CATIVA BP

Mr. Jon Horler Acetyls Project & Engineering Manager BP

 A Chartered Chemical Engineer, Mr. Jon Horler has worked for BP for 25 years and leads a team responsible for the delivery of technology and engineering in support of BP’s proprietary package for the manufacture of Acetic Acid.  Part of his role is also to provide project management during concept selection and early stage development for licensing opportunities worldwide.  Mr. Jon has previously worked on major projects in the UK, China, Taiwan, Malaysia, Korea and India.

Overview of Acetic acid Production Through Petcoke Gasification IOCL Petrochemicals Conclave 18th March 2013 Jon Horler, Projects and Engineering Manager Acetyls and Aromatics Technology © 2013 BP Chemicals Limited All rights reserved

Outline • Overview: − What is Acetic Acid − Key Uses of Acetic Acid − Chemistry • Feedstock Choices • Acetic Acid Technology • Sources of Project Value

© 2013 BP Chemicals Limited All rights reserved

What is Acetic Acid? • A very important chemical • A key raw material for the production of a wide number of products we use in our everyday lives

• Do you know that acetic acid in its very dilute form is vinegar that is consumed or used in the manufacture of food products? • Acetic acid is involved in the manufacture of other items you'll find in your shopping basket, such as washing powder, drink bottles and food packaging

With just 1 tonne of acetic acid our customers can make 38,000 jars of pickles* *BP Internal Data

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Key uses of Acetic Acid • Vinyl Acetate Monomer (VAM) − Paint, adhesives in furniture or floor covering, manufacture of clothes, shoe soles, juice cartons and cheese packaging, manufacture of safety glass for car windscreens • Purified Terephthalic Acid (PTA) − Plastic containers for beverages, food and electronics, apparel, home textiles, carpets and industrial fibre products, audio and video recording tapes, photographic films and labels • Acetate Esters (Ethyl Acetate, Butyl Acetate…) − Solvent in printing inks, laminating adhesive in flexible packaging and plastic films. Also used as solvent in paint, varnishes, resin coatings and nail polish remover • Acetic Anhydride

− More than 75% made into cellulose acetate found in filter tow, textiles, photographic and x-ray films − Also used in pharmaceuticals such as aspirin and paracetamol © 2013 BP Chemicals Ltd All rights reserved

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Acetic Acid Technology Evolution Cash cost = variable + fixed

Capital-related costs=depreciation + return on investment

•

120

Production cost [indexed to ethylene process total cost = 100]

CATIVA® gives advantages across all key project criteria: Capital - simplification of flowsheet results in lower project costs for new build plants

Time

100

•

Feedstock changes

80

• Cash Cost / Reliability - less equipment items to maintain mean lower annual maintenance spends and less downtime

Process changes

60

40

•

Scale - potential to build at scale to suit market demands improves capital efficiency

•

Fully Built-up Cost - all of the above have a positive impact on overall project economics and long term sustainable operations

20

0

Ethylene

Naphtha

Hydrocarbon oxidations

Rhodium

Rhodium / lithium

Variable Cost - patented catalyst technology and subsequent reduced energy requirements result in lower operating costs

Iridium

Methanol carbonylation Cost estimates are based on generic models © 2013 BP Chemicals Ltd All rights reserved

Methanol Carbonylation: A C1 route to Acetic Acid CO must be generated locally Natural Gas

Purify CO

Coal

Compress CO

Pure CO

Pet Coke Naphtha Light HC’s

Syngas (CO + H2)

Acetic Acid (CH3COOH)

Heavy HC’s Biomass ……….

Methanol

Distribution

Methanol (CH3OH)

MeOH purchased as a globally traded commodity

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Relative Energy Cost

Feedstock Selection In India

• For a methanol carbonylation production, feedstock access for competitive CO production cost is key to the Acetic Acid value chain

Feedstock Options • Main issues associated with accessing attractive CO economics are: − High energy costs. Investment in lower capital Nat Gas/Fuel Oil based Syngas plants (eg SMR/POX) have higher variable costs − Investment in Coal/Petcoke based Syngas plants (Gasification) delivers much lower energy / variable cost but carries a much higher capital cost burden and is dependent on scale and integration opportunity © 2013 BP Chemicals Ltd All rights reserved

BP Acetyls – Global Experience

Hull, UK Europe Commercial Office and Production

Nanjing, China

AA and Anhydrides

Byaco: AA , 50%

Naperville/Cantera

Chongqing, China

Commercial Office USA

Yaraco: AA &

Ulsan, South Korea SSBP: AA , 51%

Esters , 51%

Shanghai

Texas City

Head office

AA

Taiwan FBPC: AA, 50%

Kuala Lumpur Commercial office, Rest of Asia

Kertih, Malaysia BPPA: AA, 70%

Acetyls sites

Commercial/Sales offices % BP share of JVs

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CATIVA® Process Flow Diagram SCHEMATIC PROCESS FLOW DIAGRAM

Cativa®

Vent Gases To Flare

Off-gas Recovery Area

Lights Reactor

Removal Column

Heavy Ends Column

CO and methanol

Acetic Acid Product

(Mixed acid For disposal)

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Value Levers: Project Integration Internal Infrastructure Keys to Project Value

Petcoke ASU

• Build at scale

Gasification Purification

• Locate near market

AA

• Locate close to petcoke feedstock

• Integrate common infrastructure • Lever the strengths of both parties

External Infrastructure © 2013 BP Chemicals Limited All rights reserved

Summary

• Acetic Acid is a petrochemical building block for products associated with a sophisticate growing modern economy • BP has developed world leading technology for the manufacture of acetic acid. • Feedstock choice is critical • Integration opportunities help to lever value

Thank You

© 2013 BP Chemicals Limited All rights reserved