How to solve a problem like carbon.pdf

Confidential. © 2022 IHS MarkitTM. All Rights Reserved.
The Outlook for Refining and Petrochemicals:
How do you solve a problem like carbon?
ME-TECH 2022, Dubai, UAE
Dr. Richard Charlesworth
Executive Director,
IHS Markit Oil, Midstream, Downstream and Chemicals
richard.charlesworth@ihsmarkit.com

“How do you solve a problem like Maria?
How do you catch a cloud and pin it down?
How do you find a word that means Maria?
A flibbertijibbet! A will-o'-the wisp! A clown!”
Acknowledgement

So, What’s the Problem?
Refinery & Petrochemicals: Singing Together
Crude Oil: The Black Habit Continues
Solutions from Big to Small
Agenda
A Happy Ending?

IHS Base Case oil forecast is for liquids demand growth with a plateau after 2030.
The energy transition limits growth, but new production is still needed
0
10
20
30
40
50
60
70
80
90
100
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
Thousands
Global crude and condensate supply outlook by category and break-even price
MMb/d
Source: IHS Markit © 2021 IHS Markit
Producing conventional base
Producing unconventional base
$40–60 BEP unconventional
$20–40 BEP unconventional
$60+ BEP conventional
$40–60 BEP conventional
$20–40 BEP conventional
Less than $20 BEP unconventional
Less than $20 BEP conventional
Condensate from gas projects
Sanctioned
$60+ BEP unconventional
Yet-to-find

Around 45% of the 33 MMb/d projected global new crude production in 2040 has
break-even Brent price of $40/bbl (constant dollar terms) or less
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
$110
$120
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 26,000 28,000 30,000 32,000
Average BEP
Cost curve of new global crude oil supply in select areas in 2040
Q1
2021
full-cycle
costs
in
terms
of
Brent
($/bbl)
Cumulative crude oil production from new sources in 2040 (Thousand b/d)
Notes: For a selected country/region/play, the upper side of the bar corresponds to the highest BEP, the lower side of the bar--to the lowest BEP, while the width of the bar represents crude oil production from new sources in 2040. New sources of oil equals any volumes from
projects that were not producing as of 2020, including sanctioned projects, unsanctioned projects and assumed discoveries. GOM = Gulf of Mexico. The Middle East includes both offshore and onshore projects in Saudi Arabia, Kuwait, the United Arab Emirates, Iraq, Iran, Oman,
Qatar, and Bahrain. West Africa includes both offshore and onshore projects in Angola, the Republic of the Congo, Equatorial Guinea, Ghana, and Nigeria. Rest of the world–Onshore and Rest of the world—Offshore categories include all production from respective projects, not
included in other countries or regions. The global supply shown does not include all producing areas (in part so as not to reduce clarity of the supply stack figure) and represents 89% of total global production from new projects.
US tight oil—SCOOP/STACK
US tight
oil—Eagle
Ford
US tight
oil—Bakken
US tight oil—Permian
Kazakhstan
Canada—
Oil sands
in situ
West
Africa
Russia
China
Norway and United Kingdom
Rest of the
world—Offshore
United States—GOM
Brazil
Rest of the world—Onshore
Middle East
The highest BEP
The lowest BEP

Short/medium oil price uncertainties include Russia-Ukraine conflict’s impact on
Russian energy exports, Iranian nuclear deal and COVID-19 pandemic
• Rupture (base case): Volatile range of 1–2
MMb/d cut to Russian oil exports.
• World oil demand growth of 2.8 MMb/d in
2022, 3.1 MMb/d in 2023.
• Saudi Arabia and the UAE raise output in 2022
• Production gains outside of OPEC+ deal total
3.7 MMb/d for the year, including Iran
• Full stop: About 4–6 MMb/d of Russian oil
exports stop.
• Demand weakness: Estimated 0–1 MMb/d cut
to Russian exports and weaker oil demand.
Annual average price ($/bbl)
2021 $71
Rupture Full stop Economic
weakness
2022 $118 $163 $90
2023 $96 $138 $78
10
20
30
40
50
60
70
80
90
100
110
120
130
140
150
160
170
180
Jan-19
Apr-19
Jul-19
Oct-19
Jan-20
Apr-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Jul-22
Oct-22
Jan-23
Apr-23
Jul-23
Oct-23
Dated Brent price scenarios
Source: IHS Markit, Argus Media Limited (historical prices)
Notes: Prices shown are indicative monthly price averages and not intended to project daily/weekly high and low prices.
© 2022 IHS Markit
$/bbl
Full
stop
Rupture
(base case)
Demand
weakness
Annual average price ($/bbl)
2021 $71
Rupture Full stop Demand
weakness
2022 $106 $135 $91
2023 $95 $127 $78

International natural gas prices are unanchored from any historical experience
especially in Europe
0
20
40
60
80
100
120
140
2018 2019 2020 2021 2022 2023 2024 2025
Coal-gas switching range Henry Hub
TTF Coal-gas switching (Europe)
US SRMC benchmark US LRMC benchmark
European gas short-term gas price outlook
€/MWh
(nominal)
Note: March 2022 outlook. LRMC = long-run marginal cost.
OUTLOOK
• Gas prices at the TTF jumped to a record
€212/MWh before trending down and ending the
month around €100/MWh.
• European security of gas supply hit by:
• The war in Ukraine
• European Commission’s REPowerEU
proposal to phase out Russian gas
• Kremlin announcements regarding payment
for gas in Rubles
• Variability in daily Russian pipeline flows to
Europe

A pause in the refinery “Great Shakeout”: Benchmark margins are spiking, but
crude and feedstock availability may limit refiners’ ability to take advantage
(5.00)
0.00
5.00
10.00
15.00
USGC LLS cracking USGC Maya FCC - coking NWE sweet cracking NWE sweet hydrocracking Singapore Dubai cracking Singapore Dubai HCU - coker
Short-term benchmark margin outlook and beyond
Constant
2020
dollars
per
barrel
Note: USGC = US Gulf Coast; NWE = Northwest Europe; LLS = Louisiana Light Sweet; FCC = fluidized catalytic cracking; HCU = hydrocracking unit. NWE sweet cracking processes Forties, and NWE hydrocracking
has now been changed to 100% Forties. European and Asia benchmark yardsticks utilizing low-sulfur fuel oil (LSFO) firing with flue-gas desulfurization, and natural gas assumed to be fuel oil times a multiplier,
reflective of oil-linked hedge. USGC benchmark yardsticks utilizing natural gas based on Henry Hub price.
“The fall”—
Unprecedented collapse
in demand
“US slowly ekes ahead on
recovery”—Demand
recovers; hinged on
“goldilocks” containment
measures, consumer behavior
changes, and vaccine timeline
“Margin divergence closes as rest
of the world picks up ”—With
continual supply-side constraints and
seismic impacts from the
Ukraine/Russia conflict, global
margins pick up for a promising 2022
“Dangote looms”—As the globe rebalances in
the post- Ukraine/Russia conflict world order,
Nigeria’s largest refinery – Dangote – and the
onset of Middle East capacity places downside
pressure on margins towards the 2024/2025
forecast period
Note: Please note that owing to the current swings in the Urals differentials, we have adjusted our base margin calculations. Our standard Northwest Europe hydrocracking 50:50 composite benchmark previously used in the charts and report is now the sweet 100% Forties
benchmark. The lack of liquidity in Urals crude has made us less confident in the price discovery and therefore in the relevance of these margins. We will reassess the situation during each month’s forecast.

Future capacity rationalization beyond what has already occurred may be
postponed if Russian production must be replaced in the near term
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
Global refinery rationalization since 1 January 2020
Note: Includes partial closures. "Potential" indicates refinery owner has publicly stated closure is being considered. SVR =
SilverRange; INE = Petroineos; HFC = HollyFrontier; MPC = Marathon Petroleum Corporation; PBF = PBF Energy; TOT =
TotalEnergies; EXM = ExxonMobil; P66 = Phillips 66.
MMb/d
0
200
400
600
800
1,000
1,200
1,400
1,600
Europe Asia Pacific North America Other
Completed/announced closures Biorefinery conversions
Refinery capacity closures (2020–25)
Thousand
b/d

Total expected new capacity between 2020 and 2026 remains at 7.7 MMb/d,
primarily in Asia and the Middle East
0
500
1,000
1,500
2,000
2020 2021 2022 2023 2024 2025 2026
Africa Asia Middle East North America
Latin America Europe CIS Global historical
Anticipated crude capacity additions to 2026 (excluding closures)
Note: Historical capacity additions represent global sum of new projects and incremental capacity
creep at existing refineries.
Source: IHS Markit
Thousand
b/d
© 2022 IHS Markit
10%
53%
24%
8%
2%
0% 3%
Africa Asia Middle East North America Latin America Europe CIS
7.7
MMb/d
Anticipated crude capacity additions to 2026

Many refineries will only survive due to existing or expanding integration with
chemicals, especially in Europe/Med
0
2
4
6
8
10
12
14
16
18
20
0 2000 4000 6000 8000 10000 12000 14000
Gross Margin Lavera Tarragona
Burghausen Europoort Nerefco Grangemouth
Gross Margin - 2022
$/bbl
Refining Throughput (mbd)
Regions Selected: NWE, MED
0
2
4
6
8
10
12
14
16
18
20
0 2000 4000 6000 8000 10000 12000 14000
Integrated Gross Margin Lavera Tarragona
Burghausen Europoort Nerefco Grangemouth
Integrated Gross Margin - 2022
$/bbl
Refining Throughput (mbd)
Regions Selected: NWE, MED
Source: IHS Markit Refinery Cost & Margin Analytics

Producers added record levels of new base chemicals capacity. Global demand
growth rebounded but not sufficient to meet the supply growth.
-10
0
10
20
30
40
2019 2020 2021 2022 2023 2024 2025 2026
China Asia less China (with India)
North America Middle East
West Europe South America
Others
World base chemical* demand growth by region
Million
Metric
Ton
-10
0
10
20
30
40
2019 2020 2021 2022 2023 2024 2025 2026
China Asia less China (with India)
North America Middle East
West Europe South America
Others
World base chemical* capacity growth by region
Million
Metric
Ton
* Base chemicals = ethylene, propylene, methanol, benzene, chlorine, paraxylene

Imbalance between new capacity and demand growth would suggest a decline in
earnings.
0
5
10
15
20
25
30
35
40
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Million
Metric
Tons
Annual Capacity Change
Annual Demand Change
World Base Chemicals Capacity & Demand Growth
Base chemicals = ethylene, propylene, methanol, benzene, chlorine, paraxylene

Supply-chain disruption and demand strength keep earnings strong and well above
expectations
$0
$50
$100
$150
$200
$250
$300
$350
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Global Chemicals Earnings Forecast Comparison – March 2021 vs March 2022
History
March 2021 Forecast
March 2022 Forecast
Global chemicals = ethylene, propylene, methanol, benzene, chlorine, paraxylene, including major derivatives of each base chemical
Source: IHS Markit Chemical Competitive Cost & Margin Analytics

Middle East olefins investments in an intermission before the second act!
ORPIC, Oman
SC 2021 Q3
Nibras, Iraq
SC 2026+?
Gachsaran, Iran SC
2023?
Bushehr, Iran SC
2026?
Mokran, Iran
GTO, SC 2030?
Mehr, Iran
PDH2026?
PIC, Kuwait PDH,
MeT 2024?
Ilam, Iran SC
2020 Q4
Borouge, UAE
SC 2026+?
QP/CPChem, Qatar
SC 2026?
Amiral, Saudi
SC 2025?
Duqm, Oman
SC 2026+?
Sabic/Aramco, Saudi Arabia
OTC SC 2028?
Tahrir, Egypt
SC 2025?
Advanced/SK, Saudi
PDH 2025
SC 2026?
Sonatrach/Total, Algeria
PDH 2026+?

• Growth in energy consumption over past
decade driven by energy-intensive industry
subsectors
• Cement, steel, and chemicals are most
carbon-intensive
• Total emissions in industrial processes was
over 8.5 Gt/yr in 2020 (refinery, petrochemicals
and chemicals is estimated at ~2.6 Gt/yr)
The problem is that refining and petrochemical industry is one of the major
contributors to global carbon dioxide emissions
Source: https://www.iea.org/reports/tracking-industry-2021
Direct CO2 emissions encompass energy and process emissions. “Other industry” includes non-
energy-intensive industries such as food, beverages, mining, and textiles.

Emissions come from multiple sources
Scope 3
Downstream
processing
Construction
Co-products
Scope 2
Scope 1
UNFCCC emissions scope definition
Venting and
flaring
On-site fuel use
Fugitives
Energy trade
Land use
Refined production
use
Upstream emissions
of fuel
Note: UNFCCC = United Nations Framework Convention on Climate Change
UNFCCC emissions scope definitions

Net zero is already a corporate strategy theme, but targets range widely in scope,
ambition and definition.

An extra incentive is that CO2 can be a valuable feedstock for many processes!
Electrochemical
Photocatalytic
Catalytic
Bioconversion
Mineral carbonation Concrete
Copolymerization
Technology
Novomer Polycarbonate polyol
Product
• Sunfire Bluecrude ™
• Hitachi Zosen ETOGAS™
• Haldor Topsoe TREMP ™
• Norweigian DNV ECFORM™
Lanzatech syngas fermentation
Syngas or methane
Methane
Methanol
Formic acid
Ethanol
Concrete Curing
Process
Polycarbonate polyol
Source: IHS Markit Process Economics Program (PEP) Reports 285, 285A, 298
Captured
CO2
Green
electricity or
hydrogen

Pathways to Net Zero: multiple opportunities to manage carbon content and
emissions along complex and ever-changing supply chain
Transportation fuels
Petrochemicals
Refinery/Petchem
Complex
Crude oil/
natural gas

Pathways to Net Zero: multiple opportunities to manage carbon content and
emissions along complex and ever-changing supply chain
Crude oil/
natural gas
Biomass & greener
feedstocks
Plastic and
liquid wastes
Deeper chemical
integration
Lower-carbon transportation fuels
Use or
Sequestration
Notes: H2 = hydrogen, list of options shown non exhaustive
Renewable gas and power Electrolysis
H2
H2 Hydrogen fuel /
Low-carbon
Synthetic fuels
More sustainable petrochemicals
Onsite electrification
Refinery/Petchem
Complex

For CO2 emissions, there are multiple sectors, multiple sources, multiple
technologies and treatment
Factors affecting capture costs
• Concentration & purity of feed
stream
• Capture technology
• Process design
• Plant capacity and location
• Energy prices
CO2
source
Ethanol
Natural gas
processing
Hydrogen
Cement
Iron and steel
Coal
Natural gas
Atmosphere
Sector
High purity
streams
Large
industrial
point
sources
Power sector
Direct air
CO2 separation
technology
Absorption /
adsorption /
Absorption /
adsorption
Absorption /
adsorption /
membrane /
cryogenic
CO2
treatment
Dehydration
and
compression
Cryogenic
liquefaction
Note: Capture processes do not capture entire chemical treatment for each CO2
source.
Source: IHS Markit, National Petroleum Council: Meeting the Dual Challenge,
Capture Cost Model, NETL: Cost of Capturing CO2 from industrial sources, a
process for Capturing CO2 from the atmosphere (Joule vol 2 no 8)
Decreasing
CO2
concentration
Increasing
cost

Carbon capture solutions are available and in development from big to small
concentrations:
• Solvent Absorption • Rapid Temperature Swing
Adsorption
• Direct CO2 capture with
Caustic Absorber
Amine
Absorber
Rich
Amine
Solvent
Pump
Lean
Amine
Cooler
Condenser
Reboiler
Solvent Booster
Pump
Rich/Lean
Exchanger
Acid Gas
CO2 Free
Gas
Amine
Regenerator
CO2 Rich
Gas
Source: IHS Markit Process Economics Program (PEP) Report 180F Next Generation Carbon Capture

IHS Markit’s Process Economics Program has developed full models for OPEX and
CAPEX analysis
• Solvent Absorption • Rapid Temperature Swing
Adsorption
• Direct CO2 capture with
Caustic Absorber
CO2
Rotating Adsorption #1
G-101A
To CO2
Compressor
1
2 3
4
6 7 8
9
10
5
Waste Water
40°C
110 kPa
110°C
120 kPa
110°C
144 kPa
Steam
Hot
Rinse
Air
Cooling Air
To Rotating
Adsorption #2
V-101
E-101
40°C
In Scope
FN-101
Flue Gas Blower
V-101
Inlet Wash Drum
G-101A,B
Rotating Adsorbers
V-102
Outlet KO Drum
V-102
60°C
112 kPa
Flue Gas IN
Flue Gas OUT
Fines to Disposal
Fines to Calciner
CaCO3 Seed
CaCO3 Makeup
Separation
CaCO3 Seed
From Calciner
Air Contactor
Air Contactor Basin
19ºC
300ºC
Lime
Cooler
Steam Slaker
CaCO3 Seed to
Pellet Reactor
415ºC
4.2 MPA
674ºC
Oxygen
Preheat
Preheat 2
650ºC
Preheat 1
454ºC
H2O
21ºC
CH4
900ºC
674ºC
300ºC
ASU
Quicklime
Mix Tank
85ºC
50ºC
To CO2 Compressor
Absorber Package
G-101 G-106
Fines Filter
G-102
Causticizer
G-103
Slaker
Package
G-104
Calciner
Package
G-105
ASU
Pacakge
G-101
G-102
G-105
G-104
G-103
300 #
BFW in
Water from
Compressor
KO drums
G-106
Air in
Air
Ou
t
FN-101
Flue Gas Blower
C-101
Absorber
T-101
Amine
Surge Tank
C-102
Regenerator
V-103
Reflux Drum
E-106
Lean Amine
Cooler
E-105
Condenser
E-104
Reboiler
E-102
Absorber
Intercooler
V-101
Inlet Wash Drum
V-102
Outlet Scrubber
E-103
Rich/Lean
Amine Exchanger
T-101
To CO2 Compressor
In Scope
1
2
3
4
5
7
6
109 kPa
60ºC V-101
E-101
40ºC
45ºC
C-101
E-102
8
Water makeup
Solvent
Makeup
Water
makeup
40ºC
40ºC
E-103
123ºC
E-106
112ºC
C-102
E-104
E-105/V-103
40ºC
108 kPa
40ºC
V-102
102 kPa
43ºC
By others
E-101
Wash Drum
Intercooler
FN-101
Flue Gas IN
Flue Gas OUT

0
200
400
600
800
1000
1200
1400
1600
1800
2000
Novel amine solvent Rapid TSA Direct air capture
$
/
t
(CO2
captured/Year)
Capital cost intensity, $/t (CO2 captured/y)
Carbon capture economics (Q4 2021) show decreasing CO2 concentrations lead to
increasing cost.
0
50
100
150
200
250
300
350
400
Novel amine solvent Rapid TSA Direct air capture
Capture
cost
($/
t)
Carbon capture costs
CO2 capture cost, $/t CO2 avoided cost, $/t

Blue Hydrogen – large capacity production by SMR of natural gas with CO2
capture-compression and by-product steam/electric power generation
CO2
Capture
Unit
CO2
Compression &
Dehydration
Flue Gas
(Decarbonized)
CO2 CO2 to
Pipeline
Reformer
HT Shift
Reactor
Pressure Swing
Adsorption
Combustion
Air
Natural
Gas
(Fuel)
PSA Tail Gas
Flue Gas
Natural Gas
(Feedstock)
H2 Product
Recycle H2
from PSA
Steam Steam
Condensate
Steam
Boiler
Turbo
Generator
Feed
Desulfurization Pre Reformer
Exhaust Steam to
Regenerator Reboiler
BFW Electric Power to
H2 Plant with CO2
Capture & Compression
Combustion Air
Natural Gas (Fuel)
Combustion Gas
Source: IHS Markit PEP Review 2021-15 Hydrogen from Natural Gas with Carbon Capture
Carbon
Capture
CAPEX
OPEX+
Depr.
90% 90% ~50%
60% 75% ~40%

Ethylene production is one of the industry’s largest CO2 emitters. Technologies are
under development with comparable economics to commercial technology
• EcoCatalyst’s Chemical looping
• Coolbrook Roto Dynamic Reactor (RDR)
• Electric Furnace
Fluidized
Bed
MeOx-1
C2H4 + H2O
Air
Feed
Ethylene
MeOx-1
MeOx
Heat
N2 + Heat
Air
Excess
air
C2H6
MeOx
Source: IHS Markit PEP Report 29M Reduced Carbon Intensity Ethylene Production

Netpower is developing an “Allam cycle” process that promises low carbon power
using supercritical CO2 as the operating medium for oxycombustion of natural gas
Source: Powermag.com & PEP Review 2021-02, Electric Power via the Allam Cycle
325 MW Plant NET Power
Natural Gas
Combined
Cycle
Capital
Intensity,
$/KW
1490 1070
LCOE with
CO2 Credit,
$/MWh
25.1 37.4

HDPE
pXylene
PTA
PET
Mixed
Xylenes
Ethylene
PP
Ethylene
Glycol
Feedstocks Building Blocks Intermediates Derivatives Polymers
Propylene
Naphtha
Aromatics
Refinery
Carbon emissions increase as complexes are expanded downstream
Fuel
Electricity
Decarbonization Arc
Plant Performance
Total investment capital, $
Bn
7.3
IRR, % 1.4
CO2e emissions, MM T/YR 6.9
CO2e
(scope
1&2)
MM
T/YR
Investment capital, $ Bn
Crude Oil
Source: IHS Markit Refinery & Petrochemical Integrator & Decarbonizer (RAPID)

Ethylene
Propylene
Steam cracker
HDPE
pXylene
PTA
PET
Mixed
Xylenes
PP
Ethylene
Glycol
Naphtha
Aromatics
Refinery
Fuel
Electricity
Decarbonization Arc
CO2e
(scope
1&2)
MM
T/YR
Refinery and Integrated Olefins
Plant Performance
Bn
10.2
IRR, % 1.6
Crude Oil

Ethylene
Propylene
Steam cracker
HDPE
PTA
PET
PP
Ethylene
Glycol
Refinery, Olefins and Aromatics
Naphtha
Aromatics
Refinery
pXylene
Mixed
Xylenes
Fuel
Electricity
Decarbonization Arc
CO2e
(scope
1&2)
MM
T/YR
Plant Performance
Bn
11.5
IRR, % 10.3
Crude Oil

pXylene
Ethylene
Propylene
Steam cracker
HDPE
PET
PP
Refinery, Olefins, Aromatics and Intermediates
Naphtha
Aromatics
Refinery
Mixed
Xylenes
PTA
Ethylene
Glycol
Fuel
Electricity
Decarbonization Arc
CO2e
(scope
1&2)
MM
T/YR
Plant Performance
Bn
13.0
IRR, % 9.5
Crude Oil

HDPE
Naphtha
pXylene PTA PET
Mixed
Xylenes
Ethylene
Aromatics
PP
Ethylene
Glycol
Refinery
Steam cracker
Propylene
Refinery, Olefins, Aromatics, Intermediates and Polymers
Fuel
Electricity
Decarbonization Arc
CO2e
(scope
1&2)
MM
T/YR
Plant Performance
Bn
14.1
IRR, % 13.5
Crude Oil

HDPE
Naphtha
pXylene PTA PET
Mixed
Xylenes
Ethylene
Aromatics
PP
Ethylene
Glycol
Refinery
Steam cracker
Propylene
But then can be reduced e.g., Refinery FCC Carbon Capture
Carbon
capture
Fuel
Electricity
Decarbonization Arc
CO2e
(scope
1&2)
MM
T/YR
Plant Performance
Bn
14.8
IRR, % 11.5
Crude Oil

with
e-Furnaces
HDPE
Naphtha
pXylene PTA PET
Mixed
Xylenes
Ethylene
Aromatics
PP
Ethylene
Glycol
Refinery
Steam cracker
Propylene
With Steam Crackers upgraded to e-Furnaces
Carbon
capture
Fuel
Electricity
Decarbonization Arc
CO2e
(scope
1&2)
MM
T/YR
Plant Performance
Bn
14.8
IRR, % 11.1
Crude Oil

with
e-Furnaces
HDPE
Naphtha
pXylene PTA PET
Mixed
Xylenes
Ethylene
Aromatics
PP
bio-MEG
Refinery
Steam cracker
Propylene
With supplemental bio-MEG and recycle PET, HDPE and PP
Carbon
capture
Mechanical
recycling
Recycle
plastics
Fuel
Electricity
Decarbonization Arc
CO2e
(scope
1&2)
MM
T/YR
Plant Performance
Bn
15.4
IRR, % 12.2
Crude Oil

with
e-Furnaces
HDPE
Naphtha
pXylene PTA PET
Mixed
Xylenes
Ethylene
Aromatics
PP
bio-MEG
Refinery
Steam cracker
Propylene
And electricity with NET Power zero-carbon generation
Carbon
capture
Mechanical
recycling
Recycle
plastics
Zero carbon
power
Fuel
Electricity
Decarbonization Arc
CO2e
(scope
1&2)
MM
T/YR
Plant Performance
Bn
16.3
IRR, % 11.8
Crude Oil

CO2e
(scope
1&2)
MM
T/YR
Key Takeaways: Refining & Petrochemicals faces short/medium term volatility
whilst navigating long-term decarbonization targets
• The US-Russia confrontation over Ukraine, Covid lockdowns in
China and the Iranian nuclear deal remain key uncertainties for oil
prices in the short/medium term. Long-term $65-$85/bbl from 2025
• The refining industry “Great Shakeout” is on pause. Thereafter
oversupply and slow demand growth keeps margins low for many
years unless integrated downstream
• Base chemicals supply chain issues will soften the effect of
oversupply keeping margins higher than expected
• Commercial and emerging technologies will provide routes to
decarbonization but the “decarbonization arc” of CAPEX and CO2e
is challenging to understand

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