PBF Energy Inc.Summary Company Profile Cushing Toledo Paulsboro Delaware City Region Throughput...
Transcript of PBF Energy Inc.Summary Company Profile Cushing Toledo Paulsboro Delaware City Region Throughput...
January 2013
PBF Energy Inc. Argus Americas Crude Summit
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Legal Notice / Forward-Looking Statements
This presentation contains forward-looking statements made by PBF Energy Inc. (the “Company” or “PBF”) and
its management. Such statements are based on current expectations, forecasts and projections, including, but not
limited to, anticipated financial and operating results, plans, objectives, expectations and intentions that are not
historical in nature. Forward-looking statements should not be read as a guarantee of future performance or
results, and may not necessarily be accurate indications of the times at, or by which, such performance or results
will be achieved. Forward-looking statements are based on information available at the time, and are subject to
various risks and uncertainties that could cause the Company’s actual performance or results to differ materially
from those expressed in such statements. Factors that could impact such differences include, but are not limited
to, changes in general economic conditions; volatility of crude oil and other feedstock prices; fluctuations in the
prices of refined products; actions taken or non-performance by third parties, including suppliers, contractors,
operators, transporters and customers; adequacy, availability and cost of capital; work stoppages or other labor
interruptions; operating hazards, natural disasters, weather-related delays, casualty losses and other matters
beyond our control; inability to complete capital expenditures, or construction projects that exceed anticipated or
budgeted amounts; inability to successfully integrate acquired refineries or other acquired businesses or
operations; effects of existing and future laws and governmental regulations, including environmental, health and
safety regulations; effects of litigation; and, various other factors.
Forward-looking statements reflect information, facts and circumstances only as of the date they are made. The
Company assumes no responsibility or obligation to update forward-looking statements to reflect actual results,
changes in assumptions or changes in other factors affecting forward-looking information after such date.
Company Highlights
Delaware City Rail Facility
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Our History: Key Events and Milestones
March 2011
Completed
acquisition
of Toledo
Refinery
December 2010
Completed
acquisition of
Paulsboro
Refinery
October 2011
Delaware City
Refinery
operational
2008
Blackstone and First
Reserve approach
Tom O’Malley
2008
O’Malley begins
recruiting industry
veterans - launches
PBF Energy
2008 2009 2010 2011 2012 2013
September 2012
Completed first
two phases of
East Coast rail
infrastructure
Q1 2013
Targeted
completion of
rail project at
Delaware City
Company Formation Acquisitions & Improvement Growth & Optimization
December 2012
Successful IPO
at $26/share
June 2010
Completed
acquisition of
Delaware
City Refinery
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PBF owns three oil refineries located in Ohio,
Delaware and New Jersey
― Aggregate throughput capacity of
approximately 540,000 barrels per day
― Weighted average Nelson Complexity of 11.3
― Fifth largest U.S. independent refiner
― Recent rail infrastructure investment on East
Coast provides the entire system access to
WTI-based, cost advantaged crude supply
Summary Company Profile
Cushing
Toledo
Paulsboro
Delaware City
Region
Throughput
Capacity (bpd)
Date
Acquired
Nelson
Complexity
Replacement
Cost
Benchmark
Crack Spread
Mid-Continent 170,000 3/1/2011 9.2 $2.4 billion WTI (Chicago) 4-3-1
East Coast 370,000 2010 12.2 $5.8 billion Dated Brent (NYH) 2-1-1
Total 540,000 11.3 (1) $8.2 billion
(1) Represents weighted average Nelson Complexity for PBF’s three refineries
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DE Gov. Jack Markell and PBF’s Tom O’Malley worked together on the deal
― Governor acted as DE’s “realtor in chief”
• State’s economy was reeling from several plant shutdowns / recession
• Called Tom O’Malley after talks between Valero and PBF broke down
• Facilitated discussions between all involved parties…labor, regulating
community, State, and PBF
Reduced labor / maintenance expenses by ~$100 million / yr
Long-term agreement with DNREC on emissions limitations/capital requirements
$40 million grant money from State of Delaware
Blackstone / First Reserve agreed to fund refinery purchase / rebuild
Delaware City: “Art of the Possible”
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Implementing crude-by-rail strategy on the East Coast via 110,000 bpd rail gateway at Delaware City
― Current capacity of ~40,000 bpd
― Incremental capacity of ~70,000 bpd online Q1 2013
Delivery of 2,400 rail cars from Q1-13 through Q2-14
― 1,600 coiled & insulated and 800 general purpose railcars
State-of-the-art rail facility capable of discharging 40,000 bpd of heavy, non-diluted crude (bitumen)
Opportunity to source WCS/Bitumen at very attractive discounts to Brent
Anticipated Crude-by-Rail Volume to Delaware City
96,000
80,00075,00070,000
30,000
0
25,000
50,000
75,000
100,000
4Q'12 1Q'13 2Q'13 3Q'13 4Q'13
PBF’s East Coast Rail Infrastructure
(bpd)
Volume Average PBF Leased Railcar Capacity
Note: Volumes based on current forecast and railcar delivery schedules (subject to change)
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East Coast Rail Infrastructure: Delaware City
Industry Highlights
Delaware City Refinery
The New Frontier – Follow the Money
It is clear E&P companies have
moved their investments from
abroad back to North America
Majors Plays:
― Canadian Oil Sands
― Williston Basin
― Marcellus
― Utica Shale
― Permian Basin
― Eagle Ford
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Permian
Basin Eagle
Ford
Oil
Sands
Bakken
Utica
Marcellus
Source: EIA Data, company announcements
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0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
2010 2015 2020 2025 2030
North American Crude Growth
Note: (2) Includes upgraded conventional
Source: CAPP
Actual & Estimated Canadian Crude Production
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
2010 2015 2020 2025 2030
Pentanes / Condensate Conventional Hvy (2) Oil Sands Heavy Total Light and Medium
2030 Production:
6.2 MMbpd
(MMbpd)
Note: (1) Includes production from the Barnett, Brown Dense, Granite Wash, Mississippi Lime, Monterey, Niobrara, Tuscaloosa Marine, Uinta, Utica, and Woodford formations
Source: PIRA
2030 Production:
5.8 MMbpd
Actual & Estimated U.S. Shale Crude Production
Permian Basin Shales Bakken Eagle Ford Other (1)
(MMbpd)
U.S. light, sweet production increase
― Pushes barrels South (via water, pipeline), East and West (primarily by rail)
― Ultimately displaces USGC imports
― Distressed sweet crude opportunities may emerge
― USGC refiners processing lighter crudes
Western Canadian heavy, sour production increase
― Bitumen by rail advantaged versus pipeline transportation of diluted crudes
Recent trends point to increasing waterborne heavy crude supply and expanding light-heavy differentials
Competitive Landscape
SECTION 3
Delaware City Refinery
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U.S. Refining Industry Strengths
Inexpensive
Natural Gas
Growth in supply driving decline in U.S. natural gas pricing
― U.S. natural gas currently priced more than 60% below Europe
― ~$0.10 / bbl benefit to domestic refiners for every $1 / MMBtu
difference in natural gas price
North American
Crude
Oil Production
Secular growth in North American crude oil production
― Favorable price dislocations between North American crude
and rest of world
Complex
Refineries
U.S. average refinery Nelson Complexity of 10.9 versus Western
European average refinery Nelson Complexity of 7.8
Product
Exports
Cost and technological advantages have spurred export
opportunities
― East Coast to Europe, West Africa, and Latin America
Why will the U.S. refining industry prosper for the next 5 years?
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Atlantic Basin Refining Balance
Refinery Closures / Expected Closures Since 2009
Since 2009, ~2.6 million bpd of Atlantic Basin refining capacity shutdown, idled or converted to terminals
Complex, high-conversion refineries in the Atlantic Basin will prevail
Company Refinery Location Capacity
North America
Hovensa Hovensa St. Croix, Virgin Islands 500,000
Valero Aruba Aruba 235,000
Sunoco Marcus Hook Marcus Hook, PA 175,000
Sunoco Eagle Point Westville, NJ 145,000
Shell Montreal East Montreal, Quebec 130,000
Western Refining Yorktown Yorktown, VA 66,300
North American total 1,251,300
Europe
ConocoPhillips Wilhelmshaven Wilhelmshaven, Germany 260,000
Petroplus Coryton Essex, England 175,000
Petroplus Petit Couronne Petit Couronne, France 162,000
Total Dunkirk Dunkirk, France 137,000
Petroplus Teeside Teeside, UK 117,000
Petroplus Belgium Antwerp, Belgium 110,000
Shell Hamburg Hamburg, Germany 110,000
LyondellBasell Berre Berre L'Etang, France 105,000
Tamoil Cremona Cremona, Italy 95,000
Petroplus Reichstett Reichstett, France 85,000
European total 1,356,000
Total capacity 2,607,300
Source: company announcements
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Reached inflection point with domestic growth of crude and natural gas in 2010 – 2011
― Favorable price dislocations have emerged
Secular growth in North American crude production
― Flat production of ~11.5 million bpd from 1995 to 2008
― Actual and projected annual growth >850,000 bpd from ~13 million bpd in 2010 to >22 million bpd in 2020 (1)
― Reduced dependence on imported crude
Low cost natural gas vs. Europe
Strong Fundamentals for Industry and PBF
Source: PIRA Note: (1) Based on PIRA estimates (2) Condensate defined as all segregated oil lighter than 45 API excluding LPGs
Source: Platts; market data through 10/20/12
Actual & Estimated North American Crude Production
(MMbpd)
0
5
10
15
20
25
1995 2000 2005 2010 2015 2020
Condensates (2) Crudes Biofuels, Other NGLs
1.0% CAGR
0
2
4
6
8
10
12
14
16
Jan-08 Sep-08 May-09 Jan-10 Sep-10 Jun-11 Feb-12 Oct-12
Henry Hub vs. ICE Natural Gas Since 2008
($/MMBtu)
$3.49
$10.25
Henry Hub ICE
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Source: PIRA Note: (1) Net inter-regional imports / (exports)
Macro events combined with technological
advances created inflection point for U.S. refiners in
recent years
― North American crude oil production growth
― Natural gas pricing dislocation vs. rest of world
― Competitive international advantage
Complex domestic refineries
Atlantic Basin refinery rationalization
Combination of these factors will lead to U.S.
becoming exporter of clean products
― Europe
― West Africa
― Latin America
Source: PIRA
Macro Fundamentals Created Inflection Point
Product Imports Into Europe, Latin America
and Africa Continue to Grow (MMbpd)
Africa Latin America Europe
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2010 2015 2020
United States Light Product Trade (1)
(2.5)
(2.0)
(1.5)
(1.0)
(0.5)
0.0
0.5
1.0
1.5
1995 2000 2005 2010 2015 2020
Imports
Exports
Gasoline/
Blendstock Imports
Jet/Kero
Net Exports
Diesel/Gasoil
Net Export
Gasoline
Exports
Net Light
Products
(MMbpd)
Questions?
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January 2013
PBF Energy Inc. Argus Americas Crude Summit