PBF Energy Inc./media/Files/P/PBF...Summary Company Profile Cushing Toledo Paulsboro Delaware City...
Transcript of PBF Energy Inc./media/Files/P/PBF...Summary Company Profile Cushing Toledo Paulsboro Delaware City...
January 2013
PBF Energy Inc. AON Energy Symposium
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Legal Notice / Forward-Looking Statements
This presentation contains forward-looking statements made by PBF Energy Inc. (the “Company” or “PBF”) and
its management. Such statements are based on current expectations, forecasts and projections, including, but not
limited to, anticipated financial and operating results, plans, objectives, expectations and intentions that are not
historical in nature. Forward-looking statements should not be read as a guarantee of future performance or
results, and may not necessarily be accurate indications of the times at, or by which, such performance or results
will be achieved. Forward-looking statements are based on information available at the time, and are subject to
various risks and uncertainties that could cause the Company’s actual performance or results to differ materially
from those expressed in such statements. Factors that could impact such differences include, but are not limited
to, changes in general economic conditions; volatility of crude oil and other feedstock prices; fluctuations in the
prices of refined products; actions taken or non-performance by third parties, including suppliers, contractors,
operators, transporters and customers; adequacy, availability and cost of capital; work stoppages or other labor
interruptions; operating hazards, natural disasters, weather-related delays, casualty losses and other matters
beyond our control; inability to complete capital expenditures, or construction projects that exceed anticipated or
budgeted amounts; inability to successfully integrate acquired refineries or other acquired businesses or
operations; effects of existing and future laws and governmental regulations, including environmental, health and
safety regulations; effects of litigation; and, various other factors.
Forward-looking statements reflect information, facts and circumstances only as of the date they are made. The
Company assumes no responsibility or obligation to update forward-looking statements to reflect actual results,
changes in assumptions or changes in other factors affecting forward-looking information after such date.
Company Highlights
Delaware City Rail Facility
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PBF owns three oil refineries located in Ohio,
Delaware and New Jersey
― Aggregate throughput capacity of
approximately 540,000 barrels per day
― Weighted average Nelson Complexity of 11.3
― Fifth largest U.S. independent refiner
― Recent rail infrastructure investment on East
Coast provides the entire system access to
WTI-based, cost advantaged crude supply
Summary Company Profile
Cushing
Toledo
Paulsboro
Delaware City
Region
Throughput
Capacity (bpd)
Date
Acquired
Nelson
Complexity
Replacement
Cost
Benchmark
Crack Spread
Mid-Continent 170,000 3/1/2011 9.2 $2.4 billion WTI (Chicago) 4-3-1
East Coast 370,000 2010 12.2 $5.8 billion Dated Brent (NYH) 2-1-1
Total 540,000 11.3 (1) $8.2 billion
(1) Represents weighted average Nelson Complexity for PBF’s three refineries
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Our History: Key Events and Milestones
March 2011
Completed
acquisition
of Toledo
Refinery
December 2010
Completed
acquisition of
Paulsboro
Refinery
October 2011
Delaware City
Refinery
operational
June 2010
Completed
acquisition of
Delaware
City Refinery
2008
O’Malley and
team form PBF
Energy
2008 2009 2010 2011 2012 2013
September 2012
Completed first
two phases of
East Coast rail
infrastructure
Q1 2013
Targeted
completion of
rail project at
Delaware City
Company Formation Acquisitions & Improvement Growth & Optimization
December 2012
Successful IPO
at $26/share
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2,5402,231
540 443210 185 151 140 74
VLO PSX MPC TSO PBF HFC ALJ CVI WNR DK NTI
High quality refining assets with weighted-average Nelson Complexity of 11.3
― Exposure to Mid-Continent and East Coast economics
― Two most complex refineries on East Coast with 100% of operating coking capacity
Scalable opportunity with management track record of growth by acquisition
― Hypothetical 150,000 bpd refinery acquisition increases the size of the company
by >25%
PBF’s Industry Position
Total Throughput Capacity
Refinery Region Capacity (bpd)
Delaware City East Coast 190,000
Paulsboro East Coast 180,000
Toledo Mid-Continent 170,000
Combined 540,000
(Kbpd)
Average Complexity:
12.4 11.0 11.7 10.2 11.3 12.1 11.5 9.5 9.5 8.5 11.5
Source: Company filings and presentations, 2012 Oil & Gas Journal Annual Refining Survey and PBF estimates Note: (1) Pro forma for MPC’s pending acquisition of BP’s Texas City Refinery (Nelson Complexity Index of 15.3, and Total Throughput Capacity of 451 Kbpd) (2) Pro forma for TSO’s pending acquisition of BP’s Carson Refinery (Nelson Complexity Index of 12.1, and Total Throughput Capacity of 253 Kbpd)
(1) (2)
1,644
917
7
766
635
2,135561
128
734
73
762
-
1,000
2,000
3,000
Cumulative Capital Expenditures 2006 – YTD 9/30/12
($MM)
Over $2.8 billion of capital invested in PBF
refining system since 2006
― Minimizing near term capital needs
― PBF has invested more than $750 million
since completing the acquisitions of
Delaware City, Paulsboro and Toledo
Recent expansion and upgrade of the
Delaware City rail infrastructure allows for
utilization of cost advantaged, WTI-based
crude in East Coast system
― Estimated cost $57 million
Estimated 2013 capital expenditures in line
with 2012
Previous
Owner
Previous
Owner
Previous
Owner
Total PBF PBF PBF
Delaware City Paulsboro Toledo
2,897
Note: YTD represents 1/1/2012 – 9/30/2012
Significant Recent Capital Expenditures
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Over $500 million invested in turnaround, restart and
discretionary projects
― Complete turnaround on FCC unit
Gasifier shut down, eliminating chronic reliability
issues
Reliable steam production from cogen transition
Operating Expense &
Capital
Strong relationship with Delaware authorities
― ~$45 million support via grants from State of
Delaware
― Long-term agreement on emissions limitations
― Avoidance of state mandated capital spending
State of Delaware
Reliability
Reduced workforce and selected organized labor by
performance, not seniority. Labor / maintenance
expense reduction ~$100 million / yr
Expense reduction associated with gasifier
~$15 million / yr
Reduced energy and other costs ~$55 million / yr
Strategic investments include cogen transition,
hydrocracker corrosion control and others
Refining Margins
Improved refining margins
Improving outlook on margins
Differentials
Renewed value associated with ability to process
“challenged” crudes (i.e. Western Canadian heavy)
Co
ntr
ollab
le Im
pro
vem
en
ts
Mark
et
Dyn
am
ics
Operating Expense Improvements
($ / bbl)
Labor and
Maintenance
Expense
Reductions
Reduced
Energy
Costs
& Other
Incremental
Operating
Expense
Savings
4.00
(0.50)
(0.40)
(0.84)
(0.23)(1.53)
7.50
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
Estimated
Predecessor
Opex / bbl
Gasifier
Expense
Reduction
Reliability
Improvements
PBF
Targeted
Opex / bbl
Delaware City: Restructuring Success Story
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East Coast Rail Infrastructure: Delaware City
10
0
1,000
2,000
3,000
4,000
4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14
Implementing crude-by-rail strategy on the East Coast via 110,000 bpd rail gateway at Delaware City
― Current capacity of ~40,000 bpd
― Incremental capacity of ~70,000 bpd online Q1 2013
― Additional ladder track storage for 300 cars
Replacing ~700 railcars currently on short-term leases with 2,400 low-cost, long-term leased railcars
― Deliveries scheduled from Q1 2013 through Q2 2014
1,600 coiled & insulated and 800 general purpose railcars
State-of-the-art rail facility capable of discharging 40,000 bpd of heavy, non-diluted crude (bitumen)
Double loop track will hold two unit trains (>200 railcars)
― Capable of fully unloading one unit train in 12-14 hours
Recent term deal with Western Canadian producer highlights benefit of strategy
― Using YTD 2012 price set, Western Canadian crude lands into East Coast >$17 per barrel below Dated Brent
Anticipated Crude-by-Rail Volume to Delaware City
96,000
80,00075,00070,000
30,000
0
25,000
50,000
75,000
100,000
4Q'12 1Q'13 2Q'13 3Q'13 4Q'13
East Coast Rail Infrastructure
Anticipated PBF Leased Railcar Delivery Schedule
(bpd)
New Coiled and Insulated Existing New General Purpose
Volume Average PBF Leased Railcar Capacity
Third Party Cars
Note: Volumes based on current forecast and railcar delivery schedules (subject to change)
Note: Based on current third party railcar manufacturer delivery schedules (subject to change)
Industry Highlights
Delaware City Refinery
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U.S. Refining Industry Strengths
Inexpensive
Natural Gas
Growth in supply driving decline in U.S. natural gas pricing
― U.S. natural gas currently priced more than 60% below Europe
― ~$0.10 / bbl benefit to domestic refiners for every $1 / MMBtu
difference in natural gas price
North American
Crude
Oil Production
Secular growth in North American crude oil production
― Favorable price dislocations between North American crude
and rest of world
Complex
Refineries
U.S. average refinery Nelson Complexity of 10.9 versus Western
European average refinery Nelson Complexity of 7.8
Product
Exports
Cost and technological advantages have spurred export
opportunities
― East Coast to Europe, West Africa, and Latin America
Why will the U.S. refining industry prosper for the next 5 years?
Delaware City Refinery