1. Marcus Hook Refinery Reuse & Revitalization

2. Marcus Hook Refinery 780 acre site, South of Philadelphia Operating refinery and petrochemicals since 1902 Capacity to process 180,000 barrels per day of crude oil Produced 5.5-6 million gallons of transportation fuels per day 500 direct full time employees, 2.5X indirect FTE’s Closed and divested petrochemical operation in 2009 In 2011 Sunoco made decision to close the refinery permanently

3. Marcus Hook Refinery

4. Why? MH Refinery processed light sweet crude oil from West Africa, North Sea, Caspian Region More expensive feedstock than heavy crude oil from Mexico, Venezuela, Canada, Middle East Declining transportation fuel demand Recession and increasing vehicle efficiency standards Increased competition from non petroleum derived transportation fuels, i.e. RFS2 Compliance driven investment burden

5. What do you do with a Closed Refinery? Most closed refineries become petroleum storage terminals Refinery tankage and marine infrastructure used to handle imports and supply local markets Storage terminal employment and economic value added ~10% of a refinery Hollywood, Hollywood, Hollywood Old refineries make excellent scene setting for car chases, alien landings, and robot-on-robot violence

6. Why is Marcus Hook Different? IHS hired by Delaware County Industrial Development Authority Evaluate multiple reuse options for the Marcus Hook Refinery and employment / economic value added potential Can a better use for the facility be identified above the storage terminal default

7. The Mighty Marcellus A game changer by any definition Total U.S. natural gas demand ~ 70 BCF/D

8. Natural Gas Liquids With natural gas comes natural gas liquids Ethane, propane, butane, and pentanes

9. How Does Marcus Hook Fit Large amount of onsite storage for petroleum products Largest underground storage cavern on the East Coast for natural gas liquids storage Adjacent to Braskem petrochemical plant (natural gas liquids derivatives demand) Adjacent to Nextera gas fired power plant (natural gas demand) Existing marine infrastructure and processing equipment

10. Marcus Hook (Before)

11. Marcus Hook (Proposed Future)

12. Redeveloping a Refinery What does a refinery offer for brownfield redevelopment Typically have great logistics infrastructure; marine, rail, and road Industrial facility infrastructure; steam and power generation, nitrogen, compressed air, water, etc. Liquids storage capacity Space, most refineries are greater than 500 acres Greenbelt, many refineries have established buffer zone with local communities

13. Redevelopment Challenges Remediation, largest challenge posed for redevelopment Soil contaminated with hydrocarbons and heavy metals Lead paint and asbestos insulation Proximity of refinery to area aquifer Environmental air quality obligations Facility decay, once a refinery is taken out of operation, aging happens rapidly

14. Questions? James K. Fallon Director, IHS, Energy Insight Downstream Research & Consulting James.Fallon@ihs.com (832) 209-4452 Houston, Texas