AEDC) and Alaska Natural Gas Development Authority (ANGDA
Total Page:16
File Type:pdf, Size:1020Kb
Alaska Petrochemical Development Study Presented to The Anchorage Economic Development Corporation (AEDC) and Alaska Natural Gas Development Authority (ANGDA) November 2009 www.cmaiglobal.com CMAI Ref: SL-003472 Independent advisor to petrochemical industry participants in strategic and commercial planning, feasibility and financial studies, due diligence support, competitive and market analysis. Houston 11757 Katy Freeway, Suite 700, Houston, TX 77079 Tele: 1-281-531-4660 FAX: 1-281-531-9966 New York 400 Columbus Avenue, Suite 145 South, Valhalla, NY 10595 Tele: 1-914-579-0010 FAX: 1-914-579-0011 Singapore 69 Duxton Road, Level 2, Singapore 089528 Tele: 65-6226-5363 FAX: 65-6226-5157 Shanghai Suite 404, Building B, Golden Eagle Mansion No. 1518 Minsheng Rd, Pudong New Area, Shanghai China 200135 Tel: 86-21-6163-5470; Fax: 86-21-6854-5741 London 1st Floor, 14-16 Waterloo Place London SW1Y 4AR Tele: 44-0207 930-9818 FAX: 44-0207-930-9819 Germany Königsallee 94, Düsseldorf 40212, Germany Tele: 49-211-710081-0 Middle East P. O. Box 500395, Dubai, UAE Tele: 971-4-391-2930 FAX: 971-4-391-6476 Excellence and Experience in Petrochemical Consulting Since 1979. Table of Contents INTRODUCTION ............................................................................................................. 5 WARRANTY ................................................................................................................... 5 EXECUTIVE SUMMARY ................................................................................................. 7 THE ALASKA ADVANTAGE ....................................................................................... 7 THE ALASKA NATURAL GAS PIPELINE ................................................................... 7 PROPOSED PIPELINE PROJECTS ........................................................................... 7 THE 2010 FERC OPEN SEASONS ............................................................................ 9 PETROCHEMICAL FEEDSTOCK SITUATION AT COOK INLET ............................ 10 CRITICAL SUCCESS FACTORS .............................................................................. 13 COST OF PETROCHEMICAL PRODUCTION AT COOK INLET ............................. 13 POTENTIAL COOK INLET PLANT SITES ................................................................ 18 PORT MACKENZIE SITE ATTRIBUTES .................................................................. 19 FIRE ISLAND SITE ATTRIBUTES ............................................................................ 20 TYONEK SITE ATTRIBUTES ................................................................................... 20 NIKISKI SITE ATTRIBUTES ..................................................................................... 20 GENERALSUMMARY OF SITE CONSIDERATIONS .............................................. 21 CHANNEL TO MARKET ISSUES ............................................................................. 22 INVESTMENT CLIMATE ISSUES ............................................................................. 22 TARGET COMPANY COMPARISON ....................................................................... 23 ALASKA NATURAL GAS PIPELINE ............................................................................. 25 PROPOSED PROJECTS .......................................................................................... 25 FERC OPEN SEASON PROCESS ............................................................................... 27 WHAT IS AN OPEN SEASON? ................................................................................ 27 PIPELINE REGULATION .......................................................................................... 28 THE 2010 OPEN SEASONS ..................................................................................... 30 PETROCHEMICAL FEEDSTOCK SITUATION AT COOK INLET ................................ 32 ETHANE, PROPANE, BUTANE AND PENTANE SUPPLY AND USE POTENTIAL 32 AEDC & ANGDA – Alaska Petrochemical Development Study November 2009 Page 1 PETROCHEMICAL PROJECT CAPITAL INVESTMENT REQUIRED ...................... 36 ENERGY AND FEEDSTOCK PRICE FORECAST ....................................................... 38 THE WORLD ENERGY OUTLOOK .......................................................................... 38 Crude Oil ................................................................................................................ 38 Natural Gas ............................................................................................................ 40 ALASKAN ENERGY AND ETHANE PRICES ........................................................... 42 CASH COST COMPETITIVENESS .............................................................................. 47 METHODOLOGY ...................................................................................................... 47 ETHYLENE COST COMPETITIVENESS.................................................................. 49 Ethylene Cash Cost of Production ......................................................................... 49 COMPETITIVE ANALYSIS ........................................................................................ 49 POLYETHYLENE COST COMPETITIVENESS ........................................................ 50 Polyethylene Cash Cost of Production ................................................................... 50 MEG COST COMPETITIVENESS ............................................................................ 54 MEG Cash Cost of Production ............................................................................... 54 MEG Delivered Cost of Production ........................................................................ 54 KEY SUCCESS FACTORS FOR PETROCHEMICAL PROJECTS .............................. 56 POTENTIAL COOK INLET PLANT SITES ................................................................... 57 FOUR COOK INLET LOCATIONS HAVE BEEN STUDIED FOR PLANT SITES: .... 57 PORT MACKENZIE SITE ATTRIBUTES .................................................................. 58 FIRE ISLAND SITE ATTRIBUTES ............................................................................ 59 TYONEK SITE ATTRIBUTES ................................................................................... 59 NIKISKI SITE ATTRIBUTES ..................................................................................... 60 GENERALSUMMARY OF SITE CONSIDERATIONS ............................................... 61 LOGISTICS ISSUES FOR FINISHED PRODUCTS...................................................... 64 CHANNEL TO MARKET ISSUES ............................................................................. 65 INVESTMENT CLIMATE ISSUES ............................................................................. 65 TARGET COMPANY COMPARISON ........................................................................... 66 AEDC & ANGDA – Alaska Petrochemical Development Study November 2009 Page 2 ASIAN COMPANIES WITH POTENTIAL INTEREST IN ALASKA PETROCHEMICALS ................................................................................................. 66 TARGET COMPANY PROFILES .................................................................................. 71 ASIAN COMPANIES WITH POTENTIAL INTEREST IN ALASKA PETROCHEMICALS ................................................................................................. 71 CHINA PETROLEUM & CHEMICAL CORPORATION (SINOPEC) .......................... 72 Corporate Overview: .............................................................................................. 72 CHINA NATIONAL OFFSHORE OIL CORPORATION (CNOOC) ............................ 76 Corporate Overview: .............................................................................................. 76 SINOCHEM ............................................................................................................... 77 Corporate Overview: .............................................................................................. 77 CHEMCHINA ............................................................................................................. 78 CNPC AND PETROCHINA ....................................................................................... 80 Corporate Overview: .............................................................................................. 80 LG CHEMICAL .......................................................................................................... 83 Corporate Overview: .............................................................................................. 83 SK ENERGY .............................................................................................................. 84 Corporate Overview: .............................................................................................. 84 HANWHA CHEMICAL CORP .................................................................................... 85 Corporate Overview: .............................................................................................. 85 HONAM ..................................................................................................................... 86 MITSUBISHI .............................................................................................................. 88 Corporate Overview: .............................................................................................. 88 MITSUI .....................................................................................................................