Getting ready for APLA - see whats affecting US Ethylene and how this might affect the gobal commodity markets.

1. US olefins, PE & PP at a glance
Bernardo E. Fallas, Editor – Americas Petrochemicals 2013
© 2013 Platts, McGraw Hill Financial. All rights reserved.

2. US Ethylene: Stable in July, up in Aug.
Source: Platts
2

3. What is all means.
Click here to watch.
3

4. US Propylene: Aug. CPs rise $110/mt
Source: Platts
4

5. LDPE: Tight globally, up in Asia, US
Source: Platts
5

6. Polypropylene: Stronger on feedstock
Source: Platts
6

7. Propane
Lt Naphtha
Butane
Ethane
May-13
Apr-13
Feb-13
Mar-13
Jan-13
Dec-12
Nov-12
Oct-12
Sep-12
Aug-12
Jul-12
Jun-12
May-12
Apr-12
Mar-12
Feb-12
Jan-12
Dec-11
Nov-11
Oct-11
Sep-11
Aug-11
Jul-11
Jun-11
May-11
Apr-11
Feb-11
Mar-11
Jan-11
Cents/lb
US ethylene margins
60.00
50.00
40.00
30.00
20.00
10.00
0.00
-10.00
-20.00
-30.00
7

8. Platts New Report & Analysis
8

9. US cracker margins 2013
Source: Platts
9

10. Ethylene: Producers still “all-in”
IF built, proposed greenfield projects in the US could add as much
as 8.55-9.15 million mt/yr of ethylene capacity by 2017
Company
Location
,000 mt/yr
ETA
ExxonMobil Chemical
Texas
1,500
2016
Formosa Plastics CUSA
Texas
800
2016
Chevron Phillips Chemical
Texas
1,500
2017
Dow Chemical
Texas
1,500
2017
Sasol
Louisiana
1,500
2017
Occidental/Mexichem
Texas
550
2017
Shell Chemical
Pennsylvania
Aither Chemical/RMG
Appalachian Resins
1,000-1,500
2017
W. Virginia
200-300
2017
W. Virginia
250
2017
Source: Company announcements, Platts
10

11. Brownfield projects: The Ones to Watch
Company
Location
+,000 mt/yr
ETA
BASF-Total
Texas
60
2012
Dow Chemical (restart)
Louisiana
400
2012
Westlake Chemical
Louisiana
110
2013
Williams
Louisiana
230
2013
Ineos
Texas
120
2013
Westlake Chemical
Kentucky
80
2014
BASF-Total
Texas
100
2014
Westlake Chemical
Louisiana
110
2015
LyondellBasell
Texas (3)
830
2014-16
Dow Chemical
TX/LA (2)
400
2014-16
Source: Company announcements, Platts
11

12. Ethylene Boom: USGC is the focus
1
2
3
4
5
6
7
8
9
10
11
Production
capacity
(mm Mt/Yr)
BASF-Total
Port Arthur, TX
0.06
Dow Chemical
Hahnville, LA
0.4
Westlake Chemical Lake Charles, LA
0.11
Williams
Geismar, LA
0.23
Ineos
Alvin, TX
0.12
Westlake Chemical Calvert City, KY
0.08
BASF-Total
Port Arthur, TX
0.1
Dow Chemical
Plaquemine, LA
0.2
Dow Chemical
Freeport, TX
0.2
LyondellBasell
Channelview, TX
0.11
LyondellBasell
La Porte, TX
0.36
12
LyondellBasell
CorpusChristi, TX
0.36
2015
13
Westlake Chemical Lake Charles, LA
0.11
2015
14
Aither Chemical
Charlestn, W. VA.
TBD
2016
15
Point Comfort, TX
0.8
2016
Baytown, TX
1.5
2016
17
18
Formosa Plastics
ExxonMobil
Chemical
Chevron Phillips
Dow Chemical
Baytown, TX
Freeport, TX
1.5
1.5
2017
2017
19
Oxy/Mexichem
Ingleside, TX
0.55
2017
Reference Owner/Operator
16
20
21
Total
Shell Chemical
Sasol
Location
Monaca, PA
Lake Charles, LA
1
1
10.29
Majority of world-scale projects
are at least 3-5 years away
In-service
2012
2012
2013
2013
2013
2014
2014
2014-16
2014-16
2014-15
2014-15
2017
2017
20
14
6
1/7
16
4
8
21 3 2
17
15 18 910 13
Greenfield
Brownfield
12 11 5
19
Source: ProPublica
12

13. Propane: Lifeline for US Propylene
Tightening supplies breed volatility. Relief could be on the way,
but next 3-4 years are likely to test downstream markets
Company
Location
,000 mt/yr
ETA
Freeport, TX
750
2015
Enterprise Products (PDH)
Mt. Belvieu, TX
750
2015
C3 Petrochemicals (PDH)
Alvin, TX
1,200
2015
Point Comfort, TX
600
2016
Alberta, Canada
500
2016
Dow Chemical (PDH) *
TBD/USG
TBD
2018
Enterprise Products (PDH) *
TBD/USG
TBD
TBD
Houston, TX
Expansion
---
Texas
Expansion
---
Dow Chemical (PDH)
Formosa Plastics CUSA (PDH)
Williams (PDH)
PetroLogistics (PDH)
LyondellBasell (metathesis)
Source: Company announcements, Platts
13

14. Data: Platts LPGaswire
CFR Japan 45-60 days
FOB NWE Seagoing
Saudi CP
Mar-13
Jan-13
Nov-12
Sep-12
Jul-12
May-12
Mar-12
Jan-12
Nov-11
Sep-11
Jul-11
May-11
Mar-11
Jan-11
Nov-10
Sep-10
Jul-10
May-10
Mar-10
Jan-10
Nov-09
Sep-09
Jul-09
$/MT
US Propane: Values Diverge
$1,400
$1,200
$1,000
$800
$600
$400
$200
Gulf Coast
14

15. What About Polypropylene?
Company
Location
,000 mt/yr
ETA
N/A
N/A
N/A
N/A
• Zero projects announced
• At least for the short-term, the business appears unattractive,
and companies including Dow Chemical and Sunoco have
exited it all together
• Last year, Chevron Phillips and Sumika ended a JV in
Pasadena,TX, taking 320,000 mt/year out of the market
• “Polypropylene is going the way of polystyrene” – PP seller
15

16. Butane: On-Purpose Butadiene
Company
Location
,000 mt/yr
ETA
TPC Group (BDH)
Houston, TX
295 (isobutylene)
2014
TPC Group (OXO-D)
Houston, TX
272 (butadiene)
2016
• Restart of dehydrogenation assets to provide isobutylene
feedstock for MTBE, PIB, HP isobutylene and
diisobutylene
• Engineering design optimization for TPC OXO-D unit
due Q3 2013
• Engineering also underway for PIB expansion
16

17. Natural Gas: The Methanol Comeback
Cheap natural gas brings production back to US Gulf Coast
Company
Location
,000 mt/yr
ETA
OCI
Beaumont, TX
750
2012
Methanex (debottleneck)
Alberta, Canada
90
Q3 2013
LyondellBasell
Channelview, TX
780
Q4 2013
Methanex I (relocation)
Geismar, LA
1,000
2014
G2X Energy
Pampa, TX
65
2014
OCI (debottleneck)
Beaumont, TX
125
Q4 2014
Celanese
Clear Lake, TX
1,300
Q2 2015
Methanex II (relocation)
Geismar, LA
1,000
2016
South Louisiana Methanol
St. James, LA
1,800
Q1 2016
Lake Charles CE/BP
Lake Charles, LA
1,000
H2 2016
Source: Company announcements, Platts
17

18. U.S. Ethane Balance Including Williston
Basin Ethane Production
2,000
Mb/d
1,500
1,000
500
0
Gas Plant Supply
Refinery Supply
Exports to Canada
Rejected Volumes
Petchem Demand
18

19. Ethylene: Major Expansions Globally
70,000
2017 - Ethylene Balances
60,000
50,000
40,000
Demand
30,000
Supply
20,000
10,000
0
Asia
Europe
Middle East North AmericaSouth America
Africa

20. Thank you
Please stay in touch in the markets: bernardo.fallas@platts.com
(713) 655-2214