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2. We provide strategic
and business-level
consulting, integrated
with deep technical
expertise, across the
entire asset lifecycle
with a truly global
footprint, and the
ability to localise
solutions.
We offer our customers
specialization in the
delivery of large
complex projects. It
reflects our customers’
organizations by
supporting large and
complex projects
wherever they are in
the world.
We provide services
to local customers,
utilizing the knowledge
and capability
throughout our global
organization. From
concept selection, front-
end studies, small and
large project delivery,
and portfolio
management in
greenfield and
brownfield
environments.
We provide our
customers with global
best practice solutions
to optimize the
performance of their
operating assets,
including brownfield
project portfolio
delivery, business
improvement,
operations and
maintenance support,
shutdowns and
outages.
Advisian Major Projects Services
Integrated
Solutions
WorleyParsons Group
FY2016 Revenue: AUD 6 Billion
Advisian / 2
3. Global reach and local perspective
Advisian / 3
offices
106
countries
42
people
22,800
4. Our heritage is in the energy, resources
and infrastructure sectors
Advisian / 4
Hydrocarbons
Minerals &
Metals Chemicals Infrastructure
Power
Energy
Resources
5. The U.S. is in place to be the most
competitive global manufacturer of
chemicals as a result of hydraulic
fracturing and natural gas…
and the wave of investments is far
from over.
The American Chemistry Council (ACC), June 2017
Advisian / 5
6. Independent market drivers
North America
Petrochemical developments taking advantage of low-cost/abundant
feedstock will continue to be robust.
Midstream: major investment in pipelines, gas processing, storage and
LNG in US, Canada and Mexico.
“Permania” in the US will dominate upstream spending. Canada becoming a
more regional market with IOCs reducing presence.
Infrastructure investment and structural changes will create port, rail and
power opportunities.
Financial investors/private equity will exert increasing control and create
new market opportunities.
Advisian / 6
7. Capital spend size and growth forecast by
sector in North America
Sector
US
Capex
(US Bn,
2017)
US
Growth
CAGR
2017-2022
Canada
Capex
(US Bn,
2017)
Canada
Growth
CAGR
2017-
2022
1 Upstream 118 5-6% 32 2-3%
2 Downstream 15 Flat 2 Flat
3 Petrochemicals 55 3-4% 9 3-4%
4 Power 86 Flat 8 Flat
5 Mining 10 Flat 18 2-3%
Advisian / 7
8. Forecast US chemical market capital
spending >US60Bn in 2021 at CAGR 7.5%
All chemical groups anticipate growth in production
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2014 2015 2016 2017 2018 2019 2020
US Chemical Market Capital Spend Forecast US Production Forecasts for Chemicals All >0% Yr-on-Yr
0
1
2
3
4
5
6
7
8
2015 2016 2017 2018 2019
Organic
Plastic resins
Synthetic rubber
Specialty/other
Inorganic
Agriculture
Consumer
Manmade fibers
Advisian / 8Source: American Chemistry Council
9. 0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2015 2016 2017 2018 2019 2020 2021
Petrochemical market forecast CAGR
3% - 3.5% in North America
Canada: CAGR +3.6%
US Market: CAGR +3.1%
M USD
Petrochemical Manufacturing Revenue to 2021
Advisian / 9
US is ~10x size of Canada
38.5%
42.3% 19.2%
46.6%
<5% US
market each
12.1%
Respective Distribution of Production: US & Canada
Source: IBIS World
11. Regional value chain
Intersection of Energy and Downstream value chains
PRODUCTION
Stabilization
around
60 USD/BBL
and increased
drilling activity
MIDSTREAM
Key pipeline
projects
connecting
shale basins
to markets.
PETROCHEMICALS
Main ethylene
production
and enablers
include
infrastructure
& utilities.
DERIVATIVES
Specialty
chemical
production
with access to
feedstock and
GDP + growth
LOGISTICS
Rail, port
and road
distribution of
intermediate or
final products.
Advisian / 11
12. Regional value chain (Cont’d)
Intersection of Energy and Downstream value chains
PRODUCTION
Focus:
Stability in E&P and
selected growth
Last 12 months3:
460B
Last 15 months2:
54B
Attractive short/
mid-term returns
MIDSTREAM
Focus:
Low-cost
feedstock delivery
Last 18 months2:
173B
Last 18 months2:
8.5B
Attractive as
annuity based
PETROCHEMICALS
Focus:
Next wave
expansion projects
Last 18 months1:
25.5B
Last 18 months1:
0.5B
Focus on
procurement &
ownership of
supply chain
DERIVATIVES
Focus:
Expansion of
diversified products
Last 18 months1:
25.5B
Last 18 months1:
0.5B
Specialty Chemicals
Investors in
high growth
LOGISTICS
Focus:
Constraints,
bottlenecks, resilience
Last 18 months:
4.9B
Last 18 months:
0
Limited 3rd party
investment in key
infrastructure
Expended
3rd Party
Enabled
Why?
Source: IHS Markit, Rystad, Reuters, Preqin
Advisian / 12
13. Indicative composition of capital projects
25%
50%
25%
Utilities & Power Plants
Process Plant
Infrastructure
Capital
Outlay
■ Process Plant (40-55%)
– Process units
– ISBL requirements
■ Utilities & Power Plants (20-35%)
– Water supply, water treatment
– Power generation (CHP) and
transmission
– Feedstock pipeline(s)
– Steam generation
■ Infrastructure (20-25%)
– Roads
– Buildings
– Marine facilities, maintenance and
storage
– Rail connection, maintenance and
storage
With $70B – $80B (USD p.a.) capital spending in
North American Downstream and Petrochemicals over next 5 years (350-400B TIC),
$150B - $200B will be spent on new utilities and infrastructure.
Advisian / 13
14. NGL production in Eastern US is expected to double
in next 35 years (40% of total US production)
Advisian / 14
0
5
10
15
20
25
30
35
40
45
50
2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Outlook for NGL Production in Eastern US
BCF/day
• The US produces 25% of the world’s NGLs; 25% of US supply comes from the Eastern US.
• In PA, OH and WV, production of NGLs has grown almost 10-fold over the past 4 years.
• More than 70% of this NGL is ethane and propane. PA currently exports 100% of its ethane.
• New investments will increase US PE production to over 54 billion pounds by 2020.
Processing & Fractionation Capacity in
Appalachian Region
Top: major processing capacity sites (over 50m cu.ft./day)
Bottom: major fractionator sites (over 50,000 bpd)
Source: Petrochemical Update, EIA
Rapid expansion in NGL production from 2010 - 2020
15. Regional development projects:
Anchors and Enablers
Advisian / 15
Source: Pittsburgh Post-Gazette, West Virginia Executive Magazine, Petrochemical Update
Ethylene Processing Plants
Additional projects under consideration include:
• PTT Global Chemicals: 1 mtpa in Ohio (under review)
• Braskem: 1.1 mtpa plant in WV (stalled)
Petrochemical Storage
Above: Shell’s $6 billion project with capacity of
1.6 mtpa in Beaver County, PA (under construction).
Startup is scheduled for 2022.
Above: $10 billion Appalachian storage hub
would handle 100m barrels of NGL with 3,000
miles of pipelines across four states.
Additional projects under consideration include:
• Energy Storage Ventures LLC (ESV): bulk NGL
storage in Salina bedded salt caverns
16. Geographic and supply advantages are
threatened by midstream, labor and land risks
Advisian / 16
Source: Petrochemical Update, EIA
• 70% of North America PE customers within
700-mile range of Pittsburgh.
• Feedstock transport cost advantage vs. USGC
• Up to 400,000 b/d of ethane availability for PE
feedstock in the region – enough for 5-6 crackers.
• Lack of pipelines restricts what is sold. Remaining
150,000 b/d is downgraded and sold to homes.
• Siting: Difficult to find 200 hundred acres of flat
land; 800 to 1,000+ acres required for PC complex.
• Relatively higher plant construction costs
compared to the US Gulf Coast.
• NGL storage hub access.
• Processing near the source can avoid pipeline
transport cost to Gulf Coast ($0.15 to
$0.24/gallon).
• Expanded access to foreign markets due to lower
cost and excess volume of US production.
• New tax law offers accelerated depreciation
schedules for investments in new plants/equipment.
• Streamlining of regulations and potential options
for a regional view for synergies.
• Relatively more stringent state and federal
regulation of oil and gas production.
• Aging workforce with declining participation
among prime age men due to opioid epidemic.
• High labor costs and lack of skilled craft labor due
to competition with Gulf Coast and other
projects.
STRENGTHS WEAKNESSES
OPPORTUNITIES THREATS
∙
∙
∙
∙
∙
∙
∙
∙
18. Investment dynamics are changing
Market
availability
Regulatory
relief
Access to
capital
Tax
reform
International
markets
Domestic growth
160 changes
enacted to date
Streamlining of
processes
Appetite for
spending
Options for
deployment
Costs to
business down
Incentives to
construct up
Advisian / 18
19. The development roadmap
Identify Select OperateDeliver
Final Investment
Decision
Conceptualize/
Strategy
Prove Feasibility &
Concept
Procure/Definition
& Development
Construct Operate
Public
Sector
Private
Sector
Business Case, Feasibility Study, Project
Definition, Options Analysis
Project Design
Procurement Planning
Transaction
Management
Project
Oversight
Policy; Strategy; Business Planning;
Site Identification & Selection
Finance, Project Finance & PPP (Inception)
Finance &
Commercial
(Optimization)
Operational
Planning
Operation &
Maintenance
OwnerRequirements/
RegionalRequirements
6-12 months 12-18 months 18-36 months 20-40 years
Where are risks?
Where can
collaboration be
leveraged?
Advisian / 19
20. LOST VALUE
Take life cycle perspective on decisions
■ Capital Costs
■ Sustaining Capital
■ Power, Fuel, Chemical Consumption
■ Operation and Maintenance
■ Capacity and Reliability
■ Revenues
Internal success factors
■ Health and Safety
■ Social License and Development
■ Regulatory Trends and Changes
■ Environmental and Climate Change
■ Commodity cycles
■ Divestment / Closure
External success factors and risks
FORCED CHANGES
21. Digital risks are also emerging…
Lack of
accurate
information
Lack of
collaboration
System and
information silos
Lack of reuse
of data
Disconnect of digital and physical asset
Resources and
safety
practices not
aligned
Inefficient
operational
practices
Engineering
primarily
focused on
discipline
deliverables
Inefficient practices
Poor
return on
capital
invested
Operation
inefficiency
and safety
issues
Poor employee
engagement
Sub-optimal business outcomes
22. Navigating to FID and NPV
Advisian / 22
1
2
3
4
Market access
Establish a differentiated position,
optimize product slates, understand
feedstock supply and security, identify
and access target markets
Strategy
Clarify strategic objectives to make an
informed decision; Understand key issues
and vulnerabilities, technologies
employed, operating efficiencies and
reliabilities, logistics and supply chain.
.
Siting
Find the best available site to
meet project objectives and
streamline permitting.
Financing
Get practical advice on funding options
and opportunities, development
of partnering approach, also
business model development.
.
23. What region or project to invest in?
532 71 4 6Enablers
Location (Supply /
Demand)
Regulatory
Construction Access
Feedstock Access /
Availability
Community Sentiment
Infrastructure &
Utilities
Access to Workforce
Regional Storage Hub
Logistics services
IT services
Transportation
services
Healthcare services
Partnerships /
Academia
HR services
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Location Comparison
=0 (Poor) =4 (Excellent)
Importance
to investors
Important
Very important
Illustrative
Advisian / 23
24. The development roadmap:
risks vs. collaboration
Identify Select OperateDeliver
Final Investment
Decision
Conceptualize/
Strategy
Prove Feasibility &
Concept
Procure/Definition
& Development
Construct Operate
Public
Sector
Private
Sector
Business Case, Feasibility Study, Project
Definition, Options Analysis
Project Design
Procurement Planning
Project
Oversight
Policy; Strategy; Business Planning;
Site Identification & Selection
Finance, Project Finance & PPP (Inception)
Finance & Commercial
(Optimization)
Operations &
Maintenance
OwnerRequirements/
RegionalRequirements
• Site location/selection
• Feedstock access
• Midstream/storage
• Development finance
• Construction access
• Community & social license
• Labor resources
• Project finance /NPV
• Schedule/cost
• Community
• Labor relations
• Delivery certainty
• Operational efficiency
• New skills
• Logistics & supply
chain
• Sustaining capital
• Regional coordination/planning
• Ensuring options: feedstock, storage
• Enablers for development: regs. tax
• Common infra development
• Early contractor engagement
• Alternate finance/delivery models
• Stakeholder mgt.
• Digital plant
• Training design
• Digital industry
• Utilities/infra-sharing
• Academia partnerships
Risks
Collaboration
Ops Planning
Transaction
Management
25. • Enable focus on core business
• Reduce capital to achieve FID
• Enhance access to advanced
technologies and expertise
• Mitigation of risks
• Fit-for-purpose commercial structure
• Whole of asset lifecycle view
Patrick Mullen, Managing Director
Global Water Development Partners
A Blackstone Portfolio Company
Over the lifecycle, the project
capital construction cost is only
a percentage of the overall cost
impact of new infrastructure —
typically, capital only makes
up 30% to 50% of project
costs; the rest are related to
financing and O&M costs.
Most projects never get
priced for the entire life
of the project.
“
“
Benefits of a collaborative approach
Advisian / 25
26. • Market dynamics and
reforms are spurring
new investment but
creating competition
• Speed to market is key
but not at the expense
of longer term benefits
• Leverage asset life cycle value
during planning to reduce
risks and drive innovation
• Key risks (e.g., siting, storage
etc.) need to be mitigated to
unlock full value chain
• Non-traditional partners can
emerge but proponents need
to take broader view
27. DISCLAIMER
This presentation has been prepared by a representative of Advisian.
The presentation contains the professional and personal opinions of the presenter, which are given in good faith. As such, opinions
presented herein may not always necessarily reflect the position of Advisian as a whole, its officers or executive.
Any forward-looking statements included in this presentation will involve subjective judgment and analysis and are subject to
uncertainties, risks and contingencies—many of which are outside the control of, and may be unknown to, Advisian.
Advisian and all associated entities and representatives make no representation or warranty as to the
accuracy, reliability or completeness of information in this document and do not take responsibility for updating any information or
correcting any error or omission that may become apparent after this document has been issued.
To the extent permitted by law, Advisian and its officers, employees, related bodies and agents disclaim all liability—direct, indirect
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