Industry Recap 2014 and Outlook 2015 - listed...

Industry Recap 2014 and

Outlook 2015

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Contents

2

LNG

Petroleum

Petrochemical

LNG Petroleum Petrochemical

LNG

Presented By: Khun Supawat Tatthong

Analyst

Liquefied Natural Gas Supply Department

3

Source : PTT, Platts, MoF (J)

Price volatility

2008 : Shale Gas Revolution 2011 : Fukushima Incident 2016 : Physical LNG Export from US ?

Big Bangs in LNG industry

Key Situation for Spot LNG Market in 2014

Fukushima Incident

HH

NBP

JKM

JLC


4

Key Situation for Global LNG Market in 2014

38 bcm/year

On May 21st, 2014 Russia (Gazprom) signed GSA with CNPC (China) Duration : 30 Years from 2019 Volume : 38 Bcm/year of Gas (30 MTPA of LNG) Est. Border Price : $9.9 – 10.2 /MMbtu Est. Delivery Price : $11.9 – 13.2 /MMbtu (Less Appetite for LNG in Mid Term & Competitive LNG Price)

Source : LEA, PTT, GIIGNL

Apply from Compatibility With NRA’s regulation

Acquiring final approval from NRA and local government

New Strategic Plan On April 11, Japanese Cabinet approved a new Japanese Strategic

Energy Plan Nuclear Power will count as important base-load power source to

stability of energy supply & demand structure The Power Plant which meet the new regulatory requirement will

restart sequentially The Path of Restarting On September 10th, 2 reactors at Sendai power (Kyushu Electric)

passed the principal design test Kyushu Electric request community in both Satsumasendai and

Kogashima to vote for restarting the Sendai power plant Sendai Nuclear Power Plant has 2 reactor units for 890 MW/Unit Currently, all of the Japan’s nuclear plants still remain shut down

But market expected to see Sendai Nuclear Power plant to restart at early next year


5

Key Situation for Global LNG Market in 2014

New US FID projects in 2014 • 4 projects have been approved from FERC to start their

construction but only 2 projects, Sabine Pass Train 1-4 and Cameron, did announce their FID (Cameron announce their FID in September 2014)

• So far, total FERC approval projects have commitment to export LNG approximately 50.3 MTPA to the global LNG market

• While, the remaining projects that wait for FERC approval in 2015 could make the export volume increase up to 105 MTPA


6

• While market has expected China’s LNG demand would essentially grow at fastest pace (15% per year) from 2011 – 2019. China’s LNG demand in year 2014 is lower than market’s expectation (Last year China’s LNG import grew 25% (YoY) while this year LNG import has expected to grow 16% (YoY)).

2015 Outlook : China’s LNG Demand sustainable or impetuous growth?

China LNG demand growth is less than market estimate

Global LNG demand is lower than previous estimate As Global economy slow down

Source : WoodMac

Expected 10 – 15 MPTA from Australia Projects in 2015 (QC LNG, GLNG, Gorgon LNG)


7

2015 Outlook : Australia LNG export projects On Time or Delay?

8

NWS LNG , Pluto and

Darwin LNG Total Capacity

26 mtpa

Source : WoodMac, PTT, LEA

หลายโครงการประสบปัญหา Cost Over Run และลา่ชา้กวา่ก าหนดการเดมิ Billion US

Today Under 2018-2019 construction

LNG production in all Australia projects will

suppress Qatar at 89 mtpa in 2018


8

2015 Outlook : Spot LNG Price

Source : PTT & Platts as of 31st Oct 2014

Spot Price will be lower than 2014, Approximately 13.5 – 14.5 $/MMbtu Kay Factors should be :- - Severe or Mild Weather in this winter - China’s LNG Demand and ability to receive long term commitment from Australia Projects - Australia LNG Projects will be completed on time and delay? - How many Japanese Nuclear Reactor will be allowed to restart again? - Europe Economy getting better or still stagnation?

Spot Price 2015 : 13.5 – 14.5 $/MMBtu

Spot Price 2014 approximately 15 $/MMBtu

Spot Price 2013 is 16. 23 $/MMBtu


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2015 Outlook : Henry Hub Price

Source : Short term Outlook, Dec2013 EIA, Street Research, Bloomberg and PTT

$/MMBTU

EIA’s projected HH Price in 2015 is 3.90 USD/MMBTU ( 0.27 USD/MMBTU)

HH in 2013 = 3.73 $/MMBtu Average HH in 2014 = 4.17 $/MMBtu

Consensus

EIA Outlook

• Expectation on HH price through 2030 has been deducted from year to year as the growth in shale production continuously increase

• Generally, with comfortable storage position in 2015, HH prices should stay at average around $4/MMBtu, slightly lower from 2014

• Nonetheless, increasing in New LNG export projects and Gas-intensive manufacturing led by Chemicals could spike HH price in the future


10

10

11

LNG

Petroleum

Petrochemical


Contents

12

Petroleum

Presented By: Khun Jitwassika Hongthong Silpakul

Analyst

Market Analysis Division

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Current market situation: Recap 2014

13

70

90

110

130

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

$/BBL 2012 2013 2014

Polar Vortex: lowest temperature in decades

Ukraine evolved into full scaled civil war as Russia seized control of Crimea

Iran’s sanction lift

Iraq Crisis

Resume Libya supply

North Sea Maintenance

US Airstrike over IS in Iraq

No impact to oil supply from IS crisis in Iraq

Strong US dollar

US production hit 30 years highest at 8.7 MMBD

Dubai Seasonality


Revised

Current market situation: Fund Flow: Oil price depreciation & Dollar appreciation

*Sources: IMF World Economic Outlook

78

80

82

84

86

88

90

60

70

80

90

100

110

120

130

Jan/13 Apr/13 Jul/13 Oct/13 Jan/14 Apr/14 Jul/14 Oct/14

Brent vs. USD

ICE Brent (LHS) US Dollar Baskets Index (RHS)

Lower Oil Price

Stronger Dollar

14


Current market situation: Oversupplied market about 1 MMBD in 2014

15

2014 DEMAND = (Non-OPEC + OPEC NGLS/Condensate) + Call On OPEC crude

0.90

-1

-0.8

-0.6

-0.4

-0.2

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

DEMAND NON-OPEC

1

.

8

4

M

M

B

D

CANADA

OTHERS

U

S

A

0.19

0.24

1.41

0.94

WORLD OIL SUPPLY AND DEMAND GROWTH 2014 VERSUS 2013

Source: PTT Analysts 91.69 29.52

CALL-ON OPEC

62.17

= +


Revised

Current market situation: Downward Revision has been constant theme in IMF world’s GDP forecast

*Sources: IMF World Economic Outlook

IMF Global GDP %Growth Forecast – Quarterly Publications

2.50

3.00

3.50

4.00

4.50

Global GDP %Growth Forecast

2014 2015

16


17

Current market situation: OECD DEMAND: A RECOVERY ECONOMY WITH EFFICIENCY GAINS

22 % GDP AS % OF WORLD GDP

2.2 2.2 3.1

0

5

USA2013 2014 2015

GDP GROWTH (%)

OIL DEMAND GROWTH (KBD) YOY

470 60 290

2013 2014 2015

Economy: Better economics data as Fed completed the taper and focused on its forward guidance of rate increase. Economic Trend: Ending Quantitative Easing leads to stronger dollar. Effect on oil demand: Stronger greenback make dollar-denominated oil imports more expensive in non-dollar markets.

23% GDP AS % OF WORLD GDP

-0.4

0.8 1.3

-1012

EU

2013 2014 2015

GDP GROWTH (%)

OIL DEMAND GROWTH (KBD) YOY -130 -210

30

2013 2014 2015

Economy: ECB adjusted GDP forecast for 2015 down from 1.3% YoY to 1.1% YoY. Economic Trend: EU plans to launch asset purchase program to stimulate economic activities in the region and fight deflation. Effect on oil demand: Increasing vehicles efficiency/ fuel substitution away from oil depressing oil demand as oil users switch to alternative fuel.

5 % GDP AS % OF WORLD GDP

1.5 0.9 0.8

0

2

JAPAN2013 2014 2015

GDP GROWTH (%)

-160 -190 -60

2013 2014 2015

Economy: Struggle to boost manufacturing sector and fight disinflationary. Economic Trend: BOJ expanded stimulus to 80 trillion Yen and expected to proceed planned sales tax increase of 8 – 10%. Effect on oil demand: Oil consumption falls as Nuclear power plants restart, greater coal power generation and better progress with energy efficiency.


19.10 MMBD TOTAL OIL DEMAND 13.41 MMBD TOTAL OIL DEMAND 4.19 MMBD TOTAL OIL DEMAND

Sources: IMF WEO,IEA


18

Current market situation: NON – OECD DEMAND: SLOW DEMAND GROWTH WITH GRADUAL SUBSIDIES CUT

GDP AS % OF WORLD GDP

7.7 7.4

7.1

6.5

7

7.5

8

CHINA

2013 2014 2015

GDP GROWTH (%) 14 %

GDP AS % OF WORLD GDP

4.7

4.4

5

44.24.44.64.8

55.2

EM

2013 2014 2015 GDP GROWTH (%) 38 %


260 400 330

2013 2014 2015


700 650 690

2013 2014 2015

Economy: GDP forecast in 2015 has been revised down from 7.5% YoY to 7.1% YoY as manufacturing and labor sector weakens. Economic Trend: Concerns over economic slow down Effect on oil demand: China processed more crude amidst concerns over a slowing economy. Growing car use as economy moves to urbanization. Chemical related petroleum such as LPG and naphtha consumption grows as capacity increases. In addition, China’s crude appetite is expected to edge up due to SPR filling through out the year.

Economy: EM import growth has slowed markedly in response to a stronger Dollar Economic Trend: Funds flowing out of emerging countries back to the US as Fed exit quantitative easing, which strengthens the dollar currency. Effect on oil demand: Gradual cut in subsidies across several emerging countries consumers such as Indonesia, India, Brazil and Russia.

TOTAL OIL DEMAND 10.3 MMBD NON-OECD TOTAL OIL DEMAND 46.7 MMBD

Sources: IMF WEO,IEA


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Current market situation: DEMAND: Middle distillates lead oil demand growth

*Sources: PTT Analysts, PIRA Dataset

Total Oil Demand in 2015 = 92.87 MMBD

19


(1.50)

(1.00)

(0.50)

-

0.50

1.00

1.50

2.00

2.50

3.00

MM

BD

Annual Regional Capacity Expansion USA +Canada

Europe + FSU

LatinAmerica

Africa

Middle East

Rest of AsiaPacific

India

China

Note: Includes Condensate Splitter Capacity based on Firm + Probable Case by PIRA’s Data Sources: PIRA World Oil Datasets

Projections based on Planned Expansion

Current market situation: DEMAND: Capacities Shifting to Asia and Middle East

20


Current market situation: Refinery Margins

*Sources: PTT Analysts, Reuters, Energy Aspects

4.27 4.56 3.86 3.37

-2.30 -2.30 -2.36 -2.03

-4

-2

0

2

4

6

Q1 Q2 Q3 Q4

Singapore Gross Refinery Margins

SG Dubai GRM - Cracking 2015 SG Dubai GRM - Hydroskimming 2015 SG Dubai GRM - Cracking 2014

21

$/BBL


Crude oil outlook SUPPLY: Surplus market with better demand in 2015

22

1.18

-0.4

-0.2

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

DEMAND NON-OPEC CALL ON OPEC

M

M

B

D

OTHERS

CANADA

U

S

A

0.26

0.18

1.00

1

.

4

4

0.26

2015 DEMAND = (Non-OPEC + OPEC NGLS/Condensate) = Call On OPEC crude

Source: PTT Analyst

92.87 63.61 29.26 = +

WORLD OIL SUPPLY AND DEMAND 2015 VERSUS 2014


23

Revised

Crude Oil Outlook: Dubai price base case scenario

Dubai Price will continue to trade within $80-$90/BBL during the 1H of 2015

Source: PTT Analysts and PTT PRISM (4.11.2014), IMF, Reuters Polls

According to PRISM assumption : 2015 Brent price will average at $94.00/ BBL and with Brent-Dubai spread at $2/BBL, we have come to a consensus that Dubai will average at $92.00/BBL in 2015.

87 89

92 93

70

80

90

100

110

Q1 15 Q2 15 Q3 15 Q4 15

U

S

D

/

B

B

L

100

92

70

80

90

100

110

U

S

D

/

B

B

L

2014 2015

3.50%

2%

4%

2015 WORLD GDP (YoY)

1.2

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

OIL DEMAND GROWTH (YOY)

MM

BD

1.4

0

0.5

1

1.5

2

NON OPEC SUPPLY + OPEC NGLGROWTH (YoY)

MM

BD

Global economy will strengthen, propelled by the US economy

Geopolitical tension in MENA persists but will not affect oil production

Oil markets will have to be rebalanced via price

Over supplied crude market continues with a minimum cut in OPEC production


24

Crude Oil Outlook: What’s the PRICE FLOOR? Who goes first?

* Source: BofA Merill Lynch Global Commodities Research

IEA – "Some 98 percent of crude oil and condensates from the United States have a breakeven price of below $80/bbl and 82 percent had a breakeven price of $60/bbl or lower."

“ACCORDING TO PRODUCTION COSTS; NON-OPEC COUNTRIES ARE LIKELY TO GET HIT FIRST”

REMAINING TECHNICALLY RECOVERABLE OIL RESOURCES


25

Crude Oil Outlook: Will shale oil take a hit from lower price ?

WITH LOWER OIL PRICE, US OIL SHALE PRODUCTION IS STILL GROWING!!!

• The hampering effect of low oil price starts

initially and compounded into higher downside pressure as time goes

• Low oil price will lessen development/equipment cost due to slowdown in CAPEX and diminishing cash-flows

U.S. SHALE CRUDES AND CONDENSATE PRODUCTION MILLION BARRELS PER DAY

* Source: PIRA 2014

PIRA’s Reference case $92/bbl Brent PIRA Cases

Lost Growths in KBD

2015 2016 2017

$92/BBL (100.00) (200.00) (350.00)

$80/BBL (130.00) (280.00) (500.00)

$70/BBL (200.00) (400.00) (700.00)


26

Revised

Crude Oil Outlook: Dubai price bull case scenario

High sensitivity of oil shale production to price and supply disruptions in MENA


3.80%

2%

4%


1.4

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6


MM

BD

1.3

0

0.5

1

1.5

2


MM

BD

Lower oil price curtails shale oil production

Strong US economy boosting World Oil Demand

Iraqi oil production in the South is disrupted by IS

Iranian barrels remain offline to the market

100

105

70

80

90

100

110

U

S

D

/

B

B

L

2014 2015 105 103 104 107

70

80

90

100

110

Q1 15 Q2 15 Q3 15 Q4 15

U

S

D

/

B

B

L


27

Crude Oil Outlook: Dubai price bear case scenario

Supply gluts in the oil market; financial liquidation and geopolitics ease


US shale gas production is not disrupted from lower oil price due to production hedging

Strong dollar suppress China export and EM economy

Minimum geopolitics drama with oil production remain stable.

3.20%

2%

4%


0.8

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6


MM

BD

1.8

0

0.5

1

1.5

2


MM

BD

100

80

70

80

90

100

110

U

S

D

/

B

B

L

2014 2015

74 78

82 83

70

80

90

100

110

Q1 15 Q2 15 Q3 15 Q4 15

U

S

D

/

B

B

L


0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0U

K

Sou

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Ge

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Jap

an

Ch

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Ukr

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Pak

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Taiw

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s

Ind

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UA

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Sri L

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Ru

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Mal

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a

Ind

on

esi

a

Qat

ar

Syri

a

Iraq

Ku

wai

t

Alg

eria

Iran

Sau

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rab

ia

World's Retail Diesel Price by Pricing Mechanism USD per liter

4

3

2

1

0

World's Average Price

Revised

Trend Countries are taking opportunity of lower products’ prices to revise their subsidy policies

*Sources: PTT Analysts, PIRA as of Jul. 2014

Level of Subsidies

Level 4: Fully Subsidized - Prices set by Government Decree and kept stable throughout the years Level 3: Heavily Subsidized - Prices set by Government/NOC, kept relatively stable with some reviews Level 2: Partly Subsidized - Controlling mechanism such as Price Caps/Thresholds Level 1: Lightly Controlled - Prices set by Retailers with light mechanism to control the frequency Level 0: Market Price - Prices moves in accordance to the World’s market price.

World’s Average Price - 𝑃𝑟𝑖𝑐𝑒 𝑥 𝑉𝑜𝑙𝑢𝑚𝑒

𝑉𝑜𝑙𝑢𝑚𝑒

28


Revised

Trend Indonesian Price Subsidies: Subsidy Reforms will improve the budget

*Sources: PTT Analysts, Reuters

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Oct/06 Oct/07 Oct/08 Oct/09 Oct/10 Oct/11 Oct/12 Oct/13 Oct/14

Ind

on

esi

an R

up

iah

s

Indonesian Subsidized Gasoline

Subsidy Gap Unsubsidized Petrol Price (IDR/Liter) Subsidized Price (IDR/Liter)

29


Trend India Price Subsidies: Subsidy Reforms will improve the budget

*Sources: PTT Analysts, Reuters

0

10

20

30

40

50

60

70

80

90

Oct/07 Oct/08 Oct/09 Oct/10 Oct/11 Oct/12 Oct/13 Oct/14

Ind

ia R

up

pee

s

Indian Gasoil Prices

Subsidized Gasoil Unsubsidized Gasoil Benchmark

30


• Slower global economic growth and dollar appreciation putting pressure on commodities prices

• Global refining capacity growth continues to expand led by Asia and the ME, resulting in increased product exports – particularly middle distillates

• Even with OPEC cutting production during its Annual meeting on 27 Nov’14. Pricing mechanism will act as a rebalancing factor

• US, as Non-OPEC Producer, becomes the world largest liquid producer backing its light-sweet crude import from WAF to Asia

• According to our base case assumption, the forecast average Dubai Price in 2015 is in $90-$95/BBL range

• Countries are taking opportunity of lower products prices to revise their subsidy policies

Summary

31


32

LNG

Petroleum

Petrochemical


Contents

33

Petrochemical

Presented By: Khun Ekachai Sirithammasan

Division Manager

Commercial Risk Management

34

Olefins Outlook : Ethylene/PE: Continue in Uptrend, U.S. Crackers to be Delay

2015 Ethylene demand growth outpace new capacity PE Operating Rate remain high in 2015

Ethylene/PE in Uptrend

• Ethylene/PE capacity growth concentrates in low cost high demand regions i.e. North America, Middles East, and China

• Nearly 2.1 million ton of naphtha crackers will be permanent shutdown by 2016

• U.S. greenfield capacity is likely to be delayed, then no capacity additions before 2017

10 greenfield ethane projects announced, but only four companies (Chevron Philips, Exxon Mobil, Dow Chemical and Occidental Chem/Mexichem) has been commenced construction.

• China’s CTO/MTO projects still have several challenges such as low profitability of MTO projects, technical issues, environmental issues

85.6

85.8

87.6

88.2 88.0

83

84

85

86

87

88

89

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

2012 2013 2014 2015 2016

Americas W.Europe Middle East/Africa

Asia Others Demand Growth

Global OR

MT Operating Rate

83.6 83.2

84.9 84.9

83.9

80

81

82

83

84

85

86

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

2012 2013 2014 2015 2016

Americas W.Europe Middle East/AfricaAsia Others Demand GrowthGlobal OR

MT Operating Rate

Source : IHS Source : IHS


35

Olefins Outlook : Ethylene/PE: Continue in Uptrend, U.S. Crackers to be Delay

PE Operating Rate remain high in 2015 Ethylene and PE Margins Continue Strong

Prepare for Ethylene/PE Up-Trend in 2015

• High cost producers in Asia and Europe planned to permanent shutdown in 2015.

• However, higher export volume from Middle East will be challenges in Ethylene/PE prices

• Startup of Saudi Arabia’s Sadara Chemical in 2H-15 (1.5 million Ton ethylene, LDPE 350 KTA, LLDPE 375 x 2 KTA)

• Sumitomo Chemical, Japan Capacity 415 KTA in May • CPC No.5, Taiwan Capacity 500 KTA (uncertain schedule due to shutdown since Apr 14) • Total, France Capacity 400 KTA in 2H • Ineos, UK Capacity 330 KTA in 2H

70%

75%

80%

85%

90%

95%

2012 2013 2014 2015 2016

NAM OR WE OR NEA OR

SEA OR Global OR

434 407 402 481 507 496 565 579 537 490

87 178 166 110 113 121

126 175 134 135

1,483 1,443 1,489 1,536 1,554 1,569 1,604

1,501 1,557

1,421

1,395

1,265 1,322

1,427 1,441 1,447 1,478

1,326 1,423

1,286

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 . 2014 2015

Source: PRISM, Oct2014 and PTTGC Source : IHS

Operating Rate USD/MT

HDPE- Ethy. Ethy.- MOPJ

HDPE Price

Ethylene Price


36

Olefins Outlook : Propylene: New On-purpose Units Pull Operating Rate Down

Propylene capacity additions mainly from Asia, particularly from China

On-purpose production unit, Coal-based and PDH drive Asia propylene

Propylene Fundamental

• 2015 global operating rate will decline to 79.5% from 80.7% in 2014 due to capacity addition of propylene still outpace demand growth

• Capacity additions driven by on-purpose production unit, coal-based and PDH, mainly in China

• However, these on-purpose units still have many challenges

• PDHs mostly rely on propane import from Middle East and US. Normally propane prices being highly seasonal therefore they will be run in marginal.


80.1 80.3

80.7

79.5

78.6

76.0

77.0

78.0

79.0

80.0

81.0

82.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

2012 2013 2014 2015 2016

Americas W.Europe Middle East/Africa

Asia Others Demand Growth

Global OR

MT Operating Rate

Source : IHS

Steam cracker

6% FCC

25%

Metathesis 6% PDH

32%

MTO 10%

CTO 21%

2015 Propylene capacity additions by sources

477

1,243 1,262 1,429

1,693

386

1,276

1,099 1,076 1,242

NEA Propylene Cost of Production

by sources

Dec-13

Sep-14

Source : IHS


37

Olefins Outlook : Propylene: New On-purpose Units Pull Operating Rate Down

Ethylene up cycle and recover demand support Propylene price ratio

Propylene Price will be pressure from China self-sufficient

Propylene Fundamental

• 2015 global operating rate will decline to 79.5% from 80.7% in 2014 due to capacity addition of propylene still outpace demand growth

• Capacity additions driven by on-purpose production unit, coal-based and PDH, mainly in China

• However, these on-purpose units still have many challenges

• PDHs mostly rely on propane import from Middle East and US. Normally propane prices being highly seasonal therefore they will be run in marginal.


Source : Actual data from ICIS, Forecast data by PRISM

0.6

0.7

0.8

0.9

1.0

1.1

1.2

Propylene/Ethylene Price Ratio

345 439 415 421 434

328 388 425 394 372

1,306 1,297 1,336 1,367 1,369 1,279 1,301

1,172 1,280

1,168

0

200

400

600

800

1,000

1,200

1,400

1,600

Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 . 2014 2015

Source: PRISM, Oct2014 and PTTGC

USD/MT

Propylene- MOPJ

Propylene Price


436 343 427 323 604 554 552 341 360

1,132 1,169

981 1,047

1,542 1,497 1,474

1,254 1,156

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2007 2008 2009 2010 2011 2012 2013 2014

(YTD)

2015

(F)

PX-MOPJ

38

Aromatics Outlook : New PX Capacity Pressures Margin

More Capacity to Come in 2015 New Paraxylene Capacity in 2015

PX Price Outlook Factors to be Watched in 2015 USD/MT

Source: PRISM, October 2014

Source: IHS

Source: IHS

• Impacts of Shale Oil and Gas :

• Higher octane value in U.S., as a result of surplus light naphtha, discourages using reformate to produce aromatics -> Minimal impact

• Falling crude prices make operating cost lower

• Economics

• China’s economy still sensitive which may impact polyester demand

0.4 2.4 5.2 3.5 2.4 2.5 2.7 3.4

1.2

2.1 2.1 2.5

2.1 2.3

2.9 2.6

87.4% 86.9%

81.6% 81.9% 81.5% 81.8% 83.4% 82.7%

60%

65%

70%

75%

80%

85%

90%

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2012 2013 2014 2015 2016 2017 2018 2019

Capacity Addition Demand Growth

Global Oper. RateMT Operating Rate Unit : MT Nameplate Effective Startup

Lotte Chemical 1 (200) (200) Q1

JSC KazMunaiGas 469 352 Q2

Sinopec Hainan 600 450 Q2

Reliance Industries No.4 2,250 750 Q3

PTTGC 120 40 Q3

Subtotal 3,239 1,392

Carry Over from 2014 2,593

Total 3,985

Source: PCI


39

Aromatics Outlook : BZ Remains Strong Thanks to Shale Gas

• Impacts of Shale Oil and Gas :

• Changing to lighter feedstock limits benzene production

• U.S. and Europe need to import more benzene

• Trade Flow

• North East Asia turns to be more balanced due to

• China’s demand for SM, phenol, cyclohexane

• Japan’s cracker closure

-0.3 1.4 2.5 1.2 0.8 1.1 0.6 0.5

0.1

1.2 1.0 1.5

1.2 1.5 1.5 1.5

72.4% 72.7% 71.3% 72.3% 73.4% 74.2%

75.6% 75.0%

55%

60%

65%

70%

75%

80%

85%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2012 2013 2014 2015 2016 2017 2018 2019

Capacity Addition Demand Growth

Global Oper. Rate

326 157 133 192 166

264 380 367 365

1,022 983

686

916

1,104 1,207

1,301 1,280 1,161

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2007 2008 2009 2010 2011 2012 2013 2014

(YTD)

2015

(F)

BZ-MOPJ

Changing to Lighter Feedstock Reduces BZ Output NEA Turns to be Balanced, U.S./Europe Imports More

Benzene Price Outlook Factors to be Watched in 2015

Source: IHS

Source: PRISM, October 2014

MT Operating Rate

USD/MT

Source: IHS

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

08 09 10 11 12 13 14 15 16 17 18 N. America S. America W. Europe C. Europe

CIS & Baltics Africa Middle East Indian Subc.

Regional Benzene Net Trade

Forecast Export

Import


Thank you PTT Public Company Limited – Investor Relations Department

Tel. +66 2 537-3518, Fax. +66 2 537-3948, E-mail: [email protected] Website: http://www.pttplc.com

Disclaimer

The information contained in our presentation is intended solely for your personal reference only. In addition, such information contains projections and forward-looking

statements that reflect our current views with respect to future events and financial performance. These views are based on assumptions subject to various risks and

uncertainties. No assurance is given that future events will occur, that projections will be achieved, or that our assumptions are correct. Actual results may differ

materially from those projected.

Petroleum Reserves and Resources Information

In this presentation, the Company discloses petroleum reserves and resources that are not included in the Securities Exchange and Commission of Thailand (SEC) Annual

Registration Statement Form 56-1 under “Supplemental Information on Petroleum Exploration and Production Activities”. The reserves and resources data contained in

this presentation reflects the Company’s best estimates of its reserves and resources. While the Company periodically obtains an independent audit of a portion of its

proved reserves, no independent qualified reserves evaluator or auditor was involved in the preparation of reserves and resources data disclosed in this presentation.

Unless stated otherwise, reserves and resources are stated at the Company’s gross basis. This presentation may contain the terms “proved reserves”, “probable reserves”,

and/or “contingent resources”. Unless stated otherwise, the Company adopts similar description as defined by the Society of Petroleum Engineers.

Proved Reserves - Proved reserves are defined as those quantities of petroleum which, by analysis of geological and engineering data, can be estimated with reasonable

certainty to be commercially recoverable, from a given date forward, from known reservoirs and under current economic conditions, operating methods, and government

regulations.

Probable Reserves - Probable reserves are defined as those unproved reserves which analysis of geological and engineering data suggests are more likely than not to be

recoverable.

Contingent Resources – Contingent resources are defined as those quantities of petroleum which are estimated, on a given date, to be potentially recoverable from

known accumulations, but which are not currently considered to be commercially recoverable. The reasons for non commerciality could be economic including market

availability, political, environmental, or technological.

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