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Session 1: The Coming Resin Boom in the Gulf Coast Moderator:Curtis D. Spencer, President, IMS Worldwide, Inc. SPEAKERS:Gary Furneaux, ExxonMobil, Baytown, Texas Frank Vingerhoets, President KTN Americas

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Table of Contents How much Resin are we talking about? What transportation infrastructure is needed in order to manage this Resin Boom? How are the packagers, truckers and others situated to process this much Resin? What will the impact be on Harris County? www.imsw.com Foreign Trade Zone, Logistics and Supply Chain Consulting

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How Much Resin? 22 Billion Lbs/Yr MORE Than we produce today. 30% will be Exported- SO- Just for Exports. That is 107,300 more Resin Rail-Cars That is 23,800 more SIT storage spaces in Greater Harris County That is 400,000 more container loads/year Packaged in 40 Million More Feet of Warehouses. Equals Huge Boom for Harris County! www.imsw.com Foreign Trade Zone, Logistics and Supply Chain Consulting

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ProprietarySlide 6 Managing the Challenges of Accelerated Growth Gary Furneaux, ExxonMobil Baytown Texas Harris County International Trade & Transportation Conference October 23, 2014

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ProprietarySlide 7 Gulf Coast Growth Shale Gas Boom = Feedstock = Resin Production Gulf Coast Growth - New Stream Crackers - New Reactors - De-bottleneck projects ExxonMobil - Current Gulf Coast exports = ~300kTa - North American Growth Project = 1300kTa * 1 X Steam Cracker * 2 X Polyethylene Reactors - Proposed 1 X Polyethylene Reactor = 650kTa Potential growth from 300kTa to 2250kTa Potential growth from 50 to 360 trucks per day

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ProprietarySlide 8 Growth Challenges - Rail Current Operations - Load Hopper railcars for storage / transportation - Rail to Houston area packaging facilities or NA customers Growth Challenges - Houston rail congestion - Storage track availability Opportunities - Operational opportunities with Railroads * 7 day a week switching * Communication with RRs / forecasting to packagers - 286k capable track - RR storage track (SIT) or on-site track (loads & empties) - Packaging company rail track - Packaging on-site or adjacent property

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ProprietarySlide 9 Growth Challenges Packaging / Storage Current Operations - Railcars offloaded to packaging lines / Seabulk loading - Temporary storage prior to container loading - Drayage to Port / Railheads for export Growth Challenges - Packaging capacity - Rail infrastructure - More storage requirements / slower throughput Opportunities - Communicate growth plans with packaging companies - Commitment agreements versus enabling agreements - Accurate volume forecasts - Operational opportunities with Railroads - High-speed packaging equipment - Rail infrastructure matches capacity increases

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ProprietarySlide 10 Growth Challenges Trucking Current Operations - 20 and 40 containers drayed to PoH and Railheads - Container Yards / Trailer Transfers often utilized - Port Hours 5 days a week / 0700-1700 - Railroad Intermodal ramps open ~24 / 7 - Road weight limits 84k lbs.(w/ permit) Growth Challenges - Infrastructure - Traffic congestion - Truck / Chassis availability - Driver availability - Safety

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ProprietarySlide 11 Growth Challenges Trucking Opportunities - Support infrastructure improvement projects - Safely Increase truck weight limits - Commitment agreements vs enabling agreements - Accurate volume forecasts - Resin producer / packager - truck related infrastructure (container yard / staging yard, etc.) - Dedicated drayage truck fleets / operations - Orderly transition of chassis ownership - Dedicated trucking operations / standard driver hrs. - Driver safety standards - Transportation Management

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ProprietarySlide 12 Growth Challenges - Port Current Operations - Barbours Cut / Bayport container terminals - 2013: ~ 2M TEUs - 2013: Plastics largest export by tonnage / $ value - ~ balanced container availability Growth Challenges - Export growth - Panama Canal Growth - Infrastructure challenges: port depth / turning basin Opportunities - Expand port operating hours (CBP) - Shippers commit volumes to off-hours - Shippers communicate growth plans - Operational efficiencies

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ProprietarySlide 13 Growth Challenges Marine Dry Cargo Current Operations - All major shipping lines serve Port of Houston - Intermodal to LA / LB Growth Challenges - Container availability - Panama Canal implications Opportunities - Longer-term MDC agreements - Commitment agreements versus enabling agreements - Monitor allocation agreements - Accurate volume forecasts - Communication with SSL equipment managers - Reposition containers (Dallas / MX / East Coast strings) - Freight Forwarder serves to coordinate multiple parties

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New Manufacturing in Harris County RESIN BOOM ! Frank Vingerhoets, President KTN Americas October 23 rd 2014

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Key Data Covered warehouse capacity 60,000,000 ft Logistics platforms 150 Countries 28 Employees 11,000 Revenue $1.4 billion Headquarters Antwerp, Belgium Structure Privately owned company Number of silos 3,100

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Worldwide Locations

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North America

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Houston Locations FUTURE Current

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KTN HOUSTON POLYMERS TERMINAL, Houston TX

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20 ETHYLENE PROJECTS 10 new gas crackers have announced: Chevron Phillips (Cedar Bayou), ExxonMobil (Baytown), Dow (Freeport), Formosa (Point Comfort & Louisiana), OxyChem (Ingleside), Axiall (Louisiana), Sasol (Lake Charles), Shell (Monaca) and Odebrecht (Parkersville, WV).

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Project CCLT Master plan Site is connected to Union Pacific and BNSF: High capacity yard of 2,000 cars Large inbound and outbound tracks for flexibility to receive large block trains Easy access to major road connections (Grand Parkway 99, I- 10, 146) Close proximity to Barbours Cut and Bayport Container Terminals Heavy Haul to Cedar Bayou Barge Terminal Foreign Trade Zone Facility 21

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Project CCLT Master plan 22

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Project CCLT Artist Impression 23

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Project CCLT Phase I 24 500,000 sqft warehousing + supporting buildings (office, maintenance): Large civil infrastructure: Entrance road Massive drainage and detention structure to support master plan development Rail development: Connection UP & BNSF per approved design Rail tracks to building + bulk unloading tracks 150 HC spots yard + lead and run-around tracks

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Project CCLT Phase I 25

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Project CCLT Phase I 26

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27 Thank You for your attention !!!

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