UOP 7267-1© 2016 UOP LLC. A Honeywell Company All rights reserved.

Maximizing Profitability from Unconventional Oil and Gas using UOP Technologies

Mike BanachSr. Business Leader, Olefins &

Detergents

Petrochemical Congress Buenos Aires, Argentina14-15 June 2016

What is Honeywell

Aerospace $15.6 billion sales

Automation and Control Solutions$14.5 billion sales

Performance Materials and Technologies$10.2 billion sales

• 1,300 sites, 70 countries

• 132,000 employees

• Morristown, NJ headquarters

• Fortune 10055%sales outside U.S.

$40.3B2014 sales

1

PMT Business Overview

Data Using 2014 Estimate s

$10.2Bin sales

18%segment margin

• Refining and petrochemicals licenses & catalysts

• Gas & NGL processing• Equipment & field services

• Automation process control and field instrumentation

• Turnkey projects & services• Productivity & cyber

solutions

• Energy efficient refrigerants, foams and solvents

• Additives, fibers and resins• Metals & fine chemicals

Technologies for Oil & Gas Processing

Optimizing Manufacturing Processes

Transformed Chemicals

30%

31%17%

12%10%

Resins &Chemicals

Fluorine Products

Specialty

Asia Pac 36% Asia

Pac 26% Asia

Pac 16%

Balanced portfolio geographically diverse

22,000 employees serving 100 countries

EMEA27% EMEA

43% EMEA13%

UOP

HPS

Americas37% Americas

31%

Americas72%

UOP Honeywell Process Solutions

Advanced Materials

2

UOP creates knowledge for the oil and gas industry 4

Better Economics Continuous Innovation Reliability Expertise

800+R&D employees

3,000+ Active patents

2,500

200 with PhDs

Engineers and scientists

31out of 36refining technologies

in use today were developed by

UOP

• Process Technology• Catalysts • Adsorbents• Equipment• Services

UOP technology makes more than 60% of the world’s gasoline, 70% of its polyester and 90% of biodegradable detergents, and processes more than 40% of its LNG

Petrochemicals Natural GasRefining Renewables

UOP technologies offer a high return on investment

Continuous technology improvement allows customer operations to remain cutting edge

UOP technologies are among the most widely proven in the world

UOP has a century-long record leading technology development for the oil and gas industry

Largestprocess licensing organization in the world

Shale Oil & Gas Reserves - Argentina

Shale Development Creates Huge Opportunities for Argentina

5

Argentina has unconventional oil reserves equivalent to 27 B barrels and shale gas reserves of 802 TCF (recoverable).

15% of total gas production is coming from tight and shale exploration.

Goal is to get 50% of gas production from these formations by 2020.

Currently 50.6 thousand BOED considering oil & gas associated production.

424 shale wells in production and 173 wells drilled in 2015.

2nd Largest Gas and 4th Largest Oil Reserves Worldwide

UOP Technology Solutions for Shale Gas and Liquids6

• C1 Adv. MTO C2= & C3=

• LPG Oleflex C3= & C4=

• LPG Cyclar Benzene & Xylenes

• Naphtha RZ Platforming Benzene

UOP 7267-6Honeywell UOP Solutions Allow You to Maximize the Opportunity

MTO: Value Chain from Gas or Coal7

Coal to Olefins (CTO)

Ethylene & Propylene

Synthesis Gas

Production

Methanol Synthesis

Coal

Gas to Olefins (GTO)Natural Gas

MTO

UOP 7267-7

MTO Connects Natural Gas and Coal to Ethylene and Propylene

UOP Advanced MTO Technology

All processes licensed by UOP

8

Highest Olefin Yield High P/E Flexibility Maximum Single Train Capacity Opportunity to Produce Butadiene

Regen Gas

Air

Methanol

Water

Ethylene

C4+

Propylene

By-product

MTO Process Integrated withOlefin Cracking Process (OCP)

Sep Section

OCP

MTO Light Olefin

Recoveryn-Butenes(optional)

TPC/UOP OXO-D™Process

Butadiene(optional)

DMERecovery

Yield Benefits from OCP Integration 9

0102030405060708090

100

Naphtha MTP MTO AdvancedMTO

Car

bon

Yiel

d %

Other high value productsEthylenePropylene 2.6 tons of Methanol consumed

per ton of light olefin produced

A little more ethylene, a lot more propylene, and a lot less C4

+ by-productOCP integration increases light olefin yields by >15%

UOP 7267-9

Commercialization Status

Smooth Commercialization Results is Fast Market Acceptance

10

# Owner Location Scope Status

1 Wison (Nanjing) Clean Energy Company, Ltd.

Nanjing, Jiangsu

MTO / OCP

Onstream2013

2 Jiutai Energy (Zhungeer) Company, Ltd.

Ordos, Inner Mongolia MTO SU 2017

3 Shandong Yangmei Hengtong Chemicals Company, Ltd.

Linyi, Shandong

MTO / OCP

OnstreamJune 2015

4 Jiangsu-Sailboat Lianyungang, Jiangsu

MTO / OCP SU 2016

5 Shandong Better Energy Dongying, Shandong

MTO / OCP SU 2017

6 Undisclosed China MTO / OCP Awarded

7 Undisclosed China MTO / OCP Awarded

8 LUXI Chemical Group Co. Ltd. Liaocheng, Shandong

MTO / OCP Design

The following projects have selected the UOP/INOVYN MTO™ Process:

UOP 7267-10

LPG to High Value Olefins with Oleflex Process11

Propane

Isobutane

Propylene

ContainedIsobutylene

Feedstocks Products Uses

Gasoline Blending Components

MTBE

Iso-Octane

ETBE

Synthetic Rubbers & Acrylics

Propane

Isobutane+

Propylene+

ContainedIsobutylene

Dedicated and Mixed Unit Applications

H2

High performance plastic

Fiber

Packaging

UOP 7267-11

C3 Oleflex Complex12

UOP 7267-12

OleflexUnit

C3 LPG

C4+

Byproduct H2 C2-

Propylene

SHP

P-P Splitter

Deethanizer

Depropanizer

UOP Leads the Way in Dehydrogenation

Chosen EVERY engagement 2015 – 4 PDH and 1 BDH

13

UOP 7267-13

Why Customers Choose UOP Oleflex - I

• Lowest Overall Cost of Production: – Low feed consumption design available <1.15– Lowest gross / net energy usage– Lowest coke → Flexible byproduct disposition

• Smaller Investment Required– Fewest reactors on most compact plot space– Efficient regeneration requires smaller equipment– Constant equipment count → Best economy of scale

14

UOP 7267-14

The Lowest CAPEX and OPEX

Why Customers Choose UOP Oleflex - II

• High Reliability / On-Stream Availability– Constant process conditions– CCR technology well proven across the industry

• Smallest Environmental Footprint:– Lowest energy leads to lowest CO2

– Low NOx & VOC emissions– Non-toxic catalyst system

15

UOP 7267-15

Safe and Environmentally Friendly Technology

UOP CyclarTM Process

Cost advantaged LPG can be economically converted to a mixed aromatics product for:

High octane gasoline blending Conversion to mixed xylenes and benzene

Further processing to benzene derivatives

Conversion to para-xylene and benzene Further processing to downstream petrochemicals

UOP 6510-16

UOP CyclarTM Process

• Originally developed by UOP and British Petroleum (BP)• Conversion of cost-advantaged LPG to mixed aromatics

– LPG from field, pipeline or refinery by-product– Flexible LPG Feeds: 100% C3 to 100% C4– High-purity hydrogen by-product via PSA– No aromatics extraction unit required

• Continuous Catalyst Regeneration (CCR™) system maintains steady state operation over catalyst life

- Removes carbon deposition and re-conditions the catalyst continuously for constant activity

Economics improve as C3/C4availability increases and cost declinesUOP 6510-17

Cyclar Process Flow Diagram

CCR

HydrogenTail Gas

C6+ Aromatics

Light Ends

Heater Cells

Fresh& Recycle

Feed

Regeneration SectionSide-by-Side Reactors

Reactor Section

Fresh LPG Feed

Stripper

GasRecovery

From LPG to Gasoline and Petrochemicals

• Cyclar Process for production for gasoline blending- May include benzene management technology –

UOP BenSat™ Process (benzene saturation)

• Cyclar Process for the production of benzene and mixed xylenes

- TatorayTM Process: Toluene Benzene + Xylenes

• Cyclar Process for the production of benzene and p-Xylene- Tatoray Process: Toluene Benzene + Xylenes

- ParexTM Process: para-xylene Separation/Purification

- IsomarTM Process: o- and m-xylene para-xylene

Building Blocks from LPG to PetrochemicalsUOP 6510-19

Feedstock Versatility

Can be designed for any mix of C3/C4 feedstock.

Use of C4 generate higher aromatics than C3 and lower light byproducts.

C4 is easier to convert than C3, resulting in less amount of catalyst.

Overall conversion per pass will remain at about 60%.

Byproduct C3 is recycled back to the reactor for maximum overall yields.

C4-only leads to longer catalyst life due to slower RIT increase over cycle.

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• Typically boils between 50ºF to 160ºF (C5s/C7s)• High RVP, low octane numbers• Demand growing at ~2 %/yr average • Supply surplus over next 10 years• Sources:

- Crude Distillation & Natural Gasoline – 53%- Lightest naphtha from natural gas – 10%- Coking, Hydrocracker, hydrotreating – 16%- Raffinate and heavy naphtha blending – 21%

• Uses:- Steam crackers (Europe and Asia) – 60%- Direct use or Isomerized for gasoline blending – 30%- Diluent (cutter) for heavy oil – 4%- Paraffinic solvents – 1.5%- Other (heating, gasification, etc.) – 4.5%

Light Naphtha – What is it?

Highly Traded Commodity (378 million MTA)

21

300.000

320.000

340.000

360.000

380.000

400.000

420.000

440.000

460.000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Supp

ly/D

eman

d (1

,000

tons

/yea

r)

World: Light Naphtha Supply & Demand

Total Demand Total Supply

US Light Naphtha Supply / Price22

-

500

1.000

1.500

2.000

2.500

2000 2005 2010 2011 2012 2013 2014 2015 2020 2025 2030 2035 2040

Thou

sand

Bar

rels

per

Day

US Tight Oil Production - Forecast

BakkenEagle FordPermian PlaysNiobraraOther PlaysTotal Tight Condensate

Mid/Long Term LN SurplusContinued LN Discount at Low Oil Prices

-20%

-15%

-10%

-5%

0%

5%

10%

0,0

20,0

40,0

60,0

80,0

100,0

120,0

140,0

Dis

coun

t/Pre

miu

m L

N v

s. B

rent

(%)

Nig

ativ

e =

Dis

coun

t

Pric

e (U

S$/B

BL)

Light Naphtha FOB, Mont Belvieu vs. Eur Brent FOB(12‐month M/A)

LN Spot - FOB MB ($/bbl) - 12 month MA Brent Spot FOB ($/bbl)12-month MA

Premium/Discount LN vs. Brent

• US’ condensate from Light Tight Oil (LTO) will continue to play a role in the mid-term – current productions: 35,000 kMTA

• Light Naphtha (LN) continues to trade at a discount versus crude oil

• High LN yields from LTO/Shale-gas keeps price of LN at discount

• LN discount vs. Brent ranging 13% to 20% since 20112015 IHS Energy - Apr 2015

Source: www.eia.gov / IHSConnect - Feb 10, 2016UOP 7331A-22

RZ PlatformingTM Process for Benzene Production

Economic Route to Upgrade Light Naphtha

23

8080

6060

4040

2020

00

Aro

mat

ics

Sele

ctiv

ity, m

ol-%

Aro

mat

ics

Sele

ctiv

ity, m

ol-%

Feed Paraffin Carbon NumberFeed Paraffin Carbon Number66 77 88

• On-purpose Benzene Production- Higher aromatic yields than conventional

PlatformingTM technology- Higher selectivity from C6/C7 paraffin to aromatics

than conventional PlatformingTM technology • Upgrade paraffinic [light] feeds

- Shale-based naphtha- Low-value raffinate

• High H2 Yields for:- New fuel specifications - Higher distillates/gasoline yields- Potential for BoB conversion

RZ PlatformingTM Process: Main Reactions24

UOP 7331A-24

MethylCyclo-Pentane

H2 2 MP

3 MP

n-Hexane

1

1

3

Benzene

2c-Hexane

+ 3H2

n-HexaneMethylCyclo-Pentane

+ 3H2

Benzene

Lighter MoleculesC5-

2,2 DMB 2,3 DMB

2 MP

3 MP

RZ PlatformingTM Process: Configuration and Applications25

C4-C4-

BenzeneBenzene

TolueneToluene

RaffinateRaffinate

Heavy AromaticsHeavy Aromatics

HydrotreatedNaphthaHydrotreatedNaphtha

H2-RichGasH2-RichGas

Aromatics Extraction

and Fractionation

RZ Platforming

Unit

PurgePurge

First unit on-stream (1998)– Forward-integrated– Production of aromatic derivatives – Self-sufficient in hydrogen

Stand-alone processing– C6/C7 (Buy LN / Sell Aromatics)

Parallel LN and HN for max aromatics– w/ Fixed-Bed or CCR Platforming

Debottleneck Refinery Naphtha Section – Unconventional Light Crudes – Shale Oil

UOP 7331A-25

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• Fixed-bed process– Low pressure– 5 reactors– H2 recycle– 482-543°C – EOR 520°C – typical– CapEx and OpEx similar to CCR Platforming

Unit

• Feedstock– Best application C6/C7 – Ideal highly paraffinic– Raffinates for recycle back to RZ Platforming

Unit (after aromatics extraction)

Separator

Recovery

H2

Light Ends

RecycleGas

HHHHH

NaphthaFeed

• Ex-Situ regeneration• One load in operation• One load regenerated and stored

NHT

Stabilizer

C6+Aromatics

SGB

UOP 7331A-26

UOP RZ PlatformingTM Process Overview

Summary – RZ PlatformingTM Process27

• Addresses the product-lift needs for excess of C6-C7s

• Technology offers high benzene selectivity and yields

• High H2 byproduct can also be very beneficial

UOP 7331A-27

Summary - Shale Development Creates Opportunity28

• UOP’s Advanced MTO Technology– Highest Olefin Yields with Flexible P:E Ratio

• UOP’s Oleflex Dehydrogenation Technology– Lowest Capital Cost & Energy Usage results in

Lowest Operating Cost (CCOP) and Highest Return on Investment (ROI)

• UOP’s Cyclar Technology– Upgrade LPG to Benzene and Aromatics

• UOP’s RZ Platforming Technology– Upgrade C6-C7’s to Benzene

UOP 7267-28

Honeywell UOP Solutions Allow You to Maximize the Opportunity

Q u e s t i o n a n d A n s w e r

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