Oportunidades para la Industria Petroquímica Mexicana · Oportunidades para la Industria...

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Oportunidades para la Industria Petroquímica Mexicana Stephen Zinger Vicepresidente de Químicos [email protected] ANIQ XLVII Foro de la Industria Química 2015 15 y 16 de Octubre 2015 Ciudad de México Trusted commercial intelligence www.woodmac.com

Transcript of Oportunidades para la Industria Petroquímica Mexicana · Oportunidades para la Industria...

Page 1: Oportunidades para la Industria Petroquímica Mexicana · Oportunidades para la Industria Petroquímica Mexicana Stephen Zinger Vicepresidente de Químicos stephen.zinger@woodmac.com

Oportunidades para la Industria

Petroquímica Mexicana

Stephen Zinger

Vicepresidente de Químicos

[email protected]

ANIQ XLVII Foro de la Industria Química 2015

15 y 16 de Octubre 2015

Ciudad de México

Trusted commercial intelligence www.woodmac.com

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Over the last 40 years, Wood Mackenzie has evolved

naturally along the energy value chain to capture all

the key components affecting global markets.

Our integrated approach allows us

to spot trends and forecast future

dynamics before anyone else

Upstream

Oil & Gas

Energy

Markets

Gas

Markets

Power

Refining &

Oil Products

LNG

NGL Chemicals

Macro

Economics

Metals & Mining

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Agenda – Opportunities for the Mexican Petrochemical Industry “Viable chemical industries connect hydrocarbon sources to strong economies”

How does Mexico’s petrochemical industry

compare globally?

How does Energy Reform and Shale Gas

change hydrocarbon supplies?

What growth factors in the Mexican economy

are supportive of the petrochemical industry?

What are the opportunities & ideal examples

for future petrochemical industry growth?

Hydrocarbons Petrochemicals Economy

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Mexico = #14

Mexico = #26

0 10 20 30 40 50

ChinaUnited States

RussiaSaudi Arabia

CanadaIndonesiaAustralia

IndiaIran

QatarIraq

UAENorwayMexico

KazakhstanKuwait

South AfricaNigeria

BrazilVenezuela

AlgeriaColombiaMalaysia

AngolaUK

TurkmenistanEgyptLibyaOman

Azerbaijan

Crude Oil

Nat Gas

Coal

*kboe/d, 2015 Base Hydrocarbon Production

0 25 50 75 100

ChinaUnited States

KoreaSaudi Arabia

JapanIndia

GermanyTaiwan

ThailandSingapore

IranNetherlands

RussiaBrazil

CanadaFrance

UAEBelgium

UKSpain

MalaysiaItaly

KuwaitIndonesia

QatarMexicoPoland

South AfricaArgentina

Oman

Ethylene

Propylene

Benzene

Paraxylene

Million Tons, 2015 Base Chemical Capacity

How does Mexico’s petrochemical industry compare globally? Given the size of the hydrocarbon production, a larger chemical industry is possible

Top 30 Base Chemical Producers Top 30 Base Hydrocarbon Producers

*Kboe = thousand barrel per day of oil equivalents

Source: Wood Mackenzie Chemical Service Source: Wood Mackenzie Energy Market Service

15 Countries with Hydrocarbon

Production Smaller than Mexico

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Mexico = #26

0 25 50 75 100

ChinaUnited States

KoreaSaudi Arabia

JapanIndia

GermanyTaiwan

ThailandSingapore

IranNetherlands

RussiaBrazil

CanadaFrance

UAEBelgium

UKSpain

MalaysiaItaly

KuwaitIndonesia

QatarMexicoPoland

South AfricaArgentina

Oman

Ethylene

Propylene

Benzene

Paraxylene

Million Tons, 2015 Base Chemical Capacity

13 Countries with Economies

smaller than Mexico

Mexico = #13

How does Mexico’s petrochemical industry compare globally? Given the size of the economy, a larger Mexico chemical industry is possible

Top 30 Base Chemical Producers Top 30 Economies (GDP)

Source: Wood Mackenzie Chemical Service Source: World Bank

0 5 10 15 20

United StatesChinaJapan

GermanyUK

FranceItaly

IndiaCanada

South KoreaSpainBrazil

MexicoRussia

AustraliaNetherlands

TurkeySaudi Arabia

TaiwanIndonesia

SwitzerlandSwedenPoland

BelgiumAustriaNorway

ArgentinaSouth Africa

DenmarkHong Kong

US$Trillion, 2015 GDP

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Agenda – Opportunities for the Mexican Petrochemical Industry “Viable chemical industries connect hydrocarbon sources to strong economies”

How does Mexico’s petrochemical industry

compare globally?

How does Energy Reform and Shale Gas

benefit the petrochemical industry?

What growth factors in the Mexican economy

are supportive of the petrochemical industry?

What are the ideal examples & opportunities

for future petrochemical industry growth?

Hydrocarbons Petrochemicals Economy

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How Does Energy Reform Change Crude Oil? Large focus is on developing more oil production to secure private investment,

capital and technology

Industry

feedback on

assets

Deepwater

and heavy-oil

Nov

2014

Feb

2015

May

2015 Oct

2015

Shallow-water

exploration

Shallow-water

development

Onshore

conventional

opportunities

Release of

preliminary

contracts

Dec

2014

Dec

2013

Constitution-

al Reform

Aug

2014

Secondary

Legislation

approved

Initial Round

Zero results

Energy

Reform

Secondary

legislation

approved

Initial Round

Zero results

Start of Round

One

Qualification

0.00

1.00

2.00

3.00

4.00

5.00

6.00

2000 2005 2010 2015 2020 2025

Future ProductionOther Existing FieldsKu-Maloob-ZaapSamaria-LunaLitoral de TabascoAbkatun-Pol-ChucCantarell

Source: Wood Mackenzie Oil Supply Tool

Mil

lio

n B

arr

els

Pe

r D

ay

Mexico Oil Supply

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How Does Energy Reform Change Refining? Even with large refined product deficits and reversal of crude production

declines, Mexico refinery additions will be dependent upon the transition to

market prices for refined products

Mexico Refined Products Demand

0.0

1.0

2.0

3.0

2000 2005 2010 2015 2020 2025

OtherFuel OilDistillatesGasoline/NaphthaCapacity

Million Barrels/Day, Mexico

Source: Wood Mackenzie Refined Product Market Service

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How Does Energy Reform Change Natural Gas? Additional natural gas production grows associated with crude oil

production, but imports satisfy rapid demand growth into power sector

0

4

8

2010 2015 2020 2025

bc

fd

Production LNG Imports Net Piped Imports

0

4

8

2010 2015 2020 2025

bcfd

Local Distribution Industrial Power Other

Mexico Natural Gas Supply Mexico Natural Gas Demand

Source: Wood Mackenzie North America Gas Service – 1H 2015

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How Does Shale Gas Change Natural Gas? Shale gas has significantly changed US supply; LNG export (to world) and

pipeline export (to Mexico) are most important for US demand growth

0

60

120

2010 2015 2020 2025

bcfd

Conventional AssociatedCBM TightShale

0

60

120

2010 2015 2020 2025b

cfd

Residential CommercialIndustrial PowerLNG Exports Net Mexican ExportsTransport Other

US Natural Gas Supply US Natural Gas Demand

Source: Wood Mackenzie North America Gas Service – 1H 2015

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How Does Shale Gas Change Natural Gas? Pipeline infrastructure developments – both cross border and internal to

Mexico - are critical to bring cheap US shale gas to Mexico

US-to-Mexico Gas Pipeline Export Capacity Developing Mexico Natural Gas Infrastructure

0

2

4

6

8

10

12

2010 2015 2020 2025

bcfd

South Texas California West Texas Arizona

Source: Wood Mackenzie North America Gas Service

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How Does Energy Reform Change Power? Gas dominates existing and growth in power supply due to oil conversions

and gas imports; lower power costs allow for rapid growth in industry sector

0

100

200

300

400

2005 2010 2015 2020 2025

Te

raw

att

-ho

urs

(T

Wh

)

Coal Oil Gas

Nuclear Hydro Renewables

Source: Historical Data: IEA; Forecast: Wood Mackenzie Energy Markets

0

100

200

300

400

2005 2010 2015 2020 2025Te

raw

att

-ho

urs

(T

Wh

)

Other Losses & Gains Transport

Residential/Commercial Industry & Non-Energy Use

Mexico Power Supply Mexico Power Demand

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How Does Energy Reform Change Power? Lower power supply costs (natural gas) and increased competition are just

now starting to reduce end-user power prices

Mexico Power Supply Production Costs Mexico Power Prices

0

2

4

6

8

10

12

14

0

20

40

60

80

100

120

140

160

180

200

US

¢/k

Wh

Cen

tavo

s/k

Wh

Medium industry

Large industry

Source: Wood Mackenzie, SENER

50

100

150

200

250

300

350

400

450

500

10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000

US

$/M

Wh

(re

ali

ze

d)

MW bid into market

2012

2013

2014

2015

Source: Wood Mackenzie, CFE

0

Average daily load for

H1 has increased 11%

from 2012-2015,

but average realized

costs have decreased

by 39%

2012 2015

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Agenda – Opportunities for the Mexican Petrochemical Industry “Viable chemical industries connect hydrocarbon sources to strong economies”

How does Mexico’s petrochemical industry

compare globally?

How does Energy Reform and Shale Gas

benefit the petrochemical industry?

What growth factors in the Mexican economy

are supportive of the petrochemical industry?

What are the ideal examples & opportunities

for future petrochemical industry growth?

Hydrocarbons Petrochemicals Economy

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Mexico Economy Mexico has the strongest economic growth prospects in the Americas,

but slower than the manufacturing powerhouses of China and India

Mexico GDP Growth vs. Other Key Economies

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

1990 1995 2000 2005 2010 2015 2020 2025

Mexico Brazil Canada China India United States

Y/Y Growth Rate

Source: World Bank; Wood Mackenzie

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Mexico Demographics Mexico’s working population continues to grow with manufacturing costs

well below largest export target market in the US

0

5

10

15

20

25

30

2007 2008 2009 2010 2011 2012 2013 2014 2015

Canada

US

Mexico

US$/hour, Average Manufacturing Wages

Mexico Population Age Distribution North America Manufacturing Wages

0

50

100

150

1990 1995 2000 2005 2010 2015 2020 2025

Population by Age (65+)

Population by Age (15 - 64)

Population by Age (0 - 14)

Millions

Source: Thomson Reuters Datastream, Wood Mackenzie

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Mexico Manufacturing Outlook Mexico’s rapid automotive industry growth is a great example of

manufacturing opportunities that provide more petrochemical demand

(2014) Honda plant in

Celaya, Guanajuato

(2014) Mazda plant in

Salamanca, Guanajuato

(2013) Renault-Nissan plant in

Aguascalientes

(2017) Daimler and Renault-

Nissan plant in Aguascalientes

(2016) Audi plant in San Jose

Chiapa, PUE

(2019) BMW plant in San

Luis Potosi

(2016) Kia plant in Monterrey,

Nuevo Leon

0

5

10

15

20

25

2000 2005 2010 2015 2020 2025

Mil

lio

n u

nit

s

Mexico

Canada

USA

N America Automobile Production

0

50

100

150

200

250

300

2007 2009 2011 2013 2015

3 m

on

th m

ovin

g a

vg

, th

ou

sa

nd

un

its

Mexico internalOther regionsAsiaEuropeSouth AmericaNorth America (except Mexico)

Source: Thomson Reuters Datastream, Wood Mackenzie

Mexico Automobile Exports

New Mexico Automobile Manufacturing Plants

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Agenda – Opportunities for the Mexican Petrochemical Industry “Viable chemical industries connect hydrocarbon sources to strong economies”

How does Mexico’s petrochemical industry

compare globally?

How does Energy Reform and Shale Gas

benefit the petrochemical industry?

What growth factors in the Mexican economy

are supportive of the petrochemical industry?

What are the opportunities & ideal examples

for future petrochemical industry growth?

Hydrocarbons Petrochemicals Economy

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Opportunities for Future Petrochemical Industry Growth?

Production of basic petrochemicals has been stagnant for decades,

while imports continue to grow to over $30 billion per year

0

5

10

15

20

25

2000 2002 2004 2006 2008 2010 2012 2014

Other

C6 Chemistry

C3 Chemistry

C2 Chemistry

C1 Chemistry

Source: INEGI, Includes PEMEX Petrochemical Production Only

Million Tons

Mexico Chemical Industry Production Mexico Chemical Industry Imports

0

10

20

30

40

2000 2002 2004 2006 2008 2010 2012 2014

Inorganic Chemicals

Organic Chemicals

Polymers

$Billions

Source: INEGI

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0

16

32

48

64

80

96

112

128

144

0

2

4

6

8

10

12

14

16

18

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

China Coal Range Brent Crude Oil

US Henry Natural Gas Middle East Natural Gas Range

$ p

er

mil

lio

n

$ p

er b

arre

l (cru

de

oil)

$ p

er to

n (c

oa

l)

0

40

79

119

159

198

238

278

318

357

Emergence of the North America

Gas-based & China Coal-based Chemical Industry Advantage

Opportunities for Future Petrochemical Industry Growth? The “rollercoaster” of volatility of regional energy valuations has caused

opportunities and threats across the chemical industry

Source: ArgusMedia, NYMEX, SXCoal

Key Global Energy Benchmarks

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Opportunities for Future Petrochemical Industry Growth? North American now has a $100+ billion gas chemical renaissance

Source: Wood Mackenzie; American Chemistry Council http://chemistrytoenergy.com/shale-125-billion

natural gas & natural gas liquids

ethylene methanol ammonia others propylene

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0

30

60

2005 2010 2015 2020 2025

Existing Capacity Firm Projects

Likely Projects Hypothetical Projects

Million tons, Ethylene Capacity

Ideal Examples for Future Petrochemical Industry Growth? The North America ethylene industry is expanding initially through

debottlenecks and then through new world-scale plants

Debottlenecks of Existing Capacity

» BASF/Total, CP Chem, Dow, Eastman, Equistar,

INEOS, Westlake, Williams

Firm/Likely Projects Underway

(Before 2020)

» Braskem Idesa (end-2015)

» Oxy/Mexichem JV (2017)

» Chevron Phillips (2017)

» ExxonMobil Chemical (2017)

» Dow Chemical (2017)

» Formosa Plastics (2018)

» Sasol (2018)

» Shintech (2019)

Other Projects Under Study

» Aither, Appalachian Resins, Axiall/Lotte, Badlands

NGL, Braskem, CP Chem, Formosa, Hanwha,

Indorama, NOVA, PTT/Marubeni, Sabic, Shell, Total,

Williams, Others

North America Ethylene Capacity

Source: Wood Mackenzie Long Term Ethylene Service (1H 2015)

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Ideal Examples for Future Petrochemical Industry Growth? Braskem-Idesa Etileno XXII $5 Billion Project – Largest Petrochemical Project

0.0

0.5

1.0

1.5

2.0

2005 2010 2015 2020 2025

LDPE

LLDPE

HDPE

Million Tons

Source: Wood Mackenzie Long-term Polyethylene Service

Mexico Polyethylene Capacity

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Ideal Examples for Future Petrochemical Industry Growth? Braskem-Idesa Etileno XXII Project Keys to Competitive Success:

Feedstock, Technology, Market Competitive Feedstock

» 20-year ethane feedstock contract (66

mb/d) with PEMEX

» Ethane priced relative to USGC

Latest Technology

» World-scale size economies of scale

» Latest technologies for cracker

(Technip), HDPE (Ineos), LDPE

(LyondellBasell)

Viable Market Access

» Access to local market over 300

customers – strong technical

assistance and available inventories

» Some exports initially due to

competition from US PE producers

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2005 2010 2015 2020 2025

LLDPE ExportsLDPE ExportsHDPE Exports

LLDPE ImportsLDPE ImportsHDPE ImportsNet PE Imports

Million Tons

Source: Wood Mackenzie Long-term Polyethylene Service

Mexico Polyethylene Trade Balance

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0

16

32

48

64

80

96

112

128

144

0

2

4

6

8

10

12

14

16

18

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

China Coal Range Brent Crude Oil

US Henry Natural Gas Middle East Natural Gas Range

$ p

er

mil

lio

n

$ p

er b

arre

l (cru

de

oil)

$ p

er to

n (c

oa

l)

0

40

79

119

159

198

238

278

318

357

North America gas-based

chemistry renaissance

now at risk

Opportunities for Future Petrochemical Industry Growth? The “rollercoaster” of volatility of regional energy valuations has caused

opportunities and threats across the chemical industry

Source: ArgusMedia, NYMEX, SXCoal

Key Global Energy Benchmarks

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Opportunities for Future Petrochemical Industry Growth? A flatter global production cost curve still keeps North America ethylene

competitive at $50/bbl crude; investment returns will be lower than expected

Source: Wood Mackenzie

Aug 2015 Ethylene Costs (Brent=$47/bbl; Henry Hub=$2.80) Sep 2014 Ethylene Costs (Brent=$98/bbl; Henry Hub=$3.90

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C1 Chemistry (Imported Natural Gas, Later Domestic Gas)

» Methanol / Ammonia / Urea

» Methanol conversion (Methanol to Ethylene/Propylene, Methanol to Gasoline)

C2 Chemistry (Further PEMEX Ethane supply, Later Domestic Gas)

» Ethylene – LLDPE, Ethylene Oxide/Glycol, Vinyls

C3 Chemistry (Later Refinery recovery and Propane-based PDH)

» Propylene – Polypropylene, Acrylonitrile, Acrylates

C4 / C5 / C6+ Chemistry (Existing refinery recovery, Later Expansions & New builds)

Opportunities for Future Petrochemical Industry Growth? C1/C2 Chemistry first, then other chains later

Hydrocarbons Petrochemicals Economy

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Conclusions Opportunities for the Mexican Petrochemical Industry

» 13th largest economy; 14th largest hydrocarbon producer

» Mexico has further opportunities to grow chemical industry

beyond the 26th largest petrochemical producer

» Reform & shale gas will transform the energy industry

» Immediate focus on crude oil production, natural gas imports

and electricity costs,

» Longer term benefits to natural gas production and refinery

construction

» Well-positioned for economic and manufacturing growth

» Population demographics, export access to US market

» Rapidly growing Automobile industry is positive for chemistry

» Yesterday’s chemical industry = stagnant

» Stagnant production and increasing imports

» Tomorrow’s chemical industry = growth

» Braskem-Idesa project transforms Mexico PE

industry

» Focus on gas-based chemistries now

» Oil/refinery based chemistries will follow later

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Steve Zinger

Steve Zinger joined Wood Mackenzie in 2012 to develop a global chemical research team to compliment

Wood Mackenzie’s existing capabilities in energy, metals, and mining. In 2013, he coordinated the

launch of a comprehensive package of chemical research analyses, including the “Short-term Ethylene &

Propylene Market Service” and the “Long-term Ethylene & Propylene Market Service”.

Steve currently contributes to research, multi-client, and private consulting studies using his expertise in

the markets for ethylene, propylene, and butadiene. He regularly provides executive presentations about

the outlook for the chemical industry for his customers’ private meetings as well as for key chemical

industry events.

Steve has 25 years of international experience in the chemical industry. Previous to Wood Mackenzie, he

worked for a boutique chemical consulting firm, in various roles including Managing Director of Asia

(Singapore) and Global Olefins Business Director (USA). Steve also worked for Shell Oil Company

(USA) as a process engineer and planning manager within several olefin plants and refineries.

Steve has a chemical engineering degree from Virginia Tech (USA) and a masters degree in business

administration from Tulane University (USA).

Wood Mackenzie

Vice President – Chemicals

E [email protected]

T +1 713 470 1878

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Disclaimer

This presentation has been prepared for the ANIQ XLVII Foro de la Industria Química

on 16 October 2015 In Mexico City, Mexico by Wood Mackenzie Limited. The

presentation is intended solely for the benefit of attendees and its contents and

conclusions are confidential and may not be disclosed to any other persons or

companies without Wood Mackenzie’s prior written permission.

The information upon which this presentation comes from our own experience,

knowledge and databases. The opinions expressed in this presentation 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.

Strictly Private & Confidential

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Europe +44 131 243 4400

Americas +1 713 470 1600

Asia Pacific +65 6518 0800

Email [email protected]

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Wood Mackenzie* is a global leader in commercial intelligence for the energy, metals and mining industries.

We provide objective analysis and advice on assets, companies and markets, giving clients the insight they

need to make better strategic decisions. For more information visit: www.woodmac.com

*WOOD MACKENZIE is a Registered Trade Mark of Wood Mackenzie Limited