1. 1. Petrochemical and Refining Integration - Petrobras PanoramaPaulo Roberto Costa Downstream Director Downstream Director1
2. 2. Agenda :: Strategic Plan - 2020 :: Strategic Plan - 2020 :: Refining Investments :: Refining Investments :: Petrochemical Industry :: Petrochemical Industry :: Petrochemical-Refining Integration :: Petrochemical-Refining Integration :: Petrochemical Investments :: Petrochemical Investments :: Conclusions :: Conclusions 2
3. 3. Petrobras An Energy Integrated Company Proven reserves : 11.7 Billion boe (not including the Tupi, Jupiter, Carioca, Exploration and Exploration and Iara and Bem-Te-Vi discoveries) Production Production Oil and gas production: 2.065 millions boe/d (SEC 2007)Refining, 16 Refineries Brazil (12); Argentina (2); USA (1); Japan (1) Refining, Capacity: 2269 thousand bpd Transportation Transportation Oil and gas pipelines: 11,000 km and Marketing and Marketing Ships (own fleet): 54 Over 7,000 service stations, constituting the largest and the unique station network spread throughout brazilian territory. Distribution Distribution Over 10,000 clients among industries, thermoelectric companies, airlines and vehicle fleets. Gas Sales: 50 millions of m/day (brazilian production and imports) Natural Gas Natural Gas 15 Thermoelectric plants 5,300 MW installed Energy Energy 15 Small hydroelectric plants and 12 Thermal plants under Generation Generationconstruction 1,800 MW Petrobras has relevant shares of the two main brazilian petrochemical companies, Quattor (40%) and Braskem (30%). These two companies run 27 petrochemical plants, Petrochemical Petrochemical producing basic petrochemicals and plastic resins. The fertilizers plants, located at Bahia and Sergipe states, produced together, during and Fertilizers and Fertilizers 2007 campaign, 235,000 t of ammonia and 824,000 t of urea, most of them to Brazilian market.
4. 4. Petrobras Companys Integrated Activities
5. 5. Strategic Plan - 2020 5
6. 6. Business Segment Strategy - 2020 Corporate Strategy Corporate Strategy
7. 7. Investment Plan by Business SegmentPETROBRAS 2008-12 PeriodUS$ 112,4 bi DOWNSTREAM2008-12 PeriodUS$ 31,4 bi 13% 3%4,2 1,126,1 RTC 84% Petroqumica Biocombustvel
8. 8. Supply Challenges
9. 9. Refining Investments 9
10. 10. Current Refining Infrastructure in BrazilRefining Capacity (Thousand barrels/day) REMAN 46LUBNOR 6RLAM 323REGAP151REDUC242REVAP251RECAP 53REPLAN 365RPBC 170REPAR189REFAP189RPI 15TOTAL BRAZIL2,000ARGENTINA 69USA100JAPAN100 TOTAL PETROBRAS 2,269
11. 11. Refining New ProjectsPREMIUM IPREMIUM IIGuamarRNEST (Abreu e Lima) COMPERJ
12. 12. New Refineries Proposals Premium I -GUAMARAbreu e Lima - PEPremium II - CEMA600 thousand 300 thousand Capacity 30 thousand bpd200 thousand bpd bpdbpd Sep/2013 andSep/2014 and Operation Aug/2010 Aug/2010 Sep/2015Sep2016(2 phasis)(2 phasis)Investment US$ 191 MilllionUS$ 4.05 Billion US$ 19.8 Billion US$ 11.07 BillionGasoline and Porducts and Diesel GLP and DieselGLP, Naphta and QAV (Brazil) and Market Rio GrandeNorth and Northeast Diesel 10 ppm of sulfur do Norte (RN)BC 16 (50%) andBC-20 / BC- 18, BC-16 and OilRN mixCarabobo (50% -BC-16 mixes with TupiVenezuela) 100% Agreement in March 2008 Partnership Petrobras60% Petrobras 100% Petrobras 40% PDVSA
13. 13. Incrising Refining CapacityRefining Capacity in the Brazil (thousand bbd) REMAN 46LUBNOR 6Premium-II/CERLAM 323REGAP151REDUC242REVAP251Premium-I/MARECAP 53Guamar/RNREPLAN 365 RNEST/PE RPBC 170REPAR189REFAP189RPI 15Comperj/RJTOTAL2,000New CapacitiesPremium I 600Premium II300RNEST 200COMPERJ 150Guamar30TOTAL 3,280
14. 14. Petrochemical Industry 14
15. 15. Petrochemical Industry Value ChainExplorationOlefins andPolymerand RefiningAromatics Moulding Final UsageProduction ProductionProduction PolyolefinsNatural (HDPE, Gas Packages OlefinsLDPE, Films (Ethylene,LLDPE)Processes: Automotive Propilene) Extrusion,components Polypropylene Blow-moulding, Tubes Aromatics InjectionCables Refineries(Benzene,Styrene/PSWiresOil (Nafta andp-xylene)PTA/PETElectronicPropylene) AA/SAP equipmentsFibers No integreted oil companiesPetrochemical CompaniesIntegrated Oil CompaniesPlastic ManufacturersOil companies seek to maximize their profits integrating throughout the supply chain
16. 16. Simplified Plan of the petrochemical chainBasic Input 1st Genetation 2nd Genetation 3rd Genetation End-users Natural GasFilms, packaging. RetailEthylenePolyethylene (PE)bottles, housewares saleswires and cables Ethane Butene Tubes andEthyleneconnections, filmPVCBuildings Dichloride wiers and cablesAutopieces, casings PropylenePolypropylene (PP)and packages FoodstuffsStyrene Butadiene NaftaElectronic equipmentsEthylbenzenePoliystyrene (PS) Automotiveand packages industryBenzene ABSAutomotive parts, Oileletronic equipments Personal SBR and telephonescareDMT Para-xylene Textile fibers andPTAPET bottles OtherOtherOther
17. 17. Petrochemical Refining Integration 17
18. 18. REFINING +PETROCHEMICAL What are companies seeking? Integration Lower Costs in Operation Proximity to theProximity to theRefining and and Accomplishment Consumer Market Feedstocks PetrochemicalCompanies decisions on petrochemical investments are based on: Sense of balance between petrochemical and refining cycles (i.e. hedge) Diversification into higher value added products Partnerships focusing on access to competitive feedstocks Develop a leadership position on costs of select products through leverage of synergies Competitiviness through high production scale and cost reductions Upstream integration and flexibility: refining streams as feedstocks Oil and gas major companies, private or state-owned, have important positions in petrochemical and continously seek growth with diverse strategies.
19. 19. Refining and Petrochemical Profitability Petrochemical RefiningRefining and petrochemical integration hedges both segments against profitability cyclical performance, mitigating financial risks
20. 20. Oportunities for Petrochemical and Refining Integration Product Integrationrefinery streams as feedstock as feedstock for petrochemical plants Example: naphta, propylen, propane, ethane and refinery gaspetrochemical streams as blendstock for refining operations Example : pyrolysis gasoline Product and Energy Integrationproduct integration and power generation Example : COMPERJ, an integrated solution Technology IntegrationExample : automation technology for petrochemical companies Integration for Scheduled Maintenance Synchronization of the scheduled maintenance plans in order to optimize themaintenance efforts and avoid production gapsExample : petrochemical refinery plant
21. 21. Petrochemical Investments 21
22. 22. Petrochemical Segment Strategies on Strategic Plan - 2020Expand operations in 1st and 2nd generation processes, increasing the production of petrochemicals, while adding value to the products of the Groups refineries by capturing synergies related to the production of oil, gas, refining and petrochemicals Develop new technologies for the chemical industry based on the technological evolution of petrochemical fluid catalytic cracking (FCC), biodegradable polymers and biopolymers
23. 23. Refinery Propylene Sppliter Projects Objective: Provide petrochemical feedstock for polypropilene and other plants, through the extraction of the propylene from LPG stream, adding value to Companys products.Investiments: US$ 688 MMStart-up: 2008 -Units: REGAP, REPLAN, REPAR and REVAPTotal capacity: 741 kty
24. 24. Petrochemical ProjectsPetroqumica SuapeLocation: Suape/PE;Capacity: 640 kty PTA;Total investment: US$ 632 million;Raw material: imported p-xylene until 2012 and COMPERJ from2013 onwards;Start-up: 4thQ 2009. Companhia Txtil de Pernambuco - CITEPELocation: Suape/PE;Capacity: 240 kty POY;Total investment: US$ 342 million;Raw Material: imported POY until 2009 and Petroqumica Saupefrom 2009 onwards;Start-up: 2thQ 2008.
25. 25. COMPERJ Petrochemical Complex of Rio de JaneiroCOMPERJs main purpose is to increase the production of petrochemicals in Brazil, using as feedstock 150 thousand bpd of domestic heavy crude, the Marlim oil from Campos Basin. Area: 45 million sq. ft. Location: Itabora - RJ Investments: US$ 8.38 billion Capacity: Basic Petrochemicals: 1,300 kty ethene; 700 kty p-xylene; 881 kty propylene; 608 kty benzene; 157 kty butadiene; Downstream: 800 kty PE; 850 kty PP; 500 kty styrene; 600 kty ethylene glycol; 500 kty PTA; 600 kty PET; Start-up: 2012 Technology: Petrochemical FCC deep fluid catalytic cracking technology This technology allow the production of huge amounts of olefins (ethene and propylene) and will enable tighter integration between refining and basic petrochemicals production technologies
26. 26. COMPERJ Petrochemical Complex of Rio de Janeiro POLYPROPILENE 850 kta
27. 27. COMPERJ Location Pipelines:Cabiunas - REDUC QuattorGuapimirims APA REDUC PETROCHEMICALCOMPLEX Islands: Redonda CENPESand dguaSO GONALOS CENTRAL DISTRIBUTION BASE INTEGRATION CENTER TRAINING COORDINATION
28. 28. COMPERJ ProductionProduction ProductionProducts(kty)Products(kty)BasicsDownstreamDiesel535Polypropylene850 FuelsNaphtha 284Coke700 Polyethylene 800Ethylene 1,300Styrene500Propylene 881Ethylene Petrochemicals Benzene 608600glycolButadiene 157PTA500p-Xylene700Sulphur 45PET600
29. 29. COMPERJ Main FrameworkFEL 3 Conclusions Dez/08 Contracting of the Integrator Oct/07 End of the Integration Center ConstructionOct/08FEED ElaborationOct/08 Acquisition of the Main Access Area Dec/08Start of Embankment Mar/08 *UPB LI Feb/09 *Main Access Road LIApr/09 *345 kV Transmission Line LIJun/09*Terminal and Pipeline LIAug/09 *Submarine Emissary LIDec/09 ANP Authorization Oct/09 Start of EPCs Contracting Feb/09 Expected Start-up Jun/12 Expected Full Operation Aug/13 *LI Licenciamento de Instalaes (Facilities Licensing)
30. 30. COMPERJ Schedule StepStep 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Accomplishment Business Planning (FEL 1)Conceptual Engineering (FEL 2)Basic Engineering (FEL 3)Constr. and AssemblyUnits Start-upUPB Conditioning and Start-up ConcludedIn progress To be startedFull Operation
31. 31. Conclusions 31
32. 32. Motivation for Petrochemical-Refining Integration Benefits for Petrobras, adding value to the supply chain, capturing synergies related to both segments and following a global trend of upstream integration among large companies;Techonological challenges with the use of heavy crude oils for petrochemical purposes, using innovative Petrochemical FCC technology, developed internally and adopetd at COMPERJ, integrating refining operations and the production of basic petrochemicals;Strengthening of Brazilian Petrochemical Industry, promoting training, technology development, employment and income for the country.
33. 33. www.petrobras.com.br33