UOP Advanced MTO and OleflexTM for Profitable Olefin Production Iran Petrochemicals Forum 2017 Tehran, Iran 22 & 23rd April 2017 UOP Limited – Nigel Orchard UOP Advanced MTO and OleflexTM for Profitable Olefin Production

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Outlook for Light Olefins Pricing 2015-2017 Propylene capacity additions come on stream at a faster rate than demand growth. 2018-2020 Propylene pricing narrows and tracks ethylene rises to 2020 due to: Previous global propylene capacity overbuild outweighed by demand growth Additional Asia Region Polypropylene capacity Asia Region to become net exporter of polypropylene driving propylene demand & pricing up Source: International Market Consultant Pricing Outlook for Ethylene and Propylene is positive

Why are On-purpose Routes to Olefins Attractive MeOH, Naphtha, C2=, C3= Pricing Propane / C3= Price spreads Source: International Market Consultant Price spreads are favourable for both MTO and PDH

Global Olefin Markets Grow Strongly Ethylene annual demand growth, 3.7% Ethylene demand and production aligned over period with gradual cracker projects and: NGL (shale) cracker feedstock usage growing – increases ethylene reduces propylene production Propylene annual demand growth, 4.5% - More applications than ethylene eg: Polypropylene, Acrylonitrile, Acrylic Acid, Propylene Oxide, Propylene Glycol On-purpose technology grows rapidly to ~30% of market by 2020 Source: International Market Consultant Higher propylene growth being met by on purpose technologies

Value chain uplifts MTO Route PDH Route $ “lift” for MTO $ “lift” for PDH 2020 Price Forecast Strongest value addition is in olefin production step

Olefin Production Economics – Cash Cost of Production Naphtha cracking is least attractive route High naphtha pricing – linked to crude A discount on naphtha of ~30% is needed to achieve MTO CCOP MTO CCOP is based on Stand alone MTO In reality a new complex from Gas to Olefins (Olefin Derivatives) will share benefit of Natural Gas Pricing across the whole production chain Ethane, propane and gas based technologies are more attractive Feed prices decoupled from crude Ratio on $/Energy content has varied between 3x and 8x in last 7 years despite low crude prices 2021 Price Forecast – netback Iran Naphtha crackers less attractive than alternative technologies

C3 Oleflex Complex C2- By-product H2 Propylene Deethanizer Oleflex Process Propylene – Propane Splitter Depropanizer C3 LPG SHP C4+ C3 Oleflex Process used for 67% of operating PDH units UOP 7267-7

Why Customers Choose UOP Oleflex Lowest Overall Cost of Production Lowest MT C3/ MT C3= 2wt% higher Hydrocarbon yield <80% competitor energy use Lower investment Required Lowest number of reactors (4) Lowest cost of design Smallest plot size Operates at low positive pressure Efficient continuous regeneration Best economy of scale/ low equipment count High Reliability/ On-Stream Availability Continuous, on-line regeneration Proven regeneration technology (~300 in operation) More days on stream (no shutdown for catalyst change) Smallest Environmental & Physical Footprint Lowest CO2 emissions Low NOx and VOC emissions Lowest energy consumption Non toxic (Pt) catalyst system >$6M/yr additional margin ~$50M Lower Investment $3-5M/yr additional margin Based upon 600KMTA of Propylene Strong return on investment – resilient to product pricing

UOP Leads the Way in Dehydrogenation UOP has been awarded 80% (37 of 46) of dehydrogenation projects competitively bid since 2011 Includes ZPC and Borealis Source of competitor awards is public domain document “Worldwide Refinery Processing Review, Third Quarter 2015” by Hydrocarbon Publishing Co (from UOP Library) 8 repeat customers with two or more units 3 customers who already have a competitor iC4 unit selected UOP for their PDH project 2 Oleflex units announced in Europe in 2016 Oleflex Process is a proven investment and UOP is the market leader

C3 Oleflex- Profitable and Resilient to Price Volatility High Typical Low Maybe add continuous improvement and hide the dollars? Basis: 600 KMTA Oleflex, Propane priced at 630 $/MT, NE Asia Pricing, 100% equity Oleflex technology delivers high ROI even when prices are low Cost-advantaged propane provides potential for even higher return UOP 7267-10

UOP Advanced MTO Technology Overall Block Flow Diagram Reactor/Regenerator (Rx/Rg) Section Olefin Cracking Process (OCP) Olefin Purification Unit (OPU) CH3OH H2O C3= C2= C4=+ C2= + C3= C4=+ By-Product All Sections Commercially Proven © 2016 UOP Ltd. A Honeywell Company All rights reserved.

Why Customers Choose UOP Advanced MTO Highest Total C2= and C3= Yield ~25% higher C2= + C3= yield versus commercialized alternative ~5% higher C2= + C3= yield than best represented alternate MTO Technology Lowest Capital Cost ~12% lower capital cost than alternate MTO technology Small Rx/Rg & fewest product compression stages Fixed bed reactor system Single refrigeration system and no demethanizer column Lowest Operating Cost ~60% lower catalyst makeup rate Lower utility consumption Robust MTO catalyst, lowest catalyst makeup rate, lowest compression Highest Reliability & Unit Availability Full Rx/ RG combustion regenerator, No CO Boiler Rx/Rg uses UOP’s extensive FCC experience - >200 FCC units in operation OCP uses efficient 2 fixed bed reactor system ~$25M/yr additional product revenue ~$60M Lower CapEx ~$6M/yr lower OpEx >$2M/yr more Light Olefin * Based upon unit capacity =1650kMTA MeOH Best project economics - lowest capex and opex

UOP Advanced MTO Yield Performance Technology Comparison C2= + C3= Carbon Yield % UOP Advanced MTO yields = highest added value © 2016 UOP Ltd. A Honeywell Company All rights reserved.

UOP Advanced MTO vs Alternate MTO Technology Comparison of project financial performance: Project IRR (100% Equity) UOP Advanced MTO Alternate MTO 2020 Intl. Expected 30% 21% 2020 Iranian Netback 39% 2017 Iranian Netback 35% 29% Project IRR (70/30 Debt/Equity) UOP Advanced MTO Alternate MTO 2020 Intl. Expected 24% 16% 2020 Iranian Netback 34% 25% 2017 Iranian Netback 30% UOP Advanced MTO technology provides the best project economics © 2016 UOP Ltd. A Honeywell Company All rights reserved.

UOP Advanced MTO On-Stream Units Jiangsu Sailboat (830KMTA C2= & C3=) Nanjing (300KMTA C2=& C3=) Shandong Yangmei (300KMTA C2=& C3=) Commercially proven technology

Commercialization Status # Owner Location Status 1 Wison (Nanjing) Clean Energy Company, Ltd. Nanjing, Jiangsu Onstream 2013 2 Jiutai Energy (Zhungeer) Company, Ltd. Ordos, Inner Mongolia SU 2017 3 Shandong Yangmei Hengtong Chemicals Company, Ltd. Linyi, Shandong Onstream 2015 4 Jiangsu-Sailboat Lianyungang, Jiangsu On Stream Jan 2017 5 Shandong Better Energy Dongying, Shandong Awarded 6 Undisclosed China SU 2018 7 8 LUXI Chemical Group Co. Ltd. Liaocheng, Shandong Design 9 Connell Chemical Industrial Co. Ltd. Jilin City, Jilin Add capacities of these units and the P/E ratio Units ranging from 300kMTA – 830kMTA of total C2= + C3= © 2016 UOP Ltd. A Honeywell Company All rights reserved.

Summary ON PURPOSE OLEFINS ARE VITAL TO THE IRANIAN MARKET Market fundamentals support on-purpose olefin projects Propylene-Propane spread forecast to remain strong Natural gas and LPG prices advantaged versus naphtha Margins for MeOH as a final product are unlikely to be sustained Oleflex process offers the optimum route from C3 to C3= Lowest overall cost of production & capital cost – High on-stream availability and proven technology: 24 operating units Selected for 80% of dehydrogenation units competitively bid since 2011 UOP Advanced MTO produces the highest total ethylene and propylene yield at the lowest cost. Commercially proven technology: 9 units licensed 3 operating units demonstrate stable operation & exceed guaranteed performance Provides the best project economics. On Purpose Olefin Technologies offer financeable investment Opportunities in Iran

© 2016 UOP Ltd. A Honeywell Company All rights reserved.