Post on 10-Feb-2018
OUTLOOK OF GLOBAL PETROCHEMICAL
INDUSTRY – CHALLENGES AND
OPPORTUNITIES
STAR 2017 ROTOMOULDING CONFERENCE
January 29, 2017 – Jaipur, India
Philippe Montagne
VP PolyOlefin Orient @ TOTAL PETROCHEMICALS
GLOBAL SCENARIO OF
PETROCHEMICALS INDUSTRIES
STAR 2017 ROTOMOULDING CONFERENCE - Ph.Montagne - TOTAL PETROCHEMICALS 2
OIL, ETHANE & COAL COMPETE AS POLYMERS FEEDSTOCK
LPG or
Light Naphtha
Production
Steam-cracker
Ethane cracker
Gas
CrudeOil
Polypropylene
Polyethylene
Polystyrene
Benzene
Styrene
Toluene
Paraxylene
Xylenes
Ethylene
Pyrolysis Gasolines
Heavy
Naphtha
Butadiene
Propylene
FCC
Refinery
Aromatic
extraction
REFORMER
Coal
Methanol
MTO CTM
POLYMERS
3 STAR 2017 ROTOMOULDING CONFERENCE - Ph.Montagne - TOTAL PETROCHEMICALS
CRUDE OIL IS BACK TO 50 $/BL
• the world consumption increases by about 1%/y (2016 ~ 96 Mb/d)
• the USA have become the #1 Oil Producer in the world because of Shale Oil
• Investment by Oil Industry have been cut by 50% since 2014 (700 Bn$)
• IRAN sanctions have been lifted
US financial crisis
OPEC agreement
NATURAL GAS STAYS ABUNDANT AND CHEAP
West Texas Intermediate (WTI) vs the Henry Hub Natural Gas spot price
$/MMBTU $/BL
COAL IS VERY CHEAP BUT… EMITS 2 X CO2 VS NG
$/MT
MTPA 2016 2020
PE 2.5 6.5
PP 4 8.5
CTO Production Capacity in China
5 Mt Coal 1 Mt Polyolefin
7 STAR 2017 ROTOMOULDING CONFERENCE - Ph.Montagne - TOTAL PETROCHEMICALS
IN A CONTEXT OF CRUDE OIL @ 70$/BL, ETHANE-BASED
POLYOLEFINS ARE THE MOST PROFITABLE
Source: IHS
IRAN PETROCHEMICAL INDUSTRY IS ABOUT TO BOOM
STAR 2017 ROTOMOULDING CONFERENCE - Ph.Montagne - TOTAL PETROCHEMICALS 8
● Iran currently produces 60 million tons of petrochemicals a year. This
capacity will increase by 8.5 million tons in 2017 when a number of
new projects become operational
● The petrochemical industry is the biggest source of foreign earnings
for Iran after oil. In 2015, Iranian companies exported about $13
billion of petrochemical products.
● Iran needs $55 billion for 60 projects in the petrochemicals
sector over a period of 10 years
● Non US IOC have tabled “serious” proposals for building
petrochemical plants in Iran
STAR
2017
ROTO
MOUL
DING
CONFE
RENCE
-
Ph.Mon
● 10
URBANIZATION: KEY DRIVER FOR THE POLYMER DEMAND
0
5
10
15
20
25
30
35
40
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
kg/cap
PE - Domestic demand per capita
0
5
10
15
20
25
30
35
40
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
kg/cap
PP - Domestic demand per capita
0
1
2
3
4
5
6
7
8
9
10
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
kg/cap
PS - Domestic demand per capita
0
10
20
30
40
50
60
70
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
kg/cap
PE+PP+PS - Domestic demand per capita
Above ratio = Demand from convertors divided by population (exports of plastic finished goods are included but imports are not)
WORLD DEMAND KEEPS BEING PULLED BY ASIA
STAR 2017 ROTOMOULDING CONFERENCE - Ph.Montagne - TOTAL PETROCHEMICALS 11
0
20
40
60
80
100
120
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
scenario 2° MS
World oil products demand by region (low Brent)
Europe
Mb/d
Annual Growth 2008-2015: +1.3%
+1.9%
+1.4%
+1.6%
+2.1%
-0.2%
+0.3 %
-0.4%
Annual Growth 2016-2026: +1.0%
NAM
Asia OCDE
China
Rest of Asia
Middle East
Rest of the world
outlook
-0.1%
0
100
200
300
400
500
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
ICIS gross demand
World polymers* demand by region
Mt/year
NAM
China
Rest of Asia
ME
RoW
Europe
Annual Growth 2005-2015: +4.5%
+4.4%
+4.1%
+4.8%
+4.5%
+3.5 %
+2.8%
Annual Growth 2016-2025: +4.2%
Soft growth of refining
Tonic growth of Polymers driven by GDP and Urbanization
* : PE, PP, (E)PS, PVC, Polyester (incl. PET)
BY 2020 MIDDLE-EAST AND NORTH AMERICA WILL BOTH
EXPORT POLYETHYLENE TO EUROPE AND ASIA
12
North America
Europe
Middle East Asia
PE exports rising
from US to Europe
Polyethylene (PE) at 100 $/b
PE 2020 regional balances at 100 $/b
PE tradeflow (‘14/100$/60 $)
Asia
Existing PE exports
from Middle East to
Europe
Europe ‘14 ’20
100$
’20
60$
Demand 12.7 12.6 12.6
Capacity 16.1 15.8 15.8
Op. rate 78% 65% 81%
(0.8/2.3/2.5)
+/- x
Polyethylene market
Mta
( +/- x)
US ‘14 ’20
100$
’20
60$
Demand 15.9 18.0 18.0
Capacity 20.1 28.2 27.2
Op. rate 90% 87% 88%
China ‘14 ’20
100$
’20
60$
Demand 21.8 28.9 28.9
Capacity 14.7 22.4 21.6
Op. rate 84% 84% 84%
+6
+12
-10
(1.1/2.5/3.0)
(0.2/1.5/1.0)
(1.5/2.0/2.0) (7.0/8.3/8.5)
Middle
East
‘14 ’20
100$
’20
60$
Demand 5.6 7.4 7.4
Capacity 19.1 22.9 22.6
Op. rate 80% 86% 86%
China will represent 65% of ME PE export
STAR 2017 ROTOMOULDING CONFERENCE - Ph.Montagne - TOTAL PETROCHEMICALS
PETROCHEMICALS KEYS DRIVERS OF THE FUTURE
STAR 2017 ROTOMOULDING CONFERENCE - Ph.Montagne - TOTAL PETROCHEMICALS 13
● CTO will produce cheap PolyOlefins in China and will represent 25-30% of the Chinese capacity. Their future development will depend on Oil Price.
● Middle-East and USA will export competitive PolyOlefins based on Ethane (NG and Shale Gas).
● Within 5 to 10 years, China will be self-sufficient in PP. There will be peak period with heavy Chinese PP exports.
● Urbanization will continue in China, India, Indonesia, … and will pull more PolyOlefin consumption.
● Oil price should increase (less investment oil field not replaced in a still growing demand) and so doing, should cause rationalization of Naphtha-based cracking capacities
15 STAR 2017 ROTOMOULDING CONFERENCE - Ph.Montagne - TOTAL PETROCHEMICALS
INDIA LLDPE DEMAND OUTLOOK REMAINS VERY STRONG
Source: IHS
16 STAR 2017 ROTOMOULDING CONFERENCE - Ph.Montagne - TOTAL PETROCHEMICALS
INDIA HDPE DEMAND OUTLOOK REMAINS ROBUST
Source: IHS
17 STAR 2017 ROTOMOULDING CONFERENCE - Ph.Montagne - TOTAL PETROCHEMICALS
INDIA LDPE DEMAND OUTLOOK IN LINE WITH THE PAST
Source: IHS
18 STAR 2017 ROTOMOULDING CONFERENCE - Ph.Montagne - TOTAL PETROCHEMICALS
INDIA PP DEMAND OUTLOOK REMAINS STRONG
Source: IHS
SPECIALTY PRODUCTS TO MAKE THE
WORLD BETTER
STAR 2017 ROTOMOULDING CONFERENCE - Ph.Montagne - TOTAL PETROCHEMICALS 19
LDPE
Linear PE
Cr, Z-N
Gas phase
Metallocene
Bimodal
1930 1940 1950 1960 1970 1980 1990 2000 2010 2020
20
Bimodal
Metallocene
1933
ICI, UK
STAR 2017 ROTOMOULDING CONFERENCE - Ph.Montagne - TOTAL PETROCHEMICALS
1st autoclave process commercialized by ICI in 1938
1st tubular process commercialized by BASF in 1953
MDPE/HDPE development
LLDPE development
Dual reactor
Boosted PE properties
THE METALLOCENE PE = BREAK-THROUGH IN PE
Te
ch
no
log
ica
l p
rog
ress
THE WORLD ENTHUSIASM FOR MET-PE IS AMAZING
0
500
1000
1500
2000
2500
3000
3500
1995 2005 2015 F2025
CHINA
AMERICA
EUROPE
STAR 2017 ROTOMOULDING CONFERENCE - Ph.Montagne - TOTAL PETROCHEMICALS
Exponential World met-PE Demand (ktpa)
Source: TOTAL
21
METALLOCENE PENETRATION INTO LLDPE MARKET IS DEEP
STAR 2017 ROTOMOULDING CONFERENCE - Ph.Montagne - TOTAL PETROCHEMICALS
90%
10%
WW 2005
86%
14%
WW 2015
81%
19%
WW 2025
99%
1%
CHINA 2005
92%
8%
CHINA 2015
85%
15%
CHINA 2025
mPE/LL
Demand (MT) 2005 2015 2025
World 1.9/17 4.5/28 9.9/41
USA 0.6/4.6 1.5/5.7 3/7
China 0.03/3.7 0.7/8.4 2.4/14
88%
12%
USA 2005
79%
21%
USA 2015
70%
30%
USA 2025
22
Source: TOTAL/NEXANT
THE BIO-PLASTIC POLYMERS VOLUME INCREASES BUT WILL
NEVER MATCH THE HYDRO-CARBON BASED POLYMERS
STAR 2017 ROTOMOULDING CONFERENCE - Ph.Montagne - TOTAL PETROCHEMICALS 23
TOTAL – A KEY PLAYER IN
PROVIDING SPECIALTY PRODUCTS
STAR 2017 ROTOMOULDING CONFERENCE - Ph.Montagne - TOTAL PETROCHEMICALS 24
An Oil & Gas Company
- 2.3 Mb/d - 2nd
global player in LNG
- Net Income of 22 billion $ (2015)
- Operations in 130 countries, with 96,000 employees
A Leader in Refining & Marketing
-16 refineries worldwide. 2.2 Mb/d of refining capacity
-Network of 17,000 service stations (Europe + Africa + Asia)
A Global Petrochemical Integrated Player
-One of top 10 Producers of PP, PE and PS
A Leader in Renewable Energy
-Top 3 Solar Player with SunPower. 6GW+ already deployed
worldwide
-Developing Energy Storage with Saft Acquisition (1bn $)
-World-Class BioRefinery (La Mede, France) in construction to produce 500KT/y of bio-fuels
25
TOTAL: A LEADING ENERGY GROUP
STAR 2017 ROTOMOULDING CONFERENCE - Ph.Montagne - TOTAL PETROCHEMICALS
TOTAL REFINING & PETROCHEMICALS PLANTS
STAR 2017 ROTOMOULDING CONFERENCE - Ph.Montagne - TOTAL PETROCHEMICALS 26
Refinery
Petrochemical
plant
Large, integrated
complex
PORT ARTHUR QATAR DAESAN
JUBAIL ANTWERP NORMANDY
0
1
2
3
4
5
6
Rest
of the world
Asia Middle East North America Europe
Refining capacities Mb/d
Petrochemical capacities Mt/y
27
0
10
20
30
40
50
60
TOTAL'S POSITION AMONG GLOBAL PLAYERS
#10 world Petrochemical
producer (#2 in Europe)
#9
world refiner (#1 in Europe)
• Gobal capacities at 12.31.2015