vsmpo-avismacorporation · 2018. 4. 14. · 2035. source: bp energy outlook 2035 *million tonnes...

VSMPO-AVISMA Corporation

Joint Venture

an

A World Leader in Titanium

2

Industrial Titanium Demand Forecast 2015

Kevin J. CainPresident

Uniti Titanium LLC

Overview & 5 Year Forecast

Near Term Market Influences

3

• A 50% drop in oil prices and the rapid reduction in capital spending.

• Energy mix changes; away from coal and oil to natural gas and renewables.

• New sources of energy have emerged.• Demand shifts between the various global markets.• New government policies are being created to address

climate change.

Global Population Growth & GDP Forecast

4

Global Population Growth Continues7.35 billion now ~ 10.16 billion by 2050

-

2

4

6

8

10

12

Wor

ld P

opul

atio

n (B

illio

ns)

OECD

Non-OECD

Source: United Nations, World Population Prospects: The 2015 Revision

Regional GDP Growth

Source: IMF 5 year forecast: April 2015 (growth at constant prices)

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

China

India

United States

European Union

Middle East and NorthAfricaWorld

Industries for Ti consumption

5

• Energy• Chemical Processing• Desalination

World Energy Consumption

6

Energy

7

Energy Outlook• Oil & Gas• Power Generation

8

0500

1000150020002500300035004000

Worldwide Rig Count

Source: Baker Hughes

Oil & Gas

Demand for Oil Over the Next 20 YearsIncreases 15-20%

2000

2100

2200

2300

2400

2500

2600

2700

2800

2015 2020 2025 2030 2035

Source: BP Energy Outlook 2035

*million tonnes oil

9

Natural Gas Production Will Increase by 40-50% Over the Next 20 Years

0500

100015002000250030003500400045005000

2015 2020 2025 2030 2035

*million tonnes oil equivalent

10

Oil & Gas; Long Term View

11

• Demand for oil is forecasted to increase by 15% to 20% over the next 20 years (Exxon Mobil)

• Natural gas is likely to increase 45-50%. Growth in unconventional supplies to account for 60% of the increase.

• Use of titanium Deepwater platforms FPSO’s (Floating Production, Storage & Offloading Vessel) LNG plants Floating LNG plants Water filtration / purification plants Heat transfer equipment

• 2015 is estimated to drop by 20% to 25% from 2013/14 levels. Expansion is forecasted to occur in 2017 and beyond.

Source: www.offshoreenergytoday.com

• Gas Treatment Remove condensales,

brines, hydrogen sulfides & carbon dioxide

• Liquefaction

• Transport

• Statistics 495 meters long x 75

meters wide Process 6-7 million tons

per annum of LNG Location: W.Austalia

12

Exxon, BHP Billiton Get Approval for Scarborough FLNG

Energy

13

Energy Outlook

• Oil & Gas• Power Generation

World Net Electricity Generation

14

0

2

4

6

8

10

12

2005 2010 2015 2020 2025 2030 2035 2040

Trill

ion

kWh

OECD Americas

OECD Europe

OECD Asia

Europe and Euraisa

Source: Energy Information Administration – International Energy Outlook 2013

Forecast CAGR

3.2%

Forecast CAGR

1.3%

Forecast CAGR

3.5%

Power Generation as a % of Worldwide Primary Energy Consumption

- 5,000 10,000 15,000 20,000

2013

2015

2020

2025

2030

2035

Total EnergyConsumptionInputs to PowerGeneration

*Energy production comprises commercially traded fuels, including modern renewables used to generate electricity. *Energy consumption comprises commercially traded fuels, including modern renewables used to generate electricity.Source: BP Energy Outlook 2035

*million tons of oil equivalent

15

Energy Demand – Global Power Generation

8%

21%

43%

19%

9%

2000 DATA

OilGasCoalNuclearRenewables

144 Quadrillion BTUs

Source: Exxon Outlook for Energy: A View to 2040

3%

28%

33%

19%

17%

2040 FCST

OilGasCoalNuclearRenewables

291 Quadrillion BTUs

16

Power Generation

17

GW Forecast by Fuel Type – new on-line capacity

59 67 75 82 90

172195

202 206213

22

2527

2929

0

50

100

150

200

250

300

350

2015 2020 2025 2030 2035

GW

Gas Coal Nuclear

Source: BP Energy Outlook 2035 & Uniti Titanium Marketing Intelligence

Energy Demand by Type

38%

21%

22%

6%

13%

2000 DATA

OilGasCoalNuclearRenewables

418 Quadrillion BTUs

Source: Exxon Outlook for Energy: A View to 2040

32%

26%

19%

8%

15%

2040 FCST

OilGasCoalNuclearRenewables

717 Quadrillion BTUs

18

Power Generation: Ti demand

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Electricity: Titanium Demand

• Approximately 6000MT will be consumed per year over the next 5 years.

• Use of titanium Welded tubes Tube sheets Heat transfer equipment

Source: Internal estimate

Chemical Processing

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• Global investment in Asia and Middle East• Capital investment shifting to North America.

Natural gas liquids (NGL) $100b of incremental capital investment by 2025

• Global capital expenditures PTA (pure terephthalic acid); polyester film and filter production Urea/ammonia nitrate; crop fertilizer Chlorine/caustic soda Natural Gas Liquids (NGL), ethane and propane for use in plastics and

other building block chemicals.

BP Energy Outlook 2035, Exxon Mobile Outlook for Energy: A View to 2040

Photo — The multibillion dollar Baytown expansion will create 10,000 jobs at peak construction. Source: ExxonMobil “An interview with Neil Chapman”

Construction at Chevron Phillips Chemical’s Cedar Bayou 1-Hexene plant in Baytown will will be completed in early 2014. The expansion there and at other Chevron Phillips plants along the Gulf coast was prompted by low natural gas prices. (Chevron Phillips)Source: Chevron Phillips

SOURCE: Aerial image of furnace expansion progress at Equistar’s LaPorte steam cracker –

Bechtel-Linde Consortium to build Large-scale Ethylene Plant at ExxonMobil Baytown Complex 21

Chemical Processing

22

• Titanium end-use applications General fabrication of tanks and vessels Piping systems Heat transfer equipment Fittings and fasteners Welded tubing

• It’s estimated that the average annual consumption of titanium in the chemical process industry will be10,000MT per year for the next 5 years.

Industries for Ti Consumption

23

• Energy Oil and gas Power Generation

• Chemical Processing NGL’s PTA Urea Chlorine / Caustic

• Desalination

Desalination

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• Applications Removes salt from seawater for and potable end use Clean wastewater streams (ex. Frac flow back water from shale gas)

• Technologies Reverse osmosis (RO) Thermal (MSF and MED)

Desalination

25

Technology Split – 2013 to 2018

5% 6%

89%

million m3/d

MED

MSF

RO &ED/EDR

4,4006,100

58,700

Contract Value($ million)

MED

MSF

RO &ED/EDR

Source: Desaldata Forecast, June 2013

Desalination Forecast Drivers

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• Industry rather than municipal is strongest driver• The Saudi Water Authority (SWCC) plans to invest $80b by

2025. (Arabianbusiness.com)

• Fastest growing economic regions also have the lowest amount of fresh water; India, China and the Middle East

• Copper (copper alloy desal tubes) release into the sea from Gulf Coast desal plants is becoming problematic and will drive future technology in favor of titanium.

• Titanium consumption is estimated to be in the 2000MT per year range with the possibility to grow to 3000MT by 2020.

Industries for Ti Consumption

27

• Energy Oil and gas Power Generation

• Chemical Processing NGL’s PTA Urea Chlorine / Caustic

• Desalination

Industries for Ti Consumption

28

• Others Mining Cathodic Protection Automotive Recreational Shipbuilding / Marine Architecture

Industrial Titanium Demand ForecastHistory and Forecast

29

0

5

10

15

20

25

30

35

40

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Met

ric T

ons

(x10

00)

Chemical Processing

Desalination

Oil & Gas

Power

Automotive

Metallurgy

Architecture

Shipbuilding

Rec & Other

* Does not include shipments within China and Russia.

Historical Forecast

VSMPO-AVISMA Corporation

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