Safe Harbor Statement -...

A World of Solutions1

This presentation contains forward-looking statements regarding CB&I

and represents our expectations and beliefs concerning future events.

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forward-looking statements, we refer you to the cautionary statements

concerning risk factors and “Forward-Looking Statements” described

under “Risk Factors” in Item 1A of our Annual Report filed on Form 10-K

filed with the SEC for the year ended December 31, 2016, and any

updates to those risk factors or “Forward-Looking Statements” included in

our subsequent Quarterly Reports on Form 10-Q filed with the SEC,

which cautionary statements are incorporated herein by reference.

Safe Harbor Statement


Overview

Refining

Adding Petrochemicals to an Existing Refinery

Building a New Integrated Refinery

Petrochemical Complex

Fuels-focused Complex

Olefins-focused Complex

Summary

Agenda


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fill with picture optionOverview


Overview – Refining

In North America and

Europe, fuel markets

growing slowly or

shrinking

In Asia, increasing

demand for fuels and

industrial infrastructure

development

In Oil Exporting Countries:

Upgrade natural resources

Provide local jobs

Develop industrial infrastructure


Largest global petrochemical market segment is ethylene and propylene and

their derivatives

Competitive position is affected strongly by feedstock cost

Ethane feedstock is strongly cost-favored for ethylene production

Limited availability for new capacity outside North America and Central Asia

Overview – Petrochemicals

Solution: Integrated refinery and

petrochemical production

How do I create a cost-competitive position without ethane feedstock?


Refining


Refining Processes from CB&I and CLG

To RFCC

Crude

Unit

Sat. Gas

Plant

Vacuum

Unit

Hydrogen

Plant

Alkylation

Butane

Isomerization

Butane

DehydrogenationMTBE/ETBE

ISOMPLUS®Unsat. Gas

Plant

Hydrogenation

TAME/TAEE

FCC Gasoline HDS(R)FCCHydrotreating

VGO

Hydrotreating

Hydrocracking

VRDS*

LC-FINING®

LC-MAX

LC-SLURRY

Delayed Coking

RDS

Thermal Gasoil

Conversion

Sulfur

Recovery

Hydrogen

Recovery

Dewaxing Hydrofinishing

Methanol

Ethanol

Methanol

Ethanol

To RFCC

LSFO

Diesel

LSFO

Diesel

Diesel

LSFO

Ethylene Plant Feed

Naphtha

Jet

Diesel

H2 Rich Gas

Ethylene

Plant C4s

Alkylate

Naphtha

Middle

Distillates

=

H2S

NH3


50% Arabian Light

50% Arabian Heavy

250,000 BPSD (11,483 kta)

Refinery grade propylene

Light Naphtha

Gasoline

Jet/kerosene/diesel

Coke

Reformer, FCC, alkylation, coking Hydrotreating as required

Support units

An Example Refinery

Crude Blend

Capacity

Product Slate

Flow Scheme


Fuels Refinery Flow Scheme

Crude Unit

Naphtha Reformer

Hydrotreaters:

Naphtha

Kerosene

Diesel

Vacuum Unit

Coker

VGO Hydrotreater

FCC

C4 SHU

Alkylation

Butane

Isomerization

Hydroskimming

SectionBottoms Upgrading

Section

Crude

Fuel Gas

RG Propylene

Light Naphtha

Gasoline

Jet/Kerosene

Diesel

Coke


Fuels refinery set up to maximize

gasoline plus distillates

Slate is balanced at about 1/3 gasoline, 2/3 distillate

Gasoline and diesel meet Euro V specs

To meet a 95 RON gasoline pool:

Reformer operates in motor fuel mode, 98-

100 RON

FCC operates in max gasoline mode

FCC C4s converted to alkylate

Light naphtha sold as petrochemical

feedstock

Fuels Refinery Product Slate

ktaFuels

Refinery

Petrochemical Products:

PG Ethylene -

PG Propylene -

Butadiene -

Benzene -

Refinery Products:

RG Propylene 189

Light Naphtha 884

Gasoline 3,081

Jet/Kero 1,222

Diesel 4,168

Sulfur 821

Coke 212


Evaluate plants as new builds

Total Project Cost includes:

ISBL + OSBL expected cost

Working capital

Debt interest at 8% rate (assume 60/40 debt/equity)

Escalation at 2% to mechanical completion

Interest during construction

Owners/contractors cost

Net Revenue = Product Revenue – Cost of Crude – Cost of Utilities

Based on past 2 year average pricing for crude and products

IRR calculated over 15 years

NPV discount rate 10%

Basis For Economic Analysis


Stream Price, USD

Product Streams:

PG Ethylene $1270/ton

PG Propylene $1070/ton

Butadiene $1090/ton

Benzene $875/ton

Light Naphtha $53/bbl

Gasoline $70/bbl

Jet/Kerosene $70/bbl

Diesel $71/bbl

Fuel Coke $40/ton

Sulfur $25/ton

Feed Streams:

Arabian Light $53/bbl

Arabian Heavy $52/bbl

Basis For Economic Analysis


Fuels Refinery Economics

Fuels-driven refinery economics

marginally attractive

Fuels

Refinery

Total Project Cost, MM$ 5,000

Net Revenue, MM$/yr 860

%IRR 15%

NPV, MM$ 720


Adding Petrochemicals to an

Existing Refinery


Advantages of Petrochemical Integration

Increased

refinery margin

by upgrading

low-value

streams

Secure source

of competitively

priced raw

materials

Energy

and by-product

integration

Share fixed and

variable costs

Refinery Petrochemicals


Reuses existing assets

Adds steam cracker complex which

includes:

Steam cracker

Pyrolysis gasoline (pygas) hydrotreating

C2/C3 recovery from FCC offgas

Aromatics extraction

Butadiene (BD) extraction

Total C4 hydrogenation (THU)

Adding Steam Cracker to Fuels Refinery


New Flow Scheme

Steam Cracker

Pygas

Hydrotreating

C2/C3 Recovery

Aromatics

Extraction

Butadiene

Extraction

C4 THU

Petrochemicals

Crude Unit

Naphtha Reformer

Hydrotreaters:

Naphtha

Kerosene

Diesel

Vacuum Unit

Coker

VGO Hydrotreater

FCC

C4 SHU

Alkylation

Butane

Isomerization

Hydroskimming


Section

Crude

PG Ethylene

PG PropyleneFuel Gas

Fuel Gas

Gasoline

Jet/Kero

Coke

Diesel

BD

Benzene

Gasoline

C4/BTX Raffinates, C7+ Pygas,

PFO, Hydrogen

C2, C3, C4,

C5/C6 Naphtha


Low value naphtha product replaced

by high value petrochemicals

ktaExisting

Refinery


PG Ethylene -

PG Propylene -

Butadiene -

Benzene -

Refinery Products:

RG Propylene 189

Light Naphtha 884

Gasoline 3,081

Jet/Kero 1,222

Diesel 4,168

Sulfur 821

Coke 212

MM$Existing

Refinery

Add Steam

Cracker

Total Project Cost 5,000 1,600

Net Revenue 860/yr -

Incremental Revenue - 540/yr

%IRR 15% 42%

NPV 720 1,900

New Product Slate and Economics

Add Steam

Cracker

540

396

64

46

-

-

2,948

1,222

4,222

825

214

New Net Revenue

1,400 MM$/yr

(+62%)


Building a New Integrated

Refinery Petrochemical

Complex


Case 1 Case 2 Case 3

Crude Blend 50% Arabian Light, 50% Arabian Heavy

Refinery Capacity 250,000 BPSD

Refinery Integration Partial Full Full

Plant Focus Fuels Fuels Olefins

Basis for Evaluating Petrochemical Integration Three cases evaluated:

1. Fuels refinery plus steam cracker: olefins production included with fuels

refinery, as demonstrated earlier, taken as a single build

2. Fuels-focused complex: fully integrated, optimized refinery and steam

cracker retaining focus on fuels

3. Olefins-focused complex: fully integrated, optimized refinery and steam

cracker with increased light olefins yield

Petrochemical Investment


Case 1 Flow Scheme

Steam Cracker

Pygas

Hydrotreating

C2/C3 Recovery

Aromatics

Extraction

Butadiene

Extraction

C4 THU

Petrochemicals

Crude Unit

Naphtha Reformer

Hydrotreaters:

Naphtha

Kerosene

Diesel

Vacuum Unit

Coker

VGO Hydrotreater

FCC

C4 SHU

Alkylation

Butane

Isomerization

Hydroskimming


Section PG Ethylene


BD

Benzene

Gasoline

Crude

Fuel Gas

Gasoline

Jet/Kero

Coke

Diesel


PFO, Hydrogen

C2, C3, C4,

C5/C6 Naphtha


Adding steam cracker to

fuels refinery increases

IRR from 15% to 22%

Case 1 Product Slate and Economics

kta Case 1


PG Ethylene 540

PG Propylene 396

Butadiene 64

Benzene 46

Total 1,046

Refinery Products:

Gasoline 2,948

Jet/Kero 1,222

Diesel 4,222

Sulfur 825

Coke 214

MM$ Case 1

Total Project Cost 6,610

Net Revenue 1,400/yr

%IRR 22%

NPV 2,700


Crude Unit

Naphtha Reformer

Hydrotreaters:

Naphtha

Kerosene

Diesel

Vacuum Unit

Coker

VGO Hydrotreater

FCC

C4 SHU

Alkylation

Butane

Isomerization

Hydroskimming Section

Bottoms Upgrading Section

Steam Cracker

Pygas

Hydrotreating

C2/C3 Recovery

Aromatics

Extraction

Butadiene

Extraction

C4 THU

Petrochemicals

PG Ethylene


Gasoline

BD

Benzene

Gasoline

Case 2 Flow Scheme

Crude Unit

Hydrotreaters:

Naphtha

Kerosene

Diesel

Vacuum Unit

Coker

VGO Hydrotreater

FCC

C4 SHU

MTBE Unit

Hydroskimming Section

Bottoms Upgrading Section

Crude

Fuel Gas

Jet/Kero

Coke

Diesel


PFO, Hydrogen

C2, C3, C4,

C5/C6 Naphtha


kta Case 1


PG Ethylene 540

PG Propylene 396

Butadiene 64

Benzene 46

Total 1,046

Refinery Products:

Gasoline 2,948

Jet/Kero 1,222

Diesel 4,222

Sulfur 825

Coke 214

Case 2 Product Slate

World scale ethylene production

increases derivative options

Petrochemical product nearly

doubles to about 2 million tons

Jet/Kero + Diesel make retained

Case 2

1,028

696

140

119

1,983

2,021

1,222

4,157

834

214


Investment for fuels-focused complex similar to Case 1 investment

All-new optimized build more economically attractive than Case 1

Case 2 Economics

Case 2

6,640

1,900/yr

33%

5,300

MM$ Case 1



%IRR 22%

NPV 2,700


Maximum olefins refinery using

Indmax FCC plus steam cracker

An optimized refining petrochemical

scheme focused on increasing light

olefin production

FCC severity greatly increased

Indmax FCC increases propylene

yield from a range of 3-7 wt% to a

range of 18-22 wt% of FCC feed

Refinery scheme simplified further

All FCC C4s now routed to steam

cracker through THU

Case 3 Olefins-Focused Complex


Case 3 Flow Scheme

Steam Cracker

Pygas

Hydrotreating

C2/C3 Recovery

Aromatics

Extraction

Butadiene

Extraction

C4 THU

Petrochemicals

PG Ethylene

PG Propylene

Gasoline

BD

Benzene

Gasoline

Crude Unit

Hydrotreaters:

Naphtha

Kerosene

Diesel

Vacuum Unit

Coker

VGO Hydrotreater

FCC

C4 SHU

MTBE Unit

Hydroskimming


Section Fuel Gas

Crude

Fuel Gas

Jet/Kero

Coke

Diesel


PFO, Hydrogen

C2, C3, C4,

C5/C6 Naphtha


kta Case 1


PG Ethylene 540

PG Propylene 396

Butadiene 64

Benzene 46

Total 1,046

Refinery Products:

Gasoline 2,948

Jet/Kero 1,222

Diesel 4,222

Sulfur 825

Coke 214

Petrochemical

product increased to

over 2.8 million tons

Total ethylene up

20+% vs. fuels-

focused refinery

Total propylene up

80+% vs. fuels-

focused refinery

Refined fuel

production

decreases by 14%

Case 3 Product Slate

Case 2

1,028

696

140

119

1,983

2,021

1,222

4,157

834

214

Case 3

1,250

1,270

188

133

2,841

1,616

1,222

3,570

840

214


Steam cracker plus refinery with Indmax FCC provides highest NPV

Case 3 Economics

Case 2

6,600

1,900/yr

33%

5,300

MM$ Case 1



%IRR 22%

NPV 2,700

Case 3

7,000

2,300/yr

39%

7,300


Change in Mindset in Crude to Chemicals

Crude

Transportation

Fuels

ChemicalsCrude

Chemicals

Transportation Fuels (Optional)

Fixed Qty.

In KTA

Fixed

Barrels

Traditional

Crude to Chemicals


However – There are challenges

Polynuclear aromatics

Lowest olefin yields

High coking rate

Residue

Extreme coking rate

Contains asphaltenes that are difficult to vaporize

Solids (asphaltenes and coke) will form during vaporization and

cracking

Asphaltenes are soluble in aromatics and insoluble in paraffins

Coke is insoluble in both

HH

H

HH

H

H

H

H

HH H

CH2

H

H

H

H

H H

H H

CH2

CH3

CH2

S

O

N

S

N


What are the Challenges?

0

100

200

300

400

500

600

700

800

900

0 20 40 60 80 100

TB

P T

em

pe

ratu

re, C

Vol% Distilled

Condensate

Arab Extra Light 5%Arab Light 20%

Typically the heaviest material (residue) must be removed before cracking

Residue

Crude residue

fraction much

larger

A World of Solutions

A World of Solutions 33

Crude Cracking

Weight Percent Distilled

$/mt

Crude Oil400

500

600

0 25 50 75 100

NaphthaAGO

VGO$85 $75

$20

What if I just purchased and cracked the same feeds

(Naphtha, AGO, and VGO)?


Summary


New build regional refinery has marginal investment economics

Adding steam cracker to existing refinery increases refinery net revenue

by over 60%

New integrated, optimized complex with conventional FCC produces a

broad range of fuels plus world scale petrochemical production with

excellent economics, increasing NPV by over $2.5 billion and IRR from

22% to 33%

Incorporating Indmax FCC results in enhanced propylene

production, increasing NPV by $2 billion over a conventional FCC-based

petrochemical project and by a factor of 10 over a fuels-only refinery

Outside North America, the majority of new world scale petrochemical

olefins projects currently being considered are based on refinery

integration

Summary


Questions & Answers

Jose de Barros

[email protected]


Copyright 2017, CB&I Inc. All Rights Reserved.

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