5th Annual Conference5-6 April 2017 • Moscow, Russiawww.cispetchem.com

CIS PETROCHEMICALS CIS PETROCHEMICALS

3rd Annual Conference • 4 April 2017 • Moscow, Russiawww.cisgaschem.com

Co-located with

CIS GAS MONETISATIONCIS GAS MONETISATION

ANNIVERSARY CONFERENCE CIS PETROCHEMICALS

Post-ConfeRenCe RePoRt 2016

MAJOR PETROCHEMICAL CONFERENCE IN THE CIS REGION SHORT SUMMARTY OF 2016 CONFERENCE

the CIs Petrochemicals Conference is the region’s only event of its kind solely dedicated to the petrochemical industry in Russia, Belarus, Azerbaijan, Kazakhstan and other CIs countries uniting key industry professionals from around the world.

for the past four years, the conference has sourced the best speakers from around the globe for an open and direct discussion and in 2016 we addressed the core issues of the CIs petrochemical industry in a new global landscape.

In 2016, officially supported by Russia’s largest petrochemical producer sIBUR, the conference has demonstrated that, despite the high level of uncertainty about the future economic trend, oil and gas majors do not abandon the previously announced projects of construction and modernisation of petrochemical facilities.

the co-located CIs Gas Monetisation conference covered latest gas processing technologies and gas monetisation opportunities in the CIs region including prospects of syngas, methanol, fertilizers and gas-to-olefins technologies.

“Great format and excellent platform for communication and opinion exchange between industry’s representatives on the most topical issues” MAKSIM SAVCHENKO, General Director, Amur Gas Chemical Complex, sIBUR

“It was one of the best conferences I have participated in recent years: everything starting from the level of participants, informative presentations, and opportunities for business contacts” VITALY PROTASOV, Director for Development, BALtIC GAs CHeMICAL CoMPAnY

“the range of participants and speakers is very well balanced, foreign companies are just as active as Russian institutions”

VASILY RYBKIN, Director for Market Development, HoneYWeLL

“Very interesting conference. Good occasion to exchange experiences and perfect opportunity to approach key Russian players in the petrochemical field.”

CARLO PESCHECHERA, Commercial Manager - europe, teCHInt e&C

4th Edition of the conference 237 Attendees from 17 countries60 speakers and discussion leaders12 sessions 5 Round tables and panel discussions3 evening cocktail receptions94 % Attendees are satisfied with the conference12 official partners20 Media-partners

SPEAKERS AND DISCUSSION LEADERS 2016

ANDREY KIRILLOVDirector for DevelopmentnIPIGAZPeReRABotKA

VLADISLAV BAZHENOVAdvisor to PresidentJsfC sIsteMA

DENIS DEREVYANKINManaging Partner PWC

DENIS TANKOV Deputy General Directorfor Production stAVRoLen

ROMAN ZHIROVProject Manager - Gas Monetisation and efficiency ManagementRosneft

MITCH HINDMANGlobal LicensingManager – synfuelseXXonMoBIL ReseARCH & enGIneeRInG

SERGEY KOMYSHANMember of the Boardexecutive DirectorsIBUR

MAKSIM SAVCHENKOGeneral DirectorAMUR GAs CHeMICAL CoMPLeX

ANNA SEMENOVAChief finance officerBALtIC UReA PLAnt

VITALY PROTASOVBusiness Development DirectorBALtIC GAs CHeMICAL CoMPAnY

PETR NIKITINDeputy Head of engineering - technical CentreGAZPRoM PeReRABotKA

SERGEY MERZLYAKOVGeneral DirectorBAsHKIRIAn CHeMIstRY

GERNOT BRUCHVice President, Head of export and Project financeLInDe – enGIneeRInG DIVISION

IGOR SOGLAYEVAdvisor to President Rosneft

DENIS BORISOVDirector – Moscow oiland Gas CentreeRnst & YoUnG

ALEKSANDR PETROVMember of the Board - Managing Director for finance and economicssIBUR

ANTON PORIADINEPartner and Vice PresidentA.t. KeARneY

MIKHAIL SUTYAGINSKIY Chairman of the BoardtItAn GRoUP of CoMPAnIes

ALEKSEY KOZLOVDeputy Chairmanof the BoardsIBUR

DMITRIY BEDAREVDirector, Petrochemical and Refining Modernization Projects DepartmentBAsHneft

VLADIMIR BATKHINDirectoroil, Gas and ChemicalsstRAteGY PARtneRs GRoUP

CARLOS MONDOLFI Project Manager Refining and Petrochemical Joint Projects Development DepartmentRosneft

FARID JAFAROVGeneral DirectorsoCAR PoLYMeR

DANIL EFREMOVProject Manager Business Development Petrochemical Plants LInDe enGIneeRInG

ALExANDR RAPPOPORTHead of Construction and Projects Control DepartmentLUKoIL

ALEx LIDBACKVice President –Chemical ResearchWooD MACKenZIe

ELENA GOLMManaging Director,Head of oil and GassBeRBAnK

SOME OF THE PROJECTS THAT WE DISCUSSED IN 2016ZapSibNeftekhim

STAVROLEN Modernisation Project

ROSNEFT petrochemical projects

SOCAR petrochemical projects

Amur Gas Chemical Complex

Petrochemical projects in Tatarstan

Baltic Urea Plant

Projects of TITANGroup of Companies

WHAT WE HEARD IN 2016?

ANTON PORIADINEPartner and Vice President

A.T. KEARNEY

FARID JAFAROVGeneral Director

SOCAR POLYMER

CARLOS MONDOLFIProject Manager Refining and Petrochemical

ROSNEFT

ALEx LIDBACKVice President – Chemical Research

WOOD MACKENZIE

Acquirers Build internal capability for ongoing management of acquisition pipeline and repeatable approaches for pre-merger activities Develop strong integration capabilities to drive rapid takeout of synergies across operations, supply chain and top line

Divesting companies Apply “ruthless competitor” improvements in DivestCo Aggressively manage stranded cost and use divestiture as trigger to drive broader cost improvements in RemainCo tailor value proposition and deal options to buyer groups

Potential targets of acquisitions Create winning strategies and transparent business models to gain prominent role in future industry consolidation Get ahead of investors by setting aggressive targets for business performance

Location: Located at sumgait Chemical Industrial Park with major tax and duty exemptions granted for 7 years (profit, property, VAt and other taxes)

Configuration: 120 KtA HDPe and 184 KtA PP Plants with U&o

Start-update: 2018 (PP) and 2018 (HDPe)

Feedstock supply: ethylene, propylene and hydrogen feedstock to be supplied by soCAR on a deliver or pay basis

Total project costs: $750m. (40% equity, 60% debt)

Borrowing Structure: non-recourse project finance + local bonds

Target Markets: 30% domestic, the rest to be exported to turkey, europe, CIs and other countries

Russia and CIs countries share such a vast area that this can pose several problems when executing ePC projects. Winter, limited infrastructure, long distance from procurement centers, lack of experienced engineering manpower and skilled workers is a challenge for any ePC.

some lessons learned that can be used:

Maximize modular construction when is justified

Establish JV’s with local EPC companies

Avoid reworks at site. Issue IFC drawings only when they are ready

Implement strong HSE policy, Inspection and QA/QC

Slower economic growth? - Yes, but global chemical demand continues to grow from a large base

Lower crude oil prices have a negative impact on the global chemical industry?- not necessarily as it has provided cost relief for various regions

Low ethylene production costs translates to best in class margins?- over time, yes- More recently, no as there have been significant regional ethylene price differences

Can North America absorb all its new ethylene and derivative capacity?- no. Asia will be an important destination

KEY ISSUES FACING THE GLOBALCHEMICAL INDUSTRY

SOCAR POLYMER: PROJECT SNAPSHOT

GLOBAL CHEMICAL M&A TRENDS

INTERNATIONAL APPROACH TO EPCPROJECT MANAGEMENT

WHAT WE HEARD IN 2016?

ANDREY DEREKHChairman of the Board

UNITER

VLADIMIR BATKHINDirector oil, Gas and Chemicals

STRATEGY PARTNERS GROUP

MATTHIAS STEINDirector - Global Chemicals

AIR LIQUIDE GLOBAL E&C

DENIS BORISOVDirector – Moscow oil and Gas Centre

ERNST & YOUNG

Grodno Azot has a project for construction of a nitrogen complex for nitrogen fertilizers production. the project consists of combined production of ammonia, methanol, hydrogen and carbamide. the project is estimated at about $1,2-1,8 bn.

POLYMIR PLANT OF NAFTAN - construction of a new pyrolysis and gas separation unit (ethylene-propylene unit). estimated project cost –500 mn. UsD

MOGILEVKHIMVOLOKNO has a planned investment project for 2015-2019 to build a polyether products manufacturing unit. estimated investment required builds up to 200mn UsD.

SVETLOGORSKKHIMVOLOKNO has an open investment project involving organization of viscose staple fiber production with a capacity of 80 thou tpa.

Main issues which shall be solved to preserve positive dynamics and realize the potential: access to funds and limited inflation

strengthening of the ruble will also have a negative impact on the investment performance of the project, as the equipment purchased with the currency while debts are in rubles.

ensuring of a technological transfer — now, perhaps, is the best time to use the “Chinese model” of technology transfer. only competent teams shall cooperate with technology providers

Personnel deficiency becomes more noticeable when implementing new projects. training and increase in productivity at the existing facilities shall reduce the expected manpower shortage.

“new” Methanol Derivatives provide strongest demand growth for the commodity Methanol

China with its strong „appetite“ for commodity chemicals is the main driver for developments

Lack of natural gas in China is focusing on coal as feedstock

the «old World» is cautiously looking at the application of new technologies, clearly driven by economics

Beside fuel applications, chemicals provide double digit growth of Methanol

future technology developments may skip Methanol as an intermediate and convert syngas directly to chemicals!?

over the last 5-7 years Russia has got the status of a net importer of chemical end products

In several cases, domestic primary processing products are later refined overseas, and then comes back to the Russian market, and, as a result, added value stays in other countries

Russian market of small-tonnage chemistry is a low-gain one: the margin is close to zero, whereas large-scale production makes it to around 15%

Production of modern hi-tech competitive materials may give boost to the economy and push the development of mechanical engineering, electronics, construction, defense industry, etc.

RUSSIAN MARKET OF SMALL-TONNAGE CHEMISTRY

LARGE INVESTMENT PROJECTS OF BELARUSIAN PETROCHEMICAL ENTERPRISES

NATURAL GAS IN PETROCHEMICALS IMPORT SUBSTITUTIONIN THE CHEMICAL INDUSTRY

CIS GAS MONETISATION CONFERENCE IN 2016:

VITALIY PROTASOVDirector for Development

BALTIC GAS CHEMICAL COMPANY

DMITRIY GRECHKINPrincipal

OLIVER WYMAN

FLORIAN PENNERHead of Product Management

LINDE AG - ENGINEERING DIVISION

As a result of regulatory, macroeconomic and industry factors gas prices for industry in Russia are becoming one of the lowest in the world, which substantially increases competitiveness of gas chemical projects.

the window of opportunity will appear till 2020 at the world methanol market. It is causes by fast consumption growth, delays in projects in other countries and coming back of growth phase of the price cycle.

the maximum success of methanol projects in Russia will be possible in the case of construction of world-scale capacities in a port area (e.g. Ust-Luga) with access to natural gas with regulated price

World practice suggests that to make natural Gas attractive source of feedstock several conflicting factors should be considered.

Advantages of Natural Gas efficient ethane based cracking Low local price for natural Gas ethane-rich natural Gas

Disadvantages of Natural Gas High cost to separate ethane High local price of natural Gas Low level of ethane component

Key decision drivers: Local price of natural Gas synergies with other processes (e.g. LnG production) scale of cracker (e.g. > 1mtpa of ethylene)

for the last three decades, chemical companies worldwide have been working to develop a process to convert methane into ethylene. siluria has partnered with Linde to offer licenses to the ethylene industry worldwide.

WORLD ExPERIENCEIN GAS MONETISATION

ONE STEP PRODUCTION OF ETHYLENE FROM METHANE

METHANOL PRODUCTION.MAIN CONCLUSIONS Why is CIS Gas Monetisation conference of particular topicality right now?

natural gas is unquestionably the energy resource of the 21st century. for many years, chemical processing of natural gas and APG has been an important aspect of oil and gas industry development in Russia, turkmenistan, Azerbaijan, Uzbekistan and Kazakhstan. nowadays, the low gas prices necessitated producing countries to start looking at natural gas as a major feedstock for a number of chemicals. the main purpose of the conference is to present and analyse the most economic and profitable ways of utilisation of natural gas by converting it into diverse value-added products.

some of the projects and technologies discussed at the conference:• Ammonia and Derivatives Production• Methane technology for synthesis gas, methanol, ammonia, motor fuels• synthetic fuels Production (fischer-tropsch Process)• Liquefied Gas Production• Methanol Production• ensuring high outputs and flexibility of production by conversion of methanol to olefins technology (Mto)• Development of new catalysts and catalytic systems

Official Sponsors

Exhibitors

Official Partner Official support

Organiser

General media-partner

PARTNERS AND SPONSORS 2016

Welcome cocktail reception sponsor

Perfect opportunity to welcome high-level guests of the conference in an informal and inspirational environment with your company acknowledged as the official host with an opportunity to make a short welcome speech to all attendees.

Participation with an exhibition stand

Wow your existing and potential clients, build your credibility and communicate your brand message with an exhibition stand during the conference. All social events including coffee breaks and cocktail receptions take place in the exhibition zone.

HOW TO GET EVEN MORE ROI FROM THE CONFERENCE?

SOME OF THE SPONSORSHIP ExAMPLES:

Get more out of the conference participation by taking one of our sponsorship opportunities. Besides the generic “package” levels of Bronze to Platinum, we offer bespoke, tailored features, which are designed around your needs, to only include the most important aspects of the package for you, whether it is making a presentation at the conference or arranging face-to-face meetings with senior representatives of the petrochemical plants.

If you are interested in discussing sponsorship or exhibition opportunities, please contact us:

Artem Kim / Conference Director / a.kim@globuc.com / +44 203 567 1347

OIL AND GAS /PETROCHEMICAL COMPANIES

MANAGEMENT CONSULTANCIES / INVESTMENT BANKS / AGENCIESEPC / TECHNOLOGY / EQUIPMENT

AMONG 2016 ATTENDEES

• ACRYL sALAVAt • ARetI GRoUP• BALtIC GAs CHeMICAL CoMPAnY• BALtIC UReA PLAnt• BAsf• BAsHKIR soDA CoMPAnY• BAsHKIRIAn CHeMIstRY• BAsHneft• GAZPRoM neft• GAZPRoM nefteKHIM sALAVAt• GAZPRoM PeReRABotKA• IRKUtsK oIL CoMPAnY• KARPAtnefteKHIM• KAZAnoRGsInteZ• KUYBYsHeVAZot• LUKoIL• MetAfRAX• nIZHneKAMsKnefteKHIM• PLAstICs• Rosneft• sIBMetAKHIM• sIBUR• sInoPeC• soCAR PoLYMeR• stAVRoLen• tAU nefteKHIM• tItAn GRoUP of CoMPAnIes • totAL eXPLoRAtIon & PRoDUCtIon• totAL RefInInG & CHeMICALs• UnIteD CHeMICAL CoMPAnY• ZARUBeZHneft

• AIR LIQUIDe enGIneeRInG & ConstRUCtIon• AIR LIQUIDe GLoBAL e&C soLUtIons • BoRsIG GMBH• CB&I• DoW CHeMICAL• eMeRson PRoCess MAnAGeMent• etIReX-CHRoMALoX• eXXonMoBIL• fLUoR• Ge WAteR & PRoCess teCHnoLoGIes• GeA RefRIGeRAtIon RUs• GIPRoGAZooCHIstKA• HALDoR toPsoe• HeRMetIC PUMPen• HoneYWeLL• ICM enGIneeRInG CoMPAnY• ICt GRoUP• InstItUte of RefInInG AnD PetRoCHeMIstRY of BAsHKoRtostAn• InteCsA InDUstRIAL• IntRAtooL• InVIstA PeRfoRMAnCe• IZHoRA PLAnts• JGC CoRPoRAtIon• JKX oIL & GAs• KBR• KBR teCHnoLoGY• KoCH GLItsCH• LeonI KeRPen• LInDe - enGIneeRInG DIVIsIon

• LUMMUs teCHnoLoGY• MAMMoet• MAnoIR InDUstRIes• MetneWen• MILLIKen eURoPe• nALCo CHAMPIon• nIPIGAZPeReRABotKA• nPo nefteKHIMPRoeKt• PALL eURAsIA LLC• PoRoCeL InDUstRIes• sHeLL CHeMICALs• soJItZ CoRPoRAtIon• stRoYtRAnsGAZ• sULZeR CHeMteCH• sUnDYne• teCHnIP• toYo enGIneeRInG CoRPoRAtIon• ttt sYsteMs• UnIteD MetALLURGIC CoMPAnY• UnIVAtIon teCHnoLoGIes• UoP• URALKHIMMAsH• VeB enGIneeRInG• VIs ConstRUCtIon GRoUP• VnIPIneft• YAMAtA• YoKoGAWA eLeCtRIC CIs• ZePPeLIn sYsteMs teCHnoLoGIes

• A.t. KeARneY• eRnst & YoUnG• eULeR HeRMes• feDeRAL AntIMonoPoLY seRVICe of RUssIA• HeRBeRt sMItH fReeHILLs• IHs• InfoteK-ConsULt• InG BAnK• JACoBs ConsULtAnCY• JsfC sIsteMA • KHIM-KURIeR• oLIVeR WYMAn oIL & GAs• oXfoRD InstItUte foR eneRGY stUDIes• PoLYMeR UPDAte• PWC• RUPeC• sACe• sAMRUK-KAZYnA• sBeRBAnK• stRAteGY PARtneRs GRoUP• tAtnefteKHIMInVest HoLDInG • tHe Boston ConsULtInG GRoUP• tHoMson ReUteRs• UnIteR• WooD MACKenZIe