PETROCHEMICALS: NEW LANDSCAPE, NEW PLAYERS Michel H. BUFFENOIR CEO Ethylene Business Unit INVESTOR DAY, PARIS, FRANCE - October 22, 2004
PETROCHEMICALS: BIG BUSINESS! 127
PETROCHEMICALS: VERY BIG BUSINESS!! 128
PETROCHEMICALS: YET VERY SMALL - MOLECULE OF PLASTIC BAG 129
PETROCHEMICALS: BIG BUSINESS FOR TECHNIP BACKLOG end 2003 Petrochems 14% REVENUES 2003 Petrochems 20% 130
PETROCHEMICALS AT A GLANCE Business of US$ 12 to 14 billion yearly World Production ~600 Million t/year 2003 1 billion derivatives Feedstocks: hydrocarbons (C & H) from natural gas, oil, coal (plus minerals: chlorine, fluor, metals, and oxygen/nitrogen from air!) 131
MAKING POLYMERS FROM OIL & GAS Vinyl Chloride (VCM) Polyvinyl Chloride Ethylene Ethylene Oxide (EO) Monoethylene Glycol (MEG) Polyethylenes Propylene Polypropylenes Olefins Allyl Chloride Propylene Oxide (PO) Epichlorohydrin (ECH) Polyether Polyols Butadiene Butadiene Rubber Oil / Gas Feedstocks Styrene Butadiene Rubber Thermoplastic Rubber C 5 Olefins Isoprene Isoprene Rubber Styrene (SM) Polystyrenes Acetone Aromatics Benzene Cumene Phenol Diphenylol Propane Diphenyl methane Di-Isocyanate (MDI) Epoxy Resins Toluene Toluene Di-Isocyanate (TDI) Polyurethanes Xylenes Para-Xylene Terephthalic Acid (PTA) Polyethylene Terephthalate 132
PETROCHEMICALS: NEW ENVIRONMENT NEW LANDSCAPE Most of new capacities will be built:! Close to the cheapest feedstocks available: Middle East gas, for basic petrochemicals! Close to the fastest growing demand: Far East/China, for the downstream products Feedstock-rich countries do NOT depend on the chemical cycle to justify investments: most of them are decided by government-owned entities, driven by oil & gas revenues, ensured of low cost, abundant, captive feedstocks NEW PLAYERS Chinese chemical industry now larger than Germany s Middle East producers all have efficient, modern production facilities to meet an exploding Far East demand New world-class players who will invest alone or associated with traditional US/W.Europe/Japan groups:! NPC (Iran)! Sabic (KSA)! Sinopec (China)! Sasol (S.A.)! NPC (Thailand)! Q-Chem (Qatar) 133
THE WORLD S TOP PETROCHEMICALS PRODUCERS: EXAMPLE OF NEW PLAYERS IN ETHYLENE BUSINESS Million t/y Dow (USA) Exxon-Mobil (USA) Shell (USA/Holland) Equistar/Lyondell (USA) 2002 13.1 11.4 6.7 5.0 2006 11.8 11.7 7.0 5.2 NPC NPC (Iran) 0.7 0.7 5+ Sabic (S. Arabia) 3.0 5+ BP/Amoco (UK/USA) Chevron-Phillips (USA) Sinopec (China) 4.6 3.5 3.0 4.8 3.6 5+ Nova (Canada), AtoFina (France) BASF (Germany) NPC (Iran) 0.7 5+ 3.0 3.0 3.1 3.2 Source: UBS Warburg 134
BASIC PETROCHEMICALS: ETHYLENE CAPACITY GROWTH Millions of tons - Regions Millions of tons - World 45 40 35 30 25 20 15 10 5 0 N. America W. Europe N.E. Asia Middle East 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 150 130 110 90 80 60 40 20 0 (Source: OGJ/CMAI) 135
BASIC PETROCHEMICALS: ETHYLENE CAPACITY GROWTH Middle East 136
PETROCHEMICALS PETROCHEMICALS: TECHNIP INPUT Technologies: proprietary (ethylene) or under license: PE, PP, EDC/VCM/PVC, fertilizers, PTA or from client himself (PS ) Investments / Cost methodology Feedback from previous projects Safe, reliable & timely execution Global Network 137
OUR TEAM: A NETWORK OF EPC OFFICES The Hague Los Angeles Houston Paris Düsseldorf Rome Abu Dhabi Shanghai Kuala Lumpur 138
TECHNIP POSITION: COMPLETE ETHYLENE PLANT AWARDS Capacity in millions of tons Technip 2000/2001 1.3 2002/2003 1.5 Total Awarded 7.0 3.3 % Technip 18% 45% 139
2005 PETROCHEMICALS: MAJOR PROSPECTS FOR TECHNIP 1) Ethylene Kuwait (0.8)* $ ~ 500 mm LSTK Iran 8 th Arvand (1.0)* Iran Ilam* (0.5)* Iran 11 th * Iran 12 th ( 1.95, largest in the world)* $ ~ 1,000 mm LSTK Qatar Ras Laffan (1.0)* Qatar Petroleum* $ ~ 1,400 mm LSTK S. Arabia Yanbu (1.2)* $ ~ 600 mm LSTK S.Arabia Shark (1.2)* $ ~ 600 mm LSTK Abu Dhabi Borouge (1.5) $ ~ 800 mm LSTK SPC China Panjin China* DSM/Sabic, Holland* USA, confidential* Numerous furnaces worldwide* $ ~ 200 mm * : inquiries received &/or bids already submitted, ( ): capacities in mmt/y ethylene 140
2005 PETROCHEMICALS: MAJOR PROSPECTS FOR TECHNIP 2) Polymers (PE/PP) PE: ~20 prospects: Middle East, Far East, Europe PP: ~10 prospects: Middle East, Far East 3) Other Petrochemicals: EDC: Middle East (2) VCM/PVC: Far East, CIS (5) Ammonia/Urea: projects in Middle East, Far East PTA: few projects And other projects: methanol, acetic acid, in Middle East 141
TECHNIP REFERENCES IN POLYMERS Polyolefins! Polyethylene (LDPE, LL/HDPE swing, HDPE) 84 units! Polypropylene Polyvinychloride Polystyrene Elastomer Polyamide Polyester 18 units 13 units 3 units 3 units 4 units 142
TECHNIP REFERENCES IN POLYOLEFINS 84 Polyolefins Plants Engineered: 65 in Polyethylene:! High Pressure LDPE! Slurry HDPE! Gas Phase Swing HDPE / LLDPE 19 in Polypropylene - Slurry, Bulk Liquid Pool, Gas Phase Over a period of 36 years, average of 2 plants per year First rank in the world for Polyethylene engineered capacity 143
PTA: WORLD CAPACITY BY REGION IN 2005 Indonesia 5.8% Japan 3.9% Thailand 5.4% Other Asia 3.1% China 19.3% India 6.0% Europe & Middle East 11.9% South Korea 15.7% Taiwan 13.9% Americas 15.0% Total Capacity of 35 Million Metric Tons (PTA and Medium Purity) 144
PETROCHEMICALS: ALL TOGETHER, AN ATTRACTIVE BUSINESS! THANK YOU! 145
For more information, please contact: INVESTOR RELATIONS G. Christopher Welton Tel. +33 (0) 1 47 48 66 74 e-mail: cwelton@technip.com David-Alexandre Guez Tel. +33 (0) 1 47 78 27 85 e-mail: daguez@technip.com 146
TRADING TECHNIP ISIN FR0000131708 147