Refinery Evaluation Model Refinery Evaluation Model Independent Appraisal of Refinery Competitive Position SATORP s Jubail Project: The rise of a new wave of export refineries Wood Mackenzie 0
Introduction Jubail (SATORP) is a 400 kb/d greenfield export-orientated refinery built and operated by a JV partnership comprising French oil major, Total, and Saudi Arabia s national oil company, Saudi Arabian Oil Company (Saudi Aramco). Jubail (SATORP) is expected to be fully operational by end of 2013. Project History In May 2006, a Memorandum of Understanding (MOU) was signed to develop the Jubail Refining and Petrochemical Project. The plant was built in Jubail Industrial City 2, located on the east coast of the Kingdom of Saudi Arabia ( The Kingdom ). On June 22, 2008, the shareholders, Total (37.5%) and Saudi Aramco (62.5%), signed an agreement to form Saudi Aramco Total Refining and Petrochemical Company (SATORP), which was officially established on September 21, 2008. Pre-commissioning began during the first quarter of 2013, with full operation expected by the end of 2013. The vision for Jubail (SATORP) is to be the Middle East and Asia s leading performer in refining and petrochemicals with a passion for the environment. Source: Wood Mackenzie, Refinery Evaluation Model, SATORP Wood Mackenzie 1
Product Export Destination by Region www.woodmac.com Jubail (SATORP) is expected to export refined products to Europe and Asia Pacific US export opportunity diminished due to domestic tight oil developments Jubail (SATORP) Europe Region % Exports by Volume* Europe 40 Asia Pacific Asia Pacific 60 Diesel, Jet/Kero Paraxylene, Propylene, LPG, Pet Coke Note: The thickness of the arrows do not represent any magnitude. They are only to show the direction. * Exports by Volume represent the split of total volumes exported NOT total refinery output. Source: Wood Mackenzie 2
Refinery Net Cash Margin (NCM) Methodology, calculated with PetroPlan + Crude Oil Transport Crude Oil Cost Configuration Effect * Operating Expense Location Benefit Net Cash Margin $ / Barrel - PetroPlan Net Cash Margin (EBITDA) = Gross Margin, $/bbl Cash Operating Expenses, $/bbl * Configuration effect is synonymous with Refinery Gross Product Worth (GPW)
PetroPlan Jubail (SATORP) Block Flow Diagram and Yield Profile www.woodmac.com Jubail (SATORP) Yield Profile, PetroPlan Product Benzene 0.6 Paraxylene 3.6 Propylene 0.7 LPG 1.5 Gasoline Regular 16.3 Gasoline Premium 6.2 Jet/Kerosene 4.4 Diesel 51.6 Petroleum Coke 9.9 Sulphur 2.0 Refinery Fuel and Loss 3.2 Yield, wt%* *WM estimates PetroPlan s Block Flow Diagram (BFD) provides a transparent interface to scrutinize and interpret the internal optimisation of Jubail (SATORP) refinery. Utilisation of individual units, internal stream routing, and final product yields are all visible to the user. Source: Wood Mackenzie, Refinery Evaluation Model Wood Mackenzie 4
Its first quartile position provides Jubail (SATORP) the opportunity to push distillate products into Europe and compete, on a Net Cash Margin basis, with top European sites Source: Wood Mackenzie, Refinery Evaluation Model * 2012 NCM on a preliminary basis Note: NCM curve shows European refineries only Wood Mackenzie 5
. and be well placed to compete with other export oriented refineries in Asia Pacific Source: Wood Mackenzie, Refinery Evaluation Model * 2012 NCM on a preliminary basis Note: NCM curve shows Asia Pacific refineries only Wood Mackenzie 6
Jubail (SATORP) s completion will increase Saudi Arabia s surplus middle distillate position whilst helping to lower the gasoline deficit in the short term Balances (kt) Surplus 25,000 20,000 15,000 10,000 5,000-5,000-10,000 Deficit 0 Source: Wood Mackenzie 2012 2013 2014 LPG Naphtha Gasoline Jet/Kero Diesel/Gasoil Saudi Arabia was broadly balanced diesel/gasoil during 2012 Jubail (SATORP) s completion will move the country to a diesel/gasoil surplus of just over around 8.5 Mt by 2014 The jet/kerosene surplus will increase to just over 6 Mt over the same period Gasoline is expected to remain in deficit territory throughout the forecast period as local demand outweighs supply; hence gasoline production from Jubail remains in country Post completion of Yanbu(2015) and Jazan(2017) refineries, Saudi Arabia will become a significant exporter of middle distillates LPG and naphtha will continue to be exported to Asia Pacific as demand from the petrochemical industry grows Source: Wood Mackenzie, Product Markets Service Note: Balances reflect Jubail (SATORP) running at reduced rates during 2013 then fully operational during 2014 Wood Mackenzie 7
Wood Mackenzie Disclaimer Strictly Private & Confidential This report has been prepared by Wood Mackenzie Limited. The report is intended solely for the benefit of the recipient (sent directly by Wood Mackenzie Ltd) and its contents and conclusions are confidential and should not be disclosed to any other persons or companies without Wood Mackenzie s prior written permission. The information upon which this report is based has either been supplied to us or comes from our own experience, knowledge and databases. The opinions expressed in this report are those of Wood Mackenzie. They have been arrived at following careful consideration and enquiry but we do not guarantee their fairness, completeness or accuracy. The opinions, as of this date, are subject to change. We do not accept any liability for your reliance upon them. 8
Global Contact Details Europe +44 (0)131 243 4400 Americas +1 713 470 1600 Asia Pacific +65 6518 0800 Email energy@woodmac.com Website www.woodmac.com Global Offices Australia Brazil Canada China India Japan Malaysia Russia Singapore South Korea United Arab Emirates United Kingdom United States Wood Mackenzie is the most comprehensive source of knowledge about the world s energy and metals industries. We analyse and advise on every stage along the value chain - from discovery to delivery, and beyond - to provide clients with the commercial insight that makes them stronger. For more information visit: www.woodmac.com Wood Mackenzie 9