Asia Pacific .................................................................................................. 3-8

3.4 LPG DEMAND AND SUPPLY OUTLOOK ........................................................... 3-9 3.4.1 Middle East .................................................................................................. 3-9 3.4.2 Asia Pacific .................................................................................................. 3-11

3.5 NAPHTHA DEMAND AND SUPPLY OUTLOOK ............................................... 3-15 3.5.1 Middle East .................................................................................................. 3-15 3.5.2 Asia Pacific .................................................................................................. 3-17

3.6 FEEDSTOCK PRICING........................................................................................... 3-20 3.6.1 LPG .............................................................................................................. 3-20 3.6.2 Naphtha ........................................................................................................ 3-23 3.6.3 Ethane........................................................................................................... 3-26

3.7 CONCLUSIONS....................................................................................................... 3-28 4 Petrochemical Supply and Demand.................................................................................... 4-1

4.1 ETHYLENE.............................................................................................................. 4-1 4.1.1 Global Overview .......................................................................................... 4-1

4.2 LOW DENSITY POLYETHYLENE (LDPE).......................................................... 4-42 4.2.1 Global Overview .......................................................................................... 4-42

4.3 LINEAR LOW DENSITY POLYETHYLENE (LLDPE)........................................ 4-69 4.3.1 Global Overview .......................................................................................... 4-69

4.4 HIGH DENSITY POLYETHYLENE (HDPE) ........................................................ 4-99 4.4.1 Global Overview .......................................................................................... 4-99

4.5 MONO ETHYLENE GLYCOL (MEG) ................................................................... 4-130 4.5.1 Global Overview .......................................................................................... 4-130

4.6 PROPYLENE............................................................................................................ 4-157 4.6.1 Global Overview .......................................................................................... 4-157

4.7 POLYPROPYLENE ................................................................................................. 4-197 4.7.1 Global Overview .......................................................................................... 4-197

4.8 BENZENE................................................................................................................. 4-230 4.8.1 Global Overview .......................................................................................... 4-230

4.9 PARA-XYLENE (PX) .............................................................................................. 4-269 4.9.1 Global Overview .......................................................................................... 4-269

4.10 STYRENE................................................................................................................. 4-298 4.10.1 Global Overview .......................................................................................... 4-298

4.11 PURIFIED TEREPHTHALIC ACID (PTA) ............................................................ 4-332 4.11.1 Global Overview .......................................................................................... 4-332

4.12 METHANOL ............................................................................................................ 4-361 4.12.1 Global Overview .......................................................................................... 4-361

4.13 EDC........................................................................................................................... 4-395 4.13.1 Global Overview .......................................................................................... 4-395

4.14 VCM.......................................................................................................................... 4-419 4.14.1 Global Overview .......................................................................................... 4-419

4.15 BUTADIENE............................................................................................................ 4-449 4.15.1 Global Overview .......................................................................................... 4-449



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5 Petrochemical Refinery Integration ................................................................................... 5-1 5.1 OVERVIEW ............................................................................................................. 5-1 5.2 THE REFINERY - PETROCHEMICAL INTERFACE........................................... 5-2 5.3 PROCESS DESCRIPTIONS FOR MAJOR INTEGRATION OPTIONS ............... 5-5

5.3.1 Catalytic Cracking........................................................................................ 5-5 5.3.2 Aromatics (Benzene, Toluene, Mixed Xylenes (BTX)) Separation from

Reformate..................................................................................................... 5-15 5.3.3 n-Paraffins from Kerosene ........................................................................... 5-17

5.4 REFINERY PROCESSING CAPACITIES FOR PETROCHEMICALS ................ 5-19 5.5 REFINING SECTOR CATEGORISATION ............................................................ 5-20

5.5.1 Fluid Catalytic Cracking (FCC) ................................................................... 5-20 5.5.2 Reforming .................................................................................................... 5-26

5.6 IMPACT ON FUEL SPECIFICATIONS ................................................................. 5-33 5.6.1 Historical Development................................................................................ 5-33 5.6.2 Main Quality Parameters.............................................................................. 5-33 5.6.3 Gasoline........................................................................................................ 5-34 5.6.4 Asian Product Quality Trends ...................................................................... 5-36

5.7 CONCLUSIONS....................................................................................................... 5-37 6 Impact of the Regional Demand Growth in Asia on Global Trade ................................. 6-1

6.1 INTRODUCTION..................................................................................................... 6-1 6.2 LDPE......................................................................................................................... 6-3

6.2.1 Asia Demand and Outlook ........................................................................... 6-3 6.2.2 Capacity Build Up and Supply Capability in Asia....................................... 6-4 6.2.3 Impact of Asia on Global Trade and the Middle East .................................. 6-6

6.3 LLDPE ...................................................................................................................... 6-7 6.3.1 Asia Demand and Outlook ........................................................................... 6-7 6.3.2 Capacity Build Up and Supply Capability in Asia....................................... 6-8 6.3.3 Impact of Asia on Global Trade and the Middle East .................................. 6-10

6.4 HDPE ........................................................................................................................ 6-12 6.4.1 Asia Demand and Outlook ........................................................................... 6-12 6.4.2 Capacity Build Up and Supply Capability in Asia....................................... 6-13 6.4.3 Impact of Asia on Global Trade and the Middle East .................................. 6-15

6.5 MONO ETHYLENE GLYCOL (MEG) ................................................................... 6-17 6.5.1 Asia Demand and Outlook ........................................................................... 6-17 6.5.2 Capacity Build Up and Supply Capability in Asia....................................... 6-18 6.5.3 Impact of Asia on Global Trade and the Middle East .................................. 6-19

6.6 POLYPROPYLENE ................................................................................................. 6-21 6.6.1 Asia Demand and Outlook ........................................................................... 6-21 6.6.2 Capacity Build Up and Supply Capability in Asia....................................... 6-22 6.6.3 Impact of Asia on Global Trade and the Middle East .................................. 6-23

6.7 BENZENE................................................................................................................. 6-25 6.7.1 Asia Demand and Outlook ........................................................................... 6-25 6.7.2 Capacity Build Up and Supply Capability in Asia....................................... 6-26 6.7.3 Impact of Asia on Global Trade and the Middle East .................................. 6-28

6.8 STYRENE................................................................................................................. 6-29 6.8.1 Asia Demand and Outlook ........................................................................... 6-29 6.8.2 Capacity Build Up and Supply Capability in Asia....................................... 6-30 6.8.3 Impact of Asia on Global Trade and the Middle East .................................. 6-32



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6.9 PARA-XYLENE (PX) .............................................................................................. 6-33 6.9.1 Asia Demand and Outlook ........................................................................... 6-33 6.9.2 Capacity Build Up and Supply Capability in Asia....................................... 6-35 6.9.3 Impact of Asia on Global Trade and the Middle East .................................. 6-36

6.10 PTA ........................................................................................................................... 6-38 6.10.1 Asia Demand and Outlook ........................................................................... 6-38 6.10.2 Capacity Build Up and Supply Capability in Asia....................................... 6-39 6.10.3 Impact of Asia on Global Trade and the Middle East .................................. 6-41

6.11 EDC........................................................................................................................... 6-43 6.11.1 Asia Demand and Outlook ........................................................................... 6-43 6.11.2 Capacity Build Up and Supply Capability in Asia....................................... 6-44 6.11.3 Impact of Asia on Global Trade and the Middle East .................................. 6-46

6.12 VCM.......................................................................................................................... 6-48 6.12.1 Asia Demand and Outlook ........................................................................... 6-48 6.12.2 Capacity Build Up and Supply Capability in Asia....................................... 6-49 6.12.3 Impact of Asia on Global Trade and the Middle East .................................. 6-51

6.13 METHANOL ............................................................................................................ 6-53 6.13.1 Asia Demand and Outlook ........................................................................... 6-53 6.13.2 Capacity Build Up and Supply Capability in Asia....................................... 6-54 6.13.3 Impact of Asia on Global Trade and the Middle East .................................. 6-56

6.14 CONCLUSIONS....................................................................................................... 6-57 7 Impact of Technological and Oil Price Developments ...................................................... 7-1

7.1 INTRODUCTION..................................................................................................... 7-1 7.2 METHANOL TO OLEFINS..................................................................................... 7-5

7.2.1 Methanol ...................................................................................................... 7-5 7.2.2 Methanol to Olefins (MTO) ......................................................................... 7-21 7.2.3 Methanol To Propylene - Lurgi MTP® Process .......................................... 7-26

7.3 GAS TO LIQUIDS.................................................................................................... 7-32 7.4 ALKANE ACTIVATION......................................................................................... 7-45 7.5 CHEMICALS FROM ACETYLENE....................................................................... 7-47

7.5.1 Calcium Carbide Processes .......................................................................... 7-47 7.5.2 China Perspective......................................................................................... 7-55 7.5.3 Middle Eastern Perspective.......................................................................... 7-59 7.5.4 Butanediol via Acetylene/Formaldehyde (Reppe Concept) ......................... 7-59 7.5.5 Vinyl Chloride Monomer via Acetylene ...................................................... 7-65 7.5.6 Vinyl Acetate via the Acetylene Process ..................................................... 7-68 7.5.6 Acrylic Acid via the Reppe Process ............................................................. 7-71

7.6 COAL GASIFICATION ........................................................................................... 7-73 7.6.1 Moving-Bed Reactors .................................................................................. 7-74 7.6.2 Fluidised-Bed Reactors ................................................................................ 7-75 7.6.3 Entrained-Flow Reactors.............................................................................. 7-76 7.6.4 Coal Characteristics Affecting Gasification................................................. 7-76 7.6.5 Commercial Gasification Systems ............................................................... 7-77 7.6.6 Summary of Commercial Gasification Systems .......................................... 7-88



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7.7 INTEGRATED GASIFICATION COMBINED CYCLE (IGCC) ........................... 7-90 7.7.1 Power Generation Only................................................................................ 7-90 7.7.2 Co-Production of Power and Other Products ............................................... 7-95

7.8 OLEFIN METATHESIS........................................................................................... 7-98 7.9 CONCLUSIONS....................................................................................................... 7-104

8 Competitiveness of Middle East and Asian Production.................................................... 8-1 8.1 OVERVIEW ............................................................................................................. 8-1 8.2 METHODOLOGY.................................................................................................... 8-2

8.2.1 Leader Plant Concept ................................................................................... 8-2 8.2.2 Cost of Production Definition and Basis...................................................... 8-2 8.2.3 Capital Cost Definition and Basis ................................................................ 8-4 8.2.4 Pricing Basis................................................................................................. 8-7 8.2.5 Profitability Analysis and Basis ................................................................... 8-11 8.2.6 Currency Basis ............................................................................................. 8-12

8.3 REGIONAL COST COMPETITIVENESS.............................................................. 8-13 8.3.1 Ethylene........................................................................................................ 8-13 8.3.2 Benzene/Toluene/Xylenes (BTX) ................................................................ 8-20

8.4 DELIVERED COST COMPETITIVENESS............................................................ 8-26 8.4.1 Low Density Polyethylene (LDPE).............................................................. 8-26 8.4.2 Linear Low Density Polyethylene (LLDPE)................................................ 8-28 8.4.3 High Density Polyethylene (HDPE) ............................................................ 8-30 8.4.4 Mono-Ethylene Glycol (MEG) .................................................................... 8-33 8.4.5 Ethylene Dichloride (EDC).......................................................................... 8-35 8.4.6 Vinyl Chloride Monomer (VCM) ................................................................ 8-37 8.4.7 Benzene/Toluene/Xylenes (BTX) ................................................................ 8-41 8.4.8 Styrene.......................................................................................................... 8-43 8.4.9 para-Xylene .................................................................................................. 8-46 8.4.10 Purified Terephthalic Acid (PTA)................................................................ 8-48 8.4.11 Methanol ...................................................................................................... 8-50

8.5 IMPACT OF CAPITAL COSTS .............................................................................. 8-53 8.5.1 Recent Increase in Capital Costs .................................................................. 8-53 8.5.2 High Density Polyethylene (HDPE) ............................................................ 8-54 8.5.3 Vinyl Chloride Monomer (VCM) ................................................................ 8-55 8.5.4 para-Xylene .................................................................................................. 8-57

8.6 CONCLUSIONS....................................................................................................... 8-59 8.6.1 Margin and Profitability Analysis ................................................................ 8-60 8.6.2 Impact of Crude Oil Pricing ......................................................................... 8-64

9 Strategic Issues ..................................................................................................................... 9-1 9.1 FEEDSTOCK ISSUES ............................................................................................. 9-1

9.1.1 Ethane........................................................................................................... 9-1 9.1.2 LPG .............................................................................................................. 9-2 9.1.3 Naphtha ........................................................................................................ 9-2 9.1.4 Petrochemical/Refinery Integration ............................................................. 9-3

9.2 DEMAND AND SUPPLY ISSUES.......................................................................... 9-6 9.2.1 Impact of Chinese Demand Decrease .......................................................... 9-7 9.2.2 Impact of Increase in China’s Capacity Expansions .................................... 9-10 9.2.3 Role of Chinese Government in Controlling/Guiding Investments ............. 9-12 9.2.4 Role of Asian Governments in Controlling/Guiding Investment................. 9-15



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9.2.5 Slow-Down in Middle East Project Developments...................................... 9-16 9.2.6 Infrastructure to Support Investment and Trade........................................... 9-17

9.3 COMPETITIVENESS ISSUES ................................................................................ 9-18 9.3.1 Primary Issues .............................................................................................. 9-18 9.3.2 Secondary Issues .......................................................................................... 9-25

9.4 STRUCTURAL CHANGES..................................................................................... 9-31 9.4.1 Middle East .................................................................................................. 9-31 9.4.2 Potential for Restructuring in the Next Downturn ....................................... 9-41 9.4.3 Implications of Middle East Capacity Additions ......................................... 9-42

9.5 INVESTMENT ISSUES ........................................................................................... 9-46 9.5.1 Capital Cost Location Factors ...................................................................... 9-47 9.5.2 Equity Structures and Partner Roles............................................................. 9-49 9.5.3 Capital Structures and Sources of Debt and Equity ..................................... 9-51 9.5.4 Incentives ..................................................................................................... 9-52 9.5.5 Risk Versus Reward in New Petrochemical Projects – A Balance .............. 9-55 9.5.6 Investment Opportunities and Where to Invest ............................................ 9-56

9.6 SUMMARY OF ISSUES.......................................................................................... 9-58 9.6.1 North Asia .................................................................................................... 9-58 9.6.2 China ............................................................................................................ 9-59 9.6.3 Other Asia .................................................................................................... 9-59 9.6.4 Middle East .................................................................................................. 9-60 9.6.5 The Americas and Western Europe.............................................................. 9-61

10 Strategies for Development.................................................................................................. 10-1 10.1 “LOW-COST”........................................................................................................... 10-1 10.2 “CLOSE TO CUSTOMERS” ................................................................................... 10-3 10.3 “CLUSTERING” ...................................................................................................... 10-4 10.4 “CAPTURING ADDED VALUE”........................................................................... 10-6 10.5 “INDUSTRIAL DEVELOPMENT”......................................................................... 10-7 10.6 “BALANCING GEOPOLITICAL RISKS”.............................................................. 10-8 10.7 “TECHNOLOGY APPLICATION”......................................................................... 10-9 10.8 CONCLUSIONS....................................................................................................... 10-10

Appendix Page A Cost Data ............................................................................................................................... A-1 B Provisional Management Measures of Foreign Investment Project Ratification (China) B-1


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Section 5 Methodology

The study was managed and conducted by Nexant’s Petroleum and Chemicals staff with extensive industry experience in petrochemicals as well as direct experience in the Middle East and Asian industry.

Commercial information and forecasts were developed using Nexant’s ChemSystems in-house databases including its award-winning ChemSystems Online® tools, augmented by a programme of regional fieldwork. Discussions were held with key industry and government officials in the regions to provide a thorough understanding of the dynamics of the current and future industry in the various countries. Nexant’s Bangkok and London offices were heavily involved in this exercise.

The insights were supplemented by experience gained from previous single and multi-subscriber studies carried out by Nexant.

The commercial programme was based on developing accurate and complete information, followed by analysis using a team of expert professionals with prior expertise and by application of appropriate analytical tools. The approach covered:

Finalising an information development plan, with a focus on fieldwork in the region.

A series of interviews with:

− ministries and government agencies − local chemical companies (including personnel in marketing, technology,

planning and manufacturing) − feedstock producers and suppliers − importers, distributors, traders − end-users − engineering contractors and technology licensors − industry and regional associations.

Review of extensive in-house and published information on the GCC/Middle East and relevant global petrochemical industries.

Development of preliminary views on industry dynamics, macro-economic and country-related issues.

Carrying out multi-faceted analysis to arrive at preliminary conclusions.

Further fieldwork in the region was completed as necessary to supplement the analysis and clarify specific issues. Given the global nature of these businesses, all analysis was supported by professionals from Nexant’s network of global offices.

Nexant considered the lessons learned from other developing regions to test the initial findings and to further refine conclusions regarding the future likely direction of the industry.

This study was completed in September 2006.


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Section 6 Nexant’s Experience

6.1 BACKGROUND Nexant was established on 1 January 2000 and prior to that date, the staff of Nexant operated as a separate consulting group within a major engineering company. Nexant is now an independent company owned by a number of investors. Nexant acquired ChemSystems on 1 September 2001, and the combined entity (“Nexant”) now has access to even more enriched and extensive experience and resources, offering services that include: Master planning/feasibility studies. Technology evaluation. Techno-economic and commercial analyses. Financial evaluation (cashflow modelling, etc). Benchmarking. Monitoring project implementation.

Nexant is very well qualified to undertake the technical, commercial, economic and financial evaluations, from its own offices, without the need to subcontract. Owing to its extensive experience, and known for its “out-of-the-box” thinking, Nexant’s ChemSystems Group has also received the honourable award of “Best Large Consultancy” by the British Consultants and Construction Bureau. This award was contended by a number of companies, however, Nexant was judged the winner for its outstanding contribution in developing a real-time, on-line chemical industry simulator.

6.2 DESCRIPTION OF SERVICES Nexant is a specialist, not a generalist company. Our area of expertise is the energy and process industries, including oil refining, natural gas, petrochemicals, polymers, chemicals, pharmaceuticals and fertilizers. Our business has been built upon providing broad management consultancy services to leading companies active in these industries, and also to banks, suppliers, governments and others interested in these sectors.

Nexant’s strengths lie in its combination of technoeconomic, commercial and strategic capabilities. These "competencies" are described below, followed by an outline of the practice areas into which the Group is organised.

6.2.1 Technology/Economics From its foundation in chemical engineering and industrial chemistry, Nexant offers distinctive expertise in process technology and economic analysis. Assignments may be performed on a separate, stand-alone basis or as input to broader consulting engagements.

Services include: economic and financial analyses of projects or businesses valuation of assets or businesses technical audit of existing facilities project feasibility/planning



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technology innovation and assessment comparative/competitive technology audit and appraisal process design and cost estimation technology availability, screening, licensing arrangements contractor pre-qualification, evaluation and selection project management including resident advisory services price, margin and profitability forecasting.

This discipline is supported by comprehensive economics, cost and price databases.

6.2.2 Commercial Based upon a technical and commercial understanding of the industries we serve, Nexant supports clients through a variety of market and commercial activities. As with our technoeconomic work, these commercial assignments may be performed on a stand-alone basis but are more normally an input to broader consulting engagements.

Services include: feedstock and product market analysis marketing and market research supply/demand analysis and forecasting studies of trends and future markets "benchmarking" of costs and competitiveness medium- and long-range planning.

The commercial discipline is supported by databases of global supply, demand and capacity developments in all major petrochemicals.

6.2.2.1 Strategic Planning Industry-specific expertise and an understanding of world market forces distinguish Nexant’s work in Strategic Planning. Various innovative tools and methodologies tailored to the energy and process areas are used to challenge conventional thinking. Nexant extends its traditional project team approach to engaging clients directly in the Strategic Planning process. Interactive client-consultant relationships promote consensus, a critical factor for successfully developing pragmatic, implementable solutions.

Services include: definition of corporate and business visions portfolio planning entry strategy evaluation diversification, acquisition, divestment studies competitive analysis and business positioning global competitiveness trade flow and impact studies strategic options, selection and implementation.



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6.3 ASSIGNMENTS UNDERTAKEN WHICH COVER THE MIDDLE EAST AND ASIA 6.3.1 Multiclient Work During the past five years, Nexant’s ChemSystems Group has completed a number of major multisubscriber studies. Selected studies include: Strategic Directions for the Middle East Petrochemical Industry Logistics and Shipping: Strategic Impact on Global Chemical Industry Competitiveness Petroleum and Petrochemical Economics (PPE) - Asia Polyolefins Planning Service (POPS) The Indian Agenda Asian Petrochemical Pricing The Global Polyolefins Industry Polyester Intermediates - A global assessment Global PVC/VCM/EDC Industry

Nexant’s ChemSystems Group has also completed a number of definitive studies on specific regions. These studies have analysed the business structure and opportunities for many of the chemicals covered in this proposed study within the context of a changing economic environment. Restructuring and Growth of the East Asian Petrochemical Industry Chemicals and Plastics in China Compounding Plastics in Asia

In addition to these studies, Nexant ChemSystems’ Group maintains a global commercial and technoeconomic database covering the principal petrochemicals, intermediates and polymers.

6.3.2 Single Client Studies 6.3.2.1 Asia Asia (Confidential): Nexant undertook a detailed study evaluating the techno/economic/

commercial aspects of a proposed new olefins complex in Asia. The cracker was located adjacent to an existing refinery and the hydrocarbon and other interfaces between the two facilities formed a major element of the evaluations.

Asia (Confidential): Nexant undertook a detailed study evaluating the interfaces for a new refinery/petrochemical/power/port complex in Asia. The covered included hydrocarbons/utilities/services/storage along with the supporting management/ building/planning/IT functions and facilities. A key component of the analyses and advice focused on the commercial agreements and optimisation of the overall complex, taking into particular consideration the different ownership and management of the separate legal entities that formed the overall complex.

PET Technology Evaluation, China - Nexant assisted the China National Technical Import and Export Corporation (CNTIC) with the implementation of a 40 000 tons per year PET copolymer chip plant in Guangdong. The project began with project initiation and continued through signed construction contracts, including technical analysis, preliminary licenser evaluations, invitation to bidders, bid analysis, contract selection and contract development.



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Project Feasibility Study, China - Nexant conducted a feasibility study and training for two World Bank funded fertilizer projects in the Hubei Province; worked with several Chinese provincial Chinese Industry Design Institutes on project feasibility study; conducted a prefeasibility study with Shenzhen Petrochemical Industry Corporation.

Partner Assessment, China - Our client, a leading participant in a petrochemical complex joint venture with a global major petrochemical company that will be responsible for most chemical exports (30 percent of the joint venture's production), was interested in an evaluation of the exclusive exporting rights agreement. Nexant assessed the global company's ability to market and distribute chemicals from the joint venture on an export basis primarily in the Asian region.

Petrochemical Joint Venture Development, China - Nexant assisted a client define and formulate a negotiating position for a proposed petrochemical joint venture with Sinopec. The study included a market analysis, feedstock sourcing, capital cost estimation and project profitability and risk assessment for a complex producing a broad range of olefin and aromatic derivatives.

PET and Polyester Fibre project, China - For a client and its lead bank Nexant prepared a technical and market review for purposes of project financing. This included a review of the technology, design, engineering, procurement and implementation plans for the project. The market review provided a forecast for PET and its major raw material PTA, focusing on the Asian region.

Aromatics Plant Feasibility, Indonesia - In a follow-up study to an Aromatics Prefeasibility Study, Nexant conducted a feasibility study to prepare the commercial and technical information required by financial advisors raising funds for a condensate processing facility. Nexant consulted with the engineering company selected to design the facility, reviewing basic process configurations, material balances, product quality definitions, utility requirements and capital cost estimates in order to develop preliminary project cash flows. Cases, sensitivities and feedstocks were developed to ensure that the condensate facility was economically attractive, technically acceptable, flexible and strategically compatible with the clients corporate objectives.

Petrochemical Complex Market Assessment - For two financial institutions interested in financing the development of the Chandra Asri complex in Indonesia, Nexant assessed the outlook for the complex with regard to markets, feedstock availability, operating costs, product sales/prices and overall project economics/cash flow. The study encompassed the key global regions of US, Western Europe and Japan, reviewing ten years of history and developing estimates for ten years in the future.

Project Opportunity Analysis, Indonesia - The government of Indonesia through P T Pupuk Kaltim commissioned Nexant to assess, at pre-feasibility level, the development of an aromatics-based complex to produce petrochemicals and derivatives. The products were slated to meet demands for these materials primarily in Indonesia and other ASEAN countries. The study analysed: markets in Indonesia and other ASEAN countries, an overview of the world situation; site selection and evaluation of the project; project logic, units to be included in the complex, and representative technology; incentives offered by governments to develop comparable industries and recommendations for this project; project economics and analysis potential for successful implementation.



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Petrochemical Masterplan, Malaysia - In an effort to become a key player in the ASEAN petrochemical industry, Petroliam Nasional Berhad (PETRONAS) engaged Nexant to assist them to determine the optimal composition of the Malaysian petrochemical industry. Nexant’s assistance was directed at identifying and ranking products/processes across a wide range products - olefins, aromatics, inorganics and their derivatives and assessing the financial and commercial attractiveness of projects proposed by others. Phase I of the study encompassed commercial and technical analyses of feedstocks and markets; financial modelling of investment cost, financing, feedstocks and products and timing; project ranking and recommendations. Phase II developed a strategy for industry development - identification of strategic focus using competitive advantages - low cost feedstocks, growing domestic markets and technology access; plan to implement each of the projects - method of entry, share of ownership and project timing. PETRONAS worked closely with Nexant throughout the project to ensure that requisite technical, market and analytical skills were transferred from Nexant to the PETRONAS staff.

Master Plan for the Utilisation of Natural Gas, Malaysia - Petroliam Nasional Berhad (PETRONAS) retained Nexant and Davy McKee to develop a Master Plan for the utilisation of natural gas in Malaysia. Nexant provided current and future energy demand pattern within Malaysia, and developed a natural gas utilisation program which emphasises the maximum use of natural gas and natural gas liquids as a potential replacement for crude oil derived products (principal focus was diesel and gasoline displacement by natural gas and natural gas liquids); evaluated the Malaysian, regional and global petrochemical markets which identified natural gas and natural gas liquids-based petrochemical products which should be produced in Malaysia; recommended alternative technology; formulated an investment program, by region within Malaysia, in accordance with the identified alternative natural gas utilisation options; provided an overall project implementation plan as well as detailed plans/schedule for each project, and training staff on methodology and special software developed for the project.

Olefin/Polyolefin Market Review: An Indonesian bank required an independent review of the technical, commercial and economic situation for olefins and polyolefins in South-East Asia against the backdrop of global polyolefins.

An Assessment of an Asian HDPE Market: This study was carried out for a Western exporter of HDPE in order to assess the market size and product requirements in a specific Asian market for HDPE. Distribution channels and competitive structure were also addressed.

Polyethylene in China: This study gave detailed background support to a European PE producer planning an integrated complex in China. Factors driving the Chinese markets and supply/demand balance issues were discussed.



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6.3.2.2 Middle East For Ministry of Petroleum, Egypt – Chemical Industry Masterplan As part of a joint

team with the Ministry of Petroleum, Nexant developed the masterplan for the development of the industry. This developed a 20 year view on how the industry should develop and addressed the importance of site integration and technology selection, as means to differentiate the industry. The lessons learnt from the development of industries globally were used to provide recommendations.

Petrochemical Investment Strategy - Middle East Government: Nexant was engaged to work with the planning group of the state oil corporation to review investment options. Nexant provided comprehensive market, technoeconomic and commercial inputs to help identify those options offering the highest returns and to develop an overall investment strategy.

Dolphin Energy Limited (DEL) – Market Consultant: DEL is undertaking a number of gas development projects, which include the implementation of a major pipeline to export natural gas from the North Field in Qatar to other nearby Middle East countries. These developments also include the production and sale of a number of associated hydrocarbons (condensate, propane and butane). The scope of work included a review of the global energy markets, competitiveness of DEL’s produced hydrocarbons and development of a marketing strategy.

Confidential, Qatar – Marketing Advisor: The task was undertaken for a large joint venture company pursuing investment opportunities in the polyolefins industry. The task involved developing a number of “Polyolefin industry landscapes” which explored various “what-ifs” regarding future growth in this industry. The results were utilised to carry out a number of sensitivity analyses on market growth and also on pricing.

Confidential, Qatar – Marketing Advisor: Carried out a comprehensive analysis for various hydrocarbon markets for the national petroleum company. The objective of the engagement was to assess the marketability of proposed hydrocarbons to various regional and global markets. This information was utilised to adjust the company’s business plan to incorporate quality issues and hence the available outlets for their key products.

Confidential, Bahrain – Feasibility Study – Nexant performed an independent market study for polyolefins products to be produced from a proposed petrochemical facility. The Consultant’ analysis included an evaluation of the merits of development of various polyethylene facilities.

Oman Refining Company: Nexant is currently retained by ORC to provide independent technical and market advice to its $1 billion planned Sohar Refinery Project and adjacent Polypropylene Project. The Consultant is currently provided a lead role in finalising License Agreements (with UOP) and the tender and award of the project Front End Engineering Design (FEED) contract and tendering of the EPC contract. Nexant assisted OOC in the selection of PP technology and associated JV partner, taking a lead role in negotiating the numerous License Agreements, Performance Guarantees and Supporting Services and Product Offtake Agreements, along with the JV agreements. This assistance is ongoing.



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Confidential – Petrochemical Complex, Iran: Evaluation of olefins and polyolefins project in Iran. Includes technology comparisons and evaluation, market assessment plus cash flow modelling. This assistance is ongoing.

Confidential, Kuwait– Feasibility for New Petrochemical Complex. Nexant performed a technoeconomic and commercial assessment for the opportunity for a large scale complex to be associated with the refinery network. Recommendations were provided as to the overall complex configuration.

Royal Commission Jubail (KSA): Feasibility planning and appraisal study in respect of a potential new industrial city. The study evaluated infrastructure requirements, facility cost and economics, implementation strategies and ownership options and alternatives. This assistance is ongoing.

For Ministry of Petroleum, Egypt: Nexant is currently engaged in work to develop an infrastructure masterplan to support a developing petrochemical industry in Egypt. The consultant will also identify potential joint venture partners and provide support to enable the masterplan to gain financing.

For NAMA (Apicorp as Lenders): Nexant was the Lenders Technical consultant for this chemical project now in operation in Saudi Arabia.

Texaco, Saudi Arabia: Nexant assisted Texaco in the development of its recent submissions to Saudi Arabia relating to proposed investment projects in the Kingdom.

Core Ventures, KSA: The consultant is assisting sponsors on two of the large core venture projects under planning in Saudi Arabia.

Methanol Market Consultant – Nexant reviewed the global methanol markets, pricing and delivered cost competitiveness for a Saudi Arabian company wishing to invest in a methanol project in the Kingdom.

Global Methanol Business Outlook – Nexant undertook a study into the likely change in US demand for MTBE and potential growth of fuel cell usage. The study included global and regional supply/demand outlook, price forecasts and an analysis of the competitiveness of the Middle Eastern client's proposed plant against international competition.

MTBE Markets, Prices and Feedstock Pricing – Nexant carried out a study for a Middle Eastern Company contemplating building a world-scale field butane based MTBE unit. It focused in great detail on pricing mechanism for butanes, MTBE and methanol in Western Europe, USA and Saudi Arabia.


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Section 7 Subscription Form

7.1 THE SUBSCRIPTION FORM We wish to subscribe to Nexant ChemSystems’ study:

“Strategic Assessment of Middle East Impact on the Asian Petrochemical Industry” and understand that:

1. The cost of the study is £20,500 (twenty thousand five hundred pounds UK sterling only). These fees are net of all local taxes.

2. Subscribers will receive: one (1) hard copy of the report; and access to electronic downloads of the report via a password-protected area from www.nexant.com

Additional hard copies will be available at £300 (three hundred pounds UK sterling) per copy. If subscriber requests that reports be sent via special courier, subscribers will be invoiced for the service at cost. The complete report will also be available electronically on CD-Rom in pdf format at a cost of £500 (five hundred pounds UK sterling).

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4. The study is an original effort of Nexant ChemSystems’ Group based on their own research, though it is understood that a part of the study has involved the collection of information available from third parties, both published and unpublished. Nexant does not believe that the study contains confidential technical information of third parties.

5. Except for information that is or becomes generally available to the public in a printed publication, or is already in the possession of the purchaser or developed independently by the purchaser, or is received by the purchaser in good faith from a third party, any information in the subject study is for the sole and confidential use of the purchaser and its more than 50 percent owned affiliates. Said information may be used in research and commercial activities of the purchaser and its affiliates on a confidential basis.

Section 7 Subscription Form


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6. Each purchaser agrees to use reasonable efforts to protect the confidential nature of the final report. The foregoing obligations of the purchaser shall, in no event, continue beyond three (3) years from the date of publication.

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STANDARD TERMS & CONDITIONS


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