Refining Challenges and Opportunities Ashis Banerji UOP LLC

Who We Are Global company with manufacturing sites and offices in 16 countries n Over 2, 800 highly trained employees n Acquired by Honeywell in 2005 n More than 90 years of innovative solutions for the hydrocarbon processing industry n More than $1 billion in revenues annually from over 110 countries n UOP 4673 -02

World’s Largest Process Technology Licensing Organization n More than 70 licensed processes n 2, 500 active patents n 300+ catalysts n More than 150 Molecular sieve adsorbents n 30+ engineered products − Packaged process units and systems − Proprietary equipment − Control systems and instrumentation n Engineering, technical and training services UOP 4673 -03

What is Driving Change in the North American Region? Refining Utilization and Demand Growth 25 20 90. 0 15 85. 0 10 80. 0 5 75. 0 0 2002 2007 Demand Growth 2012 N. America 2017 Europe Asia Demand Growth Mbpd Utilization % 95. 0 n High utilization combined with growth n Growth of diesel is greater than gasoline n Growth in light product / declining resid n Processing heavy crudes n Regulations Growth with utilization near sustainable limit more capacity UOP 4673 -04

Crude Oil Quality Trends n Average crude quality declining – Increasing light / heavy price differentials n Significant impact on desulfurization requirements – Impact on heavy fuel oil markets – Light to heavy differential increasing (Sources: Purvin & Gertz) Increasing residue conversion to transport fuels UOP 4673 -05

More Conversion Needed to Process Heavy Crudes Yield n n n Tapis WTI Heavier crudes yield less gasoline and distillate Add conversion needed Heavier crudes require hydrogen addition to meet distillate fuel quality Arab Med Maya UOP 4673 -06

Oil Resources As Function of Economic Price Arctic Oil Shales Cumulative need to 2030 Deep Water Already Produced OPEC ME Other Conv. Oil E O R Heavy Oil bitumen Super deep Source: IEA, Resources to Reserves, 2005 Heavy oil development viable at current prices UOP 4673 -07

North America Incremental Product Demand 2006 -2015 (Source: Purvin & Gertz) Diesel demand increasing by 1. 2 MMBPD (25% increase) n Gasoline demand increasing by 1 MMBPD (19% increase) n More diesel then gasoline with no resid fuel UOP 4673 -08

Product Specifications Gasoline & Diesel n Low / ultra-low sulfur legislation n More stringent benzene, RVP specs n Further vehicle emissions standards anticipated – Tighter NOx standards Biofuels n Ethanol pursued in many countries n US Renewable Fuels Standard n Widespread discussion of biodiesel and green diesel legislation Fuel Oil n No major changes for inland fuel oil n Bunkers remain growing fuel oil outlet Clean fuels needs will continue to drive business UOP 4673 -09

Technology Innovations are Key to Success n n New flow schemes – Maximize yield of high value products – Flexible product slate – Distressed stream processing – Process integration New catalysts – Efficient hydrogen utilization – Higher activity and yields – Rapid catalyst commercialization UOP 4673 -10

Fix CC ed-b e R Pla d Pl tfo atfo rm rm ing cat ca aly taly sts Examples of UOP Reforming Catalyst Innovations 2005 R-98™ catalyst – high yields 2003 R-264™ catalyst - high density, high activity R-274™ catalyst - high yield 2002 R-86™ catalyst - high yields, low costs 2001 R-234™ catalyst - low coke, increased flexibility 2000 R-72™ catalyst – high yields 1994 1993 R-132™ catalyst - high activity, surface area stable R-56™ catalyst - maximum stability 1992 R-34 catalyst – low Pt version 1988 R-62™ catalyst – high stability 1983 R-32™ catalyst - lower Pt 1975 First CCR Platforming unit 1971 First SR Platforming unit 1949 UOP 4673 -11

Continuous Innovation and Improvement: Fluid Catalytic Cracking Theoretical Octane Barrels / 100 Barrels Feed 6, 200 New Reactor Concepts 6, 000 Improved Reaction Systems 5, 800 Octane Catalysts 5, 600 Extended Riser 5, 400 Zeolite Catalysts 5, 200 5, 000 Amorphous Catalysts Octane Barrel Capacity of FCC 4, 800 1950 1960 1970 1980 1990 2000 UOP 4673 -12

UOP Has Developed Rapid Delivery of High-Performance Catalysts Drivers Features Tools Technology Metal Function n Acidity n Pore Geometry Catalyst Design Engine Catalysts Feed Char n Product Char n Reaction Engr Process Models Process Levers n Clean Fuels n Yields n Flexibility n Low Cost n n Yield n Hydrogenation n Activity n Stability n n UOP Catalyst Design Engine (CDE) converted fundamental knowledge and experimental database into a computer model for catalyst design UOP 4673 -13

An Evolution in Perspective Traditionally: n Viewed catalysts from activity versus selectivity standpoint UOP 4673 -14

An Evolution in Perspective Now: n. View catalysts from more dimensions UOP 4673 -15

An Evolution in Perspective UOP 4673 -16

An Evolution in Perspective Now: n. View catalysts from more dimensions Hydrogenation is a key variable UOP 4673 -17

Synthetic Crudes and Heavy Crudes Available in Market Refining Condensate Dil. Bit Heavy SCO Light SCO Upgrading Source: Purvin & Gertz, 2004 Syn. Dil. Bit Syn. Bit Heavy Crude/Bitumen Production Light Synthetic Crude Oil (SCO) Heavy Crude Refineries Medium Crude Refineries Light Crude Refineries UOP 4673 -18

Processing Heavy Crudes Affect All Areas of the Refinery High Resid Contnt n Coking or SDA required n High contaminant level – High-severity hydrotreating n High VGO content after resid conversion Synthetic Crudes n No resid content – Blending with other heavy crudes n Low-quality distillate – High-severity hydrotreating n Large volume of lowquality VGO – FCC feed pretreatment UOP 4673 -19

Processing Heavy Crudes Affect All Areas of the Refinery Bitumen Blends n High resid content – Coking or SDA required n Synthetic Crudes n No resid content – Blending with other heavy crudes High contaminant level n High VGO content after resid conversion n – High-severity hydrotreating n Low-quality distillate – High-severity hydrotreating Large volume of lowquality VGO – FCC feed pretreatment Additional VGO Conversion Required! UOP 4673 -20

Heavy Crude-derived VGOs are Hydrogen Lean and Contaminant Rich Property Lt. Arabian Cold Lake Athabasca Coker VGO VGO HGO Gravity, °API Sulfur, wt-% Nitrogen, wppm Hydrogen, wt-% Total Aromatics, vol-% 22. 7 2. 10 820 12. 47 58 16. 3 3. 10 1380 11. 38 60 14. 2 3. 77 1854 10. 80 69 11. 4 4. 99 4032 10. 43 76 UOP 4673 -21

Integration of Hydroprocessing and FCC Operation is the Key to Processing Bitumen-derived Crudes Diesel HDS FCC Gasoline FCC Feed Hydrogen Content Must be Optimized UOP 4673 -22

FCC Feed Pretreating is Not Always the Right Solution FCC capacity still limited by high VGO content of heavy and synthetic crudes n High-quality distillate fuels cannot be produced in an FCC unit n UOP 4673 -23

Hydrocracking Required to Convert Incremental VGO and Produce Right Product Mix Diesel Unionfining™ FCC Gasoline Unicracking™ Diesel FCC Gasoline UOP 4673 -24

Is the Once-through Unicracking Process the Right Choice? n Higher yields of naphtha and distillate n Higher quality FCC feedstock n Flexibility to adjust conversion for seasonal demand UOP 4673 -25

Once-through Unicracking Process Produces FCC Feed with High Hydrogen Content H 2 R-1 61. 5 R-2 5 64 Naphtha 12 Kerosene 16 mm Smoke Point 17 Heavy Diesel 45 Cetane No. 30 FCC Feed 60 UOP 4673 -26

Increased Conversion Produces Higher-quality Fuels 80 25 oint P e k Smo 20 70 dex n I e n Ceta 15 10 60 50 5 40 0 30 100 0 20 40 60 80 Diesel Cetane Index Kerosene Smoke Point, mm 30 Conversion, wt-% Conventional VGO Feed UOP 4673 -27

Is Recycle or Co-Processing Unicracking Process the Right Choice? n Once-Through hydrocracking mode has poor hydrogen utilization - Lower light product quality - Sub-optimal hydrogen content of FCC feed n Alternative flow schemes needed for independent control of product quality UOP 4673 -28

Separate-hydrotreat Configuration Provides Flexibility H 2 30 R-2 11 Naphtha R-1 Kerosene 95 16 23 mm Smoke Point 8 30 30 Heavy Diesel 57 Cetane No. FCC Feed 60 Independent Control of Distillate and FCC Feed Qualities UOP 4673 -29

Advanced Partial-conversion Unicracking (APCU) Integrates FCC Feed Pretreatment with ULSD Production H 2 Co-feed VGO Feed AMINE PT Rx HC Rx E H S Enhanced Hot Separator Fractionation SEP ULSD FCC Feed UOP 4673 -30

Catalysis and Catalytic Processes will Enable increased Utilization of Heavy Oil in the USGC n n Hydrogenation optimizes FCC feed hydrogen content Produces high-quality distillate fuels to meet growing demand Diesel produced can meet all ULSD specs Product slate can be seasonally adjusted UOP 4673 -31

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