Chalmers Energy Conference Challenges for the refining sector Petter Holland, Preem President and CEO May 15th, 2013 1
Preem is a Leading European Refiner with Strong Local and Regional Market Shares Refining Largest Nordic oil refiner (30% of capacity) and largest Swedish oil company (80% of capacity) Two refineries (Lysekil and Gothenburg) with total nameplate capacity of 345 kbbl/day Focus on producing high quality high margin value-added transportation fuels which meet stringent European and Swedish standards Approximately 1,200 employees 27 million bbls of storage capacity Marketing Strong marketing position in Sweden with 30% share of overall fuel market Leading supplier in the commercial market (1) 37 % of diesel sales 38 % of heating oil sales 64 % of fuel oil sales c. 366 service stations and 184 truck stops 25 % diesel market share (1) 12% gasoline market share (1) Large and strategically located terminal/depot network with storage capacity of 5.4 million bbls Note: 1. Source: Statistiska Centralbyrån ( SCB, Statistics Sweden) 30 June 2012 2
Advantaged Location & Privileged Access to Infrastructure Location Proximity and good access to crude oil supply from North Sea and Russia Lulea Pitea Competitive advantage stemming from low crude delivery costs Privileged access to inland consumption in Sweden Trondheim NORWAY SWEDEN Sundsvall FINLAND Access through exports to large demand centres in NW Europe Bergen Lillehammer Gavle Naantali Porvoo Primorsk Oil Terminal Infrastructure Lysekil and Gothenburg refineries are both connected to deep-sea harbours (Lysekil harbour fully owned by Preem) Ability to receive Very Large Crude Carriers (VLCC) Facilitates access to export markets Large and strategically located network of terminals Total capacity of 5.4 million bbls Stavanger North Sea Fredrikshaven Oslo Aalborg DENMARK Aarhus Copenhagen Odense Kiel GERMANY Karlstad Preemraff Lysekil Preemraff Gothenburg Helsingborg Malmo Jonkoping Karlshamn Bornholm Norrkoping Visby Oland Gdansk Stockholm Helsinki Patnu Riga Tallinn ESTONIA LITHUANIA Kaunas RUS. FED. Vilnius Kaliningrad POLAND St. Petersburg LATVIA RUSSIA BELARUS Provides structural advantages that enhance competitive edge in the Swedish market Crude Oil Flows Refinery Terminals/Depots Access via exchange contracts 3
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GDP Growth and Energy Demand The greatest source of energy for the future is continuing to use it more effectively! 6
Global Energy Mix, 2010 to 2040 Coal grows till 2025, then decreases. By 2040, oil and gas are expected to meet about 60% of global energy demand o With increasing share from deepwater fields and shale (oil & gas) North America will transition from a net importer to a net exporter of energy The greatest source of energy for the future is continuing to use it more effectively. 7
Current Replacement Cost Curve for World Oil Supply World Oil Supply, MB/D 8
Preem priorities Vision : Preem is leading the transition to a sustainable society Grow the share of high-quality and environmentally adapted renewable fuels in our production. Energy-efficient production of high-quality fossil fuels with minimum emissions and other impact on the environment. Upgrading of waste heat to usable energy Wind power for electrical production Carbon capture 9
Preem Evolution Diesel From Tree to Tank A green HVO diesel (Hydrotreated Vegetable Oil) 10
Chalmers and Preem 2006 The first contact taken Aug 2013 Next step The role of the refinery sector Sept 2010 A developed cooperation June 2007 The first Letter of intent
2013-2018 Preem & Chalmers - Focus on sustainable refineries (processes and efficiency). - Dialogue for developing sustainable fuels. - Networking and competence flow. - Perspectives for human resources.
From OIL-refinery to BIO-refinery Energy sources: + LNG + Wind power + Waste heat Naural gas/ Synt. Natural gas Green gasoline and diesel DME, FT-diesel, metanol Gasoline/diesel stations Crude oil Renewable feed Refinery Green H 2 Waste matrial Gas purification Biogas Powerstations Biomass Gasification Carbon capture Industry 13