Eastern Ohio Outlook on Petrochemical Development February 22, 2018

85% of Natural Gas Growth from Marcellus/Utica Region represents 85% of shale gas growth in US since 2012 25 Bcf/d of natural gas production (EIA) Production expected to reach 29 to 33 BCF/d by 2022. (RBN Energy LLC)

Utica Shale Wells Over 2,100 Horizontal Utica Shale wells drilled in eastern Ohio Laterals have exceeded 18,000 feet horizontally – some of the most productive shale gas wells in the world Baker Hughes Rig Count 02/09/18: PA = Marcellus 37 Ohio = Utica 23 WV  = Marcellus 19 Source: ODNR

Long-Term Global Price Advantage

Pre-2011 Energy/PetChem Presence in Ohio Attraction opportunity for Ohio Upstream extractors Raw fossil fuels Pipelines Fractionators/processors Methanol plants Methanol plants Power generators Ammonia plants Refineries Steam crackers On-purpose propylene plants Industrial chemicals and polymers companies Complex chemicals *Not exhaustive Includes indirect and induced jobs 5

Hydrocarbon Value Chain Still has Gaps $54 B Invested *Not exhaustive

Midstream Network Robust and Growing Interstate Natural Gas Transmission Pipeline Network Proximity to 10 Natural Gas Processing plants and five fractionators Four major NGL interstate pipelines built or under development Developing underground NGL storage

Appalachian Basin NGL Production Natural Gas Liquids (NGLS) are a major source for petrochemical feedstocks 740,000 barrels/day in 2016 (RBN Energy LLC) NGLs production expected to reach 1,200,000 b/d by 2022 (RBN Energy LLC) Consuming near source can avoid pipeline transport costs to Gulf of approx. $0.15/gallon - “Mapping the Utica Shale,” CSU

Regional Opportunities Ethylene, methanol, ammonia, propylene, specialty chemicals. Energy intensive manufacturers CSU study estimates each ethane cracker will create over 650 supply chain jobs each. Regional fabrication, contract maintenance, warehousing, and compounding operations possible. Competitive freight advantage for polyethylene pellet users Enough ethane to support more crackers

PTTGCA final investment decision expected around the end of the year PTTGCA final investment decision expected around the end of the year. Approx. 5,000 peak construction jobs. Hundreds of permanent jobs.

10 Gas-fired Power Plants Currently Under Development Coal once provided nearly 90% of Ohio’s electricity; now 58%. Over 6,500 MWs of coal-fired generation has been shut down or planned for retirement in region Inexpensive and abundant natural gas filling the void Capacity on PJM Transmission Grid Planned retirements: AES’ Stuart and Killen = 3.000MW, Muskingum River = 1,425MW, Conesville units 5 & 6 = 820 MW, Burger = 568 MW, Sammis four untis = 720 MW. Sources: EIA, PUCO, & press reports

Regional Challenges in the Valley Bias of Petchem companies toward Gulf of Mexico Site Challenges Limited number of large river sites Topography – hills & floodplains Brownfields Lack of Infrastructure Lack of Zoning/potential conflicting uses adjacent Limited dual rail options Owners need for ROI vs. patient waiting for Petchem projects Perceived construction cost premium Competition for NGLs with Pipelines

Mike Jacoby mjacoby@apeg.com (740) 704-9977 www.apeg.com