CHEMICAL TANKERS DAWN OF NEW U.S. & MIDDLE EAST … · Northwest Innovation Works (BP ... Northwest...

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Slide 1 CHEMICAL TANKERS DAWN OF NEW U.S. & MIDDLE EAST LONG HAUL TRADES MARINE MONEY The Pierre NEW YORK 17 th June 2015 Steve Christy Head of Research Navig8 Group

Transcript of CHEMICAL TANKERS DAWN OF NEW U.S. & MIDDLE EAST … · Northwest Innovation Works (BP ... Northwest...

Slide 1

CHEMICAL TANKERS DAWN OF NEW U.S. & MIDDLE EAST LONG HAUL TRADES MARINE MONEY The Pierre NEW YORK 17th June 2015

Steve Christy Head of Research

Navig8 Group

Slide 2

IDENTIFYING THE HYDROCARBON STRUCTURAL CHANGES

LPG US Fracking (Gas) Associated LPG Production=Exports to Asia 2013

Crude Oil US Fracking (Crude) ‘Surplus’ Atlantic Basin Crude Going to Asia 2014 New OPEC Policy More than Expected Mid East Crude 2015 Lower Oil Prices Stronger Growth in World Oil Demand 2015

Oil Products Strategic Investment in Mid East Refining 2014/17 US Refiners Cost Advantage = More Products Exports Since 2011/12 US Condensate Exports = More Trade from US 2014/15 Lower Oil Prices = Stronger Growth in World Oil Demand 2015

WHAT IS HAPPENING IN CHEMICALS?

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Petchem feedstock price advantages

Gas Price & Naphtha Indications Worldwide $ per million btu

10 8

3

1

13 12

NAP

HTH

A

GAS

GAS

GAS

GAS

NAP

HTH

A

EUROPE ASIA

MID EAST

USA MAIN

DEMAND GROWTH

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Abundant & More US Gas Supplies

60

65

70

75

80

85

Jan

Apr

Jul

Oct Jan

Apr

Jul

Oct Jan

Apr

Jul

Oct Jan

Apr

Jul

Oct Jan

Apr

Jul

Oct Jan

Apr

Jul

Oct

2011 2012 2013 2014 2015 2016

Changing US Gas Production Forecasts (EIA) billion cubic feet/day

Jan 2012 Forecast Jan 2013 Forecast

Jan 2015 Forecast

Jan 2014 Forecast

Apr 2015 Forecast May 2015 Forecast

May 2014 Forecast

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Huge Investments in US Methanol Capacity

5.4

1.8 1.8

5.4

1.8

7.2

1.0

3.1

TOTAL 11.3

4.8 2.8

1.1

TOTAL 8.8

Texas Projects City YearCapacity,

million mt/yearLyondellBasell Channelview 2014 0.8OCI Beaumont Beaumont 2015 0.2Celanese Clear Lake 2015 1.3OCI Beaumont Beaumont 2016 1.8Fund Connell USA Energy Texas City 2019 3.6Fund Connell USA Energy Texas City 2020 3.6

Louisiana Projects City YearCapacity,

million mt/yearG2X Energy Lake Charles 2015 0.1Methanex Geismar I Geismar 2015 1.0Methanex Geismar II Geismar 2016 1.0South Louisiana Methanol St. James 2017 1.8Yuhuang Chemical I St. James 2018 1.7Castleton Commodities Plaquemine 2018 1.8Yuhuang Chemical II St. James 2021 1.3

Oregon Projects City YearCapacity,

million mt/yearNorthwest Innovation Works (BP - China) Clatskanie 2018 1.8

Washington Projects City YearCapacity,

million mt/yearNorthwest Innovation Works (BP - China) Kalama 2017 1.8Northwest Innovation Works (BP - China) Kalama 2021 1.8Northwest Innovation Works (BP - China) Tacoma 2021 1.8

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0

2

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10

12

14

16

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2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

million tons US Changing from Methanol Importer to Major Exporter

US Methanol Production US Methanol DemandSource: MSI

US Methanol capacity additions = Structural Market Change

IMPORTS

EXPORTS

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10 Million Ton Expansion in Mid East Organic Exports over 5 years (+8% p.a.)

3 4 4 4 4 5 5 5 7

9 10 10 8 9 8 9 10 11 11 11

1 2 2 2 3

3 3 4

4

5 6 7

7 7 6

7 7

7 7 8 1

2 2 1

2 1

2 3

4 5

0

5

10

15

20

25

30

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

million tons

Methanol MEG P-Xylene Benzene MTBE Others

Source: MSI, Navig8 Research

Total Mid East Exports

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Methanol From U.S./Caribs to Asia – The New Trade

2014 5 million tons x 2,000 miles

REQUIRES EQUIV OF 11 HANDY

CHEMICAL TANKERS

2019 8 million tons x 6,000-11,000 miles

REQUIRES EQUIV OF 49 HANDY

CHEMICAL TANKERS

We will Need the Equivalent of an Extra 38 Handy Tankers for this trade alone

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Even More Long Haul Trades From the Middle East

2014 5 million tons x 2,000 miles

REQUIRES EQUIV OF 11 HANDY

CHEMICAL TANKERS

2019 8 million tons x 6,000-11,000 miles

REQUIRES EQUIV OF 49 HANDY

CHEMICAL TANKERS

+7 million tons

+2 million tons

2014 to 2019 +9 million tons x 6,000-7,000 miles

REQUIRES EQUIV OF AN EXTRA 42 HANDY

CHEMICAL TANKERS

THESE CHANGES REQUIRE THE EQUIVALENT OF AN EXTRA 80 HANDY CHEMICAL TANKERS

60% OF THIS INCREASE IS FOR METHANOL

Zinc, Stainless Steel and MarineLine/InterLine 9001

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0

2

4

6

8

10

12

14

16

18

20

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

million dwt

Short Haul Stainless Steel

Short Haul Epoxy coated

Long Haul Epoxy coated

Long Haul Interline 9001 MarineLine Stainless Steel

Source: MSI, based on organic/inorganic chemical trades

Specialised Coatings Better Suited to Chemical Tanker Demand Growth

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We Have Seen Developments in LPG, Crude & Products

STRUCTURAL CHANGE IN CHEMICALS ARE UNDERWAY

US & MIDDLE EAST PETROCHEMICAL PROJECTS IN THE PIPELINE

DEMAND IS IN ASIA = LONG HAUL TRADES & LARGER VESSELS

SPECIALISED COATINGS A BIG ADVANTAGE

INVEST TO MEET THE EMERGING MARKETS

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THANK YOU DISCLAIMER AND CONFIDENTIALITY This presentation was produced by and the opinions expressed are those of Navig8 Group as of the date of writing and are subject to change. Navig8 Group reserves the right to make changes to the information in this presentation at any time without further notice. The information contained herein is given in good faith but without guarantee and Navig8 Group does not make any representation as to its accuracy or completeness and does not accept liability for any loss and/or damage arising from the use hereof. A party taking any commercial decision based on information provided in this document shall be solely responsible for making an independent appraisal and/or evaluation and forming its own opinion Neither this presentation nor any of its contents may be used, copied, reproduced, disseminated, quoted or referred to in any presentation, agreement or document (with or without attribution to the Navig8 Group) at any time or in any manner without the express, prior written consent of the Navig8 Group. Navig8 Group consists of Navig8 Limited of First Island House, Peter Street, St. Helier, Jersey and all of its subsidiaries.