OCI Partners LP Corporate Presentation September 2016
2
Safe Harbor Provision Unless the context otherwise requires, references in this presentation to “our partnership,” “we,” “our,” “us” and similar terms, when used in a historical context, refer to the business and operations of OCI Beaumont LLC, a Texas limited liability company (“OCIB”) that OCI USA Inc. will contribute to OCI Partners LP in connection with this offering. When used in the present tense or future tense, those terms and “OCI Partners LP” and “OCIP” refer to OCI Partners LP, a Delaware limited partnership, and its subsidiaries, including OCIB. References to “our general partner” refer to OCI GP LLC, a Delaware limited liability company and a wholly owned subsidiary of OCI USA Inc. References to “OCI” refer to OCI N.V., a Dutch public limited liability company, and its consolidated subsidiaries other than us, our subsidiaries and our general partner. References to “OCI USA” refer to OCI USA Inc., a Delaware corporation, which is an indirect wholly owned subsidiary of OCI. References to “OCI Fertilizer” refer to OCI Fertilizer International B.V., a Dutch private limited liability company, which is an indirect wholly owned subsidiary of OCI.
This presentation may contain forward‐looking statements that are based upon current expectations and involve a number of risks and uncertainties. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include the words “will,” “believe,” “expect,” “anticipate,” “intend,” “estimate” and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward‐looking statements. Statements concerning our current estimates, expectations and projections about our future results, performance, prospects and opportunities and other statements, concerns, or matters that are not historical facts are "forward‐looking statements," as that term is defined under United States securities laws. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results and performance to be materially different from any future results or performance expressed or implied by these forward‐looking statements.
Investors are cautioned that the following important factors, among others, may affect these forward‐looking statements. These factors include but are not limited to: risks and uncertainties with the respect to the quantities and costs of natural gas, the costs to acquire feedstocks and the price of the refined products we ultimately sell; management's ability to execute its strategy; our competitive position and the effects of competition; the projected growth of the industry in which we operate; changes in the scope, costs, and/or timing of capital projects; general economic and business conditions, particularly levels of spending relating to demand for methanol and ammonia; our ability to operate as an MLP; changes in the regulatory and/or environmental landscape; potential conflicts of interest between OCI USA and other unitholders; and other risks contained in our registration statement (including a prospectus) filed with the United States Securities and Exchange Commission (the “SEC”).
Forward‐looking statements should not be read as a guarantee of future performance or results and will not be accurate indications of the times at or by which such performance or results will be achieved. Forward‐looking information is based on information available at the time and/or management's good faith belief with respect to future events, and is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. OCI Partners LP undertakes no obligation to update or revise any such forward‐looking statements.
The Partnership has filed a registration statement (including a prospectus) with the SEC for the offering to which this presentation relates. Before you invest, you should read the prospectus in that registration statement and other documents the Partnership has filed with the SEC for more complete information about the partnership and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the Partnership, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by emailing BofA Merrill Lynch at [email protected] or by calling either Barclays at (888) 603‐5847 or Citigroup at (800) 831‐9146.
OCI Partners LP’s registration statement has not yet become effective and OCI Partners LP’s common units representing limited partnership interests may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. The offering of the common units representing limited partner interests is being made by means of the prospectus only, copies of which may be obtained from the underwriters as noted above.
This presentation is not, and under no circumstances is to be construed to be, a prospectus, offering memorandum, advertisement and is not an offer to sell securities. The SEC and state securities regulators have not reviewed or determined if this presentation is truthful or complete.
Non-GAAP Financial Measures Disclosure
Today’s presentation includes certain non‐GAAP financial measures as defined under Regulation G of the Securities Exchange Act of 1934, as amended. A reconciliation of those measures to the most directly comparable GAAP measures is available in the appendix to this presentation.
Partnership Overview
4
Partnership Overview
Organizational Structure
OCI N.V. (NYSE Euronext
Amsterdam: OCI:NA)
OCI USA Inc. 69,497,590 common units
OCI Partners LP (NYSE: OCIP)
OCI Beaumont LLC
OCI GP LLC (our general partner) Public Unitholders
17,500,000 common units
20% limited partner interest
100% ownership interest
80% limited partner interest
Non‐economic general partner interest
100% indirect ownership interest
___________________________________ (1) No excess distribution coverage and GP has non-economic interest and no incentive distribution rights
(1)
New Capital Injection New Shares Issued Capital Structure
Common Units (mm) 3,502,218 OCI NV units (mm) 69,497,590 79.88% Share Price ($) 17.132 Public Unitholders units (mm) 17,500,000 20.12%
Total Capital ($) 60,000,000 Total Shares Outstanding 86,997,590 100%
5
Partnership Overview
Asset History of OCI Beaumont
Key Milestones
Plant Capacity
(‘000 tpa)
DuPont builds 600 Ktpa methanol plant, largest in the world at the time
Modernization of The methanol unit using Lurgi GmbH’s Low Pressure Methanol technology
Terra adds a 250 mtpa ammonia synthesis loop to The methanol plant
Start‐up of the ammonia plant built by Foster Wheeler with a Haldor Topsoe process design
Terra shuts‐ Down methanol production
OCI N.V. and its partner acquire the plant from Eastman Chemical
OCI N.V. acquires minority stake securing 100% ownership of the plant
2000 1967 2011
2004
2011
1997 1980s
600 600 600 730 913 250 250 265
331 600
850 850 995 1,244
1967 1997 2003 4Q 2012 1Q 2015
Total Capacity Methanol Ammonia (Post‐Debottleneck)
Ammonia production at the facility begins in December
Methanol production at the facility begins in July
Debottlenecking process completed in 1Q 2015
2011 2015
2012
6
Partnership Overview OCI Partners Summary
• OCI’s facility near Beaumont, TX (“OCI Beaumont”) is an integrated methanol and ammonia facility strategically located on the Texas Gulf Coast
• OCI N.V. acquired the Beaumont plant from Eastman Chemical Company in May 2011. Previously the Beaumont plant was owned by Terra Industries and DuPont, and was shut down from 2004 until OCI’s acquisition in 2011
• Following a comprehensive upgrade, methanol and ammonia production commenced in July 2012 and December 2011, respectively
• Partnership has completed all work related to debottlenecking project in 1Q 2015, with ammonia and methanol lines restarted in 2Q
– Increased methanol production capacity by 25% to 912,500 mtpa
– Increased ammonia production capacity by 25% to 331,000 mtpa
• Partnership recently implemented a state‐of‐the‐art methanol and ammonia truck loading facility on‐site and expects to sell 80,000 mtpa via the new facility
Facility Overview
Ownership • 100%
Natural Gas Supply
• Volumes contractually secured and pricing based on spot market
Distribution • Direct sales to customers by truck, pipeline, and barges
Product Pre – Debottlenecking Capacity
Production During Full Year 2014
Current Production Capacity post-
Debottlenecking Project
Product Storage Capacity
Metric Tons/Day
Metric Tons/ Year (1) Metric Tons
Metric Tons/ Day
Metric Tons/ Year
Metric Tons
Methanol 2,000 730,000 617,031 2,500 912,500 42,000 (two tanks)
Ammonia 726 264,990 259,214 907 331,000 33,000 (two tanks)
Capacity Key Information
(1)
___________________________________ (1) Assumes facility operates for a full year.
7
Partnership Overview Superior Site with Strong Customer Relationships
45% 49%
6%
Barge
Pipeline
Terms Delivery (2015)
Contract Life: 2‐5 Years / Renewable
Pricing: Jim Jordan Minus
Payment Terms: 25‐30 Days
Key Customers:
83%
11% 6%
Truck
Barge
Contract Life: Monthly
Pricing: Tampa CFR Minus
Payment Terms: 30 Days
Key Customers:
Methanol Customers
Ammonia Customers
Terms Delivery (2015)
100%
Pipeline
Gas Suppliers
Suppliers Delivery (LTM)
Pipeline
Natural Gas Pipelines
OCI Beaumont
Barges
Methanol Storage
Kinder Morgan
DCP Midstream
Florida Gas Transmission
Ammonia Storage
Methanol Pipelines
Exxon Mobil Methanex Lucite
Air Liquide
Nitrogen Pipeline
Air Products
Hydrogen Pipeline
Selected Methanol Customers
Ammonia
Arkema
Barges
Houston Pipe Line
Ammonia Pipeline
Lucite
DuPont
Methanol Truck Terminal
Ammonia Truck Terminal
Truck
8
Partnership Overview Debottlenecking Project Drives Distribution Growth
• The Partnership delayed the planned debottlenecking to January 2015 due to the holiday season to ensure all pre‐turnaround construction activities are complete.
• Construction completed in 1Q 2015.
• Total cost was US$ 384 million for project; US$ 97.5 million for debottlenecking, US$ 124.4 million to improving reliability and US$ 162.1 million for ensuring environmental compliance
Overview
• Install a selective catalytic reduction unit
• Install an additional flare
• Modify the convection section and heat exchangers
• Increase the capacity of the synthesis gas compressor and the refrigeration compressor on the ammonia production unit
• Replace and refurbish equipment that caused downtime
• Both methanol and ammonia production lines have been running at or above design capacity since April 23, 2015
Processes
Benefits
• Expands existing capacity
• Expected to maximize operational availability
• Increases efficiency of plant
• Increases margins; current headcount will be maintained
Capacity Increase
Previous Capacity Current Capacity
Product Metric Tons/Day
Metric Tons/Year
Metric Tons/Day
Metric Tons/Year
% Increase
Methanol 2,000 730,000 2,500 912,500 25%
Ammonia 726 264,990 907 331,000 25%
9
Partnership Overview Financial Overview and 2Q 2016 Results Summary
Three Months Ended Six Months Ended June 30 June 30 US$ thousand 2016 2015 Change 2016 2015 Change Revenues 56,278 79,568 ‐29.3% 126,219 117,313 7.6% Cost of Goods Sold 39,758 44,514 ‐10.7% 84,593 69,679 21.4% Depreciation Expense 15,513 12,648 22.7% 30,891 18,732 64.9% Selling, General and Administrative Expenses 6,442 4,912 31.1% 12,901 9,972 29.4% Income from Operations (before interest expense, other income (expense) and income tax expense) (5,435) 17,494 ‐131.1% (2,166) 18,930 ‐111.4%
Interest Expense 9,973 1,785 458.7% 18,765 4,291 337.3% Interest Expense ‐ Related Party 51 51 0.0% 102 101 1.0% Gain (loss) on disposition of fixed assets (26) (1,982) ‐98.7% (448) 5 Other Income (9) 30 ‐130.0% 13 121 ‐89.3% Income (loss) from Operations (before tax expense) (15,494) 13,706 ‐213.0% (21,468) 14,664 ‐246.4% Income Tax Expense (47) 228 ‐120.6% 33 293 ‐88.7% Net Income (Loss) (15,447) 13,478 ‐214.6% (21,501) 14,371 ‐249.6% 30-Jun-16 31-Dec-15 Total Debt 448,838 450,193 ‐0.3% Net Debt 440,278 436,955 0.8%
*Net Debt is defined as Total Debt minus Cash and Cash Equivalents
*Total Debt is the outstanding principal portion of our Term Loan B Credit facility and Revolving Credit Facility less the unamortized portion of the Deferred Financing Cost and Original Issue Discount associated with these facilities
Sales Volumes 000 Metric Tons H1 2016 Q2 2016 Q1 2016 H1 2015 Q2 2015 Q1 2015 Ammonia 166.6 69.9 96.7 84.6 49.1 35.5 Methanol 402.2 183.3 218.9 211.9 158.9 53.0
10
Partnership Overview OCI Partners LP Long-Term Strategy
• Maximize utilization rates of the debottlenecked plants
• Leverage sponsor’s technical know‐how, expertise and track‐record in identifying value‐accretive projects and new investment opportunities
• Evaluate potential downstream projects for both methanol and ammonia to diversify product portfolio
• Maximize and maintain distributions to OCIP unitholders of 100% of cash available for distribution
• Maintain strong customer relationships near Beaumont, TX
11
Partnership Overview Investment Highlights
IA
MO
IL IN OH
WI MN
ND
SD
MT
WA
OR
NV
CA
WY
NE
UT
ID
CO
NM
KS
TX
AZ OK AR
AL LA
GA
FL
MS
TN
KY
SC
NC
WV
PA
VA
NY
ME VT
NH
MA CT
NJ
DC
MI
Producer of essential, global products: methanol and
ammonia
Global low‐cost producer due to U.S. natural gas advantage
US methanol and ammonia markets suffer from an import
deficit, which is expected to continue through at least 2018
Key barriers to entry include high capital requirements,
lengthy permitting process and proximity to customers /
suppliers
Advantageous access to feedstock, customers and
infrastructure
Strong cash flow generation and significant step‐up in projected
revenue and EBITDA from debottlenecking project
Supported by a technically strong sponsor, with an
exceptional entrepreneurial track‐record
Industry Overview
13
Industry Overview Robust and Growing Global Methanol Market
• Methanol, also known as methyl alcohol or wood alcohol is the simplest of all alcohols
• With its diversity of applications – from paints and plastics, furniture and carpeting, car parts and windshield wash fluid – methanol is one of the world’s most widely used industrial chemicals
– Global demand in 2014 was roughly 72 million tons with 51% attributed to GDP‐linked consumer and industrial products, while 37% is from fuel/energy related uses, and 12% is from methanol to olefins (“MTO”) / methanol to propylene (“MTP”)
– Historical demand has been robust and is forecasted to remain so in the long term with China at the forefront
___________________________________ Source: Argus JJ&A
2014 Global Methanol Demand by Derivative China Leading Forecasted Industry Growth
Formaldehyde
27%
Acetic Acid 9%
Methyl Methacrylate
1%
MTBE & TAME 11%
Biodiesel 5%
Fuel Applications
12%
Dimethyl Ether 9%
Captive MTO/MTP
7%
Merchant MTO/MTP
5%
All Other 14%
Note: Total demand = 72 million Blues = GDP-core - 51% Purples = Fuel/Energy - 37% Grays = Methanol to olefins = 12%
mn t/%
0
50
100
150
200
250
300
2015 2020 2025 2030 2035
mn t China
N/E Asia
S/E Asia/India
ME/Africa
EU/Russia
SouthAmerica
NorthAmerica
CAGR = 6.2%
14
Industry Overview Chinese MTO Changing Global Methanol Demand
World Demand Growth (2000 - 2035E) (1)
• Excluding CTO/CTP, 2015 methanol demand is estimated to be 78 million tons
• China is the world’s largest producer of MTO and in 2015, MTO accounted for almost 18% of the country’s merchant methanol demand
• MTO/MTP is poised to drive methanol demand, but affordability in current global crude oil environment remains key
___________________________________ (1) Source: Argus JJ&A
0
50
100
150
200
250
300
2000 2005 2010 2015 2020 2025 2030 2035
mn t
Core - GDP Fuel MTO/MTP CTO/CTP
CAGR = 6.3%
CAGR = 6.2%
(Coal to Olefins / Coal to Propylene)
15
Industry Overview Exponential Growth Expected From Fuel Applications & MTO/MTP
___________________________________ Source: Argus JJ&A
• Chinese gasoline blending will continue to grow with its expanding population and automobile demand
‒ Europe currently allows blending of up to 3% methanol in gasoline. Countries such as Australia, Israel, Ecuador, Mexico, Egypt, and Oman are actively exploring methanol as a blend component in gasoline.
‒ MTBE use has been growing constantly and has reached 20 mm t/yr, mostly from Asia which is not subject to ethanol blending programs
‒ Many countries are also advancing the use of biodiesel, which requires blending approx. 10% methanol
• Methanol’s attractive features as transportation fuel – easy blending, high octane, improved combustion– is encouraging new potential demand uses
‒ Use of methanol as a marine fuel is a large potential new market. Stenna Line has converted one of its ferry’s to methanol fuel and Methanex has on order six new dual‐fueled methanol transport ships
Fuel Applications and Gasoline
Blending
China’s MTO/MTP Expansion
• Beginning in 2011, China redefined the methanol industry with its implementation of methanol consumption for olefin production
‒ Historically, olefins were produced from naphtha, but coal to methanol to olefins provided an economic alternative
• Chinese MTO/MTP will significantly increase forecasted global methanol demand in the near term
‒ Argus expects China to add 3.75 mm t/yr of MTO capacity from 2016 to 2019. By 2020, MTO use will consume 67 mm t/yr of methanol.
‒ Because 1 ton of olefins requires 3 tons of methanol, China’s capacity growth equates to over 10 mm t/yr of merchant methanol demand
0
1
2
3
4
5
6
7
8
9
10
2016 2017 2018 2019 2020
mn t
Core - GDP Fuel MTO/MTP
World Methanol Demand Growth (Year over Year)
16
Industry Overview Attractive U.S. Methanol Market
US Methanol Supply & Demand
The majority of U.S. methanol demand is currently supplied by imports
• In 2015, the U.S. imported approximately 3.7 million metric tons of methanol to meet its supply deficit (57% of consumption)
• The U.S. sources a majority of its imports from Trinidad, which is currently facing a natural gas supply deficit
– Structural shortages in natural gas reserves have led to government rationing
• U.S. methanol demand is expected to increase at a CAGR of 6.3% between 2015 and 2020, driven by GDP
___________________________________ Source: Argus JJ&A
-10,000
-5,000
0
5,000
10,000
15,000
20,000
2009 2013 2017 2021 2025
’000t Exports Imports Production
17
Industry Overview China Cost Curve Setting Industry Floor
China Cost Curve
• Cost curve remains steep at the high end with Chinese producers using coal or expensive natural gas as feedstock
• As the global marginal producer, China’s cost curve sets a price floor for methanol market
– In current lower energy price environment, the price floor is ~$200/metric ton
• China’s natural gas‐based cost structure was reduced in Q4 2015; however, the cost curve is not expected to see significant change in 2016
___________________________________ Source: Argus JJ&A
18
Industry Overview Attractive U.S. Ammonia Markets
50%
28.1%
21.9%
Three-Year Average U.S. Ammonia Use by End Market (1)
___________________________________ Source: CRU (formerly Commodities Research Unit). (1) Based on 2010-2012.
Fertilizer Feedstock
Industrial Feedstock
Direct Application as
Fertilizer
A significant portion of current and future U.S. ammonia demand is expected to be supplied by imports
• In 2015, the U.S. imported 5.1 million metric tons of ammonia
– Represents 31% of total consumption
• Ammonia must be imported to the U.S. as approximately 20 ammonia plants were closed between 1999 and 2007, including OCIP’s Beaumont facility
– These plants had total annual capacity of more than 8.0 million metric tons
• The U.S. is expected to remain a net importer for ammonia for the foreseeable future as the majority of new capacity announced has already been cancelled
19
U.S. Fertilizer-Crop Price Relationship (1)
(US$ / St) (US$ / Bushel)
• Historically, there has been a meaningful correlation between nitrogen fertilizer prices and crop prices
– High crop prices incentivize farmers to increase fertilizer application in order to maximize crop yields, thereby increasing fertilizer demand and resulting in higher ammonia prices
• Marginal producers in Eastern Europe (particularly the Ukraine), effectively set the price floor, with each region applying its own premium based on a number of factors such as local supply/demand dynamics, transportation, logistics and government policies
___________________________________ (1) Source: Bloomberg
Industry Overview Ammonia Prices Remain Strong Along with Crop Prices
0
2
4
6
8
10
12
0
200
400
600
800
1,000
1,200
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Ammonia Mid Cornbelt Wheat Kansas City Cash Corn Chicago Cash
20
Industry Overview Declining Trinidad Natural Gas Reserves: Supportive of OCI Partners LP Story
Overview
• Trinidad faces fundamental gas deficit issues as increased natural gas production has not been matched by new reserves, leading to a fall in reserve life to 8.8 years in 2013
• Natural gas production fell in 2011 and 2012 as existing reserves have been depleted
Appropriation of Natural Gas
Impact on Nitrogen Fertilizer
Production
• Ammonia capacity utilization rates in Trinidad have been consistently declining since 2011 as gas supply issues limited production
• The nitrogen industry in Trinidad was established when there was a gas cost‐based competitive advantage over the U.S.; however, as U.S. gas costs have fallen, this advantage has eroded
• From 2013 to 2014, gas allocation to the production of ammonia dropped by 12%, and allocation to methanol dropped by 1.2%.
• Fertilizer exports to the U.S. are expected to continue to fall, creating a more favorable environment for domestic production
___________________________________ Source: CRU March 2013 Ammonia 10 Year Forecast, Trinidad Ministry of Energy, Wood Macknezie, Integer, EIA.
(TCf) (R/P Ratio)
0
9
18
27
36
45
0
0.5
1
1.5
2
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13
Natural Gas Production Reserve to Production Ratio
___________________________________ (1) Source: EIA, Annual Energy Outlook 2014. 21
Industry Overview We Expect Our U.S. Natural Gas Advantage to Continue for the Foreseeable Future
Total U.S. Natural Gas Production and Consumption, 1990 – 2040 (1)
(Trillion Cubic Feet)
• The emergence of a U.S. “shale gas advantage” has led to an increase in natural gas supply
• Production from shale formations increasing to ~50% of total annual natural gas production by 2040 as compared with 34% in 2011
• According to the Energy Information Association (the “EIA”) forecasts, increases in the supply of U.S. natural gas are tracking to exceed increases in U.S. natural gas demand by 2019, leading to approximately 5.8 Tcf of net exports by 2040
Increased US natural gas production…
…has lead to lower prices
• This abundance of U.S. natural gas has resulted in attractive domestic natural gas prices, often substantially below natural gas prices in other global markets, such as Europe, Japan and Northeast Asia
• Having a low cost feedstock for the majority of our methanol and ammonia production gives us a significant competitive advantage
• The EIA expects U.S. Henry Hub natural gas prices to remain low for the foreseeable future; natural gas forward for 2015 is under US$ 3.00 MMBtu
‐10
0
10
20
30
40
2000 2005 2010 2015 2020 2025 2030 2035 2040
Production Consumption Net Imports
Sponsor Overview
23
Sponsor Overview Overview of Our Sponsor – OCI N.V.
• OCI N.V. is a global natural gas‐based fertilizer and industrial chemicals producers with production facilities in the Netherlands, USA, Egypt, and Algeria
• As of September 2015, the Sawiris family collectively owns 54% of the outstanding shares
• Currently employs approximately 3,000 people worldwide
• OCI N.V. is traded on the NYSE Euronext Amsterdam (OCI:NA)
• Approximately € 3.1 billion market capitalization as of September 2016
24
Sponsor Overview Overview of Our Sponsor – OCI N.V.
Summary Overview
Leading global natural gas-based fertilizer & chemicals producer
‒ Production facilities in The Netherlands, USA, Egypt and Algeria complemented by global distribution network
‒ Top 5 five global nitrogen-based fertilizer producer - sellable capacity of c.7.7 mtpa at end-2014 with competitive blended natural gas cost advantage over peers
Natural gas monetization focus following demerger of Construction business as of 9 March 2015
‒ Pure play fertilizer & chemicals company offering distinct investment propositions
Growth initiatives 2014 - 2016
‒ 2015: additional volumes from Sorfert Algeria, debottlenecking OCI Beaumont and Iowa Fertilizer Co start-up
‒ On track to increase sellable capacity by 60% to c.12 mtpa by end-2016
‒ On June 12, 2015, OCI NV acquired BioMCN, a methanol and bio-methanol producer in the Netherlands with two methanol plants, of which one is operational (440 ktpa) and one mothballed (430 ktpa)
Trading on Euronext Amsterdam since 25 January 2013 (NYSE Euronext: OCI)
‒ AEX Index constituent since March 2014
25
Sponsor Overview OCI Fertilizer Highlights
• With the addition of Iowa Fertilizer Company (IFCo), total design saleable capacity for nitrogen‐based fertilizers will increase to 8.7 million metric tons (10.4 million tons including merchant ammonium sulphate) by 2016
• OCI Fertilizer operates five production assets located in North Africa (Egypt, Algeria), Europe (the Netherlands) and the U.S., with production capacity of nearly 7.0 million mtpa of nitrogen‐based fertilizer
- This capacity is expected to increase to 8.6 mtpa in 2016 with the addition of IFCo and OCI Beaumont’s post‐expansion capacity
• Fertilizers produced include ammonia, urea, calcium ammonium nitrate (CAN), urea ammonium nitrate (UAN) and other intermediary products; the business also sells ammonium sulphate (AS) out of the Netherlands and Belgium
• OCIP also produces methanol at OCI Beaumont with a capacity of 0.75 mtpa expanding to 0.9 mtpa
• OCI Fertilizer’s downstream product portfolio includes:
- Melamine production
- AS distribution
• North African facilities with attractive production costs
• Global in‐house distribution network with a presence in Europe and strategic joint ventures in Brazil and the U.S.
Egyptian Fertilizers Co.
Egypt Basic Industries Co
OCI Nitrogen
Sorfert
OCI Beaumont
Iowa Fertilizer
Appendix
27
Appendix Board of Directors
OCI GP LLC
Chairman
Director, President & CEO
Director
Director
Michael Bennett
Frank Bakker
Renso Zwiers
Nassef Sawiris
Background
Significant experience in the nitrogen industry, including serving as CEO of Terra Industries from 2001 to 2010
Served as vice president and general manager of OCIB from September 2011 to June 2013
Served as COO of OCI Fertilizer since January 2013 and has served as CEO of OCI Nitrogen since May 2010
Served as CEO and director of OCI N.V. and Orascom Construction Industries (“OCI SAE”) since its incorporation in 1998
Director Francis Meyer Served as Executive VP of Terra Industries from 2007 until April 2008 and as Senior VP and CFO from 1995 until 2007
Director Dod Fraser Served as President of Sackett Partners Inc. since its formation in 2000 upon retiring from a 27‐year career in Investment Banking
CFO & Vice President Fady Kiama Served as corporate planning director and group controller of OCI SAE from 2001 until May 2013
Director Nathaniel Gregory Senior lecturer in finance at the MIT Sloan School of Management.
28
Appendix Partnership Overview
Methanol Ammonia
• Methanol is a liquid petrochemical utilized in a variety of industrial and energy‐related applications
• The primary use of methanol is to make other chemicals
- ~30% of global methanol demand is converted to formaldehyde, which is used in various industrial applications
• Methanol is also used in the lumber industry, in paper and plastic products, and various other paint and textile applications
• Outside of the U.S., methanol is used as a fuel in several capacities:
- Direct fuel for automobile engines
- Gasoline blended fuel
- Octane booster in reformulated gasoline
Essential Building Blocks for Numerous End-Use Products
• Ammonia constitutes the base feedstock for nearly all of the world‘s nitrogen chemical production
• Over 95% of global ammonia output is used as a feedstock to produce other chemical forms of nitrogen, such as:
- Fertilizers
- Blasting/mining compounds
- Fibers and plastics
- NOx emission reducing agents
- Direct application to soil for agricultural purposes
• Ammonia is widely used in industrial applications, particularly in the Texas Gulf Coast market
Heat from Natural Gas Combustion
29
Appendix Product Process Overview
Optional H2N2
Natural Gas
Desulphurization Reactor
Steam Reformer Unit
Heat Recovery
Syngas Compression
Methanol Synthesis Reactors
Cooling
Methanol Separation
Methanol Distillation
Barge / Pipeline
Methanol Storage
Syngas
Steam
Ammonia Separation Cooling NH3
Synthesis
Syngas Compression
PSA Hydrogen Recovery
Liquid Pure Ammonia
Liquid
Pure Methanol
H2
Recycle
Ammonia Storage
Recy
cle
Ammonia Process Flow
Methanol Process Flow • Methanol production unit is a 730,000 metric ton per year unit that is comprised of Foster Wheeler‐designed twin steam methane reformers for synthesis gas production, two Lurgi‐designed parallel low pressure, water‐cooled reactors and four distillation columns
• Ammonia production unit is a 264,990 metric ton per year unit with a Haldor Topsøe‐designed ammonia synthesis loop that processes hydrogen produced by the methanol production process as the feedstock to produce ammonia
Natural Gas
Steam is also used to drive the compressors
Purge Gas
30
Appendix Site Facility Pictures
31
Appendix The U.S. Natural Gas Outlook
Annual Average Henry Hub Spot Natural Gas Prices, 2001 – 2028 (1)
Low U.S. natural gas prices contribute to the competitive position of U.S. methanol and ammonia producers relative to foreign producers
• Natural gas forwards project low Henry Hub Spot prices through 2028
– Below $4.00 per MMBtu until 2026
– Below $4.50 per MMBtu through 2028
___________________________________ (1) Source: Bloomberg
($/MMBtu)
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
2001 2004 2007 2010 2013 2016 2019 2022 2025 2028
Historical Henry Hub Spot Price Projected Henry Hub Spot Price
32
Appendix OCIP Realized Methanol Pricing History
($/metric ton)
150
250
350
450
550
650
2012 2013 2014 2015 2016
Methanex Contract Southern Chemical Contract Argus Contract OCIP Realized Price
33
Appendix US Methanol Imports
___________________________________ (1) Source: Argus JJ&A
34
Appendix Gulf Methanol Capacity
___________________________________ (1) Source: Argus JJ&A
35
Appendix New Methanol Capacity
Start Year Methanol Facility (1) Location Production Capacity (MTPA) Technology/EPC Status
2015 Methanex – Geismar I Geismar, LA 1,000,000 Jacobs Engineering 1/24/15 Produced first methanol from Geismar 1
2015 Celanese – Fairway LLC Clear Lake, TX 1,300,000 WorleyParsons 10/16/15 Started production
2015 Pampa Fuels LLC Pampa, TX 65,000 ExxonMobil/Proman Group 6/1/15 Fully operational and completed first shipment of methanol
2016 Methanex – Geismar II Geismar, LA 1,000,000 Jacobs Engineering 12/29/15 Successfully produced first methanol
2017 OCI – Natgasoline Beaumont, TX 1,650,000 Lurgi/OEC Construction began in November 2014
2019 Yuhuang Chemical St. James Parish, LA 1,800,000 Lurgi/Amec Foster Wheeler 8/18/15 Yuhuang secures St. James site for methanol plant
2019 G2X ‐ Big Lake Fuels Lake Charles, LA 1,400,000 Johnson Matthey/Proman Group 1/15/16 G2X hosted ground breaking ceremony for construction
___________________________________ (1) Source: Argus JJ&A
36
Appendix New Ammonia Capacity
Start Year Ammonia Facility (1) Location Production Capacity (STPA)*
Sellable/Usable Capacity (STPA) (1) Technology/EPC Permitting Status
2015 Koch Enid, OK +350,000 ‐ KBR • 8/16/14 Began construction in mid‐September; project will be implemented over three years
2016 PotashCorp Lima, OH +110,000 ‐ KBR • Expected start up in 2016
2016 OCI Wever, IA 850,000 100,000 KBR/OEC • On schedule to complete by 2016
2016 CF Industries Donaldsonville, LA 1,275,000 185,000 ThyssenKrupp
Uhde • Urea production began in November 2015
2016 CF Industries Port Neal, IA 850,000 80,000 ThyssenKrupp Uhde • On track for 2016 startup
2016 Dyno‐Cornerstone Waggaman, LA 850,000 850,000 KBR • 8/05/13 Cornerstone breaks ground on project
2016 LSB Industries El Dorado, AR 375,000 375,000 Leidos/SAIC (for Nitric Acid) • Nitric acid plant expected start up in early 2016
2016 Agrium Borger, TX +160,000 ‐ KBR • 8/7/15 Urea project will be completed at end of 2016; cancelled ammonia expansion
2017 Dakota Gasification Beulah, ND ‐ ‐ IHI E&C • 1/28/14 Urea plant scheduled for completion in early 2017
‐ Koch (Invista) Victoria, TX 400,000 400,000 1/31/14 Invista has put project on hold
‐ Northern Plains Grand Forks, ND 850,000 100,000 5/02/15 Announces product list of UAN, urea, DEF, AN, ATS, and anhydrous ammonia; no construction progress to date
‐ Ohio Valley Resources Rockport, IN 850,000 350,000 KBR/SEI • 12/19/13 Signed MOU with TEQSA for development, and selected
Sinopec (SEI) for FEED & EPC; no construction progress to date
‐ MFC (Fatima) IN 850,000 50,000 • 6/24/14 Signed MOU with Maire Tecnimont; no construction progress to date
‐ CHS Spiritwood, ND 850,000 ‐ • 9/05/14 CHS approved final plans for construction of fertilizer plant; no construction progress to date
___________________________________ (1) Source: Blue Johnson (2014).
* Production capacity with “+” indicates additional capacity expansion on existing facility
37
Appendix Methanol and Ammonia Plant Closures
Year of Closure Ammonia Facility Location Production
Capacity (MTPA)
1999 Potash Corp. Clinton, IA 281,000
1999 Potash Corp. La Platte, NE 231,000
1999 Solutia Lulling, LA 551,000
2000 Borden Chemicals & Plastics Geismar, LA 468,000
2000 Diamond Shamrock Dumas, TX 83,000
2001 Agrium Kennewick, WA 237,000
2001 Cytec Fortier, LA 485,000
2001 DuPont Beaumont, TX 540,000
2001 Farmland Lawrence, KS 518,000
2001 Vanguard Pollock, LA 568,000
2003 Koch Sterlington, LA 1,213,000
2003 Simplot Pocatello, ID 116,000
2003 Terra Yazoo City, MS 193,000
2004 Air Products Pace, FL 110,000
2004 Potash Corp. Memphis, TN 452,000
2004 Terra Blytheville, AR 496,000
2005 Agrium Kenai, AK 694,000
2005 Diamond Shamrock Dumas, TX 88,000
2005 Terra* Beaumont, TX 264,990
2007 Agrium Kenai, AK 777,000
Year of Closure Methanol Facility Location Production
Capacity (MTPA)
1998 Georgia Gulf Plaquemine, LA 480,000
1999 Methanex Fortier, LA 570,000
1999 Ashland Plaquemine, LA 450,000
2000 Sterling Texas City, TX 450,000
2000 Borden Chemicals & Plastics Geismar, LA 990,000
2001 Delaware City Delaware City, DE 200,000
2001 Enron Pasadena, TX 375,000
2003 Air Products Pace, FL 120,000
2003 El Paso Cheyenne, WY 180,000
2004 Lyondell Channelview, TX 770,000
2004 Celanese Clear Lake, TX 600,000
2005 Beaumont Methanol * Beaumont, TX 730,000
2005 Celanese Bishop, TX 500,000
___________________________________ * Represents current OCI Beaumont facility.