Analyst Meeting 2Q14 14 August 2014
Disclaimer
This presentation material has been prepared solely for informational purposes only. IRPC is
furnishing it solely for use by prospective investors / analysts in the proposed event. IRPC makes no
representations or warranties as to the accuracy or completeness of such information. By accepting
this material each recipient agrees that IRPC shall not have any liability for any representations
(express or implied) contained in, or for any omissions from this presentation.
The information contained herein does not purport to be all-inclusive or to contain all of the
information that may be material to the recipient’s decision. Each recipient of the information and data
contained herein should perform its own independent investigation and analysis of the transaction
and the creditworthiness of IRPC . Reference in this Disclaimer to this shall include references to the Appendices (if any) hereto.
2
3
Agenda
1. 2Q14 Overview
• Fire Incident
• Delta & UHV Project
2. Highlight Update
3. Operation & Financial Performance
4. Industry Outlook
5. UHV Project & Post Phoenix
• Strategic Direction
• Phoenix Project
Appendix
67,150 71,854 71,658
136,114 143,512
YoY 7%
QoQ 0.3%
104.5 106.1 104.5 105.3
2Q14 Overview
Overview of Business
Revenue (net excise)
Dubai
Unit: USD/BBL
(1,159)
344 178
(1,006)
522 Net income
Unit: MB
Unit: MB
Market GIM 8.0 7.8 5.4
7.7 6.6
(0.9)
0.7 3.8
(0.6)
2.2
7.1 8.5 9.2
7.1
8.8
4
Accounting GIM
Net stock gain/(loss)
LCM & oil hedging
Unit: USD/BBL
2Q13 2Q14 1H14
YoY 30%
QoQ 8%
YoY 115%
QoQ 48%
1) In 2Q14, average Dubai price rose to
$106.1/bbl from $104.5/bbl in 1Q14, driven by
geopolitical tension in Iraq, Libya and Ukraine.
2) Net sales were 71,658 MB in 2Q14, decreasing
by 0.3% from 71,854 MB in 1Q14 due to a
decrease of 0.4% in the product prices despite
an increase of 0.1% in the sales volume.
In 1H14, net sales were 143,512 MB, higher
than net sales of 136,114 MB in 1H13.
3) Market GIM in 2Q14 was $5.4/bbl dropping by
$2.4/bbl compared to $7.8/bbl in 1Q14 because
of lower product spreads and VGOHT unit
shutdown. However, the Accounting GIM was
$9.2/bbl, rising from $8.5/bbl in 1Q14 mainly
due to stock and hedging gains.
4) In 1H14, the Market GIM dropped to $6.6/bbl
from $7.7/bbl in 1H13 while the Accounting GIM
increased to $8.8/bbl from $7.1/bbl in 1H13.
5) Net profit was 178 MB in 2Q14, compared to
344 MB in 1Q14. In 1H14, net profit was 522
MB, compared to net losses of 1,006 MB in
1H13.
1Q14 1H13
HoH 5%
HoH 24%
HoH 152%
5
Agenda
1. 2Q14 Overview
• Fire Incident
• Delta & UHV Project
2. Highlight Update
3. Operation & Financial Performance
4. Industry Outlook
5. UHV Project & Post Phoenix
• Strategic Direction
• Phoenix Project
Appendix
Highlight: Fire Incident Update
Refi
nery
Pla
nt
DCC
VGOHT
LR Lube
LS ATB • Propylene • Gasoline • High Speed
Diesel
VGO
HTVGO
6
Shutdown
VGOHT and DCC Operation Update Mitigation Action
Anticipated Shutdown Period
Claim Amount
• Procure additional propylene to fulfill polypropylene
capacity
• Successfully negotiate with customers on shortage
of gasoline and gas oil
• Re-commission of Deep Catalytic Cracking (DCC),
running at 60%-70%, since 29 June 2014
• Successfully arrange for imports of HTVGO,
resulting in DCC higher utilization
• VGOHT unit is now expected to shut down for
about 10 months due to purchases of long-lead
machinery.
• Property damage (PD) USD 40 m
(Less deductible USD 5 m)
• Business Interruption (BI)
(Losses of 10 months, less deductible
2 months) Total USD 91 m
USD 35 m
USD 56 m
Imp
ort
Run 70%
Export
7
Agenda
1. 2Q14 Overview
• Fire Incident
• Delta & UHV Project
2. Highlight Update
3. Operation & Financial Performance
4. Industry Outlook
5. UHV Project & Post Phoenix
• Strategic Direction
• Phoenix Project
Appendix
Highlight: Delta Project Update
Operational Excellence
Commercial Excellence
Human Resource Excellence
Achieving EXCELLENCE across all 3 strategic pillars ensures that
IRPC will meet its vision by 2020.
Value chain optimization
Overall plant effectiveness
Energy efficiency improvement
Reliability & asset integrity
Product portfolio optimization
Salesforce effectiveness
Transportation optimization
Labor cost productivity
Corporate overhead reduction
Sourcing optimization
8
37
20
10
Benefit (USD M)
Target (USD M)
7.0
8.8
1.7
• Reallocation of spot/term
contracts for petroleum products
• Focus on higher margin and
high potential customers, and
maintain customer royalty for
petrochemical products
• Quality giveaway reduced by upgraded LP model
• Optimized steam consumption
• Usage of alternative steam with lower costs
• Shortened time required for turnaround
• Budget saving
• Reduced non-moving inventory of spare parts
As of 31/12/14
67 17.5
As of 30/6/14
Highlight: UHV Project Update
9
UHV (Upstream Project for Hygiene & Value Added Products)
• Project Description: Upgrade bottom refinery
products to be high-value feedstock for
petrochemicals
• Capacity Expansion: Increase the capacity of
propylene from 412 KTA to 732 KTA.
• EIA approved in January 2013
• COD: September 2015
HYVAHL reactor
Stream reformer
package
Atmospheric tank
erection
Main control room
building
C3 rectifier & C3
stripper erection
Reactor and
regenerator
Progress
• As of 25 July 2014, 75.9%: now EPC phase II stage II (construction)
Concrete pouring work for API pond
10
Agenda
1. 2Q14 Overview
• Fire Incident
• Delta & UHV Project
2. Highlight Update
3. Operation & Financial Performance
4. Industry Outlook
5. UHV Project & Post Phoenix
• Strategic Direction
• Phoenix Project
Appendix
(7.3) (3.6)
(10.7) (10.4) (8.5)
(10.6)
(5.5) (9.5)
1Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14
0
20
40
60
80
100
120
140
160
180
200
$/BBL Dubai ULG 95 GAS OIL 0.05% FUEL OIL
Mixed performance of Petroleum Spreads
Source: Platts, IRPC Analysis Team
Note: Starting Jan-13 onward Gas oil 0.05%s is used instead of Gas oil 0.5%s.
For comparison purpose, historical data is re-stated based on Gas oil 0.05%
106.3 106.4 AVG.
Price. 1 7
2Q14 2Q12 4Q12 1Q13 2Q13 3Q13 4Q13
106.3
3Q12
0.04 107.5 106.8 108.2 100.8 0.5 5
18.4 14.6 12.4
9.2 14.6 16.1 16.5 15.3
1Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14
19.6 16.8 17.3 17.7 17.8 16.0 18.2 16.9
1Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14
ULG95-Dubai
1Q14
104.5 2
Gasoil-Dubai ($/BBL)
Fuel oil -Dubai ($/BBL)
0.7
• Average Dubai price increased in 2Q14, mainly driven
by geopolitical tension in Ukraine and Iraq with
prolonged supply disruption in Libya support price.
• ULG spread improved due to US driving season,
stockpiling demand from Muslim countries ahead of
Ramadan, and tight supply driven by refinery
turnaround.
• Gas oil spread softened since regional demand
remained low while there was an increase in the
supply from Jubail refinery.
• A decline in fuel oil spread was due to weak bunker
demand and an increase in the arbitrage from South
America and Russia to the Asian market.
($/BBL)
($/BBL)
($/BBL)
11
106.1 1.6 116.1 10
1Q12
Source: Platts, ICIS, IRPC Analysis Team
0
200
400
600
800
1,000
1,200
1,400
1,600
$/TON FO 180 3.5%S 500SN 150BS Asphalt
1Q12 2Q12 4Q12 2Q13 4Q13 2Q14 3Q12 1Q13 3Q13
421 494 518 509 486 501 458 494
1Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14
$/TON
500SN – FO 180 3.5%S Spread
(19) (7) (3)
(27)
(68) (77)
(13)
(73)
1Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14
$/TON Asphalt – FO 180 3.5%S Spread
1.0 2.0
0.2 0.3 1.3
0.6 1.5 1.0
1.4
1.5
1.4 1.2
1.8
1.1
1.4 1.4
2.4
3.5
1.6 1.6
3.1
1.7
3.0 2.4
1Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14
$/BBL
Market GRM
Lube Base
Refinery
1Q14
• Lube base oil spread rose due to stockpiling demand
from China before monsoon seasons.
• Asphalt spread continued to decline since the demand
from China and Vietnam softened and there was a rise in
the supply from Korea.
Divergence of Lube Base Oil Performance
12
• Polyolefin spread maintained at high level because of stockpiling demand before the Ramadan period and tight
regional supply due to ongoing turnaround.
500
700
900
1,100
1,300
1,500
1,700
$/TON Naphtha Ethylene Propylene HDPE PP
1Q12 2Q12 4Q12 2Q13 4Q13 2Q14
434 405 397 480 507 496 420 501
87 179 171 110 113 121 133
117 521 585 568 590 620 618 553 619
1Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14
$/TON
HDPE-Ethylene –Naphtha Spread
3Q12
HDPE-Ethylene
Ethylene - NP
1Q13
345 439 412 420 434 328 392 381
236 175 184 177 193 304 205 248
581 614 596 597 627 632 597 629
1Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14
$/TON
PP-Propylene
Propylene - NP
3Q13
PP-Propylene –Naphtha Spread
1Q14
Relatively Stable Olefin Spreads
13 Source: Platts, ICIS, IRPC Analysis Team
Source: Platts, ICIS, IRPC Analysis Team
• Mixed xylene and toluene spreads continued to drop. Mixed-xylene was adversely affected by ongoing poor
performance of Paraxylene while toluene faced a downward pressure from Chinese economic slowdown resulting in
a drop in the demand for solvents and gasoline in China.
500
600
700
800
900
1,000
1,100
1,200
1,300
1,400
1,500
$/TON Naphtha Benzene Toluene Mixed Xylene
1Q12 2Q12 4Q12 1Q13 2Q13 4Q13 2Q14
426 428 336 338 364 341
427 352
1Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14
$/TON
305 260 205 192 161 134
283
148
1Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14
$/TON
366 334 349 269
169 115
350
142
1Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14
$/TON Benzene – Naphtha Spread
3Q12 3Q13
Toluene – Naphtha Spread MX – Naphtha Spread
1Q14
Weaker Aromatics Spreads
14
500
700
900
1,100
1,300
1,500
1,700
1,900
2,100
2,300
2,500
$/TON Naphtha SM ABS PS
1Q12 2Q12 4Q12 1Q13 2Q13 4Q13 3Q12 3Q13
922 976 995 891 863 804 949 834
1Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14
$/TON
1,051 1,057 1,015 960 980 974 1,054 977
1Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14
$/TON
PS –Naphtha Spread
773 851 895 759 724 673 812 699
1Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14
$/TON
SM - Naphtha Spread
ABS –Naphtha Spread
1Q14
Source: Platts, ICIS, IRPC Analysis Team
Sliding Styrenics Spreads
15
• ABS and PS spreads dropped amid weak demand largely
caused by a slowdown in Chinese economy. PS price was
also adversely affected by falling price of its feedstock.
133 168 123 125
156 137
149 147
151 141 132 135 66
39
146
53
140 157
126 129 116 94
148
105
1Q13 2Q 3Q 4Q 1Q14 2Q 1H13 1H14
Aromatic
&Styrenics
Olefins
Market PTF*
$/Ton
* Exclude Intermediate Stream Margin
2Q14
63% 67% 67% 63% 61%
0%
65% 62%
33% 28% 22% 23% 21%
32%
22%
4% 5% 11% 14% 18%
3%
16%
2Q13 3Q 4Q 1Q14 2Q 1H13 1H14
Domestic Crude
Sweet Crude
Sour Crude
Increased Domestic Crude Intake
Crude Intake
Mbbl
16
• Crude intake slightly increased in 2Q14 relative to
1Q14, amounting to 173 KBD.
• Domestic crude intake in 2Q14 was 31 KBD or 18%
of total intake increasing from 23 KBD or 14% of
total intake in 1Q14.
• Utilization rates of olefins, styrenics, and aromatics
were 90%, 84%, and 75%, down 7%, 2%, and 11%
respectively due to schedule turnaround and
unplanned shutdown from fire incident.
Unit: KBD
100%
107% 111%
97%
90%
104%
94%
89%
78%
89% 85%
75%
88%
80% 78%
81%
95%
87%
84% 85%
85%
2Q13 3Q 4Q 1Q14 2Q 1H13 1H14
Olefins Aromatic Styrenic
88%
83%
81% 80%
80% 86%
80% 83%
95%
92%
82%
79%
86%
81%
2Q13 3Q 4Q 1Q14 2Q 1H13 1H14
Refinery Lube
Utilization
Petrochemical Petroleum
179 174 172 173 189
173 186
17.2 16.5 16.0 15.5 15.7 33.6 31.3
63% 62% 55% 58% 59%
62% 59% 37% 38% 45% 42% 41%
38% 41%
311 344
373 343 347
656 690
2Q13 3Q 4Q 1Q14 2Q 1H13 1H14
Export
Domestic
86% 84% 83% 84% 84%
85% 84% 14% 16% 17% 16% 16%
15% 16%
17.7 17.6 17.8 16.7 16.7
34.8 33.4
2Q13 3Q 4Q 1Q14 2Q 1H13 1H14
Petchem
Petroleum
58% 58% 62% 65% 65%
61% 65%
42% 42% 38% 35% 35%
39% 35%
15.3 14.9 14.8 14.0 14.0
29.5 28.0
2Q13 3Q 4Q 1Q14 2Q 1H13 1H14
Export
Domestic
Focus on Domestic Market
Petr
ole
um
P
etr
och
em
ical
Unit: Mbbl
Unit: KTon
Unit: Mbbl
Petroleum
84%
Petrochemical
16%
Direct 24%
Agent 35%
Export 41%
Direct 6%
Wholesale 29%
Article 7 32%
Export 33%
Domestic
65%
Export
35%
Sales Volume Structure
2Q14 Sale volume
By Sales Channels
2Q14 Sale volume
By Destinations
17
3.5 1.6 1.6
3.1 1.7
3.0 2.4
3.8
3.3 4.1 3.4
2.5
3.9 3.0
0.8
1.1 0.8
1.3
1.2
0.9 1.2
8.0
6.0 6.5 7.8
5.4
7.7 6.6
88% 83% 81% 80% 80% 86% 80%
2Q13 3Q 4Q 1Q14 2Q 1H13 1H14
Power & Utility
Petrochemical
Petroleum
GIM in 2Q14
2Q12 3Q12 4Q12 1Q13 2Q13
2.97 3.08 3.12 3.88
3.09 3.09 2.77 2.93
1.03 0.88 0.97 1.02
7.09 7.05 6.86 7.83
30 Jun 12 30 Sep 12 31-Dec-12 31-Mar-13 30-Jun-13
98.3 112.7 111.2 101.8
115.0 114.8 116.7 105.0
223.9 220.7 226.7 220.6
126.1 127.4 129.8 118.4
8.0 6.0 6.5 7.8
5.4 7.7 6.6
(1.0)
4.0 0.1
(0.4)
1.9
(1.0)
0.7 0.1
0.4
2.3 1.1 1.9 0.3 1.5
7.1 10.4
8.9 8.5 9.2 7.1 8.8
2Q13 3Q 4Q 1Q14 2Q 1H13 1H14
Accounting GIM
8.5 9.8
7.0
11.0
6.3
0
5
10
15
A/C GIM
Market GIM
Utilization rate
Unit: $/bbl
18
Hedging
Stock gain/loss
Net LCM
Market GIM
Unit: $/bbl
• The Market GIM in 2Q14 was
$5.4/bbl, compared to $7.8/bbl in
1Q14.
• A decline in the Market GIM was
due to the shutdown of VGOHT
unit and lower product spreads,
particularly petroleum and
styrenics products.
• The Accounting GIM in 2Q14
was $9.2/bbl, rising by $0.7/bbl,
compared to 1Q14.
• In 2Q14, stock gains and
reversal of provision for LCM
were $1.9/bbl, compared to
$0.4/bbl from stock losses and
provision for LCM.
• Hedging gains were $1.9/bbl,
rising by $0.8/bbl from 1Q14 at
$1.1/bbl.
Financial Highlight
2Q14 2Q13 1Q14 YoY QoQ 1H14 1H13
Foriegn Exchange Rate Avg. 32.59 30.03 32.80 2.56 (0.21) 32.70 29.99
Net Sales 71,658 67,150 71,854 4,508 (196) 143,512 136,114
Market GIM 2,773 4,141 3,970 (1,368) (1,197) 6,743 7,783
Stock Gain/(Loss) net LCM 962 (506) (228) 1,468 1,190 734 (978)
Oil Hedging Gain/(Loss) 975 10 580 965 395 1,555 322
Accounting GIM 4,710 3,645 4,322 1,065 388 9,032 7,127
OPEX (3,113) (2,763) (2,760) 350 353 (5,873) (5,234)
Other Income 364 298 306 66 58 670 552
EBITDA 1,961 1,180 1,868 781 93 3,829 2,445
Gain/(Loss) from Fx (5) (760) 156 755 (161) 151 (200)
Gain/(Loss) from Impairment (51) (15) - (36) (51) (51) (1)
Investment Gain/(Loss) 7 22 35 (15) (28) 42 (10)
Net Profit 178 (1,159) 344 1,337 (166) 522 (1,006)
Unit: MB
ChangeQuarter
19
43,180 42,735 56,725
66 5,620
177 43,246
48,355 56,902
5,408 2,974
16,144
2Q13 1Q14 2Q14
Long term Short term Cash & S/T investment
2Q14 Debt Portfolio
Float 27 THB 49
Fixed 73 USD 51
Currency (%) Interest Rate (%)
Net Debt = 40,758 MB
Debt Structure As of June 30, 2014
ST Loan 177
LT Loan 14,368
Bond (USD) 7,746
Bond (THB) 34,611
Total 56,902
Debt (MB)
ST Loan 0.3%
LT Loan 25%
Bond (USD) 14%
Bond (THB) 61%
1.68
1.16 1.26
2Q13 1Q14 2Q14
> 1.05x 0.51 0.60 0.55
2Q13 1Q14 2Q14
< 1.0x
Net D/E CA/CL
37,838 45,381 40,758
2Q13 1Q14 2Q14
Cost of Debt 4.04% 3.90% 3.97%
Debt Profile
Financial Ratios
20
USD/THB = 32.60
Agencies Annual Review
March 2014 “Ba1” (Negative outlook)
April 2014 “BB+” (Stable outlook)
February 2014 “A-(tha)” (Negative outlook) / F2
(tha)
Credit Ratings
Net Debt
Unit: MB
21
Agenda
1. 2Q14 Overview
• Fire Incident
• Delta & UHV Project
2. Highlight Update
3. Operation & Financial Performance
4. Industry Outlook
5. UHV Project & Post Phoenix
• Strategic Direction
• Phoenix Project
Appendix
Crude Oil and Petroleum Products Outlook
Driving Determinants
• Dubai price faces downward pressure from resumption of oil production in Libya and absence of supply disruption from geopolitical tension in Iraq and Ukraine.
• Peak maintenance of oil field in North Sea is expected to support the crude oil price.
• Gasoline spread may soften seasonally.
• Gas oil spread improves because of winter demand in North Asia and power generation consumption in ME.
• Fuel oil is also expected to be supported by lower arbitrage from Europe.
• Lube base oil spread is sustained due to lower feedstock prices but lack luster demand during regional monsoon season limits gain.
Company Capacity
(KT/Year) Timing
Jinan
Petrochemical 150 Q4 2014
Shandong
Qisheng
Industry & Trade
70 Q4 2014
2014 Shutdown Schedule
22
Key
Products
Price
(2Q14)
Spread
(2Q14) 3Q14
Outlook
Refinery ($/bbl) ($/bbl)
Dubai 106.1 -
ULG95 122.2 16.1
GAS OIL 0.05% 122.2 16.0
FO 95.5 -10.6
Lube Base Oil ($/T) ($/T)
500 SN 1,108 501
150 BS 1,245 627
Source: ICIS, 1 August 2014
Petrochemical Products Outlook
23 23
• Polyethylene is supported by demand from agriculture sector during winter season and high scheduled turnaround during 3Q14.
• Polypropylene spread can be improved further due to reversal of demand from western country in Polypropylene derivatives.
• PS spreads is supported by higher
demand from manufacturing
activities before year end.
• However, with the absence of
sustainable global economic
recovery, ABS spread improvement
is underway.
Key
Products
Price
(2Q14)
Spread
(2Q14)
3Q14
Outlook
Olefins ($/T) ($/T)
Ethylene 1,447 496
HDPE 1,569 618
Propylene 1,279 328
PP 1,583 632
Styrenics ($/T) ($/T)
PS 1,755 804
ABS 1,925 974
Driving Determinants
24
Agenda
1. 2Q14 Overview
• Fire Incident
• Delta & UHV Project
2. Highlight Update
3. Operation & Financial Performance
4. Industry Outlook
5. UHV Project & Post Phoenix
• Strategic Direction
• Phoenix Project
Appendix
UHV Project Progress : Video Presentation
25
UHV Project: Video Presentation
26
Strategic Initiatives: Post-Phoenix
• DELTA Initiative Implementation
• Assets Management (Bankai/EIZ)
Para-Xylene
(PX)
Acrylic Acid
(AA)
• Specialty focus and Moving away
from heavy-asset company
• CHP I: Electricity +220MW, Steam +420T/hr
• PRP +100KTA of Propylene
• EURO IV: Gasoline 15KBD, Diesel 10KBD, Jet 15KBD
• TDAE +28KTA, 150BS +25KTA
• Lube Blending +60m.Ltrs./year
• EBSM +60KTA, ABS/SAN +60KTA
Completed Project during 2011-13
2013 Crude Run 181 KBD
Nelson Complexity Index
Portfolio of Revenue:
Petroleum/Petrochemical & Others
2
2015 Crude Run 215 KBD
Nelson Complexity Index
More stable portfolio of Revenue:
Petroleum/Petrochemical & Others
76% / 24%
59% / 41% 6.6
8.6 84%
100%
1
3
STS 2014:
Strengthening
Core Business
• Increase product value by converting
fuel oil to petrochemical products
• Running at full capacity of 215 KBD
• PP Expansion
160 KTA
• PP Compounding
140 KTA
Super Absorbent
Polymer
(SAP)
PP Derivatives
Quick Win Initiatives
UHV Completion
New investments through JV
2013
2014
2015
2017
27
The future begins now creating shared value
Q & A
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Social
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Religion
Public Health
Thank You
Investor Relations Contact: [email protected]
Tel. 02-649-7380, Fax. 02-649-7379
Presentation is available at
www.irpc.co.th
Click “Presentations”
This presentation material has been prepared solely for informational purposes only. IRPC is furnishing it solely for use by prospective investors / analysts in
the proposed event. IRPC makes no representations or warranties as to the accuracy or completeness of such information. By accepting this material each
recipient agrees that IRPC shall not have any liability for any representations (express or implied) contained in, or for any omissions from this presentation.
The information contained herein does not purport to be all-inclusive or to contain all of the Information that may be material to the recipient’s decision. Each
recipient of the information and data contained herein should perform its own independent investigation and analysis of the transaction and the creditworthiness of IRPC . Reference in this Disclaimer to this shall include references to the Appendices (if any) hereto.
29
Agenda
1. 2Q14 Overview
• Fire Incident
• Delta & UHV Project
2. Highlight Update
3. Operation & Financial Performance
4. Industry Outlook
5. UHV Project & Post Phoenix
• Strategic Direction
• Phoenix Project
Appendix
Strategic Initiatives: Overview
Delta: 2014 Onwards
• Margin Improvement Initiatives
– Operational Excellence
– Commercial Excellence
– HR Excellence
• Acceleration of Assets
Utilization
– EIZ
– Bankai
– Dry port
• Domestic crude use up to
35,000 Barrels per day
Post-Phoenix: 2015 Onwards
• Adding more value to
petrochemical feedstock from
UHV project
• Shifting product portfolio to be
specialty player through PTT
Group Partnership strategy
– PP compound
– Polyol
– AA/ SAP
– PX
– SM
Phoenix + : 2010 Onwards
• Transformation to support high
value added product growth
– CHP I
– PRP
– EBSM
– UHV
• Quick specialty capacity
expansion/ Grade shifts
– TDAE
– ABS6/SAN3
– HDPE-Pipe Grade
– UHMWPE
3
Structural changes for
specialty growth
Quick win initiatives
for cost reduction
and margin enhancement
Specialty focus and moving
away from heavy-asset
company by investing
through JV
1 2
30
Post-Phoenix Specialty Growth through JV
Delta Margin Improvement Initiatives
Phoenix + Structural Changes for Specialty Growth
Strategic Initiatives: Phoenix +
31
HDPE-Pipe
HDPE-Pipe grade
+140 KTA
TDAE +28 KTA
150BS +25 KTA
TDAE/BS
UHMW
UHMW
+16 KTA
CHP I
Electricity +220 MW
Steam +420 T/h
Combined Heat
and Power
ABS/SAN
ABS +30 KTA
SAN +30 KTA
UHV
EBSM
EBSM +60 KTA
PRP
Propylene +100KTA
Increase product value by converting fuel
oil to petrochemical products
Running at full capacity of 215 KBD
2-3 USD/BBL margins improvement
Propylene +320 KTA
Co
mp
lete
d P
roje
cts
C
urr
en
t P
roje
cts
COMmercial EXcellence
Strategic Initiatives: Delta
Post-Phoenix Specialty Growth through JV
Phoenix + Structural Changes for Specialty Growth
Delta Margin Improvement Initiatives
32
Organisation
DELTA
HR EXcellence
7 Workstreams
USD 37 M
5 Workstreams
USD 10 M
2 Workstreams
USD 20 M
USD 67 M
Delta
HR EXcellence OPerational EXcellence
33
Agenda
1. 2Q14 Overview
• Fire Incident
• Delta & UHV Project
2. Highlight Update
3. Operation & Financial Performance
4. Industry Outlook
5. UHV Project & Post Phoenix
• Strategic Direction
• Phoenix Project
Appendix
Phoenix Initiatives & Roadmap
Capacity & Products
Expansion
Capacity & Product
Expansion
Operational Efficiency
Improvement Asset Utilization
Enhancement
Product & Services
Improvement
Petrochem Petroleum Port & Tank Real Estate & Services
6. Supply Chain Optimization
(Griffin and Trading)
3. Ethylene Specialty
Development
7. Lube Group 1 Specialty
Products Focus
12. I'M ACE: IRPC Service
Solutions
1. Petrochem Operation &
Energy Efficiency
5. Petroleum Operation &
Energy Efficiency
9 . New Value Added for Port
and Tank Business 2. Capacity Development for
Propylene Growth
11. Build and sustain land for
green industrial
complex
4. EBSM Upgrading for ABS
Specialty
14. Performance Chemical
Business Development
Project
8. Petroleum quality
improvement to clean fuel
and green growth
development
13. Petrochem Catalyst
Commercialization
15. Utilities for
Sustainability
16: Oil Depot and Lube
Blending Business
Improvement
17: Analytical Lab
19: Hydrocarbon Management
20: Intellectual Property
Stewardship
34
35
Additional Capacity in Phoenix Projects
Sep.
+60 KTA
2012 2013 2014 2015
EBSM
Upgrading for
ABS
Lube Group1
Petroleum
Quality
Improvement
SM
200/260 KTA
TDAE 22/50 KTA
150BS 95/120 KTA
EURO IV
Gasoline 15KBD
Diesel 10KBD
Kerosene 15KBD
Project Total Capacity
Old/New
Oct.
Propylene
+100 KTA
Sep.
Propylene
+320 KTA
PRP+ Propylene
Growth (UHV) Propylene
312/732 KTA
SAN3/ABS6 Apr.
+60 KTA
ABS/SAN
117/177 KTA
Sep.
TDAE +28 KTA
150BS +25 KTA
Feb.
GHU 15 KBD
Mar.
Co-Invest
Diesel 10KBD
Kerosene 15KBD
Refinery & Lube
ADU
Lube Base
Asphalt
Products 2011 2012 2013 2014 2015 2016
CDU 215 KBD 215 KBD
150BS 95 KTA 120 KTA
TDAE 22 KTA 50 KTA
Lube Group 1 Specialty Products:
Increase high value added lube specialty products: TDAE & Bright Stock
+28 KTA
Petroleum Quality Improvement to Clean Fuel & Green Growth Development:
Upgrading HSD / Gasoline to be EURO IV standard
Products 2011 2012 2013 2014 2015 2016
Gasoline 75 M.Ltrs 75 M.Ltrs
Diesel 180 M.Ltrs 180 M.Ltrs
50 KTA
Phoenix by Business Unit
120 KTA +25 KTA
36
Initiative
7
Initiative
8
Products 2011 2012 2013 2014 2015 2016
Benzene 114 KTA 114 KTA
Toluene 132 KTA 132 KTA
Mixed Xylene 121 KTA 121 KTA
Products 2011 2012 2013 2014 2015 2016
SM 200 KTA 260 KTA
ABS/SAN 117 KTA 177 KTA
PS 100 KTA 100 KTA
EPS 30 KTA 30 KTA
+60 KTA
Performance Chemical Business Development Project:
Increase 60 KTA EBSM for feeding ABS specialty.
To satisfy local demand for ABS/SAN expansion and to produce Nano additive.
260 KTA
Styrene
+60 KTA
177 KTA
ABS/SAN Expansion 6
Increase ABS/SAN from 117 KTA to 177 KTA to support ABS specialties production and Nano
additive production.
Phoenix by Business Unit (Con’t)
Aromatics
37
Initiative
4
Olefins Products 2011 2012 2013 2014 2015 2016
Ethylene 360 KTA 433 KTA
Propylene 312 KTA 732 KTA
Butadiene 56 KTA 56 KTA
Acetylene 4 KTA 4 KTA
Upstream Project for Hygiene & Value Added Products (UHV):
Upgrading low value product (HS-ATB) to be high value added product for petrochemical feedstock:
Propylene 320 KTA, Ethylene 73 KTA, and Heavy Aromatic Naphtha 250 KTA, etc.
+320 KTA +100 KTA
+73 KTA
412 KTA 732 KTA
433 KTA
Products 2011 2012 2013 2014 2015 2016
PP 475 KTA 475 KTA
HDPE 140 KTA 140 KTA
Ethylene Specialty Development High Value Added Product of HDPE Specialty & PE Wax .
Phoenix by Business Unit (Con’t)
Polyolefins
38
Initiative
2
Initiative
3
After completion of UHV
• Running at full capacity of 215 KBD
• Propylene 320 KTA
• Light Distillate yield
• Crude Selection Flexibility
Sweet : Sour = 30:70 20:80
39
Benefits of UHV Project
Production Yield
0%
20%
40%
60%
80%
100%
Current Run +40 KBD Crude Run with UHV
20%
43%
8%
11%
10%
35%
35%
38%
11%
10%
19% 20%
21%
4% 2%
5% 6% 2% Ethylene
Propylene
LPG
Naphtha
Gasoline
Diesel/Jet
Lube Base
FO
09 10 11 12 13 14 15 16
Other Projects
Phoenix
BAU
Market GIM
GIM up 50%
Other projects consist of CHP, PRP and ABS6/SAN3
Currently running at full capacity is not optimal.
at 175 KBD (As of 2012)