1. Hosted & Organized by
Qatar Fuel Additives Company Limited (QAFAC)

2. UPSTREAM | MIDSTREAM | DOWNSTREAM | FUEL & TRANSPORT
Making the Case for Oxygenates in the GCC
Tammy Klein, Senior Vice President
Middle East Methanol Forum, Nov. 26, 2014

3. © Stratas Advisors. All rights reserved. 3
Sulfur reduction and octane improvement primary focus
GCC Fuel Quality Change Drivers 2012-2030
Prevalence of
MTBE blending
No regulatory
push to increase
octane, but
market octane
demand
expected to
increase
No ethanol push
Benzene and
aromatics
reductions
expected
beginning in
2016 in GCC
(GSO
2196/2011)

4. © Stratas Advisors. All rights reserved. 4
Proposed/Confirmed FQ Changes
• Jordan (GCC applicant)
– 2018: 400 to 50 ppm sulfur
• Kuwait
– 2018: 500 to 10 ppm sulfur
• Saudi Arabia
– 2016: FQ Roadmap
• Sulfur: 1,000 to 10 ppm
• Benzene: 3 to 1 vol% max
• Aromatics: No limit to 35 vol% max
• Olefins: 20 to 18 vol% max
• RVP: 45-62 (s) / 45-69 (i) / 45-79
(w) → 45-60 (s) / 45-70 (w)
• Distillation EP: 225 to 210 ⁰C max
• UAE
– 2015: 100 to 10 ppm sulfur
Proposed/Confirmed Fuel Quality Changes
Sulfur reduction a key focus; Saudi Arabia’s fuel quality roadmap takes effect in 2016
Legend:
10 ppm
11-99 ppm
100-150 ppm
151-600 ppm
601-2500 ppm
No information
Sulfur Limits in 2020

5. © Stratas Advisors. All rights reserved. 5
Market octane demand expected to increase, desulfurization a key driver along with
phase out of low octane grades
Octane Market Share
RON 81 84 87 90 91 92 95 98
Bahrain 40.0% 60.0%
Iran 90.0% 10.0%
Iraq 100.0%
Jordan
(applicant) 75.0% 25.0%
Kuwait 35.0% 63.0% 2.0%
Oman 12.0% 88.0%
Qatar 43.0% 57.0%
Saudi
Arabia 65.0% 35.0%
U.A.E. 38.0% 60.0% 2.0%
Yemen 99.9% 0.1%
Octane Market Share in GCC Countries, 2013
 Data as at the end of 2013
 Iran's gasoline market share may change as starting from April 2014 RON 95 50 ppm sulfur production accounted
for about 30% of total gasoline production
Source: Stratas Advisors, 2014

6. © Stratas Advisors. All rights reserved. 6
Average Annual Growth is 3.2% between 2012 -2030
Middle East Gasoline Supply & Demand
0
20
40
60
80
100
120
140
2012 2015 2020 2025 2030
MillionTons
Middle East Production Middle East Demand
 Robust demand growth in Arab Gulf stems from population increases
and economic growth coupled with subsidized gasoline prices
 The above positive factors will be offset partially by lower growth in
the rest of the Middle East
 Significant level of refining investments will shift the region from a net
importer to net exporter
Source: Stratas Advisors, 2014

7. © Stratas Advisors. All rights reserved. 7
Region becomes a net exporter after 2020
Middle East Gasoline Net Imports, 2012-2030
 From a regional perspective, Latin America and Africa will remain net
importers of gasoline throughout the forecast timeframe
 North America and Middle East will shift from being net importers to
net exporters
-50
-40
-30
-20
-10
0
10
20
30
2012 2015 2020 2025 2030
MillionTons
North America Latin America Europe CIS Asia Pacific Middle East Africa
Source: Stratas Advisors, 2014

8. © Stratas Advisors. All rights reserved. 8
Highlights and Observations
• Oxygenates Limits
– 10 vol% max: Kuwait, Oman, UAE
– 15 vol% max: Saudi Arabia, Qatar
– No limit: Bahrain
• Oxygen limit:
– 2.7 wt% max: Kuwait, Iran, Oman, Jordan,
UAE
– No limit: Bahrain, Qatar (proposed for 2015),
Saudi Arabia
• Metallic Additives
– In use in Iraq and Yemen
• No ethanol blending in the region
– Though American producers are hunting for
export markets!
• No methanol blending in
the region at this time
MTBE Blending in the GCC Countries
Sulfur reduction a key focus; Saudi Arabia’s fuel quality roadmap takes effect in 2016
MTBE Blending in the Middle East
Legend:
Blends MTBE
Doesn’t Blend MTBE
No information

9. © Stratas Advisors. All rights reserved. 9
Two Largest Growth Markets Are Asia Pacific and GCC
Stratas Base Case: Global MTBE Demand, 2012-2030
0.0
5.0
10.0
15.0
20.0
25.0
2012 2015 2020 2025 2030
MillionTons
Latin America Europe Russia/CIS Asia Pacific Middle East Africa
 Latin America constrained on refining capacity for producing volume and gasoline octane
 Russia has large octane deficit due to increasing octane and removal of metallic additives
 China has large octane deficit due to sulfur reduction and removal of metallic additives;
China has limited refinery octane producing capability
8.98%
7.69%
6.63% 2.87%
Note: Percentages represent growth in each of the study time increments shown.
Source: Stratas Advisors, 2014

10. © Stratas Advisors. All rights reserved. 10
Demand to increase, will largely be supplied by domestic production
Stratas Base Case: GCC MTBE Demand
 Demand to increase as region reduces sulfur, improves octane
 Region will largely be supplied by domestic production
0
1
2
3
4
5
6
2012 2015 2020 2025 2030
MillionTons
Source: Stratas Advisors, 2014

11. Contact Information
Q & A
Tammy Klein, Senior Vice President
tlkein@stratasadvisors.com
+1.239.970.2231

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