Overview UOP Yields

Slide1: 

Project Overview Border Energy Forum October 13, 2005

Project Overview: 

Project Overview USA’s first new refinery in almost 30 years USA shortage of refining capacity a key factor in market pricing – exacerbated by economic growth in other countries Recent impact of Hurricanes Katrina and Rita underscores the value in locational diversification of refineries New Energy Bill provides added economic incentive for new refining capacity – additional proposed legislation would improve economics and permitting time Negotiations underway with Pemex for pipeline access, long term crude oil supply, and product offtake agreement Final Air Permit issued by ADEQ / EPA - Other Permits under development

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DOES THE U.S. NEED MORE REFINING CAPACITY? Product Imports Exceed 3 Million Barrels per Day Hurricane Katrina Idled 1MB/D – Shutdown 800 kBD Hurricane Rita Idled 3+MB/D – Shutdown 1+MB/D

Why an Arizona refinery?: 

State Population Growth and Petroleum Products Demand has stretched current Pipeline Supply system Arizona and California Product Quality Requirements limit Supply Alternatives Refinery will add significant reliability to petroleum supply system in Arizona and NW Mexico Refining economics in Southwest will support new Refinery Construction –LA Spreads more than double USGC Current and Forecast Product demand will support economies of scale Access to crude oil supplies from Mexico – Canadian Options possible Why an Arizona refinery?

PROJECT SITE1450 Acres – 40 miles east of Yuma AZ: 

PROJECT SITE 1450 Acres – 40 miles east of Yuma AZ Looking East

Product Supply Pipelines: 

Product Supply Pipelines Arizona is 100% dependent On California and Texas for Fuel supply 70% of Arizona’s fuel comes From California refineries Via a 350 mile pipeline 30% of Arizona’s fuel comes From Texas refineries via a 300 mile pipeline Imports 300 kBD 120 kBD 240 kBD

Slide7: 

Refinery Characteristics 150,000 Barrels per day of Gasoline, Diesel and Jet Fuels KBD Total Mexico (probable) Mogas 85 35 Jet 30 10 Diesel 35 5 Products to meet most stringent Arizona and California specifications “Best Available Control Technology” applied to all potential air emission sources – annual emissions less than half the “best” U.S. refinery Zero-water discharge design Engineering Design and Operating Practices to meet strict OSHA, ADEQ, industry, and local codes

Slide8: 

SIMPLIFIED FLOWPLAN Crude & Vacuum Light Ends NHT DHT H’Cracker Coker InAlk Ben Sat/ Isom CCR Hydrogen Production Amine, Sour Water, SRU P R O D U C T S Crude & Nat Gasoline Purchased C4’s

Slide9: 

Crude Oil Supply Options New Pipelines Existing Pipelines Shipping Routes

Project Cost Estimate: 

Project Cost Estimate Million $ (2006-09) Refinery Onsite Units 1,600 Refinery Offsites 565 Owner’s Cost / Startup 190 Construction Period Interest 280 Total Refinery Capital 2,635 Working Capital Estimate 220 Total ACFY 2,855 Crude Supply Terminal /Pipeline 500 Historical Margin 2000-2004 $13.00/B Return on Equity – AT 22%

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FINALIZE AIR PERMIT 2005 2006 2007 FINALIZE CRUDE OIL PIPELINE AGREEMENT FINALIZE DESIGN BASIS PRODUCT AGREEMENTS & MAQUILA DESIGN ENGINEERING EPC CONTRACTS PIPELINE PERMITS AND CONSTRUCTION DETAILED DESIGN Project Timeline Completion in Early 2010

Conclusions: 

Conclusions Broad public and political recognition of the need for new U.S. Refining Capacity providing support for ACFY Average Historical Margins support new Arizona Refinery Construction Costs – Recent Margins significantly better Products will displace Imports and supply Arizona, Mexico, and California (by displacement) Final ADEQ Air Permit and Crude Oil Pipeline Access Agreement with Mexico underpin project financing Financing discussions currently underway with several parties