Latin America Petrochemical and Polymers Outlook 9-13-12

PetroChemicalConsultinggAlliance

Latin America Petrochemical and Polymers OutlookPolymers Outlook

bbyJorge O. Bühler-Vidal

ICIS World Chemical Purchasing SummitgBoston

September 13, 2012

North Brunswick Los Ángeles Bogotá São Paulo Buenos Aires

Polyolefins Consulting, L.L.C.www.polyolefinsconsulting.com

Polyolefins Consulting, L.L.C.www.polyolefinsconsulting.comAPLA Logística 12 de junio, 2012

North Brunswick – Los Ángeles – Bogotá – São Paulo – Buenos AiresBahía Blanca – Mendoza – Santiago – Porto Alegre – Guatemala – Atlanta – Charleston – Houston – New York

O tliOutlineIntroductionProducers and demandGrowing companiesRegional situationRegional situation– Brazil– Bolivia

Peru– Peru– Venezuela– Mexico– OthersOthers

The value chainSourcing products and servicesOpportunities

A l ti f t ti l t iti

ICIS BOS September 13, 2012


An exploration of potential opportunities

PetroChemicalConsulting

Provides consulting products and services to clients in the

gAlliance

worldwide petrochemical and plastics industries, combininglocal insights with a global perspective

Members

– Dr. Alfredo Friedlander, Buenos Aires, Argentina– INovatius ICS, São Paulo, Brazil – Meem Consulting, Costa Mesa, CA, USA– Multidynamics Ltda., Bogotá, Colombiay , g ,– Polyolefins Consulting, LLC, North Brunswick, NJ, USA

Th b d t t k f t h i l lt t i th



The broadest network of petrochemical consultants in the American continent

F ti l d hi lPetroChemicalConsultingFunctional and geographical coverage

Highly experienced consultants l t d th h t th

Professionals specialized in:P j l i

gAlliance

located throughout the Americas

– Argentina• Buenos Aires, Bahia Blanca,

– Project planning– Product development and

applications– Development and selection of

d ti t h lMendoza– Brasil

• São Paulo, Porto Alegre– Chile

production technology– Operations– Logistics– Commercialization, marketing and

• Santiago– Peru

• Lima– Colombia

gsales

– Technology and technical service for converters

Colombia• Bogotá

– Guatemala• Guatemala

U S A

Relationships with related and complementary consulting firms

– U.S.A.• Los Angeles, Houston,

Atlanta, Charleston, New York

C i l l fi d t f th t h i l



Covering polyolefins and sectors of the petrochemical industry functionally and geographically

L ti A i A R i K bLatin America - A Region Known by…Natural wonders and culture

Is generating global brands

H ll itiHas a generally positive business environment– The world’s most pacific

regionregion– Joined by two major

languages– Generally stable

tgovernments– Mildly affected by the

global economic crisis– Generally investment– Generally investment

friendly

Wh th t iti ?



Where are the opportunities?

External Perception of Latin America and the C ibbCaribbean

Brasil, Chile, Peru and Colombia– Predictable without surprises– Predictable, without surprises– Government encouraging investments

and projects

Bolivia, Ecuador, Trinidad & Tobago, and VenezuelaVenezuela

– Vulnerable, depend on one main export product

Argentina, Bolivia, Ecuador and Venezuela E ti i li i f d l– Erratic economic policies, fuzzy models

– Legal uncertainty

México– Very interconnected with the U S– Very interconnected with the U.S.– Declining oil reserves

Braskem and Petrobras are behind most ofthe regional polyolefins projects

The most active area for petrochemical projects after



The most active area for petrochemical projects after Asia, Middle East, and U.S.-Canada

Significant Petrochemical Countries G D ti P d t A l G th [%]Gross Domestic Product Annual Growth [%]

Country 2009 2010 2011 2012 f 2013 f

North America 2 0 2 2 2 5North America 2.0 2.2 2.5Canada -2.8 3.2 2.5 2.1 2.2Mexico -6.3 5.5 4.0 3.6 3.7United States -3.5 3.0 1.7 2.1 2.4South America 4.8 3.8 4.3Argentina 1 0.9 9.2 8.9 4.2 4.0Bolivia 3.4 4.1 5.1 5.0 5.0Brazil -0.3 7.5 2.7 3.0 4.1Brazil 0.3 7.5 2.7 3.0 4.1Chile -0.9 6.1 5.9 4.3 4.5Colombia 1.7 4.0 5.9 4.7 4.4Ecuador 0.4 3.6 7.8 4.5 3.9P 0 9 8 8 6 9 5 5 6 0Peru 0.9 8.8 6.9 5.5 6.0Venezuela -3.2 -1.5 4.2 4.7 3.2Caribbean 2.8 3.5 3.6Trinidad and Tobago -3.3 0.0 -1.3 1.7 2.4

Source: IMF, April 2012. Figures are based on official GDP data. f - Forecasted figures.1 Estimates by private analysts have shown growth that is, on average, significantly lower than official GDP growth from 2008 onward..

IMF sees Latin America very dependent on commodity

Latin America and Caribbean -1.6 6.2 4.5 3.7 4.1



IMF sees Latin America very dependent on commodity prices, vulnerable to a slowdown in China and Asia

C it f L t Th l ti P dCapacity of Largest Thermoplastic Producers

WorldwideAmericas PE – PP – PVC

8,000

10,000

12,000

510

1 2305,000

6,000

7,000

10,914

9,3118,668

7,7497,284 7,109

6,541 6,460

4,000

6,000kt/yr

2,915

4,077

1,230

4,200

627

1,731

1,210

2 000

3,000

4,000

kt/yrPVCPPPE

, 6,460

4,681 4,564 4,303 4,079

0

2,000

LyondellBasell

Exxon Mobil Sinopec Dow Formosa SABIC INEOS Braskem Total IPIC Reliance PetroChina

3,0352,525

1,050

8222,340 2,311

0

1,000

2,000

Braskem Exxon Mobil Dow Lyondell Basell Formosa Shintech Chevron Phillips

R i h th f th ld’ l t d

Source: Braskem



Region has three of the world’s largest producers

W ld Pl ti P d ti 2010World Plastics Production 2010

L ti A i h t ti l f th b it 5 %

Source: PlasticsEurope



Latin America has potential for growth above its 5 % population proportionality

Pl ti D d b R iPlastics Demand by Region139

136140

108105

99100

120

89

60

80kg per

capita

45 48

32 3630

24

46

4050

40

60

NAFTAW. Europe

J2005

2015 e

16

2421

20

1011

97

2

0

20

Y

L ti A i h t ti l f th

pJapan

WorldC. Europe

& CIS LatinAmerica Asia other

MEA

19802 3

Region

Year

Source: PlasticsEurope



Latin America has potential for growth

Eth l P j t W ldEthylene Projects - WorldCHINA

Company Capacity [kt/yr]

Start Up [year] Status

Baotailong/LongMay Mining Group 300 studyChina Coal Shaanxi Yulin Energy & Chemical 570 2013 engineering underwayCNOOC 1,500 2016 study (feasibility)CNOOC 1 000 2016 planned

EUROPECompany Country Capacity

[kt/yr] Start Up

[year] Status

Repsol Polimeros Portugal 570 2011 delayedGazprom Neftekhim Salavat Russia 380 2015 engineering underwayKazanorgsintez JSC - (KOS) Russia 605 2010 completeNizhnekamskneftekhim Russia 1,000 planned CNOOC 1,000 2016 planned

Consortium 1,000 studyDalian Shide Group 1,300 2011 + studyDaqing Petrochemical 600 2T 2012 engineering underwayDow Chemical/Shenhua 600 delayedFREP 1,100 4T 2013 plannedFushun Petrochemical 800 2T 2012 engineering underwayKuwait Petroleum/Sinopec 1,000 2015 under constructionLanzhou Petrochemical 450 2Q 2011 plannedNingbo Lingzhou Chemical 40 plannedPetroChina Sichuan Petrochemical 800 2013 delayedQingdao Petrochemical 1,000 Pre-2020 study (feasibility)Rosneft / China National Petroleum Corp. (CNPC) 1,200 studyShaanxi Shenmu Chemical Industrial 150 2013 plannedShaanxi Xingwang Group 350 2015 studyShaanxi Yanchang Petroleum Group Yulin Energy & 80 i i d

, pNovourengoyski Gas Chemical Complex Russia 340 2013 under constructionSibur Russia 1,500 2017 studyTaneco OJSC Russia 600 studyVNHK - Rosneft Russia 1,400 planned

6,395

U.S. - CANADACompany Location Capacity

[kt/yr] Start Up

[year] Status

Aither - Bayer Appalacchia - 2015 pre-feasibilityAppalachian Resins NE U.S. 227 2016 study (feasibility)BASF FINA Porth Arthur, TX - 2014 pre-feasibilityBraskem - pre-feasibilityChevron Phillips Cedar Bayou, TX 1,500 2017 planned g p gy

Chemicals 80 engineering underway

Shanghai Petrochemical Co. - (SPC) 700 2011-2012 studyShanxi Coking 300 2T 2014 under constructionSinochem Quanzhou Petrochemical 2,400 4T 2014 studySinopec 1,000 2016 study (feasibility)Sinopec 1,000 2016 + study (feasibility)Sinopec 600 under constructionSinopec Hainan Refining & Chemical Co. - (HRCC) 1,000 2015-2016 studySinopec Shanghai Gaoqiao Petrochemical 1,000 studySinopec Wuhan Petrochemical 800 H1 2013 under constructionSinopec/Henan Coal Chemical Group 900 plannedSkyford Chemical - 1H 2012 under constructionTaizhou Petrochemical 1,200 2013 studyWison Nanjing Chemical 145 2013 under constructionXinjiang Guanghui Industry - 2015 study

MIDDLE EASTCompany Country Capacity

[kt/yr] Start Up

[year] Status

Gachsaran Petrochemical Iran 1,000 2015 under constructionIlam Petrochemical Iran 500 2015 under constructionKavian Petrochemical Iran 1 000 2012 under construction

Dow Chemical Freeport, TX 1,500 2014-2017 study (feasibility)Dow Chemical 800 plannedEastman Longiew, TX - engineering underwayExxonMobil Baytown, TX 1,500 2016 engineering underwayFormosa Point Comfort, TX 800 2016 pre-feasibilityIndorama 1,300 2018 study (feasibility)INEOS Chocolate Bayou, Alvin, TX 210 2013 studyLyondellBasell Channelview, TX 227 2012 plannedLyondellBasell Morris, IL 45 2013 plannedLyondellBasell La Porte, TX 386 2014 plannedLyondellBasell - Partner - studyMexichem - OxyChem Ingleside, TX 500 2016 studySasol Lake Charles, LA 1,400 2019 studyShell Monaca, PA 1,300 2016 pre-feasibilityWestlake Chemical Calvert City, Ky 204 1H 2014 study Xinjiang Guanghui Industry 2015 study

Yanchang Petroleum Group/Shaanxi Government 100 engineering underwayZhejiang Xingxing New Energy 300 2013

25,285

Kavian Petrochemical Iran 1,000 2012 under constructionKavian Petrochemical Iran 1,000 2013 engineering underwayPersian Gulf Iran 600 2014 studyEquate Petrochemical Kuwait 1,400 2015 + study

Duqm Refinery and Petrochemical Complex - (DRPC) Oman - study (feasibility)

Oman Petrochemical Industries Co. - (OPIC) Oman 850 1Q 2012 on holdExxonMobil Chemical/Qatar Petroleum Qatar 1,600 4T 2015 studyQatar Petrochemical Co Ltd - (Qapco) Qatar 900 1Q 2014 studyRas Laffan Olefins Co. - (RLOC) Qatar 1,450 studyShell/Qatar Petroleum Qatar 1,300 2017 plannedRabigh Refining and Petrochemical - (Petro-Rabigh) Saudi Arabia 1,600 2015 study (feasibility)Sadara Chemical Saudi Arabia 1,500 2H 2015 approvedSaudi Polymers Co Saudi Arabia 1,165 Q1 2012 completePetkim Turkey 575 studyAbu Dhabi National Chemicals (ChemaWEyaat) UAE 1 450 2015 + planned REST OF ASIA

Westlake Chemical Lake Charles, LA 113 4Q 2012 study (feasibility)Westlake Chemical Lake Charles, LA 113 4Q 2014 study (feasibility)Williams Geismar, LA 272 3Q 2013 study

TOTAL 12,397

AFRICA

LATIN AMERICA AND CARIBBEANCompany Country Capacity

[kt/yr] Start Up

[year] Status

Dow Quimica Argentina 400 on holdYPFB Bolivia 1,050 2016 biddingBraskem JV Bolivia - Brazil 600 on holdBraskem Brazil 500 studyCOMPERJ Brazil 960 2018 plannedDow Chemical - Mitsui Brazil 350 2015 plannedSolvay Brazil 60 1Q 2015 plannedEcopetrol Colombia 1,000 2017 pre-feasibilityPDV - CUPET Cuba 200 studyBraskem IDESA Mexico 1,050 1Q 2015 engineering underwayPemex Mexico 900 2014-2015 studyPemex Mexico 900 2014-2015 study

Abu Dhabi National Chemicals (ChemaWEyaat) UAE 1,450 2015 + plannedAbu Dhabi Polymers Co Ltd - (Borouge) UAE 1,500 2T 2014 under construction

19,390

REST OF ASIACompany Country Capacity

[kt/yr] Start Up

[year] Status

ASM Chemical Industries Bangladesh 300 studyBrahmaputra Cracker and Polymers Ltd. - (BCPL) India 220 1H 2013 engineering underwayIndian Oil Corp - (IOC) India 850 2015 studyONGC Petro-additions Ltd - (OPaL) India 1,100 H1 2013 under constructionReliance India 1,400 4Q 2015 engineering underwayKazakhstan Petrochemical Industries - (KPI) Kazakhstan 840 2016 studyPetronas Malaysia 1,200 4T 2016 study (feasibility)Petronas Malaysia 1,000 study (feasibility)JG Summit Petrochemical Philippines 320 1H 2013 under constructionExxonMobil Singapore 1,000 2H 2012 under constructionShell Singapore 960 2014-2015 plannedHonam Petrochemical South Korea 1,000 5 2012 plannedS T t l P t h i l S th K 2011 d t ti

L ti A i h l t 12% f th l b l iSources: ICIS Chemical Business and Polyolefins Consulting

AFRICACompany Country Capacity

[kt/yr] Start Up

[year] Status

Total/Sonatrach Algeria 1,100 2014 delayedSidi Kerir Petrochemicals - (Sidpec) Egypt 460 plannedViva Polymers Ltd Nigeria - delayedSasol South Africa 48 approved

1,608

Pemex Mexico 900 2014 2015 studyPetroPeru - Braskem Peru 1,200 2018 study

SABIC and SINOPEC Trinidad and Tobago - study

Polimerica Venezuela 1,300 2015 study10,470

Samsung Total Petrochemicals South Korea - 2011 under constructionSamsung Total Petrochemicals South Korea 1,000 2011 under constructionCPC Taiwan 600 1Q 2013 plannedKuokuang Petrochemical Technology Corp Taiwan 1,200 2015 uncertainLong Son Petrochemical Co Vietnam 1,400 2014 study

14,390



Latin America has almost 12% of the global increase

Eth l P j t A iEthylene Projects - AmericasU.S. - CANADA

Company Location Capacity [kt/yr]

Start Up [year] Status

Aither - Bayer Appalacchia - 2015 pre-feasibilityAppalachian Resins NE U S 227 2016 study (feasibility)Appalachian Resins NE U.S. 227 2016 study (feasibility)BASF FINA Porth Arthur, TX - 2014 pre-feasibilityBraskem - pre-feasibilityChevron Phillips Cedar Bayou, TX 1,500 2017 plannedDow Chemical Freeport, TX 1,500 2014-2017 study (feasibility)Dow Chemical 800 plannedEastman Longiew, TX - engineering underwayExxonMobil Baytown, TX 1,500 2016 engineering underwayFormosa Point Comfort, TX 800 2016 pre-feasibilityIndorama 1,300 2018 study (feasibility)INEOS Ch l t B Al i TX 210 2013 t dINEOS Chocolate Bayou, Alvin, TX 210 2013 studyLyondellBasell Channelview, TX 227 2012 plannedLyondellBasell Morris, IL 45 2013 plannedLyondellBasell La Porte, TX 386 2014 plannedLyondellBasell - Partner - studyMexichem - OxyChem Ingleside, TX 500 2016 studySasol Lake Charles, LA 1,400 2019 studyShell Monaca, PA 1,300 2016 pre-feasibilityWestlake Chemical Calvert City, Ky 204 1H 2014 studyWestlake Chemical Lake Charles, LA 113 4Q 2012 study (feasibility)W tl k Ch i l L k Ch l LA 113 4Q 2014 t d (f ibilit )

LATIN AMERICA AND CARIBBEANCompany Country Capacity

[kt/yr] Start Up

[year] Status

Dow Quimica Argentina 400 on holdYPFB Bolivia 1,050 2016 biddingB k JV B li i B il 600 h ld

Westlake Chemical Lake Charles, LA 113 4Q 2014 study (feasibility)Williams Geismar, LA 272 3Q 2013 study

TOTAL 12,397

Braskem JV Bolivia - Brazil 600 on holdBraskem Brazil 500 studyCOMPERJ Brazil 960 2018 plannedDow Chemical - Mitsui Brazil 350 2015 plannedSolvay Brazil 60 1Q 2015 plannedEcopetrol Colombia 1,000 2017 pre-feasibilityPDV - CUPET Cuba 200 studyBraskem IDESA Mexico 1,050 1Q 2015 engineering underwayPemex Mexico 900 2014-2015 studyPemex Mexico 900 2014-2015 study

Ab d t U S h l i fl L ti A iSources: ICIS Chemical Business and Polyolefins Consulting

PetroPeru - Braskem Peru 1,200 2018 study

SABIC and SINOPEC Trinidad and Tobago - study

Polimerica Venezuela 1,300 2015 study10,470



Abundant U.S. shale gas influences some Latin American projects

Eth l P j t Addi 89 935 ktEthylene Projects – Adding 89,935 ktAfrica, 1,608

China, 25,285 LAC, 10,470

Europe, 6,395

U.S. - Canada, 11,670

LAC i di l d f 4th l i it iSource: ICIS Chemical Business and Polyolefins Consulting

Capacities in kt/yr

ME, 19,390 ROA, 14,390



LAC is displaced from 4th place in capacity increases

PE Producers LACI t ll d C it E d f 2007 2009 d 2012Installed Capacity End of 2007, 2009 and 2012

Ipiranga11%

Rio Polimeros11%

PequivenQuattor

19%

Dow13% Pemex

20%

Dow13%

Dow14%

Pequiven8%

Polietilenos União3%

Pet. Triunfo3%

Solvay2%

E t l

19%

Pequiven10%

Solvay2%

Ecopetrol

Pequiven10%

Ecopetrol1%

Ecopetrol1%

Pemex20%

Ecopetrol1% Polimerica

0%

Braskem - IDESA0%

COMPERJ0%

4 647 kt/yr

Braskem27%

Pemex20%

5 354 kt/yr

Braskem35% Braskem

56%

5 468 kt/yr

All Brazilian producers consolidated into Braskem

4,647 kt/yr 5,354 kt/yr

Source: Polyolefins Consulting, LLC

5,468 kt/yr



All Brazilian producers consolidated into Braskem

PP Producers LACI t ll d C it E d f 2007 2009 d 2012Installed Capacity End of 2007, 2009 and 2012

Indelpro8%

Ipiranga8% Petroken

7%

Petroquim6%

Indelpro16%

Propilco12%

Petroken5%

Propilco16%

Petroken7%

Petroquim6%

Propilco14%

6%

Pet. Cuyo5%

Propilven4%

Petroquim4%

Pet. Cuyo4%

Propilven3%

Indelpro22%

6%

Pet. Cuyo5%

Propilven4%

Propilsur

B k

Quattor25%

0%

2,650 kt/yr

Suzano Pet.27%

Braskem21%

3,485 kt/yr

Braskem31%

3,835 kt/yr

Braskem40%

Braskem incorporated Ipiranga and Quattor Indelpro

, y 3, 85 t/y

Source: Polyolefins Consulting, LLC

3,835 t/y



Braskem incorporated Ipiranga and Quattor, Indelpro surpassed Propilco

P t h i l M ltil ti B i Gl b lPetrochemicals Multilatinas Becoming GlobalAlpek – Mexico– The leading producer of PTA and polyester fibers in the

A i d th d i PET l PP d i M iAmericas and the second in PET, only PP producer in Mexico, operates the largest expanded PS unit in the Americas

– Operates 20 plants in the Mexico, Argentina, and U.S.Braskem – Brazil– Largest thermoplastic resins producer in the Americas, eight

largest in the world, largest biopolymer producer– Operates plants in Brazil, Germany, Mexico (2015) and U.S.

Mexichem – MexicoMexichem Mexico – Produces vinyl chloride monomer (VCM); PVC in Mexico and

Colombia; compounds in Mexico, Colombia and U.S.; and PVC pipe throughout LA and EuropeHas 95 plants in 19 countries– Has 95 plants in 19 countries

Oxiteno – Brazil – Largest producer of surfactants in Latin America– “To be recognized as the best Surfactants and SpecialtyTo be recognized as the best Surfactants and Specialty

Chemicals company in the Americas”– Operates plants in Brazil, Mexico, U.S. (2013), Uruguay, and

VenezuelaL ti A i t h i l i l b l



Latin American petrochemical companies are global competitors

Al k M iAlpek – MexicoAlfa’s petrochemicals and

th ti fib b isynthetic fibers business groupProduces PTA, PET, PP, EPS, caprolactam, urethanes, glycols, chemical specialties, g y , p ,polyester fibers and nylon polymersDAK – the leading producer of PTA and polyester fibers in thePTA and polyester fibers in the Americas and second in PET

– also operates the largest EPS production site

Indelpro – only PP producer in Mexico. Plants in Mexico, Argentina and U.S.U.S.2011 revenues US$ 6.5 billion, earnings US$ 577 million

E di i ll d th h i iti



Expanding organically and through acquisitions

B k B ilBraskem – BrazilLargest resin producer in the A iAmericas

– Building 1 million t/yr of C2 and 1 million t/yr of PE with IDESA in Mexico

– Developing projects in Peru and Venezuela

– Considering project in Bolivia– Participating in COMPERJ – Evaluating additional U.S.

acquisitions and expansions– Producing “green” PE from sugar– Producing green PE from sugar

cane ethanolPlants in Brazil, U.S. and Germany2011 revenues US$ 17.7 billion, earnings US$ -280 million

C l b ti it 10th i



Celebrating its 10th anniversary

M i h M iMexichem – MexicoMost important chlorine, caustic

d PVC d i d isoda, PVC and pipe producer in Latin America and EuropeOver last few years made numerous acquisitionsq

– Bayshore Group (U.S.); Amanco (Latin America); Petco (Colombia); Geon Polimeros Andinos (Colombia); DripsaAndinos (Colombia); Dripsa (Argentina); Colpozos (Colombia); Bidim (Brazil); Comindustrias (Peru); Polycid and Plasticos Rex (Mexico);and Plasticos Rex (Mexico); INEOS Fluor (U.S., Europe, Asia); Plastisur (Peru); AlphaGary (U.S., Canada, UK); Wavin (Europe)Wavin (Europe)

2011 revenues US$ 3.4 billion, earnings US$ 194 million

E l ti JV ith O Ch t d 500 kt/ f C i



Evaluating JV with OxyChem to produce 500 kt/yr of C2 in Texas

O it B ilOxiteno – BrazilIs a leading manufacturer of surfactants and specialty chemicals operating worldwideLargest prod cer ofLargest producer of surfactants in Latin AmericaNet revenue of US$ 1,438 billion in 2011billion in 2011Plants in Brazil, Mexico, Uruguay and Venezuela2011 revenues US$ 1 32011 revenues US$ 1.3 billion, earnings US$ 83 million

St th i l b l ith i iti i B il



Strengthening global presence with acquisitions in Brazil, Uruguay and U.S.

B ilBrazilOne of the best economic outlooks in the region

The world’s 6th largest economy– The world s 6th largest economy– Stable economy aided by

• Exports to China• Petrobras pre-salt program success

R ff d i i t ti i t i d j t fid– Rousseff administration maintains and projects confidence

Petrobras– Fourth largest public company in the Americas, after ExxonMobil,

Microsoft and Wal MartMicrosoft and Wal-Mart– Planning to be among the largest five integrated energy companies in

the world– Pre salt reserves provide large increase of gas and oil offerings

Braskem– Largest plastic resin producer in the Americas– Planning to be among the largest five petrochemical companies in 2020

Largest producer of biopolymers– Braskem and Dow-Mitsui build world scale plants



Able governmental political and diplomatic support helps its business grow and seduce the world

B li i I d t i li i N t l GBolivia – Industrializing Natural GasYPFB accountable for petrochemical projectspetrochemical projectsCarrasco– Ammonia-urea plant awarded to

SamsungWill d 650 kt/ f• Will produce 650 kt/yr of ammonia and 726 kt/yr of Urea

• Start up by 4Q2015 Yacuiba– Liquid Separation Plant awarded

to Técnicas Reunidas• By 2021 will process 27.7

million m3/d of natural gasmillion m /d of natural gas before crossing border into Argentina

• Start up by 2014– Plan to award conceptualPlan to award conceptual

engineering for 1050 kt/yr of C2and PE by October 18, 2012• Start up by 2016

M j j t d b t t l

Source: CIA The World Factbook



Major projects under way, some concern about natural gas reserves and availability

P P t h i l C lPeru Petrochemical ComplexesGrupo Brescia (Peru) and Grupo Sigdo Koppers (Chile) Sigdo Koppers (Chile) – 800 kt/yr ammonia y 350 kt/r

ammonium nitrate at Pisco– US$ 650 million

Project under way– Project under wayCF Industries (U.S.) – 1 million t/yr urea at San Juan de

Marcona, IcaUS$ 1 billi– US$ 1 billion

– Orica Mining (Australia) with ammonium nitrate

– On holdBraskem, Petrobras and PetroPeru– 1,200 kt/yr ethylene and PE by 2018

at Ilo– Requires over 40 million m3 natural– Requires over 40 million m natural

gas to be viable and 1000 km duct from Camisea to the South

Successive administrations Fujimori Toledo Garcia

Source: CIA The World Factbook



Successive administrations – Fujimori, Toledo, Garcia and Humala – promoted petrochemical projects

V l Th P t h i l R l tiVenezuela - The Petrochemical RevolutionJose project delayed to

Match expected sales upswing by 2014– Match expected sales upswing by 2014– Have better access to financing– Negotiate reduction in process equipment and contractor costs

PP plant will be built in Paraguaná– Propylene availability reduces investment from US$ 1200 to 500 million

Reconsidering PE plansSome uncertainty regarding natural gas availability

Reconsidered Jose PE projects potential move to ParaguanáSource: Pequiven



Reconsidered Jose PE projects, potential move to Paraguaná, capacity increases in U.S. reduce attractive

M iMexicoContinuously decreasing oil production and revenue

Large resin importer, specially PE– Installed PE capacity in 2010 is 1.078 million t/yr– Importing approximately 600 ktImporting approximately 600 kt– Estimate that by 2015 Mexico will require 1.9 million t/yr PE

Etileno XXI - IDESA and BraskemP G ill id 66 th d b/d f th– Pemex Gas will provide 66 thousand b/d of ethane

– Cracker for 1,05 million t/yr of ethylene– Two 375 kt/yr MDPE/HDPE each, and 300 kt/yr LDPE/EVA– Start up in 2015Start up in 2015

Market even more anxious for new capacity while



Market even more anxious for new capacity, while processors continue losing ground against imports

Oth t iOther countriesArgentina

Ecuador

Colombia

CubaCuba

Trinidad and Tobago



S th C Sh l G P t ti lSouthern Cone Shale Gas Potential

CountryRisked Gas

In PlaceTechnically

Recoverable Country In PlaceTCF

ResourceTCF

Argentina 2732 774

Bolivia 192 48

Brasil 906 226Brasil 906 226

Chile 287 64

Paraguay 249 62

Uruguay 83 21

Source: EIA – World Shale Gas Resources

TOTAL 4440 1195

A th ift f t t b t t d ti lTCF – trillion cubic feet



Another gift from nature to be extracted promoting general welfare y and with great respect with the environment

Polyolefins Chain in Latin AmericaStrength and Proportion

Country Oil and 1st Generation

Ethylene2nd Generation

PE PP3rd Generation

PEnd users and

k tCountry gas yPropylene PE - PP Processors markets

Argentina

Brazil

Chile

Peru

Colombia

Venezuela

Trinidad &

Source: Gas Energy Polyolefins Consulting

Tobago

MexicoArrow thickness represents relative strength



Source: Gas Energy, Polyolefins Consulting

Countries have very obvious needs and more hidden ones Arrow thickness represents relative strength

P l l fi R M t i l A il bilitPolyolefins Raw Materials AvailabilityArgentina Brazil Chile Bolivia Peru Colombia Venezuela Trinidad &

TobagoCentral America

Mexico

RResources

Oil -Nat. gas -

B i t h i l 1st tiBasic petrochemicals – 1st generation

Ethylene - - - -Propylene - - - -

HighMediumLowVery low

- NoneC4 - - - - - - - -C6 - - - - - - - - - -C8 - - - - - - - - - -

NoneNo data

VA - - - - - - - - -Catalysts - - - - - - - - -Co catalysts - - - - - - - - - -y

Additives

Sh ld dd l t t t d t i lSource: Polyolefins Consulting



Should add value to extracted raw materials

P l l fi A il bilit d P iPolyolefins Availability and ProcessingArgentina Brazil Chile Bolivia Peru Colombia Venezuela Trinidad &

TobagoCentral America

Mexico

Resins – 2nd generation

PE - - - -EVA - - - - - - - - -Acrylate cop. - - - - - - - - - -PP - - - -

Machinery manufacturing

HighMediumLowVery low

- Nonemanufacturing

Processing

Compounding

Market size

NoneNo data

Market size

End users

Recycling

Waste mgmtWaste mgmt.

Th b i t iti i ll t i

Source: Polyolefins Consulting



There are business opportunities in all countries

S R i l P t h i l Off iSome Regional Petrochemical OfferingsChemicals Raw materials– Commodity

• Ethylene oxide• Monoethylene glycol

– Biodiesel– Ethanol– From Argentina and Brazily g y

– Specialty• Surfactants• Softeners

g

Softeners• Dispersants• Emulsifiers• Hydraulic fluids• Hydraulic fluids• Leather chemicals

– From Brazil. Mexico, Venezuela and UruguayVenezuela and Uruguay

f h i l d t i l



for chemicals and raw materials …

S R i l P t h i l Off iSome Regional Petrochemical OfferingsPolymers Additives– Commodity

• PE, PP, PET, PVC– Specialty

– Calcium stearate, zinc stearate, magnesium stearate, potassium stearatep y

• UHMWPE• Bio PE and PP

– Braskem Dow others

stearate– Phthalic Anhydride– Plasticizers & Auxiliaries

Braskem, Dow, others– From Brazil and Argentina – Corporacion Sierra Madre

(Mexico)Varteco Quimica Puntana– Varteco Quimica Puntana (Argentina)

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for polymers and additives …

S R i l P t h i l Off iSome Regional Petrochemical OfferingsMachinery– Plastics processing

• Blown film extrusion lines• Flexographic printersg p p• MD orientation machines• Flexible plastic recycling lines• Sheet extrusion linesSheet extrusion lines• Screen changer, gear pump, circular and flat dies• Nip roll and winders• Carnevalli Rulli Standard Rodofeli• Carnevalli, Rulli Standard, Rodofeli• From Brazil and Argentina

E i t f i d t i– Equipment for process industries• IMPSA Process, Tenaris

f hi



for machinery …

S R i l P t h i l Off iSome Regional Petrochemical OfferingsEnd products • Bags– Household products

• Office, Stationery & School accessories

• BOPET film• Cardboard like

corrugated plastic• Food (institutional)• Curtain and

accessories

• Bag-in-box packing• Form-fill-seal film• Pharmaceutical

• Household cleaning products

• Housewares

packaging• Zippers• Reusable boxes

– Industrial packaging• PET jars

• BOPP film• Geotextiles and big

bagsj• Masterbatches• Stretch film

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– From Brazil, Guatemala, Costa Rica

f l ti d d t



for plastic end products …

S R i l P t h i l Off iSome Regional Petrochemical OfferingsServices– EPC - engineering, procurement, construction and plant start-up

• Argentina– AESA, Techint, Tecna, Hytech, , , y

• Bolivia– Bolpegas

• BrazilBrazil– Odebrecht

• ColombiaTipiel– Tipiel

• Mexico– ICA

V l• Venezuela– Pentech

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and for services!

Opportunities for suppliers, investors and hpurchasers

Still some opportunities for new PE producers – Projects in Peru, Bolivia, Brazil j , ,– Cartagena in Colombia and still additional capacity need in Mexico

Need for regional production of hexene or octene comonomers for PE

Need for additional EVA grades and production– Only Brazil produces EVA copolymers– 1 tubular and 2 autoclave plants

Additives and compounds– There are still opportunities for adding local production capacity

Processing opportunitiesProcessing opportunities– Sophisticated packaging industry– Agricultural, automotive compounds, pipe, and oil and gas applications – Opportunities for investment and consolidation

Regional and global suppliers– Chemicals, raw materials, polymers, additives, machinery, end products

and services

Th t iti th h t th l h i



There are many opportunities throughout the value chain

S i N bPetroChemicalConsultingSee us in November…

Petrochemical Seminar 2012

gAlliance

Petrochemical Seminar 2012

Rio de JaneiroFriday, November 9, 2012



Date post:	23-Jan-2015
Category:	Business
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