9h55 am-Tammy Klein Presentation_Nov2014_REV

1. Hosted & Organized by Qatar Fuel Additives Company Limited (QAFAC)

2. UPSTREAM | MIDSTREAM | DOWNSTREAM | FUEL & TRANSPORT Making the Case for Oxygenates in the GCC Tammy Klein, Senior Vice President Middle East Methanol Forum, Nov. 26, 2014

3. © Stratas Advisors. All rights reserved. 3 Sulfur reduction and octane improvement primary focus GCC Fuel Quality Change Drivers 2012-2030 Prevalence of MTBE blending No regulatory push to increase octane, but market octane demand expected to increase No ethanol push Benzene and aromatics reductions expected beginning in 2016 in GCC (GSO 2196/2011)

4. © Stratas Advisors. All rights reserved. 4 Proposed/Confirmed FQ Changes • Jordan (GCC applicant) – 2018: 400 to 50 ppm sulfur • Kuwait – 2018: 500 to 10 ppm sulfur • Saudi Arabia – 2016: FQ Roadmap • Sulfur: 1,000 to 10 ppm • Benzene: 3 to 1 vol% max • Aromatics: No limit to 35 vol% max • Olefins: 20 to 18 vol% max • RVP: 45-62 (s) / 45-69 (i) / 45-79 (w) → 45-60 (s) / 45-70 (w) • Distillation EP: 225 to 210 ⁰C max • UAE – 2015: 100 to 10 ppm sulfur Proposed/Confirmed Fuel Quality Changes Sulfur reduction a key focus; Saudi Arabia’s fuel quality roadmap takes effect in 2016 Legend: 10 ppm 11-99 ppm 100-150 ppm 151-600 ppm 601-2500 ppm No information Sulfur Limits in 2020

5. © Stratas Advisors. All rights reserved. 5 Market octane demand expected to increase, desulfurization a key driver along with phase out of low octane grades Octane Market Share RON 81 84 87 90 91 92 95 98 Bahrain 40.0% 60.0% Iran 90.0% 10.0% Iraq 100.0% Jordan (applicant) 75.0% 25.0% Kuwait 35.0% 63.0% 2.0% Oman 12.0% 88.0% Qatar 43.0% 57.0% Saudi Arabia 65.0% 35.0% U.A.E. 38.0% 60.0% 2.0% Yemen 99.9% 0.1% Octane Market Share in GCC Countries, 2013  Data as at the end of 2013  Iran's gasoline market share may change as starting from April 2014 RON 95 50 ppm sulfur production accounted for about 30% of total gasoline production Source: Stratas Advisors, 2014

6. © Stratas Advisors. All rights reserved. 6 Average Annual Growth is 3.2% between 2012 -2030 Middle East Gasoline Supply & Demand 0 20 40 60 80 100 120 140 2012 2015 2020 2025 2030 MillionTons Middle East Production Middle East Demand  Robust demand growth in Arab Gulf stems from population increases and economic growth coupled with subsidized gasoline prices  The above positive factors will be offset partially by lower growth in the rest of the Middle East  Significant level of refining investments will shift the region from a net importer to net exporter Source: Stratas Advisors, 2014

7. © Stratas Advisors. All rights reserved. 7 Region becomes a net exporter after 2020 Middle East Gasoline Net Imports, 2012-2030  From a regional perspective, Latin America and Africa will remain net importers of gasoline throughout the forecast timeframe  North America and Middle East will shift from being net importers to net exporters -50 -40 -30 -20 -10 0 10 20 30 2012 2015 2020 2025 2030 MillionTons North America Latin America Europe CIS Asia Pacific Middle East Africa Source: Stratas Advisors, 2014

8. © Stratas Advisors. All rights reserved. 8 Highlights and Observations • Oxygenates Limits – 10 vol% max: Kuwait, Oman, UAE – 15 vol% max: Saudi Arabia, Qatar – No limit: Bahrain • Oxygen limit: – 2.7 wt% max: Kuwait, Iran, Oman, Jordan, UAE – No limit: Bahrain, Qatar (proposed for 2015), Saudi Arabia • Metallic Additives – In use in Iraq and Yemen • No ethanol blending in the region – Though American producers are hunting for export markets! • No methanol blending in the region at this time MTBE Blending in the GCC Countries Sulfur reduction a key focus; Saudi Arabia’s fuel quality roadmap takes effect in 2016 MTBE Blending in the Middle East Legend: Blends MTBE Doesn’t Blend MTBE No information

9. © Stratas Advisors. All rights reserved. 9 Two Largest Growth Markets Are Asia Pacific and GCC Stratas Base Case: Global MTBE Demand, 2012-2030 0.0 5.0 10.0 15.0 20.0 25.0 2012 2015 2020 2025 2030 MillionTons Latin America Europe Russia/CIS Asia Pacific Middle East Africa  Latin America constrained on refining capacity for producing volume and gasoline octane  Russia has large octane deficit due to increasing octane and removal of metallic additives  China has large octane deficit due to sulfur reduction and removal of metallic additives; China has limited refinery octane producing capability 8.98% 7.69% 6.63% 2.87% Note: Percentages represent growth in each of the study time increments shown. Source: Stratas Advisors, 2014

10. © Stratas Advisors. All rights reserved. 10 Demand to increase, will largely be supplied by domestic production Stratas Base Case: GCC MTBE Demand  Demand to increase as region reduces sulfur, improves octane  Region will largely be supplied by domestic production 0 1 2 3 4 5 6 2012 2015 2020 2025 2030 MillionTons Source: Stratas Advisors, 2014

11. Contact Information Q & A Tammy Klein, Senior Vice President tlkein@stratasadvisors.com +1.239.970.2231