APIC ANNUAL MEETING, Singapore

India a new growth engine of petrochemicals?

Threat or Opportunity for Asian producers?

Clive Gibson
Vice President, Nexant
cgibson@nexant.com
19-20 May 2015

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Macro Economic Fundamentals

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Industry Growth Drivers

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Increasing consumer wealth is driving vehicle fleet growth in India resulting in

higher fuels demand
India Vehicles, Population and GDP

Vehicle ownership per

capita in India is one
of the fastest growing
in Asia

Regional Vehicle Ownership vs GDP

Indian transportation fuels demand

Global Polymer Consumption Trends

Market Growth - percent CAGR 2015- 2020

10
9

India

China

7
6
5
4

United States

Western Europe

Japan

1
0
0

10

20

30

40
50
60
70
Current Annual Consumption, Kg/Capita

80

90

100

Bubble size indicates total current demand

Polymers include: LD, LL, HD, PP, PVC, PS, EPS, ABS, SBR, BR
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Indian polymer growth trends remain well above the global average
Global Polymer Consumption Trends

Market Growth - percent CAGR 2015- 2020

10
9

India

China

7
6
5
4

United States

Western Europe

Japan

1
0
0

10

20

30

40
50
60
70
Current Annual Consumption, Kg/Capita

80

90

100

Bubble size indicates total current demand

Polymers include: LD, LL, HD, PP, PVC, PS, EPS, ABS, SBR, BR
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Industry Landscape

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10

Indian refining capacity is 4.2 million barrels per day (210 million tons per year),
concentrated in West India.
Refinery Locations

Most recent grass roots capacity additions

HMEL Bathinda, 180kbd

IOC Panipat, 300kbd
IOC Mathura, 160kbd
Reliance DTA
Jamnagar, 660kbd
Reliance SEZ
Jamnagar, 580kbd

IOC Barauni,
120kbd

IOC
Bongaigon,
47kbd
BPCL Numaligarh,
60kbd

BORL Bina, 120kbd

IOC Koyali 260kbd

Essar Vadinar, 400kbd
IOC Haldia, 150kbd
Essar
Vadinar,
400kbd

IOC Paradip, 300kbd

HPCL Mumbai, 130kbd

BPCL Mumbai, 240kbd

HPCL Vizakh, 166kbd

MRPL Mangalore, 300kbd

CPCL, Madras 210kbd

New Refinery

BPCL Kochi, 192kbd

Existing Refinery

include IOCL Paradip (2015/6), HMEL

Bathinda and BORL Bina (2012)
Over 50 percent of refining capacity in W India
Landlocked refineries must match local
demand
Refinery upgrading focused on FCC and
coking
Refinery-Petrochemicals integration focused
on propylene and aromatics
Ownership is domestically focused and mainly
state owned.

Threat or Opportunity?

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12

Uncertain times but sources of competitive advantage

remain clear and robust in refining and chemicals sectors
PARAMETER

KEY OBJECTIVES

Size

Capture economies of scale

Location

Access to low cost feedstocks/

deficit markets

Configuration

Cost advantage/ product

differentiation

Integration

Synergies with adjacent facilities

Petrochemicals feedstock cost advantages remain at

lower oil prices but are substantially reduced

Ethylene Cash Cost

(Current US dollars per ton ethylene)

Global ethylene production cost curves versus crude oil price

3000
Liquids cracking

2500

Oil Price
(US$ per bbl)
140

2000
Lighter feedstocks

100

1500
70

1000

50

500
0
0

50

100
150
Ethylene Cumulative Capacity (million tons)

200
14

Revisiting sustainable value drivers in turbulent times

2020 VISION
Feedstocks

Sourcing a competitive cost advantage

Integration

Creating value via optimising molecules

Technology

Innovation to capture cost advantages

Lower oil prices may bring longer term benefits for industry
leaders
Stronger global GDP growth and product demand growth

Weaker capacity growth in the near term

Lower capital costs.in the longer term

Clive Gibson
Vice President
Energy & Chemicals Advisory
M: +66 89 890 6450
T. +66 2793 4600
E. cgibson@nexant.com

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