OCI Partners LP. Corporate Presentation November 2016

Transcription

1 OCI Partners LP Corporate Presentation November 2016

2 Safe Harbor Provision Unless the context otherwise requires, references in this presentation to our partnership, we, our, us and similar terms, when used in a historical context, refer to the business and operations of OCI Beaumont LLC, a Texas limited liability company ( OCIB ) that OCI USA Inc. will contribute to OCI Partners LP in connection with this offering. When used in the present tense or future tense, those terms and OCI Partners LP and OCIP refer to OCI Partners LP, a Delaware limited partnership, and its subsidiaries, including OCIB. References to our general partner refer to OCI GP LLC, a Delaware limited liability company and a wholly owned subsidiary of OCI USA Inc. References to OCI refer to OCI N.V., a Dutch public limited liability company, and its consolidated subsidiaries other than us, our subsidiaries and our general partner. References to OCI USA refer to OCI USA Inc., a Delaware corporation, which is an indirect wholly owned subsidiary of OCI. References to OCI Fertilizer refer to OCI Fertilizer International B.V., a Dutch private limited liability company, which is an indirect wholly owned subsidiary of OCI. This presentation may contain forward looking statements that are based upon current expectations and involve a number of risks and uncertainties. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include the words will, believe, expect, anticipate, intend, estimate and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. Statements concerning our current estimates, expectations and projections about our future results, performance, prospects and opportunities and other statements, concerns, or matters that are not historical facts are "forward looking statements," as that term is defined under United States securities laws. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results and performance to be materially different from any future results or performance expressed or implied by these forward-looking statements. Investors are cautioned that the following important factors, among others, may affect these forward looking statements. These factors include but are not limited to: risks and uncertainties with the respect to the quantities and costs of natural gas, the costs to acquire feedstocks and the price of the refined products we ultimately sell; management's ability to execute its strategy; our competitive position and the effects of competition; the projected growth of the industry in which we operate; changes in the scope, costs, and/or timing of capital projects; general economic and business conditions, particularly levels of spending relating to demand for methanol and ammonia; our ability to operate as an MLP; changes in the regulatory and/or environmental landscape; potential conflicts of interest between OCI USA and other unitholders; and other risks contained in our registration statement (including a prospectus) filed with the United States Securities and Exchange Commission (the SEC ). Forward looking statements should not be read as a guarantee of future performance or results and will not be accurate indications of the times at or by which such performance or results will be achieved. Forward looking information is based on information available at the time and/or management's good faith belief with respect to future events, and is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. OCI Partners LP undertakes no obligation to update or revise any such forward looking statements. The Partnership has filed a registration statement (including a prospectus) with the SEC for the offering to which this presentation relates. Before you invest, you should read the prospectus in that registration statement and other documents the Partnership has filed with the SEC for more complete information about the partnership and this offering. You may get these documents for free by visiting EDGAR on the SEC website at Alternatively, the Partnership, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by ing BofA Merrill Lynch at dg.prospectus_requests@baml.com or by calling either Barclays at (888) or Citigroup at (800) OCI Partners LP s registration statement has not yet become effective and OCI Partners LP s common units representing limited partnership interests may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. The offering of the common units representing limited partner interests is being made by means of the prospectus only, copies of which may be obtained from the underwriters as noted above. This presentation is not, and under no circumstances is to be construed to be, a prospectus, offering memorandum, advertisement and is not an offer to sell securities. The SEC and state securities regulators have not reviewed or determined if this presentation is truthful or complete. Non-GAAP Financial Measures Disclosure Today s presentation includes certain non-gaap financial measures as defined under Regulation G of the Securities Exchange Act of 1934, as amended. A reconciliation of those measures to the most directly comparable GAAP measures is available in the appendix to this presentation. 2

3 Partnership Overview

4 Partnership Overview Organizational Structure OCI N.V. (NYSE Euronext Amsterdam: OCI:NA) 100% indirect ownership interest OCI USA Inc. 69,497,590 common units OCI GP LLC (our general partner) (1) Non-economic general partner interest 80% limited partner interest 20% limited partner interest Public Unitholders 17,500,000 common units OCI Partners LP (NYSE: OCIP) 100% ownership interest OCI Beaumont LLC New Capital Injection New Shares Issued Capital Structure Common Units (mm) 3,502,218 OCI NV units (mm) 69,497, % Share Price ($) Public Unitholders units (mm) 17,500, % Total Capital ($) 60,000,000 Total Shares Outstanding 86,997, % (1) No excess distribution coverage and GP has non-economic interest and no incentive distribution rights 4

5 Partnership Overview Asset History of OCI Beaumont DuPont builds 600 Ktpa methanol plant, largest in the world at the time 1967 Start-up of the ammonia plant built by Foster Wheeler with a Haldor Topsoe process design 2000 OCI N.V. acquires minority stake securing 100% ownership of the plant 2011 Ammonia production at the facility begins in December 2011 Debottlenecking process completed in 1Q Key Milestones 1980s Modernization of The methanol unit using Lurgi GmbH s Low Pressure Methanol technology 1997 Terra adds a 250 mtpa ammonia synthesis loop to The methanol plant 2004 Terra shuts- Down methanol production 2011 OCI N.V. and its partner acquire the plant from Eastman Chemical 2012 Methanol production at the facility begins in July Plant Capacity ( 000 tpa) 1, Q Q 2015 Methanol Ammonia Total Capacity (Post-Debottleneck) 5

6 Partnership Overview OCI Partners Summary OCI s facility near Beaumont, TX ( OCI Beaumont ) is an integrated methanol and ammonia facility strategically located on the Texas Gulf Coast OCI N.V. acquired the Beaumont plant from Eastman Chemical Company in May Previously the Beaumont plant was owned by Terra Industries and DuPont, and was shut down from 2004 until OCI s acquisition in 2011 Following a comprehensive upgrade, methanol and ammonia production commenced in July 2012 and December 2011, respectively Partnership has completed all work related to debottlenecking project in 1Q 2015, with ammonia and methanol lines restarted in 2Q Increased methanol production capacity by 25% to 912,500 mtpa Increased ammonia production capacity by 25% to 331,000 mtpa Partnership recently implemented a state-of-the-art methanol and ammonia truck loading facility on-site and expects to sell 80,000 mtpa via the new facility Facility Overview Capacity Key Information Product Pre Debottlenecking Capacity Production During Full Year 2014 Current Production Capacity post- Debottlenecking Project Product Storage Capacity Ownership 100% Metric Tons/Day Metric Tons/ Year (1) Metric Tons Metric Tons/ Day Metric Tons/ Year Methanol 2, , ,031 2, ,500 Ammonia , , ,000 (1) Metric Tons 42,000 (two tanks) 33,000 (two tanks) Natural Gas Supply Distribution Volumes contractually secured and pricing based on spot market Direct sales to customers by truck, pipeline, and barges (1) Assumes facility operates for a full year. 6

7 Partnership Overview Superior Site with Strong Customer Relationships Selected Methanol Customers Methanol Customers Terms Delivery (2015) Methanol Truck Terminal Natural Gas Pipelines Lucite Methanex Exxon Mobil Arkema Methanol Pipelines Barges Contract Life: Pricing: 2-5 Years / Renewable Jim Jordan Minus Payment Terms: Days Key Customers: Ammonia Customers Pipeline Truck 49% 6% 45% Barge Houston Pipe Line Kinder Morgan DCP Midstream Methanol Storage Ammonia Pipeline Ammonia Lucite DuPont Contract Life: Pricing: Monthly Payment Terms: 30 Days Terms Delivery (2015) Tampa CFR Minus Pipeline Truck 6% 11% 83% Barge Florida Gas Transmission OCI Beaumont Ammonia Storage Barges Key Customers: Gas Suppliers Hydrogen Pipeline Nitrogen Pipeline Ammonia Truck Terminal Suppliers Delivery (LTM) Pipeline Air Products Air Liquide 100% 7

8 Partnership Overview Debottlenecking Project Drives Distribution Growth Overview The Partnership delayed the planned debottlenecking to January 2015 due to the holiday season to ensure all preturnaround construction activities are complete. Construction completed in 1Q Total cost was US$ 384 million for project; US$ 97.5 million for debottlenecking, US$ million to improving reliability and US$ million for ensuring environmental compliance Product Previous Capacity Metric Tons/Day Capacity Increase Metric Tons/Year Current Capacity Metric Tons/Day Metric Tons/Year % Increase Methanol 2, ,000 2, ,500 25% Install a selective catalytic reduction unit Install an additional flare Processes Modify the convection section and heat exchangers Increase the capacity of the synthesis gas compressor and the refrigeration compressor on the ammonia production unit Replace and refurbish equipment that caused downtime Both methanol and ammonia production lines have been running at or above design capacity since April 23, 2015 Benefits Expands existing capacity Expected to maximize operational availability Increases efficiency of plant Increases margins; current headcount will be maintained Ammonia , ,000 25% 8

9 Partnership Overview Financial Overview and 3Q 2016 Results Summary Three Months Ended Nine Months Ended September 30 September 30 US$ thousand Change Change Revenues 66, ,683-36% 192, ,996-13% Cost of Goods Sold 48,250 52,109-7% 132, ,788 9% Depreciation Expense 15,253 15,547-2% 46,144 34,279 35% Selling, General and Administrative Expenses 3,447 5,193-34% 16,348 15,165 8% Income (loss) from Operations (before interest expense, other income (expense) and income tax expense) (874) 30, % (3,040) 49, % Interest Expense 10,104 7,278 39% 28,869 11, % Interest Expense - Related Party % % Gain (loss) on disposition of fixed assets (4) % (451) % Other Income (Expense) (16) (20) -20% (5) % Income (loss) from Operations (before tax expense) (11,141) 23, % (32,610) 38, % Income Tax Expense % % Net Income (loss) (11,697) 23, % (33,199) 37, % 30-Sep Dec-15 Total Debt 458, ,193 2% Net Debt 447, ,955 2% Sales Volumes 000 Metric Tons 9M 2016 Q Q Q M 2015 Q Q Q Ammonia Methanol *Net Debt is defined as Total Debt minus Cash and Cash Equivalents *Total Debt is the outstanding principal portion of our Term Loan B Credit facility and Revolving Credit Facility less the unamortized portion of the Deferred Financing Cost and Original Issue Discount associated with these facilities 9

10 Partnership Overview OCI Partners LP Long-Term Strategy Maximize utilization rates of the debottlenecked plants Leverage sponsor s technical know-how, expertise and track-record in identifying value-accretive projects and new investment opportunities Evaluate potential downstream projects for both methanol and ammonia to diversify product portfolio Maximize and maintain distributions to OCIP unitholders of 100% of cash available for distribution Maintain strong customer relationships near Beaumont, TX 10

11 Partnership Overview Investment Highlights Producer of essential, global products: methanol and ammonia CA WA Strong cash flow generation and OR significant step-up in projected ID revenue and EBITDA from debottlenecking project NV UT Key barriers to entry include high capital requirements, AZ lengthy permitting process and proximity to customers / suppliers MT WY CO NM ND SD NE KS TX OK MN IA MO LA AR WI IL MS TN AL GA NC VT NH NY MA MI CT PA NJ IN OH DC WV VA KY ME Supported by a technically strong sponsor, with an exceptional entrepreneurial track-record Global low-cost producer due to SC U.S. natural gas advantage FL Advantageous access to feedstock, customers and infrastructure US methanol and ammonia markets suffer from an import deficit, which is expected to continue through at least

12 Industry Overview

13 Industry Overview Robust and Growing Global Methanol Market Methanol, also known as methyl alcohol or wood alcohol is the simplest of all alcohols With its diversity of applications from paints and plastics, furniture and carpeting, car parts and windshield wash fluid methanol is one of the world s most widely used industrial chemicals Global demand in 2014 was roughly 72 million tons with 51% attributed to GDP-linked consumer and industrial products, while 37% is from fuel/energy related uses, and 12% is from methanol to olefins ( MTO ) / methanol to propylene ( MTP ) Historical demand has been robust and is forecasted to remain so in the long term with China at the forefront 2014 Global Methanol Demand by Derivative China Leading Forecasted Industry Growth mn t/% Merchant MTO/MTP 5% Captive MTO/MTP 7% Dimethyl Ether 9% All Other 14% Fuel Applications 12% Blues = GDP-core - 51% Purples = Fuel/Energy - 37% Grays = Methanol to olefins = 12% Source: Argus JJ&A Formaldehyde 27% Acetic Acid 9% Methyl Methacrylate 1% MTBE & Biodiesel TAME 5% 11% Note: Total demand = 72 million mn t CAGR = 6.2% China N/E Asia S/E Asia/India ME/Africa EU/Russia South America North America 13

14 Industry Overview Chinese MTO Changing Global Methanol Demand mn t 300 World Demand Growth ( E) (1) 250 CAGR = 6.2% CAGR = 6.3% Core - GDP Fuel MTO/MTP CTO/CTP (Coal to Olefins / Coal to Propylene) Excluding CTO/CTP, 2015 methanol demand is estimated to be 78 million tons China is the world s largest producer of MTO and in 2015, MTO accounted for almost 18% of the country s merchant methanol demand MTO/MTP is poised to drive methanol demand, but affordability in current global crude oil environment remains key (1) Source: Argus JJ&A 14

15 Industry Overview Exponential Growth Expected From Fuel Applications & MTO/MTP Chinese gasoline blending will continue to grow with its expanding population and automobile demand Europe currently allows blending of up to 3% methanol in gasoline. Countries such as Australia, Israel, Ecuador, Mexico, Egypt, and Oman are actively exploring methanol as a blend component in gasoline. Fuel Applications and Gasoline Blending MTBE use has been growing constantly and has reached 20 mm t/yr, mostly from Asia which is not subject to ethanol blending programs Many countries are also advancing the use of biodiesel, which requires blending approx. 10% methanol Methanol s attractive features as transportation fuel easy blending, high octane, improved combustion is encouraging new potential demand uses Use of methanol as a marine fuel is a large potential new market. Stenna Line has converted one of its ferry s to methanol fuel and Methanex has on order six new dual-fueled methanol transport ships China s MTO/MTP Expansion Beginning in 2011, China redefined the methanol industry with its implementation of methanol consumption for olefin production Historically, olefins were produced from naphtha, but coal to methanol to olefins provided an economic alternative Chinese MTO/MTP will significantly increase forecasted global methanol demand in the near term Argus expects China to add 3.75 mm t/yr of MTO capacity from 2016 to By 2020, MTO use will consume 67 mm t/yr of methanol. Because 1 ton of olefins requires 3 tons of methanol, China s capacity growth equates to over 10 mm t/yr of merchant methanol demand mn t World Methanol Demand Growth (Year over Year) Core - GDP Fuel MTO/MTP Source: Argus JJ&A 15

16 Industry Overview Attractive U.S. Methanol Market In 2015, the U.S. imported approximately 3.7 million metric tons of methanol to meet its supply deficit (57% of consumption) The U.S. sources a majority of its imports from Trinidad, which is currently facing a natural gas supply deficit Structural shortages in natural gas reserves have led to government rationing U.S. methanol demand is expected to increase at a CAGR of 6.3% between 2015 and 2020, driven by GDP US Methanol Supply & Demand 000t Exports Imports Production 20,000 15,000 10,000 5, ,000-10, The majority of U.S. methanol demand is currently supplied by imports Source: Argus JJ&A 16

17 Industry Overview China Cost Curve Setting Industry Floor China Cost Curve Cost curve remains steep at the high end with Chinese producers using coal or expensive natural gas as feedstock As the global marginal producer, China s cost curve sets a price floor for methanol market In current lower energy price environment, the price floor is ~$200/metric ton China s natural gas-based cost structure was reduced in Q4 2015; however, the cost curve is not expected to see significant change in 2016 Source: Argus JJ&A 17

18 Industry Overview Attractive U.S. Ammonia Markets In 2015, the U.S. imported 5.1 million metric tons of ammonia Represents 31% of total consumption Ammonia must be imported to the U.S. as approximately 20 ammonia plants were closed between 1999 and 2007, including OCIP s Beaumont facility These plants had total annual capacity of more than 8.0 million metric tons The U.S. is expected to remain a net importer for ammonia for the foreseeable future as the majority of new capacity announced has already been cancelled Three-Year Average U.S. Ammonia Use by End Market (1) Direct Application as Fertilizer 21.9% Fertilizer Feedstock 50% Industrial Feedstock 28.1% A significant portion of current and future U.S. ammonia demand is expected to be supplied by imports Source: CRU (formerly Commodities Research Unit). (1) Based on

19 Industry Overview Ammonia Prices Remain Strong Along with Crop Prices Historically, there has been a meaningful correlation between nitrogen fertilizer prices and crop prices High crop prices incentivize farmers to increase fertilizer application in order to maximize crop yields, thereby increasing fertilizer demand and resulting in higher ammonia prices Marginal producers in Eastern Europe (particularly the Ukraine), effectively set the price floor, with each region applying its own premium based on a number of factors such as local supply/demand dynamics, transportation, logistics and government policies U.S. Fertilizer-Crop Price Relationship (1) (US$ / St) 1,200 (US$ / Bushel) 12 1, Ammonia Mid Cornbelt Wheat Kansas City Cash Corn Chicago Cash (1) Source: Bloomberg 19

20 Industry Overview Declining Trinidad Natural Gas Reserves: Supportive of OCI Partners LP Story Overview Trinidad faces fundamental gas deficit issues as increased natural gas production has not been matched by new reserves, leading to a fall in reserve life to 8.2 years in 2015 Natural gas production has fallen since 2012 as existing reserves have been depleted (BCM) (R/P Ratio) Production Reserve Life Impact on Nitrogen Fertilizer Production Ammonia capacity utilization rates in Trinidad have been consistently declining since 2011 as gas supply issues limited production The nitrogen industry in Trinidad was established when there was a gas cost-based competitive advantage over the U.S.; however, as U.S. gas costs have fallen, this advantage has eroded Appropriation of Natural Gas From 2012 to 2015, gas allocation to the production of ammonia dropped by 9%, and allocation to methanol dropped by 4%. Fertilizer exports to the U.S. are expected to continue to fall, creating a more favorable environment for domestic production Source: BP, Trinidad Ministry of Energy 20

21 Industry Overview We Expect Our U.S. Natural Gas Advantage to Continue for the Foreseeable Future The emergence of a U.S. shale gas advantage has led to an increase in natural gas supply Increased US natural gas production Production from shale formations increasing to ~50% of total annual natural gas production by 2040 as compared with 34% in 2011 According to the Energy Information Association (the EIA ) forecasts, increases in the supply of U.S. natural gas are tracking to exceed increases in U.S. natural gas demand by 2019, leading to approximately 5.8 Tcf of net exports by 2040 This abundance of U.S. natural gas has resulted in attractive domestic natural gas prices, often substantially below natural gas prices in other global markets, such as Europe, Japan and Northeast Asia has lead to lower prices Having a low cost feedstock for the majority of our methanol and ammonia production gives us a significant competitive advantage The EIA expects U.S. Henry Hub natural gas prices to remain low for the foreseeable future; natural gas forward for 2015 is under US$ 3.00 MMBtu Total U.S. Natural Gas Production and Consumption, (1) (Trillion Cubic Feet) (1) Source: EIA, Annual Energy Outlook Production Consumption Net Imports 21

22 Sponsor Overview

23 Sponsor Overview Overview of Our Sponsor OCI N.V. OCI N.V. is a global natural gas-based fertilizer and industrial chemicals producers with production facilities in the Netherlands, USA, Egypt, and Algeria As of September 2015, the Sawiris family collectively owns 54% of the outstanding shares Currently employs approximately 3,000 people worldwide OCI N.V. is traded on the NYSE Euronext Amsterdam (OCI:NA) Approximately 2.9 billion market capitalization as of November

24 Sponsor Overview Overview of Our Sponsor OCI N.V. Leading global natural gas-based fertilizer & chemicals producer Production facilities in The Netherlands, USA, Egypt and Algeria complemented by global distribution network Top 5 five global nitrogen-based fertilizer producer - sellable capacity of c.7.7 mtpa at end-2014 with competitive blended natural gas cost advantage over peers Natural gas monetization focus following demerger of Construction business as of 9 March 2015 Summary Overview Pure play fertilizer & chemicals company offering distinct investment propositions Growth initiatives : additional volumes from Sorfert Algeria, debottlenecking OCI Beaumont and Iowa Fertilizer Co start-up On track to increase sellable capacity by 60% to c.12 mtpa by end-2016 On June 12, 2015, OCI NV acquired BioMCN, a methanol and bio-methanol producer in the Netherlands with two methanol plants, of which one is operational (440 ktpa) and one mothballed (430 ktpa) Trading on Euronext Amsterdam since 25 January 2013 (NYSE Euronext: OCI) AEX Index constituent since March

25 Sponsor Overview OCI Fertilizer Highlights With the addition of Iowa Fertilizer Company (IFCo), total design saleable capacity for nitrogen-based fertilizers will increase to 8.7 million metric tons (10.4 million tons including merchant ammonium sulphate) by 2016 OCI Fertilizer operates five production assets located in North Africa (Egypt, Algeria), Europe (the Netherlands) and the U.S., with production capacity of nearly 7.0 million mtpa of nitrogen based fertilizer - This capacity is expected to increase to 8.6 mtpa in 2016 with the addition of IFCo and OCI Beaumont s post-expansion capacity Fertilizers produced include ammonia, urea, calcium ammonium nitrate (CAN), urea ammonium nitrate (UAN) and other intermediary products; the business also sells ammonium sulphate (AS) out of the Netherlands and Belgium OCIP also produces methanol at OCI Beaumont with a capacity of 0.75 mtpa expanding to 0.9 mtpa OCI Fertilizer s downstream product portfolio includes: - Melamine production - AS distribution North African facilities with attractive production costs Global in-house distribution network with a presence in Europe and strategic joint ventures in Brazil and the U.S. Egyptian Fertilizers Co. Egypt Basic Industries Co OCI Nitrogen Sorfert OCI Beaumont Iowa Fertilizer 25

26 Appendix

27 Appendix Board of Directors OCI GP LLC Background Nassef Sawiris Director Served as CEO and director of OCI N.V. and Orascom Construction Industries ( OCI SAE ) since its incorporation in 1998 Michael Bennett Chairman Significant experience in the nitrogen industry, including serving as CEO of Terra Industries from 2001 to 2010 Frank Bakker Director, President & CEO Served as vice president and general manager of OCIB from September 2011 to June 2013 Renso Zwiers Director Served as COO of OCI Fertilizer since January 2013 and has served as CEO of OCI Nitrogen since May 2010 Francis Meyer Director Served as Executive VP of Terra Industries from 2007 until April 2008 and as Senior VP and CFO from 1995 until 2007 Dod Fraser Director Served as President of Sackett Partners Inc. since its formation in 2000 upon retiring from a 27-year career in Investment Banking Fady Kiama CFO & Vice President Served as corporate planning director and group controller of OCI SAE from 2001 until May 2013 Nathaniel Gregory Director Senior lecturer in finance at the MIT Sloan School of Management. 27

28 Appendix Partnership Overview Methanol Methanol is a liquid petrochemical utilized in a variety of industrial and energy-related applications The primary use of methanol is to make other chemicals - ~30% of global methanol demand is converted to formaldehyde, which is used in various industrial applications Methanol is also used in the lumber industry, in paper and plastic products, and various other paint and textile applications Outside of the U.S., methanol is used as a fuel in several capacities: - Direct fuel for automobile engines - Gasoline blended fuel - Octane booster in reformulated gasoline Ammonia Ammonia constitutes the base feedstock for nearly all of the world s nitrogen chemical production Over 95% of global ammonia output is used as a feedstock to produce other chemical forms of nitrogen, such as: - Fertilizers - Blasting/mining compounds - Fibers and plastics - NOx emission reducing agents - Direct application to soil for agricultural purposes Ammonia is widely used in industrial applications, particularly in the Texas Gulf Coast market Essential Building Blocks for Numerous End-Use Products 28

29 Appendix Product Process Overview Methanol production unit is a 730,000 metric ton per year unit that is comprised of Foster Wheelerdesigned twin steam methane reformers for synthesis gas production, two Lurgi-designed parallel low pressure, water-cooled reactors and four distillation columns Methanol Process Flow Natural Gas Desulphurization Reactor Natural Gas Heat from Natural Gas Combustion Steam Reformer Unit Heat Recovery Syngas Steam Steam is also used to drive the compressors Syngas Compression Recycle Methanol Synthesis Reactors Cooling Ammonia production unit is a 264,990 metric ton per year unit with a Haldor Topsøe-designed ammonia synthesis loop that processes hydrogen produced by the methanol production process as the feedstock to produce ammonia Ammonia Process Flow Optional H 2 N 2 Syngas Compression NH 3 Synthesis H 2 Recycle Cooling PSA Hydrogen Recovery Ammonia Separation Purge Gas Liquid Pure Ammonia Methanol Separation Liquid Methanol Distillation Pure Methanol Methanol Storage Ammonia Storage Barge / Pipeline 29

30 Appendix Site Facility Pictures 30

31 Appendix The U.S. Natural Gas Outlook Low U.S. natural gas prices contribute to the competitive position of U.S. methanol and ammonia producers relative to foreign producers Natural gas forwards project low Henry Hub Spot prices through 2028 Below $4.00 per MMBtu until 2026 Below $4.50 per MMBtu through 2028 ($/MMBtu) $10.0 Annual Average Henry Hub Spot Natural Gas Prices, (1) $8.0 $6.0 $4.0 $2.0 $ Historical Henry Hub Spot Price Projected Henry Hub Spot Price (1) Source: Bloomberg 31

32 Appendix OCIP Realized Methanol Pricing History ($/metric ton) Methanex Contract Southern Chemical Contract Argus Contract OCIP Realized Price 32

33 Appendix US Methanol Imports (1) Source: Argus JJ&A 33

34 Appendix Gulf Methanol Capacity (1) Source: Argus JJ&A 34

35 Appendix New Methanol Capacity Start Year Methanol Facility (1) Location Production Capacity (MTPA) Technology/EPC Status 2015 Methanex Geismar I Geismar, LA 1,000,000 Jacobs Engineering 1/24/15 Produced first methanol from Geismar Celanese Fairway LLC Clear Lake, TX 1,300,000 WorleyParsons 10/16/15 Started production 2015 Pampa Fuels LLC Pampa, TX 65,000 ExxonMobil/Proman Group 6/1/15 Fully operational and completed first shipment of methanol 2016 Methanex Geismar II Geismar, LA 1,000,000 Jacobs Engineering 12/29/15 Successfully produced first methanol 2017 OCI Natgasoline Beaumont, TX 1,650,000 Lurgi/OEC Construction began in November Yuhuang Chemical St. James Parish, LA 1,800, G2X - Big Lake Fuels Lake Charles, LA 1,400,000 Lurgi/Amec Foster Wheeler Johnson Matthey/Proman Group 8/18/15 Yuhuang secures St. James site for methanol plant 1/15/16 G2X hosted ground breaking ceremony for construction (1) Source: Argus JJ&A 35

36 Appendix New Ammonia Capacity Start Year Ammonia Facility (1) Location Production Sellable/Usable Capacity (STPA)* Capacity (STPA) (1) Technology/EPC Permitting Status 2015 Koch Enid, OK +350,000 - KBR 8/16/14 Began construction in mid-september; project will be implemented over three years 2016 PotashCorp Lima, OH +110,000 - KBR Expected start up in OCI Wever, IA 850, ,000 KBR/OEC On schedule to complete by CF Industries Donaldsonville, LA 1,275, , CF Industries Port Neal, IA 850,000 80,000 ThyssenKrupp Uhde ThyssenKrupp Uhde Urea production began in November 2015 On track for 2016 startup 2016 Dyno-Cornerstone Waggaman, LA 850, ,000 KBR 8/05/13 Cornerstone breaks ground on project 2016 LSB Industries El Dorado, AR 375, ,000 Leidos/SAIC (for Nitric Acid) 2016 Agrium Borger, TX +160,000 - KBR Nitric acid plant expected start up in early /7/15 Urea project will be completed at end of 2016; cancelled ammonia expansion 2017 Dakota Gasification Beulah, ND - - IHI E&C 1/28/14 Urea plant scheduled for completion in early Koch (Invista) Victoria, TX 400, ,000 1/31/14 Invista has put project on hold - Northern Plains Grand Forks, ND 850, ,000 - Ohio Valley Resources Rockport, IN 850, ,000 KBR/SEI - MFC (Fatima) IN 850,000 50,000 - CHS Spiritwood, ND 850,000-5/02/15 Announces product list of UAN, urea, DEF, AN, ATS, and anhydrous ammonia; no construction progress to date 12/19/13 Signed MOU with TEQSA for development, and selected Sinopec (SEI) for FEED & EPC; no construction progress to date 6/24/14 Signed MOU with Maire Tecnimont; no construction progress to date 9/05/14 CHS approved final plans for construction of fertilizer plant; no construction progress to date * Production capacity with + indicates additional capacity expansion on existing facility (1) Source: Blue Johnson (2014). 36

37 Appendix Methanol and Ammonia Plant Closures Year of Closure Methanol Facility Location Production Capacity (MTPA) Year of Closure Ammonia Facility Location Production Capacity (MTPA) 1998 Georgia Gulf Plaquemine, LA 480, Methanex Fortier, LA 570, Ashland Plaquemine, LA 450, Sterling Texas City, TX 450, Borden Chemicals & Plastics Geismar, LA 990, Delaware City Delaware City, DE 200, Enron Pasadena, TX 375, Air Products Pace, FL 120, El Paso Cheyenne, WY 180, Lyondell Channelview, TX 770, Celanese Clear Lake, TX 600, Beaumont Methanol * Beaumont, TX 730, Celanese Bishop, TX 500, Potash Corp. Clinton, IA 281, Potash Corp. La Platte, NE 231, Solutia Lulling, LA 551, Borden Chemicals & Plastics Geismar, LA 468, Diamond Shamrock Dumas, TX 83, Agrium Kennewick, WA 237, Cytec Fortier, LA 485, DuPont Beaumont, TX 540, Farmland Lawrence, KS 518, Vanguard Pollock, LA 568, Koch Sterlington, LA 1,213, Simplot Pocatello, ID 116, Terra Yazoo City, MS 193, Air Products Pace, FL 110, Potash Corp. Memphis, TN 452, Terra Blytheville, AR 496, Agrium Kenai, AK 694, Diamond Shamrock Dumas, TX 88, Terra* Beaumont, TX 264, Agrium Kenai, AK 777,000 * Represents current OCI Beaumont facility. 37