Mr. B. AshokCEO, RRPCL

November 12th, 2019

Addressing Feedstock Challenges for Indian Chemical Industry

Summit on Global Chemicals and Petrochemicals 2019

2

Addressing Feedstock Challenge

About RRPCL

Focus of today

1

2

3

Feedstock Availability

About RRPCL

Focus of today

1

2

4

RRPCL has been conceptualized as world’s largest integrated refinery and petrochemical project to meet domestic demand

Project highlights

1. After obtaining land and required permissions2. Includes export commitments

Crude capacity

Petchemcapacity

Key Products

Investment Proposed

Time to commission

Key stakeholders

Area

60 MMTPA

18 MMTPA

Fuels (BS VI+), Olefins, Aromatics, Derivatives

~USD 45 billion

60 months1

JV b/w IOCL, HPCL, BPCL, Saudi Aramco and ADNOC

15,000 acres

Fuel deficit (MMTPA)

185

354454

230320

378

2016 2025 2030

~75 MMTPA

Petchem deficit (MMTPA)

12

32

50

915

2016 2025 2030

14.3

~18 MMTPA

Domestic demand2 Domestic production

5

Equipment Procurement of Heat

exchangers, boilers, valves, actuators, motors, pumps,

automation

Steel6.9 lakh MT steel

Equal to

130 Eiffel towers

Concrete108 lakh m3 concrete

Equal to

54 Petronas twin towers

Electrical Cable1.2 lakh km

Equal to

3 x earth’s circumference

Pipe network10000 km

Equal to

4 x length of Ganga river

Multiple industries to benefit from the material demand generated.

The scale of the greenfield project development is unprecedented

6

National GDP improvement of ~2%

State GDP improvement of ~10%

Impact of RRPCL project

The refinery and petrochemical project will bring large scale socio-economic benefits for the region

Forex outflow reduction worth $23 Bn annually

Key contributor in makingMaharashtra a USD 1 Tn economy

Upgradation of quality of life through world-class urban infrastructure and

better connectivity

Contribution of ~5-10% of India’s total FDI inflow

1-1.5 lakh jobs during construction; 20,000 direct jobs, once commissioned

Multiplier Effect on other domestic industries such as construction

materials, downstream chemicals, manufacturing, etc.

Contribution towards flagship schemes like Make in India, Skill

India, Digital India, Smart City

The project is critical to drive India towards energy security and self sufficiency in chemicals

7

Addressing Feedstock Challenge

About RRPCL

Focus of today

1

2

8

Domestic feedstock availability remains a key challenge dampening domestic chemical industry growth

Petrochemical Feedstock(Net deficit, KTPA)

Propylene

Propylene Oxide

Acrylic Acid

Phenol

Ethylene

Ethylene Oxide

1,000

2,600

35

80

4,000

17,000

800

4,000

175

350

120

570

2018 2030 2018 2030 2018 2030

1. Source: Nexant, A.T. Kearney

9

Multiple avenues have been suggested to overcome feedstock challenges in the domestic chemicals sector

Elaborated further

• Partnerships with feedstock advantaged regions to secure feedstock (JV or offtake agreements, buying consortiums) can be a viable alternative

Partnerships & Alliances3

• Chemicals derived from bio based feedstock have seen selective success. However, technology, scale and economics remain big change

• Unlikely to capture major share in next decade or two

Alternative non-hydrocarbon Feedstock

5

• Significant progress in recent past with majority of standalone refineries planning petchem integration (e.g. multiple examples such as BORL, BPCL Mumbai, HPCL etc )

Integration of petrochemical with refinery

1

• MTO/CTO suffer from issues such as high capex, economics and sustainability concerns

• PDH and ethane can be viable alternatives for select coastal locations

Non-traditional hydrocarbon feedstocks

4

• PCPIRs have seen limited progress due to issues related to land acquisition, feedstock sharing, planning and implementation focus

• Critical to shore up implementation with a focused task force

Robust ecosystem with downstream players

2

Robust ecosystem with close integration of petrochemical and downstream players is critical to solve feedstock problem for domestic chemical sector

10

Six key factors are critical to create a vibrant ecosystem of petrochemicals and downstream chemical companies

Policy Support• Availability of land at affordable rates• Single window clearance• Provision of incentive package

Close integration between tenants

• Presence of anchor tenant• Sharing of building blocks and feedstock between tenants

Focused Park Governance• Dedicated park developer entity with participation from

government and other stakeholders for development of park, investor attraction and facilitation

Key Success Factors

Centralized utilities and ancillary industries

• Cost effective utilities and services through centralization and sharing among multiple players

Plug-n-play Infrastructure• Presence of multi-modal logistics, infrastructure and other

facilities to allow ‘plug-n-play’ by downstream companies

Locational Advantage• Proximity to consumer markets• Easy access to imports and exports infrastructure

11

Development of downstream industries

unit unit RRPCL

Conversion & Specialty

chemicals players

Downstream organic

synthesis players

High level of integration, scale, state of the art technology will allow for low cost production of

intermediaries making industry globally competitive

RRPCL provides an attractive location and can act as anchor to foster a downstream cluster development

RRPCL will focus on core refinery and select petrochemicals

It can serve as an anchor tenant to provide cost-effective building

blocks for downstream industries

Attractive location with access to large domestic market as well as

exports

12

We have provisioned chemical building blocks for downstream industries and open to production partnerships

1 – 1.5 MMTPA of building block (Ethylene,

Propylene…) capacities available for downstream

industries

Open to explore partnerships with industry players for current planned

derivatives

Opportunities with RRPCL

Ethylene

Propylene

C4/C5 Stream

Benzene, Toluene, Xylene

Polyethylene, PVC, Ethylene Oxide (EO),

MEG…

Polypropylene, Propylene Oxide (PO), Acrylic Acid,

Acrylates…

Butadiene, Butane…

Acetone, Phenol, Styrene, Terephthalic Acid (PTA)…

Planned petrochemical building blocks and derivatives in RRPCL

13

Downstream players and government stakeholders need to come together to jointly develop the required integrated cluster

Government

RRPCLDownstream Investors

• Acceleration of land acquisition; provisioning land for downstream players at attractive rates

• Setup of institutional structure to streamline project implementation

• Provision of incentive package and key infrastructure

• Investment across the downstream value chain

• Technology for niche chemicals

• Production of locally-customized products

• Serving as an anchor and ensuring feedstock availability

• Playing active role with park developer to facilitate provisioning of services and infrastructure

14

Thank You!