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Transcript of PEMEX Day NY_Industrial Transformation
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PEMEX Investor Day New YorkDecember 4, 2014
A Turning Point: Defining the Future ofMidstream and Downstream Activities
Alejandro Martnez Sibaja
Pemex-Gas General Director
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Content
Strategic Assets
Integrating the Value Chain
Main Projects
Production Objectives
Collaboration, Association & Divestitures
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Downstream Rankings
Pemex Downstream is ranked among the largest producers in the world in dif
the value chain.
Pemex is the 9th
producer of gasoline
Mexico is the 5th
largest consumer market forgasoline
Pemex i
producer o
Source: Pemex Statistical Yearbook, Forbes and ICIS Top 100 Chemical Companies.
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Domestic Sales 2006 - 2013
Gasolines,17,358
Diesel, 6,919
Natural Gas,5,896
Fuel Oil, 3,390
LPG, 4,131
Petrochemicals,1,903Jet Fuel, 1,480
Others, 696
Gasolines,31,669
Diese
LP
Jet Fuel, 2,773Others, 981
USD MM
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Downstream Infrastructure
Cadereyta
Monterrey
Madero
Tula
Minatitl
Salamanca
Guadalajara
Cd. Mxico
Camargo
Reynosa
Poza Rica
Cosoleacaque
San Martn
Matap
Arenque
Burgos
Production Capacity
Refining Atmospheric distillation capacity 1,690 Mbd
Gas Processing Sour Nat Gas 4.5 Bcfd Cryogenic 5.9 Bcfd Condensate Sweetening 144 Mbd Fractioning 568 Mbd Sulfur Recovery 3,256 t/d
Petrochemical 13.55 MMt nominal per year
Infrastructure
Refining 6 Refineries Fleet: 21 tankers Storage of 13.5 MMb of Refined Products 14,176 km of pipelines
Gas 70 Plants in 11 Gas Processing Centers 12,678 km of pipelines
Petrochemical 8 Petrochemical Plants
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Gasoline Balance 2006-2013
Gasoline market has shown a compound annual growth rate (CAGR) of 2.7% between 2006 an
PEMEXs own production has declined 0.6% over the same period.
This trend led to an increase in imports (CAGR 8.4%) representing 31% of demand in 2006 and
2013.
204308 340 329
379 405 395
456 456 451 472424 400 418
732769
798 798 803 800 804
-
100
200
300
400
500
600700
800
900
2006 2007 2008 2009 2010 2011 2012
PEMEX Supply
Demand
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451386
447 422 536791
1,089
-
1,000
2,000
3,000
4,000
5,000
6,000
2006 2007 2008 2009 2010 2011 2012
Natural Gas Balance PEMEX Gas Market,2006-2013MMcfd
PEMEX
Deman
Imports
Domestic market for natural gas has shown great dynamism in recent years, due to lower price
market in USA and Canada, and its environmental benefits.
The increasing trend in demand coupled with a decrease in domestic supply in recent years has
increase in import volumes of natural gas.
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Petrochemical Production 2006-20131Thousands Tons2
1,4041,859 2,202 1,962
2,282 2,306 2,473
2,7482,607
2,604 2,6952,831 2,750 2,775
1,0891,085
1,058957
1,042 923 1665,241 5,551
5,864 5,614
6,155
5,980 5,414
2006 2007 2008 2009 2010 2011 2012
Methane derivatives Ethane derivatives Aromatics and derivatives
1. Main petrochemicals chains2. Includes petrochemicals produced by Pemex-Petrochemicals, Pemex-Refining, and ethane and sulfur produced by Pemex-Gas and Basic Petrochemicals. January
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Content
Strategic Assets
Integrating the Value Chain
Main Projects
Production Objectives
Collaboration, Association & Divestitures
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Integrating the Value Chain
Transport1
Processing
Delivery
Imports
Storage
Raw
Materials
The Energy reform implies that all market players may participate in all segments of the value c
Open and regulated market under the principles of asymmetric regulation and unbundling.
1. The new law creates the CENAGAS, responsible for the transportation of natural gas (PEMEX will be another participant).
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Integrating the Value Chain: Key Dates
Until 2015, import permits onlyfor PEMEX, Productive
Companies and its
Subsidiaries.
From 2016, propane & butaneopen to imports.
From 2017, open market forgasoline and diesel imports.
Propawill b
mark
2017
Gasowill b
mark
2018
Transport
Processing
Delivery
Imports
StorageRaw
Materials
CENAGASOperation, 2015.
PEMEX becomesservice user.
There are key dates for some segments of the value chain
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Market
(EconomicAgents)
Production(Supply)
Infra-structure
Pricesand
Rates
Commercial(Demand)
PEMEX creates value through the consolidation of the value chain of industrial proces
an open and regulated market. This will be achieved through:
New Downstream Framework
Cost efficiency and strategic pricing policies
Assessment of infrastructure to maximize bu
and returns
Diversify marketing by geographic area
Strategic alliances with private companies in
environment
High performance of human resources
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Industry Transition
Only (PEMEX)
RegulatoryFram
ework
Rigid
Flexible
Market prices Private property,
associations, PEMEX Free product access Social projects
Regulated Prices State property PEMEX obligated to
provide products Product access through
PEMEX
Regulatory guidelines:
New focus: relevant mar
Business strthe industry
Multiple
Enterprises
TRI1
Current
Future
Road to transition
I. Terms for firsthand sales (CRE)
II. Retail prices, transit of "regulated" free-market
III. Regulated tariffs for transport, storage anddistribution (CRE)
III. Permits access to industry segments
IV. Open access in logistics systems (C
V. "Adequate" energy supply (SENER)
1. TRI: Downstream
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PEMEX
Exploration &Extraction
Downstream
SPE Oil Treatment
Refining
Gas & Petrochemical Processin
Import & Export
First-Hand Sales
Marketing
Sales & Distribution
Logistic
State Productive Enterprise aim
economic value and profitability for th
by improving its productivity, maximand contribute to national developmen
Cogeneration& Services Fertilizers
Ethylene
Given market conditions
greater operational flexib
new subsidiaries_1/comp
an array of services, from
sale of fertilizers.
1. The fertilizers business line will be under the umbrella of the PEMEX Productive Enterprise; meanwhile the Ethylene Subsidiary will be part of the dow
PEMEX as a State Productive Enterprise (
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Value proposal to the marketBusiness Organization
A renewal of the Mission and Vision of Downstream
Value generation analysis by market segment, identifying "key segments
Growth and profit improvement based on target markets
A business model for every market
Maximizing sustainable value
Reformulate the overall flow in decision-making
Execution and development of new business models
Cost structure analysis to identify target markets" and "vulnerabilities
Performance indicators to measure segments of participation
A new perspective (based on value generation) in:
CAPEX Investment
Alliances
Value proposal
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Content
Strategic Assets
Integrating the Value Chain
Main Projects
Production Objectives
Collaboration, Association & Divestitures
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Project Development Strengthening
BusinessProcess
Management
Executive Business Process
Projects Development
Business portfolio focuses on substantive areas of
profitability, attending relevant industry markets
PEMEX will participate only where it genera
Elaborate the Business Plan focused on economic
Align projects to the strategy Promote coordinated execution of projects
Project Development Institutional System which:
Uses international best practices
Promotes effectiveness in capital manageme
Supports efficient assignment of investment r
Optimized Business Portfolio
D t B i P tf li
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Downstream Business Portfolio:Main Challenges
Challenges Main P
Gas
Processing
Expand gas pipeline network
Capture trading opportunities
Finish Los Ramo
Transoceanic Co
propane, gas and
Refining
Increase operational
efficiency Infrastructure for better fuels
Investments in su
(Project Gulf-Cen Refineries reconfi
Clean fuels projec
Petrochemicals
Integrate value chains:
ethane, methane and
aromatics
Fertilizers strate
Ethylene oxide a
glycol projects
Modernization of
Cogeneration Take advantage of PEMEXs
power cogeneration potential Cogeneration pro
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Refining Transport & Storage Gulf-Center
Project GulfC
Tuxpan- Arco Norte24, 2
23
Arco NorteTula18, 1
8
Arco NorteRegin
Centro
16, 1
8
Arco Norte - Apizaco14, 8
64
Regin Centro
Cuernavaca
10,
78
MT(2)Tuxpan25
3
CAB(3)Arco Norte 1,506
Tula45
3
TAR(4)Apizaco 17
TAR Regin Centro 29
TAR Cuernavaca 19
New pipeline
Debottlenecking
Import project
Gulf-Center
[XX] Capacity in Mbd
(XX)
ApizacoReginCentro
Tuxpan
Tula
CABArco Norte
Cuernavaca
24
18
16 14
10
Salamanca
Morelia
Guadalajara
Aguascalientes
Quertaro
San LuisPotos
Irapuato[280]
[100] [80]
[167]
[35]
(195)
(175)
(1,500)
(295)
Capacity in Mb1. Estimated diameters. New pipeline project under analysis.
2. MT: Maritime Terminal3. CAB: Pump & Storage Station4. TAR: Storage and Distribution Terminal
The required infrastructure for this system will be implemented through two
projects:
Import Project Gulf-center by PMI (paid via a built-in contract molecule to
import a minimum volume of 125 Mbd). Projects Tula-Salamanca, debottlenecking and storage in Bajo Terminals.
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Revamping Pemex Refineries
Objectives Investme
plants to
by produ
distillates
Increase
receive m
volumes
Strategic
fuel oil to
Operations
Salamanca
2018, and S
Tula
Salina Cruz
Salamanca
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Refining: Clean Fuels Projects
To address changes in specifications for distillate fuels Ultra Low Sulfur (ULS) in accordance w
the Mexican market, a set of projects is developed for the six refineries at the National Refining
considering the following plants and investment:
Salamanca Refinery
Gasoline Diesel
New plant.
Postreat.Gnas.
catalytic
1 New HDS1diesel
3 Revamps HDS DI
Cadereyta Refinery (2015)
Gasoline Diesel
New plant.
Postreat. Gnas.
catalytic
1 New HDS diesel
3 Revamps HDS DI
Tula Refinery
Gasoline Diesel
New plant.
Postreat. Gnas.
catalytic
5 Revamps HDS DI
Salina Cruz Refinery
Gasoline Diesel
2 New plants.
Postreat. Gnas.
catalytic
4 Revamps HDS DI
Made
Gasoline
2 New plants.
Postreat. Gnas.
catalytic
Minatitl
Gasoline
New plant. Postreat.
Gnas. catalytic
Gasoline (8 new plants), this projects are ongoing and will be completed by 2015. Diesel (5 new plants, 17 revamps) to be completed by 2018.
1. HDS: hydro-desulphurization Process Plant
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Natural Gas: Integrated Supply Strategy
Gas Supply StrategyActions
Short-term: Increasing imports of li
natural gas (LNG) (car
during 2013 and 2014)
Long-term:
Increase investments i
production.
Expand gas transporta
infrastructure.
Explore and evaluate t
shale gas reserves.
Expand the production
hydrocarbons in the co
the Energy Reform.
View of Natural Gas Transportation Infras
http://www.google.com.mx/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=D5p8AgdElv3jIM&tbnid=aXlo8GX5lQPwcM:&ved=0CAUQjRw&url=http://www.manufactura.mx/industria/2013/05/27/encuesta-50-de-las-empresas-no-sufren-por-suministro-de-gas&ei=5pM1U5GsKpTRsASp0IAI&bvm=bv.63808443,d.b2I&psig=AFQjCNF8xrvXdGZ5hbkNhN9OwmvaGit4vQ&ust=1396106368541346 -
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View of Natural Gas Transportation InfrasProjects, 2028
11
101
2
3
1
2
4
5
C
12
ii
6
8
i
iii
9
7
Import capacity increase
Liquid natural gas terminal
Private pipelines
Pipeline projects
PEMEX Gas pipelines
Pipelines
1. Nvo. Pemex - C
2. Los Ramones p3. Los Ramones p
South)
4. Agua Dulce - Fr
5. Tucson - Ssab
6. Los Ramones -
7. Colombia - Esco
8. Matapionche - M
9. Jltipan - Salina
Private:
10. Morelos11. Tamazunchale -
12. Norte - Noroest
Storage and liquefa
i. Natural gas sto
ii. Underground s
iii. Liquefaction pla
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Los Ramones Phase I & II: Success Case
PEMEX Gas signed a long term transport service
contract with the company Gasoductos del Noreste.
The construction of a 115 km pipeline was sped up, from
the US border to Los Ramones, NL.
Operations start: December, 2014.
Maximum transportation capacity: 2,100 MMcfd
738 km pipeline goes, from Los Ramones, NL. to the
central west region of the country.
Operations start: December 2015
Additional maximum transport capacity: 1,430 MMcfd
Project Los Ramones p hase I
Project Los Ramo nes phase II
Los Ramones I is being constructed by G
Noreste, in strategic alliance with Pemex
Los Ramones II is developed by Tag Pipe
owned by Mex Gas Supply and Mex Ga
Pemex Gas affiliates.
Los Ramones pipeline will be supplied of
pipeline from Agua Dulce, Texas to the M
constructed in a strategic alliance with NE
The advantages of the Tag Pipelines Sub
More flexibility and agility to analyze and
projects.
Time and cost reduction in project execu
Ability to venture with third parties for pro
ownership in an efficient manner.
Scheme
Trading Opportunities: PEMEX as a key player
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Trading Opportunities: PEMEX as a key playerPacific market (Transoceanic Corridor Project
Pemex has identified the opportunity to move product from the US Gulf Coast to the Pac
Mexico has a privileged geographical position to move
hydrocarbons from the Gulf Coast to the Pacific, through
the Tehuantepec Isthmus.
PEMEX has operating infrastructure in both coasts which
are 186 miles apart.
Expanding current existing infrastructure w
to move product from the USGC to the Pac
shipping costs and time (compared to Pana
optimizing vessels fleet routes.
The products to move to the Pacific are na
propane, naphtha, diesel and gasoline.
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Petrochemicals: Fertilizer Market Strategy
A new eintegratchain frothe end
The addinvestm
three
four
new cente
Energy Reformrequires PEMEX tosupply fertilizers tothe domesticindustry and
distributors ofammonia, with long-term contracts andfixed prices.
Ammonia production for PEMEX is ofutter importance to ensure the supply ofraw materials with which the fertilizersare made.
Currently, there are plants located atCosoleacaque, Veracruz, and inCamargo, Chihuahua.
Petrochemicals: Second Stage of the Ethy
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Petrochemicals: Second Stage of the EthyOxide Plant
Morelos
Scope
Construction and startup of two ncooled reactors at the Morelos co
will replace the four existing oil-co
to increase the plant capacity from
360 Mt/y of ethylene oxide equiva
Operations start in 2018
Source: Pemex Business Plan 2015-2019
Petrochemicals: Modernization and Expan
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Petrochemicals: Modernization and ExpanAromatics Train at Cangrejera P.C.
Cangrejera
Scope Modernization of the aromatics chain
Technology upgrade
Broad operational flexibility
Lower energy consumption and overall cost
of production
Minimum feedstock consumption
Minimal environmental impact
Increase the offer of Para-xylene in the domesticmarket.
Increase the capacity of Para-xylene
production to 448 Kt/a
Reduce imports
Take advantage of the available benzene.
Start of operations in 2020.
Source: Pemex Business Plan 2015-2019
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PEMEXs Power Cogeneration Potential
PEM
ProjectE.E. Generation
(MW)
Cactus 560
Salina Cruz 690
Tula 640
Minatitln 690
Cadereyta 390
Total 2,970
Salina Cruz
Cactus
MinatitlnTula
Cadereyta
PEMEXs productive processes consume large
energy.
Strategy for taking advantage of cogeneration
(PEMEXs Business Plan).
On April 2013 the CPG Nuevo PEMEX cogene
(300 MW and 550 t/h steam) began operations
Five projects which represent 2,970 MW of en
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Content
Strategic Assets
Integrating the Value Chain
Main Projects
Production Objectives
Collaboration, Association & Divestitures
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Refining: Transition to Cleaner Fuels
4%15% 17% 16% 20% 11%2%
20% 20% 18%21%
59%
7%
5%7% 9%
11%
8%
32%
29%
17%16% 19%
15%
21%
57%
58%
44% 40%38%
33%
9%
2006 2008 2010 2012 2013 2014 2016
Decline in demand for fuel oil mainly due to environmental restrictions and competition with nat
Introduction of Premium Ultra Low Sulphur (ULS) from October 2006 and all the demand since
Magna ULS since October 2008 in metropolitan areas. Total demand in 2015.
Diesel ULS from January 2007 in northern border and metropolitan areas. Total demand in 201
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Natural Gas Domestic Balance 2015-2018
Expected demand will need transportation infrastructure to handle natural
gas imports
The domestic supply considering PEP Round Zero granted by SENER.
4,417 4,267 4,195 4,103
3,639 4,429 4,9965,829
2015 2016 2017 2018
National Supply Net Imports Net Exports Demand
MMcfd
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Content
Strategic Assets
Integrating the Value Chain
Main Projects
Production Objectives
Collaboration, Association & Divestitures
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New Business Models - Downstream
PEMEX is seeking to create value through successful businessschemes for new projects.
The business schemes PEMEX is looking for are:
Alliances with partners that have capital and operationalexcellence.
Strategic suppliers of materials. Joint Ventures (transportation, cogeneration, etc.)
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New Business Models - Downstream
PEMEX has developed successful strategic alliances in our dow
Project Deer Park PEMGas Pipelines
PEMEXs
Participation
1. Joint Venture
2. Oil supply
1
2
3. Sup
1. Joint Venture
Objective Refine Mexican heavy
crude oil and increase
gasoline supply to Mexico
Increas
Natural Gas and LPG
transportation to power
plants in the northern region
of Mexico
Operations
Startup 1993 1997
Partner
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Investo
(+52 55
ri@pem
www.r