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U.S. oil and gas export scenario’s: What are the opportunities for Vopak?
Capital Markets Day, 10 December 2013
Dick Richelle, Division President Americas
Forward-looking statements
This presentation contains ‘forward-looking statements’, based on currently available plans and forecasts. By
their nature, forward-looking statements involve risks and uncertainties because they relate to events and
depend on circumstances that may or may not occur in the future, and Vopak cannot guarantee the accuracy
and completeness of forward-looking statements.
These risks and uncertainties include, but are not limited to, factors affecting the realization of ambitions and
financial expectations, developments regarding the potential capital raising, exceptional income and expense
items, operational developments and trading conditions, economic, political and foreign exchange
developments and changes to IFRS reporting rules.
Vopak’s EBITDA ambition does not represent a forecast or any expectation of future results or financial
performance.
Statements of a forward-looking nature issued by the company must always be assessed in the context of the
events, risks and uncertainties of the markets and environments in which Vopak operates. These factors could
lead to actual results being materially different from those expected, and Vopak does not undertake to publicly
update or revise any of these forward-looking statements.
2 Capital Markets Day 10 December 2013
Dick Richelle President, Vopak Americas
43
Education Dick holds a doctoral degree Business Economics
from Erasmus University in Rotterdam.
Career Dick joined Vopak in 1995 and has held various
(general) management positions in Brazil, Mexico and the
Netherlands. He was appointed as President Vopak
North America in 2009.
Age
Name Dick Richelle
3 Capital Markets Day 10 December 2013
Americas Positive developments at the U.S. Gulf Coast and Venezuela, with downside in Los Angeles (U.S.) and Brazil
4 Capital Markets Day 10 December 2013
Total 3.3
Other** 0.4
Brazil 0.3
Mexico* 0.3
Canada 0.2
U.S. East Coast 0.4
U.S. West Coast 0.4
U.S. Gulf Coast 1.3
Storage Capacity
In million cbm
Occupancy rate***
In percent
EBIT****
In EUR million
* Excluding LNG Altamira (0.3 million cbm); ** Columbia, Venezuela, Ecuador, Peru and Chili; *** Subsidiaries only; **** Including net result from joint ventures and associates; excluding exceptional items. Note: Due to the retrospective application of the Revised IAS 19, EBIT for 2012 has been restated.
90.0 -4%
YTD 2013 YTD 2012
94.0
46.5 -6%
YTD 2013 YTD 2012
49.5
Contents
Main market developments U.S. Gulf Coast area
Vopak’s position in U.S. Gulf Coast area
Vopak’s opportunities in U.S. Gulf Coast area
Capital Markets Day 10 December 2013 5
Shale gas Tight oil Biofuels
Main market developments The shale revolution and biofuels developments
6
The North American shale revolution Government mandates
drive biofuels trade
Capital Markets Day 10 December 2013
The shale revolution It has strengthened the (export) growth and competitiveness of the U.S. oil and gas industry
7 Capital Markets Day 10 December 2013
Crude oil production
In Mb/d
2020
9.9 6.4 +55%
2012
Natural gas production
In Tcf
2020
16.7 7.5 +123%
2012
NGL production
In Mb/d
2020
3.5 1.6 +119%
2012 Source: US Ministry of Energy; ICP International; EIA.
Current shale plays
Stacked plays
Shallowest / youngest
Intermediate depth / age
Deepest / oldest
* Mixed shale and chalk play
** Mixed shale and limestone play
*** Mixed shale and tight dolostone-
siltstone-sandstone play
Prospective shale plays
Basins
Natural gas as a cheap feedstock North America positioned as second lowest-cost producer of ethylene-intensive chemicals globally
8 Capital Markets Day 10 December 2013
$1550
$1250
$1100
$ 950
$ 800
$ 650
$ 500
$ 200
0 20 40 60 80 100 120 140 160
Cumulative ethylene capacity (million metric tons)
North America
Middle East
Indian
subcontinent
Southeast Asia
Northeast
Asia
West
Europe
2012
ethylene
demand
Note: Ethylene cash costs, U.S. Dollars per metric ton; 2012 WTI crude oil is US$ 105 per barrel; average feedstock basis. Source: IHS Chemical.
$ 350
$1400
$ 50
U.S. Ethane
Natural gas as cheap feedstock New ethylene capacity and downstream plants are currently under construction or consideration
9 Capital Markets Day 10 December 2013
113
363
105
800
363
272
544
Total 8,560
1,500 1,500 1,500 2016-2020 1,500
2015
2014
2013
Capacity announced
Kt/y Project
operator
1
2
4 5
6 7 8 9
Project Location in
Texas (US)
Source: Vopak analysis
1
2
4
5
Ethylene expansion
Ethylene expansion
Ethylene expansion
Ethylene expansion
Chocolate Bayou
La Porte
Channelview
Corpus Christi
3 Ethylene expansion Geismar 3
6
7
8
9
Ethylene expansion
Ethylene cracker
Ethylene cracker
Ethylene cracker
Baytown
Point Comfort
Freeport
Cedar Bayou
Ethylene cracker Ingleside
Ethylene cracker Cedar Bayou
10
11
10 11
Shale gas impact Potential increasing U.S. Gulf Coast ethylene and LPG exports
10 Capital Markets Day 10 December 2013
0.0
0.4
0.8
1.6
1.2
2012 2018 2016 2014 2020
0
5
10
15
20
25
2022 2020 2014 2012 2018 2016
Export potential
Committed storage capacity
Potential ethylene exports and capacity
In millions tons
Potential LPG exports and capacity
In millions tons
Source: Vopak analysis
Source: Wood McKenzie; EIA; Purvin&Gertz
11 Capital Markets Day 10 December 2013
Key U.S. crude oil
trade flow (2012)
Latin America
Africa
Middle East
FSU
Tight oil impact Source and composition of North America crude oil supply is changing
Potential key U.S. crude
oil trade flow (2020)
Expected decreasing
crude oil imports into
U.S. Gulf Coast from
Latin America, Mexico
and Middle East
Heavy crude oil imports
remain
Expected increase in
intra-regional trade flows
It is not allowed to export
crude oil out of the U.S.
(presidential approval)
United States
Forecast U.S. crude
oil trade flow (2020)
Source: US Department of Transportation
12 Capital Markets Day 10 December 2013
CA
OR
WA
ID
MT
WY
NV
UT
AZ
NM
CO
TX
OK
KS
NE
SO
ND
MN
IA
MO
AR
LA
MS AL GA
FL
IL
WI
MI
IN
KY
TH
OH
WV VA
NC
SC
PA
NY
ME
DC
MD
NJ
DE
CT RI
VT
NH MA
NYC
PADD 5:
West Coast
PADD 4:
Rocky
Mountain
PADD 3:
Gulf Coast
PADD 2:
Midwest
PADD 1:
East
Coast
U.S. refinery
Canadian Oil Sands
Tight oil impact Source and composition of North America crude oil supply impact future US crude oil flows
Tight oil impact: Competitive CPP exports Potential expansion of splitter capacity might stimulate distillates and naphtha exports
13 Capital Markets Day 10 December 2013
0
10
20
30
40
50
60
Naphtha exports Fuel oil exports Gasoline exports Distillate exports
High Case 2020
Low Case 2020
Actual 2012
USGC Refined Products Flows
Volume (MMT)
Source: Vopak analysis
Biofuels impact A growing commodity going forward, as part of transport fuel composition
14 Capital Markets Day 10 December 2013
Note: Transport fuel composition in million tons. Source: Wood Mackenzie; Vopak analysis
Volumes increased rapidly
with obligatory mandates in
Europe and North America
in early 2000s
Composition of declining
gasoline demand in the
U.S. is changing
Biofuels are expected to
stay and behave like typical
commodity
400
100
0
2022 2012 2002
600
200
0
2022 2012 2002
150
50
0
2022 2012 2002
Brazil
Diesel
Biodiesel
Gasoline
Ethanol
U.S. Europe
Contents
Main market developments U.S. Gulf Coast area
Vopak’s position in U.S. Gulf Coast area
Vopak’s opportunities in U.S. Gulf Coast area
Capital Markets Day 10 December 2013 15
16 Capital Markets Day 10 December 2013
Potential brownfield project Deer Park (100%) 3.3 acre waterfront for 1 ship dock
18.7 acres inland site
Galena Park (100%)
170,032 cbm
86 tanks; 1 ship dock 12 truck bays; 11 rail spots
Potential greenfield projects (100%) 108 acre inland site
23 acre marine site
Unit train capabilities (up to 120 cars)
Multiple ship docks (deep water)
Deer Park (100%)
1,115,103 cbm
242 tanks; 5 ship docks
22 truck bays;
23 rail spots; 40 car ethanol unit train rack
Vopak position in U.S. Gulf Coast area Existing presence and expansion opportunities
Competition in U.S. Gulf Coast area Examples of storage capacity currently under construction or consideration
Oiltanking Partners
announces $200M in
expansion projects
Kinder Morgan begins
service at BOSTCO Oil
Terminal on Houston
Ship Channel
17 Capital Markets Day 10 December 2013
Contents
Main market developments U.S. Gulf Coast area
Vopak’s position in U.S. Gulf Coast area
Vopak’s opportunities in U.S. Gulf Coast area
Capital Markets Day 10 December 2013 18
Existing terminals
and brownfield
(Crude) oil
To a lesser extent
Chemicals / gasses*
Potential
opportunities,
amongst others
through industrial
pipeline
connections
Biofuels
Potential
opportunities for
ethanol and
biodiesel
Growth opportunities in U.S. Gulf Coast area At existing terminals and two additional land plots
Potential
opportunities in
both crude oil and
clean petroleum
products
Through pipeline
and unit train
capability
Potential
opportunities for
gasses through
pipeline
connections
Potential
opportunities for
ethanol through
unit train Greenfield opportunities
Capital Markets Day 10 December 2013 19
* Excluding LNG.
▪ Pipeline connection
▪ Time to market or first
mover advantage
▪ Right partner for the
right reason
1
2 3
Critical success factors Growth opportunities in U.S. Gulf Coast area
Capital Markets Day 10 December 2013 20
Royal Vopak
Westerlaan 10 Tel: +31 10 4002911
3016 CK Rotterdam Fax: +31 10 4139829
The Netherlands www.vopak.com