U.S. Downstream Projects Update

U.S. Chemical Industry Capital Spending Outlook

$208B announced since 2010

● 70% in Gulf Coast

● 2/3 has been put in place or under construction

● 1/3 still in planning

Annual chemical capital project expenditure (capex) expands to $36.1B by 2025

Crude Distillation Unit (CDU) + Secondary unit capacity additions

● Total CDU capacity globally = 102 MMbpd

● CDU addition = +5MMbpd by 2026

● Total secondary unit* capacity additions = 10 MMbpd

          ◦ Conversion = 3.2 MMbpd

          ◦ Desulfurization = 5.4 MMbpd

          ◦ Octane = 1.4 MMbpd

*Secondary conversion refers to the final step (after the crude has been distilled) in the petrochemical refining process to a second unit where it is separated by particle size into fractions.

Total active projects 2021 by sector:

● Refining = 41%

● Petrochemicals = 35%

● Gas Processing/LNG = 24%

U.S. Project Outlook

● Total capital investment:  $320B

● > 60% of active projects are in PADD 3 (e.g., USGC)

● Active project market share leaders

          ◦ Texas = 41%

          ◦ Louisiana = 18%

New project announcements, 2020-2022

● 2020

          ◦ Refining = 63%

          ◦ Gas Processing/LNG = 30%

          ◦ Petrochemical 7%

          ◦ PADD3 (Gulf Coast) projects announced = 7

● 2021

          ◦ Refining = 73%

          ◦ Gas Processing/LNG = 15%

          ◦ Petrochemical 12%

          ◦ PADD 3 projects announced  = 11

U.S. petrochemicals sector

● Texas dominates in active petrochemical project market share with 63%

          ◦ Louisiana = 15%

          ◦ All other = 22%

*Source:  ACC, Renewable Fuels, LNG and Petrochemicals:  U.S. Role in the Global Capital Construction Market, EIA