kbr technology business

©2013 KBR, Inc. All Rights Reserved 1

KBR Technology Business Tanya Niu ------ Director, Chemicals

Platts Olefins Asia 2014, Shanghai, China 6-7 March, 2014


Agenda

Introduction to KBR and KBR Technology

Olefins Market Overview

– Impact on Propylene Markets

Propylene-on-Demand Technology Options

KBR Options for Propylene Production


Agenda







KBR at a Glance

Revenue: $7.9 Billion

(FY2012)

Backlog: $14.9 Billion

(YE2012)

Headquarters in Houston,

Texas

4 Business Groups, 13

Business Units

27,000 employees; 70+

countries


KBR Technology Introduction

KBR Technology (TBU) is the

licensing arm of KBR

– Business Unit was created in 2008

– Prior licensing through EPC projects

Commercializes a collection of

technologies developed or acquired

by KBR

Monetizes the value of KBR

proprietary technologies

Main business focus Technology

Licensing

– Other adjacent services enhance

value to customer and to KBR

Technology License

Proprietary Equipment and Catalysts

Basic Engineering and Design

Support for Detailed Engineering

Commissioning and Start-Up Services

Plant Operations Management Systems

Operator Training Simulators

Technical Services and Studies

Revamping and Retrofits


KBR Technology Portfolio

Refining

• ROSE®

• FCC

• VCC™

• HydroProcessing

Olefins

• SCORE™

• K-COT™

Chemicals

Ammonia and Syngas

• Phenol

• BPA

• PVC

• NExOCTANE™ and

NExETHERS™

• TRIG™

• Power applications

• Industrial

applications

Automation and Process Technologies

• InSite™ Performance

Monitoring

• OTS

• OMS

• Technical Services

Proprietary

Equipment

• Refining

• Coal

Monetization

• Olefins

• Chemicals

• Ammonia and

Syngas

• Ammonia

• Fertilizers

• Syngas

• Hydrogen

Coal Monetization


SCORE™ • Reliable and flexible process, easy operation and

low maintenance needs

• Best return on investment: Low CAPEX and OPEX

• Small footprint

• Tailored coil design to meet customer’s objectives

K-COT™ • Flexible feed: capable of processing C4-C10 olefinic,

paraffinic or mixed feeds

• Higher propylene-to-ethylene ratio

Olefins


Chemicals

Phenol: Delivers high quality phenol and acetone at low

long term cost of production, with high yields, low energy

and high on-stream time. KBR has licensed 50% of the

world's phenol capacity.

NExOCTANE™: Highly selective, commercially proven

technology for dimerization of isobutylene to iso-

octene/iso-octane.

NExETHERS™: The ultimate technology for the combined

production of MTBE, TAME and heavier ethers or their

counterparts ETBE, TAEE and heavier ethers in one unit.

BPA: Produces the highest quality BPA at lowest long-term

cost of production. High selectivity and yield. Low total

installed cost and lowest cost of production.

PVC: Lowest environmental footprint technology for the

production of high quality commodity and specialty PVC.


Agenda







US Shale Gas Boom Brings Surplus NGL

Ethane and Propane profoundly changed NA petrochemical feedstocks

structure with its cost advantage and availability

US NGL production, Million Barrels/Day


Impact to Olefins Production

Ethane and propane cracking produces less propylene than naphtha cracking

Propane can be used as feedstock for on purpose propylene production

Source: public literatures

0

20

40

60

80

100

120

Ethylene

Propylene

Typical olefins plant product yields


Export Balances: US Propane

Ample propane supply after

retail and petrochemical

feedstock use

US recently becomes the

leading propane exporter,

topping Middle East

– Propane export capacity

expanded with matching gas

processing, pipeline, and

storage

Possible US propane global

price parity concerns PDH

economics


Global Propylene Supply Demand Gap Widens

Propylene demand keeps growing: organic growth; new applications

– Propylene demand to go from 80 to 100MM ton in 5 years

Propylene production can’t keep up

– Crackers propylene: ethylene driven; lighter feedstocks

– Refinery propylene: gasoline driven; slow growth

Cracker

55%

Refinery

31%

PDH

5%

Metathesis

4%

MTO

1%

Others

4% Other

14%

Global Propylene Production, 2012

Source: IHS


North America Propylene Production

0

2

4

6

8

10

12

14

16

18

2000 2007 2012 2017

PDH

Metathesis

Refinery

Cracker

Cracker production declines further until new projects come up

Refinery propylene battles declining fuel consumption

On purpose production fills the gap

Million Metric Ton

Source: IHS


New North America On-Purpose-Propylene

Projects

On Stream Capacity

(KTA)

Technology Location Company

2015 750 PDH Freeport, TX Dow

2015 750 PDH Mt. Belvieu, TX Enterprise

2016 300 PDH Odessa, TX RedTac

2017 600 PDH Point comfort, TX FPC

2017 500 PDH Redwater, AB Williams

2017 1000 PDH Alvin, TX Ascend

On hold 750 PDH Freeport, TX Dow

Petrologistics started up 500 KTA PDH plant in 2010. Another project pending

Seven upcoming PDH projects with a total capacity of 3.9 MM Ton per year

LyondellBasell called off their 225 KTA metathesis project

Feedstock stability important to downstream players in addition to cost

Source: company press releases, IHS


Impact on North America Propylene

Derivatives

Reduced PP export for a few years

Impact less prominent to other propylene derivatives

7.5 9.0 7.6

8.4

0

2

4

6

8

10

12

14

16

2000 2007 2012 2017

Others

Propylene Oxide

Polypropylene

Butanols

2-Ethyl Hexanol

Isopropanol

Cumene

Acrylonitrile

Acrylic Acid

Source: IHS

NA propylene demand, Million Ton


Impact on Global Propylene Derivatives

Propylene demand growth sensitive to macroeconomics

– Most propylene derivatives tied to durable goods

China

– Strong desire for self sufficiency, building on coal supply

– Favorable tax structure to encourage propane import

– PDH and MTO to make up 1/3 production by the decade end

– Gap remains, despite reduced import

Middle East

– Continue to export, yet slower growth


US propylene price high, yet volatile

Tight supply-demand brings price volatility

Strength of derivatives demand and inventory management

Operational outages and seasonal turn around

Alternative RG propylene value and on purpose production economics

Arbitrage opportunity for import

Source: Argus

0

500

1000

1500

2000

2500

2006 2007 2008 2009 2010 2011 2012

Ethylene, $/MT

Propylene, $/MT


Agenda







On-purpose propylene production

Traditionally demand driven in regions with shortages

New Norm: supply driven to take cost advantage of feedstocks

Technologies

– Propane Dehydrogenation (PDH)

– Metathesis

– Methanol to Olefins (MTO / MTP)

– Catalytic Cracking

– High Severity FCC


Propane to Propylene (PDH)

High selectivity, >80% propylene yield from propane

Hydrogen typically used as fuel for the process

Fixed bed, fluid bed, and moving bed reactors, all commercialized

Propane/Propylene pricing differentials drives project economics

Market considerations: feedstocks security; derivative competitiveness

Propane Propylene + Hydrogen

Source: Argus

US Pricing

0

500

1000

1500

2000

2500

2006 2007 2008 2009 2010 2011 2012

Propylene, $/MT Propane, $/MT


Metathesis (rearrangement of olefins)

Requires high purity ethylene and high purity butene

Commercially proven operation in fixed bed reactors, cyclic operation

Unique set of requirements for positive project economics

– Positive propylene to ethylene price ratio

– Availability and low cost of C4 or

– Ethylene dimerization unit when C4 is not available

Ethylene

2-Butene

Propylene

Ethylene

Metathesis

1-Butene Isomerizes to 2-Butene


Methanol to Olefins

Primarily a coal play in China

Capital intensive, especially with syngas and methanol plant

No economic direct methane to propylene route exists

Economics depend low cost feedstocks or methanol

Environmental concerns

Syngas production

Syngas to Methanol

MTO Coal or

Natural Gas

Ethylene

Propylene

Methanol Synthesis

Methanol to Olefins

MTO/MTP


Light Hydrocarbon Catalytic Cracking

Feedstocks flexibility

No need for pre-treatment

Either fluidized or fixed beds, using catalysts

Catalytic cracking

Various

refinery and

cracker light

streams

Ethylene

Propylene


High Severity FCC

Propylene yield improvement from FCC

Improvement achieved by

– Catalyst and additive modifications

– Process condition changes: pressure, temp, catalyst/oil ratio

– Hardware change

– A variety of technology offerings

2 - 8% FCC propylene yield

15 -25%


On Purpose Technologies Comparison

Process Metathesis PDH Catalytic Olefins MTO/MTP

Feedstocks Ethylene &

Butene

Propane C4-C10 Olefins or

Straight Run

Methanol (or

coal/methane)

Ethylene price sensitivity Negative Neutral Positive Positive (MTO)

Feed Pretreatment Significant Significant None to little None

Major Byproducts None None Ethylene

BTX gasoline

Ethylene (MTO)

Water

Economic plant size Small to

moderate

Large Small to large Large

Commercial proven Yes Yes Yes Yes

Capital Investment Low to

moderate

Moderate Moderate Moderate to Large


Agenda







K-COT™ - KBR Catalytic Olefins Technology

Maximize production of

propylene from light

olefinic or paraffinic feeds

– Typical P/E ratio = 2:1 for

olefin-rich feed

– Typical P/E ratio = 1:1 for

straight run naphtha

FCC-based fluidized

reactor

Cryogenic purification for

polymer grade products

Proven, efficient technology

High Propylene-to-Ethylene

Ratio

Feedstock Flexibility


MAXOFINTM – KBR High Severity FCC

Maximize production of light olefins from gas oil and resid refinery streams

– 20+ wt % propylene yield

Flexibility to adjust product mix based on propylene and gasoline market conditions

Developed from KBR FCC technology

– Advanced, proven FCC hardware features

– Separate reaction zones for cracking heavy

molecules and light molecules

– ZSM-5 additive

High propylene yield

Flexible product mix

Proven Technology


Conclusions

Availability of ethane from US shale gas has shifted the dynamics of the global olefins market

Propylene-on-demand technologies will be needed to close the gap in propylene supply/demand

KBR provides cost effective, proven and efficient technologies to improve your propylene yields


Thank You

kbr technology business

Documents

proven technology

ultimate technology

propylene production

propylene markets propylene

lowest cost of production

chemicals phenol

high quality phenol

agenda introduction