VSMPO-AVISMA Corporation. Joint Venture

Transcription

1 an VSMPO-AVISMA Corporation Joint Venture

2 A World Leader in Titanium Industrial Titanium Demand Forecast 2015 Kevin J. Cain President Uniti Titanium LLC Overview & 5 Year Forecast 2

3 Near Term Market Influences A 50% drop in oil prices and the rapid reduction in capital spending. Energy mix changes; away from coal and oil to natural gas and renewables. New sources of energy have emerged. Demand shifts between the various global markets. New government policies are being created to address climate change. 3

4 Global Population Growth & GDP Forecast World Population (Billions) Global Population Growth Continues 7.35 billion now ~ billion by OECD Non-OECD 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% Regional GDP Growth China India United States European Union Middle East and North Africa World Source: United Nations, World Population Prospects: The 2015 Revision Source: IMF 5 year forecast: April 2015 (growth at constant prices) 4

5 Industries for Ti consumption Energy Chemical Processing Desalination 5

6 World Energy Consumption 6

7 Energy Energy Outlook Oil & Gas Power Generation 7

8 Oil & Gas Worldwide Rig Count Source: Baker Hughes 8

9 Demand for Oil Over the Next 20 Years Increases 15-20% *million tonnes oil Source: BP Energy Outlook

10 Natural Gas Production Will Increase by 40-50% Over the Next 20 Years *million tonnes oil equivalent

11 Oil & Gas; Long Term View Demand for oil is forecasted to increase by 15% to 20% over the next 20 years (Exxon Mobil) Natural gas is likely to increase 45-50%. Growth in unconventional supplies to account for 60% of the increase. Use of titanium Deepwater platforms FPSO s (Floating Production, Storage & Offloading Vessel) LNG plants Floating LNG plants Water filtration / purification plants Heat transfer equipment 2015 is estimated to drop by 20% to 25% from 2013/14 levels. Expansion is forecasted to occur in 2017 and beyond. 11

12 Exxon, BHP Billiton Get Approval for Scarborough FLNG Gas Treatment Remove condensales, brines, hydrogen sulfides & carbon dioxide Liquefaction Transport Statistics 495 meters long x 75 meters wide Process 6-7 million tons per annum of LNG Location: W.Austalia Source: 12

13 Energy Energy Outlook Oil & Gas Power Generation 13

14 World Net Electricity Generation OECD Americas OECD Europe OECD Asia Trillion kwh Europe and Euraisa Forecast CAGR 3.2% Forecast CAGR 3.5% Forecast CAGR 1.3% Source: Energy Information Administration International Energy Outlook

15 Power Generation as a % of Worldwide Primary Energy Consumption Total Energy Consumption Inputs to Power Generation ,000 10,000 15,000 20,000 *million tons of oil equivalent *Energy production comprises commercially traded fuels, including modern renewables used to generate electricity. *Energy consumption comprises commercially traded fuels, including modern renewables used to generate electricity. Source: BP Energy Outlook

16 Energy Demand Global Power Generation 2000 DATA 144 Quadrillion BTUs 2040 FCST 291 Quadrillion BTUs 3% 19% 9% 43% 8% 21% Oil Gas Coal Nuclear Renewables 19% 17% 33% 28% Oil Gas Coal Nuclear Renewables Source: Exxon Outlook for Energy: A View to

17 Power Generation GW Forecast by Fuel Type new on-line capacity GW Gas Coal Nuclear Source: BP Energy Outlook 2035 & Uniti Titanium Marketing Intelligence 17

18 Energy Demand by Type 2000 DATA 418 Quadrillion BTUs 2040 FCST 717 Quadrillion BTUs 6% 22% 13% 21% 38% Oil Gas Coal Nuclear Renewables 8% 19% 15% 26% 32% Oil Gas Coal Nuclear Renewables Source: Exxon Outlook for Energy: A View to

19 Power Generation: Ti demand Electricity: Titanium Demand Approximately 6000MT will be consumed per year over the next 5 years. Use of titanium Welded tubes Tube sheets Heat transfer equipment Source: Internal estimate 19

20 Chemical Processing Global investment in Asia and Middle East Capital investment shifting to North America. Natural gas liquids (NGL) $100b of incremental capital investment by 2025 Global capital expenditures PTA (pure terephthalic acid); polyester film and filter production Urea/ammonia nitrate; crop fertilizer Chlorine/caustic soda Natural Gas Liquids (NGL), ethane and propane for use in plastics and other building block chemicals. BP Energy Outlook 2035, Exxon Mobile Outlook for Energy: A View to

21 Photo The multibillion dollar Baytown expansion will create 10,000 jobs at peak construction. Source: ExxonMobil An interview with Neil Chapman Construction at Chevron Phillips Chemical s Cedar Bayou 1-Hexene plant in Baytown will will be completed in early The expansion there and at other Chevron Phillips plants along the Gulf coast was prompted by low natural gas prices. (Chevron Phillips) Source: Chevron Phillips SOURCE: Aerial image of furnace expansion progress at Equistar s LaPorte steam cracker Bechtel-Linde Consortium to build Large-scale Ethylene Plant at ExxonMobil Baytown Complex 21

22 Chemical Processing Titanium end-use applications General fabrication of tanks and vessels Piping systems Heat transfer equipment Fittings and fasteners Welded tubing It s estimated that the average annual consumption of titanium in the chemical process industry will be10,000mt per year for the next 5 years. 22

23 Industries for Ti Consumption Energy Oil and gas Power Generation Chemical Processing NGL s PTA Urea Chlorine / Caustic Desalination 23

24 Desalination Applications Removes salt from seawater for and potable end use Clean wastewater streams (ex. Frac flow back water from shale gas) Technologies Reverse osmosis (RO) Thermal (MSF and MED) 24

25 Desalination Technology Split 2013 to 2018 Contract Value ($ million) million m 3 /d 4,400 6,100 MED 5% 6% MED MSF MSF 58,70 0 RO & ED/EDR 89% RO & ED/EDR Source: Desaldata Forecast, June

26 Desalination Forecast Drivers Industry rather than municipal is strongest driver The Saudi Water Authority (SWCC) plans to invest $80b by (Arabianbusiness.com) Fastest growing economic regions also have the lowest amount of fresh water; India, China and the Middle East Copper (copper alloy desal tubes) release into the sea from Gulf Coast desal plants is becoming problematic and will drive future technology in favor of titanium. Titanium consumption is estimated to be in the 2000MT per year range with the possibility to grow to 3000MT by

27 Industries for Ti Consumption Energy Oil and gas Power Generation Chemical Processing NGL s PTA Urea Chlorine / Caustic Desalination 27

28 Industries for Ti Consumption Others Mining Cathodic Protection Automotive Recreational Shipbuilding / Marine Architecture 28

29 Industrial Titanium Demand Forecast History and Forecast Metric Tons (x1000) Historical Forecast Chemical Processing Desalination Oil & Gas Power Automotive Metallurgy Architecture Shipbuilding Rec & Other * Does not include shipments within China and Russia. 29

30 Thank You! an VSMPO-AVISMA Corporation Joint Venture