welcome louisiana refining division garyville, la
Post on 14-Feb-2017
220 Views
Preview:
TRANSCRIPT
Welcome
Louisiana Refining DivisionGaryville, LA
March 25, 2012
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements relate to, among other things, Marathon Petroleum Corporation’s (MPC) current expectations, estimates and projections concerning MPC business and operations, as well as MPC’s evaluation of strategic alternatives, including a possible initial public offering of interests in a master limited partnership. You can identify forward-looking statements by words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “project,” “could,” “may,” “should,” or “would” or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the company’s control and are difficult to predict. Factors that could cause actual results to differ materially from those in the forward-looking statements include: further volatility in and/or degradation of market and industry conditions; the availability and pricing of crude oil and other feedstocks; slower than anticipated growth in domestic and Canadian crude supply; completion of pipeline capacity to areas outside the U.S. Midwest; consumer demand for refined products; changes in governmental regulations; transportation logistics; the availability of materials and labor, delays in obtaining necessary third-party approvals, and other risks customary to construction projects; the reliability of processing units and other equipment; our ability to successfully implement growth opportunities; impacts from our repurchases of shares of MPC common stock under our stock repurchase plan, including the timing and amounts of any common stock repurchases; the risk that an initial public offering or other transaction may not be pursued, or if pursued, may not be consummated; other risk factors inherent to our industry; and the factors set forth under the heading “Risk Factors” in MPC’s Annual Report on Form 10-K for the year ended December 31, 2011 filed with the Securities and Exchange Commission (the “SEC”). In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here or in MPC’s Form 10-K could also have material adverse effects on forward-looking statements. Copies of MPC’s Form 10-K are available on the SEC website, at http://ir.marathonpetroleum.com or by contacting MPC’s Investor Relations Office.
2
Agenda
Garyville Refinery Facts – Bubbie Anderson, Division Manager
The GME Expansion Story – Bubbie Anderson, Division Manager
Safety and Environmental Excellence – Bubbie Anderson, Division Manager
Product Supply and Distribution – John Weber, Products Control Manager
Growth/Optimization of Existing Assets – Eric Sjunnesen, Technical Services Mgr.
Reliability is Key – David Gautreaux, Maintenance Manager
Commitment to the Community – Jaime De La Cruz, HR Manager
Refinery Tour – Mark Perry, Operations Manager
San Francisco Plantation Reception
3
Garyville Refinery Fact Sheet
Site – Located between New Orleans and Baton Rouge on approximately 3,500 acres of land adjacent to U.S. Highway 61 and the Mississippi River.
History – Construction began in 1973 by ECOL, Ltd.; completed in 1976, when Marathon purchased and started up the plant; last grassroots refinery built in the U.S.; located on former San Francisco Plantation property, designated a National Historic Landmark.
Refining Capacity – 490,000 barrels per calendar day
Crude Oil Supply – Primarily heavy sour crude oils
Operations – Crude distillation, hydrocracking, catalytic cracking, hydrotreating, reforming, alkylation, sulfur recovery and coking
Products – Gasoline, diesel, kerosene, asphalt, propylene, butane, isobutane, propane, petroleum coke and sulfur
Product Distribution – Pipeline, tanker truck, barge, rail, ocean tanker
Economic Impact – Approximately 800 employees and 350 contract workers
Major Project – Completed $3.9 billion expansion project in late 2009
4
The GME Expansion Story
Bubbie Anderson
5
Garyville Major Expansion (GME) Project
Garyville, LA refinery is last grassroots refinery built in the U.S. (1976) Base Garyville refinery, 2008 Solomon survey
Best U.S. cash cost operating expense Second-best U.S. Energy Intensity Index
$3.9 billion, excluding capitalized interest, GME Project completed in late 2009 initially expanded crude oil refining capacity by 180,000 BPD and improved Garyville’s overall fixed cash cost by ~20% per barrel
Garyville is now the 3rd largest refinery in U.S. at 490,000 BPCD Currently have permit to test throughput at higher volumes
GME Significantly Enhances MPC’s Cash Flow and Profit Opportunities
6
$3.9 Billion* Garyville Major Expansion
1/1/2009 256 MBPCD
Crude Capacity
190 MBPCD Gasoline
95 MBPCD Diesel
18th Largest U.S. refinery
1/1/2012 490 MBPCD
Crude Capacity
305 MBPCD Gasoline
215 MBPCD Diesel
Third Largest U.S. refinery
*Excludes capitalized interest
7
1/1/2010 436 MBPCD
Crude Capacity
290 MBPCD Gasoline
175 MBPCD Diesel
Fourth Largest U.S. refinery
1/1/2011 464 MBPCD
Crude Capacity
300 MBPCD Gasoline
185 MBPCD Diesel
Third Largest U.S. refinery
Further Enhancing Last Grassroots Refinery Built in U.S.
Safety and Environmental Excellence
Bubbie Anderson
8
Safety and Environmental Excellence
Only petroleum refinery in the country admitted into the EPA’s National Environmental Performance Track Program
Only refinery accepted in the EPA’s Voluntary Early Reduction Program for Air Toxics under Clean Air Act
14 Governor’s Environmental Leadership Awards since 1996
OSHA Voluntary Protection Program (VPP) Star Site since 1994
9
Product Supply and Distribution
John Weber
10
Crude and Feedstock Flexibility Creates Opportunity
Crude Options Heavy Sour to Light Sweet
High TAN
Foreign and Domestic
Feedstock Purchases Allow Us to: Maximize downstream unit utilization
Take advantage of low cost blendstocks
Boost production and lower $/BBL cost
Product Flexibility – We can: Meet export gasoline and diesel specs
Supply products to both domestic and foreign markets
Swing in and out of asphalt and heavy fuel oil markets
11
Garyville Opportunity Crudes
12
NEW CRUDES PROCESSED IN 2011
Crude OriginAPI
Gravity Sulfur TANVac
Resid %
AccessWestern Blend
Canada 21.8 4.04 2.3 38.3
Albian Muskeg Heavy
Canada 21.6 3.81 1.6 36.0
Frade Brazil 19.9 0.72 1.4 27.3
Olende Gabon 20.7 1.36 4.6 30.1
Peregrino Brazil 13.6 1.76 0.9 41.8
Roncador Heavy
Brazil 18.1 0.69 2.6 32.2
Processed 30 Crudes from 12 Different Countries
Gabon
Canada
USA
Brazil
Angola
MexicoVenezuela
Chad
Saudi Arabia
Iraq
Russia
Kuwait
New 2011 Countries
Other Current Countries
Blue Water Logistics
New dock increased capacity by 40%
Supply Florida while increasing exports
In addition to products, supports opportunity crudes, feedstocks and blendstocks
Brown Water Logistics
Import heavy Canadian crudes
Allows movement of intermediates to and from all of MPC's Midwest refineries
Product supply contingency for Midwest
Pipelines Logistics
Connected to LOOP/LOCAP, Colonial and Plantation
Capacity for 100% of crude supply and 80% of light products
Advantage of “up-line” product premium
Flexibility to trade Garyville production for Houston-sourced volumes
Europe
South America
Mexico
Florida Market
Flexibility to Participate in the Highest Value Markets
13
Garyville: World-class Refinery – Worldwide Options
13
U.S. Distillate Exports Continue to Grow
U.S. distillate exports continue to reach record levels, exceeding 1 MMBPD in October 2011.
Gasoline exports have also strengthened, exceeding imports recently.
The global trade in these two products continues to grow after averaging 3.4 and 5.6 MMBPD for gasoline and distillate, respectively, in 2010.
14
Source: U.S. Energy Information Administration
U.S. Exports Mitigate Declining Domestic Transportation Fuels Demand
0
100
200
300
400
500
600
700
800
900
2003 2004 2005 2006 2007 2008 2009 2010 2011e
U.S. Distillate Export Growth
Central & South America
Mexico
Netherlands
Other
MBP
D
Garyville Gasoline and Diesel Export
Scope – Add gasoline export tank and expand diesel loading capacity to docks
Strategic Focus – Increase export capability
Investment: ~$40 million
Estimated incremental annual EBITDA based on: 2010-11 Prices: ~$10 million
Completion in 2014
15
Expanding Export Potential
16
Growth/Optimization of Existing Assets
Eric Sjunnesen
Garyville Diesel Projects
Scope – Modify Crude Unit, Hydrocracker and Distillate Hydrotreaters
Strategic Focus – Increase finished ULSD production from gas oil
Investment: ~$250 million over four years
Estimated incremental annual EBITDA based on: 2006-10 Prices: ~$170 million 2011 Prices: ~$180 million
Multiple projects with completion of final phase in 2015
17
Expanding Diesel Production Capacity
Diesel Production Profile
20%
22%
24%
26%
28%
30%
32%
34%
36%
38%
40%
0
50
100
150
200
250
300
350
400
450
500
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 est
2013 est
2014 est
2015 est
Diesel volum
e % of crude
Die
sel p
rodu
ctio
n M
BPCD
MPC Diesel MBCD MPC Diesel % U.S. Avg. %
(Excludes Kerosene and Jet Fuel)
18
U.S. Avg. based on EIA data through 2010, then projected growth based on MPC evaluation of expected demand, imports, exports, capacity, etc., for U.S.
Expanding Diesel Production CapacityNote: Excludes St. Paul Park Refinery that was sold on December 1, 2010
Other Projects
Improving molecule management
Recovering distillate from FCCU slurry
Increasing coker distillate endpoint
Increasing off-gas sales
Smaller rate creep projects
Projects that cost < $2 MM, but have over 100% ROI
Removing hydraulics constraints with pump impellers, etc
19
Reliability is Key
David Gautreaux
20
Reliability
In order to maximize shareholder value, Garyville operation must be predictable and reliable.
Mechanical Integrity Program is the heart of reliability effort Any and all equipment included that upon failure could result in a
– Release of highly hazardous chemical– Failure to detect or mitigate a release of a highly hazardous chemical
21
Mechanical Integrity
Our approach to OSHA PSM guidelines for Mechanical Integrity involves doing more than the minimum requirements.
Garyville numbers: 13,000 fixed equipment assets
2,200 rotating equipment assets
150,000 locations at which thickness of equipment is monitored for damage
All of this equipment is inspected and maintained on regular intervals.
22
Availability is a Key to Optimizing MPC Profitability
50%
55%
60%
65%
70%
75%
80%
85%
90%
95%
100%
2005 2006 2007 2008 2009 2010 2011
Mechanical Availability*
23
*Rated Capacity less lost capacity due to planned and unplanned outagesRated Capacity
Consistent Execution
Commitment to our Community
Jaime De La Cruz
24
Our Philosophy
Investing and volunteering in our community are integral to our business
Our community’s health and vitality are essential to our success
We focus resources where we can make the greatest impact
Working in Garyville and St. John Parish is our privilege
We are committed to a full partnership with our neighbors so they can grow and prosper with us
25
Our Actions and Investments
Invest over $1 million dollars on employee welfare and community initiatives annually
St. John United Way – Executive Board Member Company Largest contributor in Parish – over $206,000 from 2011 employee campaign
Chair every major St. John United Way fundraiser – Golf Tournament; Cook-off
Internal United Way Committee of 30 employees
Supriya Jindal Foundation for Louisiana’s Children – Charter Member Invested $70,000 in 2012
24 Interactive Smart Boards installed locally
17-29% improvement in academic achievements
Classroom visits with Supriya Jindal to teach students
Other Educational Investments $45,000 invested annually in three local “adopted” schools
$17,000 invested annually in all remaining Parish schools
Backpack Drive – 180 fully stocked backpacks provided to grade school students
MPC Science Experiments Expo Day
Judge local Social Studies and Science Experiments
Teach For America Support – $2,000 per teacher
26
Our Actions and Investments
Ezekiel Jackson Park – Garyville Sponsor and organize annual Ezekiel Jackson Park Festival for Garyville residents Fence and concession stand repairs New playground equipment installed Lighted walking/jogging track New gazebo
San Francisco Plantation Foundation Provide annual volunteer and budgetary support Sponsor and organize annual “Frisco Fest” festival
Other Community Outreach Activities Recently hired Community Relations Representative SCL Technical College Big Brothers Big Sisters of Southeast Louisiana – over $10,000 provided annually Young Marines UNCF Walk for Life Thanksgiving Meals to the Community Adopt a Family with St. John Ministry of Care VFW – Veterans of Foreign Wars LSU Scholarships – over $44,000 provided
27
Refinery Tour
Mark Perry
28
top related