KBR Technology Business
Tanya Niu ------ Director, Chemicals
Platts Olefins Asia 2014, Shanghai, China 6-7 March, 2014
2013 KBR, Inc. All Rights Reserved 1
Agenda
Introduction to KBR and KBR Technology
Olefins Market Overview
Impact on Propylene Markets
Propylene-on-Demand Technology Options
KBR Options for Propylene Production
2013 KBR, Inc. All Rights Reserved 2
Agenda
Introduction to KBR and KBR Technology
Olefins Market Overview
Impact on Propylene Markets
Propylene-on-Demand Technology Options
KBR Options for Propylene Production
2013 KBR, Inc. All Rights Reserved 3
KBR at a Glance
Revenue: $7.9 Billion
(FY2012)
Backlog: $14.9 Billion
(YE2012)
Headquarters in Houston,
Texas
4 Business Groups, 13
Business Units
27,000 employees; 70+
countries
2013 KBR, Inc. All Rights Reserved 4
KBR Technology Introduction
KBR Technology (TBU) is the
licensing arm of KBR
Business Unit was created in 2008
Technology
License
Proprietary Equipment
and Catalysts
Prior licensing through EPC projects
Basic Engineering and
Design
Commercializes a collection of
technologies developed or acquired
by KBR
Support for Detailed
Engineering
Monetizes the value of KBR
proprietary technologies
Main business focus Technology
Licensing
Other adjacent services enhance
value to customer and to KBR
Commissioning and
Start-Up Services
Plant Operations
Management Systems
Operator Training
Simulators
Technical Services
and Studies
Revamping and
Retrofits
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KBR Technology Portfolio
Refining
Coal Monetization
ROSE
TRIG
FCC
Power applications
VCC
Industrial
applications
HydroProcessing
Olefins
Chemicals
SCORE
K-COT
Phenol
BPA
PVC
NExOCTANE and
NExETHERS
Ammonia and
Syngas
Automation and
Process Technologies
Fertilizers
OTS
Ammonia
InSite Performance
Monitoring
Syngas
OMS
Hydrogen
Technical Services
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Proprietary
Equipment
Refining
Coal
Monetization
Olefins
Chemicals
Ammonia and
Syngas
Olefins
SCORE
Reliable and flexible process, easy operation and
low maintenance needs
Best return on investment: Low CAPEX and OPEX
Small footprint
Tailored coil design to meet customers objectives
K-COT
Flexible feed: capable of processing C4-C10 olefinic,
paraffinic or mixed feeds
Higher propylene-to-ethylene ratio
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Chemicals
Phenol: Delivers high quality phenol and acetone at low
long term cost of production, with high yields, low energy
and high on-stream time. KBR has licensed 50% of the
world's phenol capacity.
NExOCTANE: Highly selective, commercially proven
technology for dimerization of isobutylene to isooctene/iso-octane.
NExETHERS: The ultimate technology for the combined
production of MTBE, TAME and heavier ethers or their
counterparts ETBE, TAEE and heavier ethers in one unit.
BPA: Produces the highest quality BPA at lowest long-term
cost of production. High selectivity and yield. Low total
installed cost and lowest cost of production.
PVC: Lowest environmental footprint technology for the
production of high quality commodity and specialty PVC.
2013 KBR, Inc. All Rights Reserved 8
Agenda
Introduction to KBR and KBR Technology
Olefins Market Overview
Impact on Propylene Markets
Propylene-on-Demand Technology Options
KBR Options for Propylene Production
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US Shale Gas Boom Brings Surplus NGL
US NGL production, Million Barrels/Day
Ethane and Propane profoundly changed NA petrochemical feedstocks
structure with its cost advantage and availability
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Impact to Olefins Production
Typical olefins plant product yields
120
100
80
60
40
20
Ethylene
Propylene
Ethane and propane cracking produces less propylene than naphtha cracking
Propane can be used as feedstock for on purpose propylene production
Source: public literatures
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Export Balances: US Propane
Ample propane supply after
retail and petrochemical
feedstock use
US recently becomes the
leading propane exporter,
topping Middle East
Propane export capacity
expanded with matching gas
processing, pipeline, and
storage
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Possible US propane global
price parity concerns PDH
economics
Global Propylene Supply Demand Gap Widens
Propylene demand keeps growing: organic growth; new applications
Propylene demand to go from 80 to 100MM ton in 5 years
Propylene production cant keep up
Crackers propylene: ethylene driven; lighter feedstocks
Refinery propylene: gasoline driven; slow growth
Global Propylene Production, 2012
MTO
1%
Refinery
31%
Other
14%
Cracker
55%
Source: IHS
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Metathesis
4%
Others
4%
PDH
5%
North America Propylene Production
18
16
14
12
10
8
6
4
2
0
Million Metric Ton
PDH
Metathesis
Refinery
Cracker
2000
2007
2012
2017
Cracker production declines further until new projects come up
Refinery propylene battles declining fuel consumption
On purpose production fills the gap
Source: IHS
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New North America On-Purpose-Propylene
Projects
On Stream
Capacity
(KTA)
Technology Location
Company
2015
750
PDH
Freeport, TX
Dow
2015
750
PDH
Mt. Belvieu, TX
Enterprise
2016
300
PDH
Odessa, TX
RedTac
2017
600
PDH
Point comfort, TX
FPC
2017
500
PDH
Redwater, AB
Williams
2017
1000
PDH
Alvin, TX
Ascend
On hold
750
PDH
Freeport, TX
Dow
Petrologistics started up 500 KTA PDH plant in 2010. Another project pending
Seven upcoming PDH projects with a total capacity of 3.9 MM Ton per year
LyondellBasell called off their 225 KTA metathesis project
Feedstock stability important to downstream players in addition to cost
Source: company press releases, IHS
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Impact on North America Propylene
Derivatives
NA propylene demand, Million Ton
16
14
Others
12
Propylene Oxide
Polypropylene
10
8
7.5
9.0
2000
2007
7.6
8.4
2012
2017
4
2
0
Reduced PP export for a few years
Impact less prominent to other propylene derivatives
Source: IHS
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Butanols
2-Ethyl Hexanol
Isopropanol
Cumene
Acrylonitrile
Acrylic Acid
Impact on Global Propylene Derivatives
Propylene demand growth sensitive to macroeconomics
Most propylene derivatives tied to durable goods
China
Strong desire for self sufficiency, building on coal supply
Favorable tax structure to encourage propane import
PDH and MTO to make up 1/3 production by the decade end
Gap remains, despite reduced import
Middle East
Continue to export, yet slower growth
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US propylene price high, yet volatile
2500
2000
1500
Ethylene, $/MT
1000
Propylene, $/MT
500
0
2006
2007
2008
2009
2010
2011
2012
Tight supply-demand brings price volatility
Strength of derivatives demand and inventory management
Operational outages and seasonal turn around
Alternative RG propylene value and on purpose production economics
Arbitrage opportunity for import
Source: Argus
2013 KBR, Inc. All Rights Reserved 18
Agenda
Introduction to KBR and KBR Technology
Olefins Market Overview
Impact on Propylene Markets
Propylene-on-Demand Technology Options
KBR Options for Propylene Production
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On-purpose propylene production
Traditionally demand driven in regions with shortages
New Norm: supply driven to take cost advantage of feedstocks
Technologies
Propane Dehydrogenation (PDH)
Metathesis
Methanol to Olefins (MTO / MTP)
Catalytic Cracking
High Severity FCC
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Propane to Propylene (PDH)
Propylene + Hydrogen
Propane
2500
High selectivity, >80% propylene yield
from propane
Hydrogen typically used as fuel for the
process
Fixed bed, fluid bed, and moving bed
reactors, all commercialized
Propane/Propylene pricing
differentials drives project economics
Market considerations: feedstocks
security; derivative competitiveness
US Pricing
2000
1500
1000
500
0
2006 2007 2008 2009 2010 2011 2012
Propylene, $/MT
Propane, $/MT
Source: Argus
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Metathesis (rearrangement of olefins)
Metathesis
Ethylene
Ethylene
Propylene
2-Butene
1-Butene Isomerizes to 2-Butene
Requires high purity ethylene and high purity butene
Commercially proven operation in fixed bed reactors, cyclic operation
Unique set of requirements for positive project economics
Positive propylene to ethylene price ratio
Availability and low cost of C4 or
Ethylene dimerization unit when C4 is not available
2013 KBR, Inc. All Rights Reserved 22
Methanol to Olefins
Methanol to Olefins
Methanol Synthesis
Coal or
Natural Gas
Syngas
production
Syngas to
Methanol
MTO/MTP
MTO
Ethylene
Propylene
Primarily a coal play in China
Capital intensive, especially with syngas and methanol plant
No economic direct methane to propylene route exists
Economics depend low cost feedstocks or methanol
Environmental concerns
2013 KBR, Inc. All Rights Reserved 23
Light Hydrocarbon Catalytic Cracking
Various
refinery and
cracker light
streams
Catalytic cracking
Ethylene
Propylene
Feedstocks flexibility
No need for pre-treatment
Either fluidized or fixed beds, using catalysts
2013 KBR, Inc. All Rights Reserved 24
High Severity FCC
2 - 8%
FCC propylene yield
15 -25%
Propylene yield improvement from FCC
Improvement achieved by
Catalyst and additive modifications
Process condition changes: pressure, temp, catalyst/oil ratio
Hardware change
A variety of technology offerings
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On Purpose Technologies Comparison
Process
Metathesis
PDH
Catalytic Olefins
Feedstocks
Ethylene &
Butene
Propane
C4-C10 Olefins or Methanol (or
Straight Run
coal/methane)
Ethylene price sensitivity
Negative
Neutral
Positive
Positive (MTO)
Feed Pretreatment
Significant
Significant
None to little
None
Major Byproducts
None
None
Ethylene
BTX gasoline
Ethylene (MTO)
Water
Economic plant size
Small to
moderate
Large
Small to large
Large
Commercial proven
Yes
Yes
Yes
Yes
Capital Investment
Low to
moderate
Moderate
Moderate
Moderate to Large
2013 KBR, Inc. All Rights Reserved 26
MTO/MTP
Agenda
Introduction to KBR and KBR Technology
Olefins Market Overview
Impact on Propylene Markets
Propylene-on-Demand Technology Options
KBR Options for Propylene Production
2013 KBR, Inc. All Rights Reserved 27
K-COT - KBR Catalytic Olefins Technology
Maximize production of
propylene from light
olefinic or paraffinic feeds
Feedstock
Flexibility
Typical P/E ratio = 2:1 for
olefin-rich feed
Typical P/E ratio = 1:1 for
straight run naphtha
FCC-based fluidized
reactor
Cryogenic purification for
polymer grade products
2013 KBR, Inc. All Rights Reserved 28
High
Propyleneto-Ethylene
Ratio
Proven, efficient
technology
MAXOFINTM KBR High Severity FCC
Maximize production of light olefins from gas oil and resid refinery
streams
20+ wt % propylene yield
Flexibility to adjust product mix based on propylene and gasoline
market conditions
Developed from KBR FCC technology
Advanced, proven FCC hardware features
Separate reaction zones for cracking heavy
molecules and light molecules
ZSM-5 additive
High propylene yield
Flexible product mix
Proven Technology
2013 KBR, Inc. All Rights Reserved 29
Conclusions
Availability of ethane from US shale gas has
shifted the dynamics of the global olefins
market
Propylene-on-demand technologies will be
needed to close the gap in propylene
supply/demand
KBR provides cost effective, proven and
efficient technologies to improve your
propylene yields
2013 KBR, Inc. All Rights Reserved 30
Thank You
2013 KBR, Inc. All Rights Reserved 31
