GCC Petrochemicals Industry , GOICs Perspective Presented by: Suleiman Albalushi

WORLD REFINING AND PETROCHEMICAL TECHNOLOGY SUMMIT 2013 25 - 27 November, 2013, Doha, Qatar

Contents:

GCC Petrochemical Industry; opportunities for downstream industries Challenges GOIC services for the petrochemical Industry Concluding remarks

GOIC in brief . . . .

Established in 1976

7 members : United Arab Emirates, Bahrain, Saudi Arabia, Oman, Qatar, Kuwait and Yemen.

Achieve Industrial cooperation and coordination between member states.

Propose industrial ventures between member states,

Prepare, evaluate and recommend industrial projects,

Collect and disseminate information about industrial data and studies

Objectives :

| 4 GOIC-PRTM Overview | 2011 Proprietary CONFIDENTIAL

GOIC services

Practice Areas

Expertise

Economic Competitiveness Assessment

Policy and Regulatory Gap Analysis

Investment Strategies and Business Cases

Business Models Partnership and

Investment Strategies

Industrial Market Intelligence Industrial Coordination,

Technical Cooperation and Expertise Exchange

Industrial Technical Assistance and Support for SMEs

Investment Promotion

Economic

Development

Cluster

Strategy

Industrial

Policies and

Development

Industrial Structure and Operations Industrial Sensing, & Project

Promotion

Project Planning & Implementation Detailed Economics and Performance

Manufacturing Technologies Industrial/Automotive/Chemicals/

Energy

Cleantech,

Industrial

Expertise

Technology

Expertise

New Industrial Investment Opportunities within the GCC Market

Locating, Screening and Recommending Regional Investments Opportunities along with Qualified Business Partners

Market and Technology Assessments

Industrial

Investment

Strategies

8.4%

38.6% 1.4%

51.5%

Firms by Sector

35.4%

60.0%

0.7%

3.9%

Investments by Sector

Refined Petroleum Products

Chemicals & Chemical Products

Pharmaceutical Products

Rubber & Plastics Products

16.6%

38.9%

3.4%

41.2%

Labor by Sector

Size of Chemical Industry in the GCC - 2102

Source : GOIC Data

Total Chemicals = 3017 firms Total all Industries : 15,165

Cumulative Chemicals: 199 Billion US Dollars Total all Sectors : 336 Billion US Dollars

Base year : 1990

Total Chemicals : 260,808 Total all sectors : 1.3 Million

Main economic activities contribution to GDP ( % GDP, 2012) GCC Total GDP : 1,579,911 Million US Dollars

Source :National Statistical Data, GOIC Report, 2012

MINing ,QUAR.& FUEL

MANUFACTURING

CONSTRUCTION

TRADE REST.& HOTEL

TRAN.,COMM.& STORAGE

FINANANCE,INSUR. & BANK

GOVT.SERVICES

OTHER ACTIVITIES

49%

9%

5%

8% 6% 4%

10%

9%

Estimated Contribution by Chemicals & Petrochemicals Sector 1.5% & Refing by 2.1%

5,000

15,000

25,000

35,000

45,000

55,000

65,000

2010 2011 2012 2013 2014 2015 2016

Ethylene Methanol Propylene Butadiene Benzene Toluene O-Xylene P-Xylene

Installed & Planned Capacity of Basic Petrochemicals In GCC up to 2016 ( 000 Tons per year)

Source : GPCA & GOIC research

GCC Ethylene Production 2013 (Total World Capacity : 143,402,426 Tons/Year)

1%

2%

8%

1%

88%

kuwait Qatar Saudi Arabia UAE World

Source : Oil & Gas Journal, 2013

Ethylene

LDPE

LLDPE

HDPE

EO

EG Ethanolamines Ethoxylates

PET PBT

Alpha Olefins EPDM

EDC

VCM PVC

Tri chloro ethylene

Tetra chloro ethylene

Synthetic Ethanol Ethyl Acetate

EB SM

PS ABS SBR SAN

VAM

EVA PVAC PVOH

Example : Ethylene Derivatives

Source : GOIC Research

BASIC CHEMICALS FEEDSTOCK DERIVATIVES APPLICATIONS INTERMEDIATES

Natural Gas Acetic Acid

(2022) Syn Gas Methanol (2011)

Ammonia (2012)

Fertiliz ers (2012)

Technical Urea (2013)

Formaldehyde (2013)

Industrial Solvents

UF Resin (Thermoset Plastics)

Ethyl/Butyl Acetate (2013)

Industrial Solvents

The four digit IS I C numbers in the box indicates the linking subsectors

Available in GCC Under development

/Planning

Not Available / In - A dequate

GCC Petrochemical opportunities - Methane

Source : GOIC Research-2012

BASIC

CHEMICALS FEEDSTOCK DERIVATIVES APPLICATIONS INTERMEDIATES

NGLs/

Naphtha

(Cracker)

Propylene

EPDM (2013)

Ethylene

Packaging, pipes

The four digit ISIC numbers in the box indicates the linking subsectors

LDPE: Low-Density Polyethylene HDPE: High-Density Polyethylene

LLDPE: Linear Low Density Polyethylene EPDM: Ethylene Propylene Diene Monomer

Polyethylene

(2013)

LDPE (2013)

HDPE (2013)

LLDPE (2013)

Containers

Cling films

As seals, diaphrams,

strips, profiles

(Automotive

Industries)

Anti-vibration

mounts

(Mechanical

goods)

As sealants, hoses,

strips

(Construction/cables

chemicals)

Available in GCC Not Available /

In -Adequate

GCC Petrochemical opportunities - Ethylene

Source : GOIC Research

BASIC CHEMICALS FEEDSTOCK DERIVATIVES APPLICATIONS INTERMEDIATES

Naphtha

(Cracker) Propylene

BOPP (2013)

Fiber (2030)

Polypropylene

(2013)

Film (2013)

Acrylonitrile

(2011)

Acrylic Acid

(2011)

Acrylates

(2011)

Acrylamides

(2011)

Flocculant,

thickening agent,

water treatment

(2029)

Paints,

coatings,

Textile /Fiber

(2022)

The four digit ISIC numbers in the box indicates the linking subsectors

BOPP: Bi-axially Oriented Polypropylene

Available in GCC Not Available / In

-Adequate

GCC Petrochemical opportunities - Propylene

Source : GOIC Research

BASIC CHEMICALS FEEDSTOCK DERIVATIVES APPLICATIONS INTERMEDIATES

Benzene

Styrene (2013)

HIPS, EPS

Packaging

Ethyl Benzene

(2011)

LAB (2023)

Aniline (2021) Nitro Benzene

(2011)

Rigid polyurethane

(2013)

Engineering Plastic,

Refrigeration

Polystyrene

(2013)

SBR (2013)

ABS (2013)

MDI (2030)

Detergent, cleaning

chemicals

Rubber products, Tires

Available in GCC Not Available / In -

Adequate

Dyes, Photography

GCC Petrochemical opportunities - Benzene

The four digit ISIC numbers in the box indicates the linking subsectors

HIPS: High Impact Polystyrene; EPS: Expanded Polystyrene; LAB: Linear Alkyl Benzene;

SBR: Styrene Butadiene Rubber; ABS: Acrylonitrile Butadiene Styrene; MDI: Methylene

Diphenyl Diisocyanate

Source : GOIC Research

GCC Petrochemical opportunities - Benzene

Source : GOIC Research

GCC Petrochemical opportunities - Toluene / Xylene

Source : GOIC Research

Petrochemical Derivatives

Source : GOIC Market studies

Added Value products for UAE: LDPE,PVC resin, PS, PET,BR,SBR, PC

Added Value products for Kuwait: EPS, SAN resins, ABS resin, SBR, PET

Added Value sub-sectors for Oman: Methanol , Aromatics

Potential for Engineering Plastics in GCC : Nylons or PA,PC,ABS,PET,PBT,POM,

Challenges:

Feedstock competing with energy demand. Shortage of gas leading to use of liquids, examples: Kuwait Aromatics, KSA , Oman Aromatics.

Increasing power demand projections in GCC, shortage of gas , long-term gas export commitments. Example, Saudi consumption of energy is growing 8-10% annually.

Capitalize on economies of scale , creation of integrated complexes for Refineries and petrochemicals .

Technological development in specialty products , R& D development, innovation and differentiation, increase products slate to sustain a competitive edge .

Unlocking of shale gas and impact on the long term.

Infrastructure to increase local manufacturing , increase export and generate employment.

Downstream Industries development, raw materials prices, industrial land use .

Agro-Industries 4%

Food 10%

Textiles & Leather

2%

Non-Metallic Minerals

6%

Chemicals 16%

Medical 5%

Plastics & Rubber

17%

Engineering 23%

Metals 16%

Environment & Recycling

1%

Chemicals

Opportunities in Chemicals & Petrochemicals

Plastics & Rubber

investment opportunities in industrial sectors

GOIC Services- Manufacturing Investment Opportunities

GOIC Services for the petrochemical Industry

Ongoing Initiatives

Identification of investment opportunities

Multi-clients studies

Feasibility and bankable studies.

Technology assessment and evaluation

Recent Petrochemical studies 2009-2012

Oman Aromatics Downstream Sector Study Kuwait Aromatics Sector Study UAE Petrochemical Sector Study Engineering plastics Study GCC Industrial Map Road Map Manufacturing Investment opportunities for Kuwait

Concluding Remarks:

GCC Petrochemicals is a growing business.

The region will continue to play a major role as a producer and exporter of petrochemicals.

Regional Aromatics capacity will grow faster and more downstream will come up in the region.

Regional comparative advantage leveraged for ethylene based petrochemical will not be the same for Aromatics.

Feedstock will be heavier and mixed.

R&D will get more attention in the region.

| 21 GOIC-PRTM Overview | 2011 Proprietary CONFIDENTIAL