**TABLE 1**

**ALTERNATIVE DEHYDROGENATION-BASED MTBE PLANT CONFIGURATIONS BARRELS PER STREAM DAY**  **Operating Mode MTBE**  **ISOOCTANE ALKYLATE**  **Feeds** Mixed Butanes 15,000 15,000 13,733 Normal Butane 0 0 15,000 Methanol 5,130 0 0 **Products** Fuel from Dehydrogenation (FOE*) 2,130 2,169 2,026 Less Hydrogen for Isooctene Saturation 0 (441) 0 Fuel from Isomerization (FOE*) 111 111 102 MTBE 15,090 0 0 Butane Purge 62 0 0 Isooctane 0 10,368 0 Alkylate 0 0 22,019 Feed to Isomerization Unit 13,943 13,943 12,766 Feed to Dehydrogenation Unit 29,870 30,215 29,680 Feed to Deisobutanizer Tower 29,083 29,083 26,626
*Fuel Oil Equivalent Barrels @ 6.3 MMBTU/Barrel**1994 1995**  **1996 1997**  **1998 1999**  **2000**

**CAPACITY: 22,019 BPSD (323,679 MGAL/YR) ALKYLATE FEEDSTOCKS**  Mixed Butanes (20.97) (22.86) (28.39) (26.31) (18.33) (24.43) (40.65) N-Butane (24.14) (26.23) (32.32) (30.02) (21.22) (27.95) (45.83) Total Feedstock Costs (45.11) (49.09) (60.71) (56.33) (39.55) (52.37) (86.47) **VARIABLE OPERATING COSTS** Fuel (4.06) (3.57) (5.08) (5.35) (4.55) (4.88) (8.85) Electricity (1.30) (1.33) (1.37) (1.39) (1.36) (1.44) (1.50) Steam (1.77) (1.56) (2.22) (2.34) (1.99) (2.13) (3.87) Catalysts & Chemicals (1.41) (1.41) (1.41) (1.41) (1.45) (1.42) (1.45) Treated W ater (0.20) (0.20) (0.21) (0.22) (0.22) (0.22) (0.23) Total Variable Costs (8.74) (8.08) (10.29) (10.71) (9.57) (10.08) (15.90) **FIXED OPERATING COSTS (1)** (4.62) (4.74) (4.83) (4.95) (5.00) (5.05) (5.05) **TOTAL CASH COSTS** (58.47) (61.90) (75.83) (71.98) (54.11) (67.50) (107.42) **PRODUCTS** Fuel 2.17 1.91 2.72 2.87 2.44 2.61 4.74 Alkylate (2) 57.13 59.04 67.03 66.25 48.89 59.52 96.56 Total Products 59.30 60.95 69.76 69.12 51.33 62.14 101.31 **CASH MARGIN** 0.83 (0.96) (6.07) (2.87) (2.79) (5.37) (6.11) **ALKYLATE PRICE NEEDED FOR CASH BREAKEVEN** 56.30 60.00 73.11 69.12 51.68 64.89 102.68 **CASH BREAKEVEN "GREEN PREMIUM" (3) (0.83)**  **0.96 6.08**  **2.87 2.79**  **5.37 6.12**  **ADD ALKYLATION INVESTMENT** Needed Margin @ 25% ROI (4) 4.89 5.02 5.14 5.27 5.40 5.42 5.55 **ALKYLATE PRICE NEEDED FOR ROI** 61.18 65.01 78.25 74.39 57.08 70.31 108.22 **"ROI GREEN PREMIUM" (5) 4.05**  **5.97 11.21**  **8.14 8.19**  **10.79 11.66**  **48.01 51.08**  **59.93 58.99**  **41.79 52.37**  **83.78** 11.29 9.86 9.83 10.13 9.54 9.76 17.52
(1) Includes direct labor, supervisory & administative staff, maintenance, supplies, property taxes and insurance. (2) Alkylate value derived from vapor pressure and octane blending calculations versus gasoline at 8 RVP and 93 R+M/2. (3) Alkylate price premium above (below) calculated blending value required to produce cash breakeven economics (zero net cash flow). (4) Simple before-tax return on alkylation investment only; no further return on pre-existing dehydro and isomerization facilities assumed. (5) Alkylate price premium above (below) calculated blending value required to produce 25% BTROI on new alkylation equipment investment. **TABLE 2 USGC DEHYDROGENATION-BASED C4 ALKYLATION ECONOMICS** 

**ALKYLATE PRICE/VALUE SENSITIVITY CENTS PER GALLON** **TABLE 3 USGC DEHYDROGENATION-BASED C4 ALKYLATION ECONOMICS** 

**PREMIUM-REGULAR PRICE SPREAD SENSITIVITY CENTS PER GALLON**  **1994 1995**  **1996 1997**  **1998 1999**  **2000 CAPACITY: 22,019 BPSD (323,679 MGAL/YR) ALKYLATE**  **FEEDSTOCKS** Mixed Butanes (20.97) (22.86) (28.39) (26.31) (18.33) (24.43) (40.65) N-Butane (24.14) (26.23) (32.32) (30.02) (21.22) (27.95) (45.83) Total Feedstock Costs (45.11) (49.09) (60.71) (56.33) (39.55) (52.37) (86.47) **VARIABLE OPERATING COSTS** Fuel (4.06) (3.57) (5.08) (5.35) (4.55) (4.88) (8.85) Electricity (1.30) (1.33) (1.37) (1.39) (1.36) (1.44) (1.50) Steam (1.77) (1.56) (2.22) (2.34) (1.99) (2.13) (3.87) Catalysts & Chemicals (1.41) (1.41) (1.41) (1.41) (1.45) (1.42) (1.45) Treated W ater (0.20) (0.20) (0.21) (0.22) (0.22) (0.22) (0.23) Total Variable Costs (8.74) (8.08) (10.29) (10.71) (9.57) (10.08) (15.90) **FIXED OPERATING COSTS (1)** (4.62) (4.74) (4.83) (4.95) (5.00) (5.05) (5.05) **TOTAL CASH COSTS** (58.47) (61.90) (75.83) (71.98) (54.11) (67.50) (107.42) **PRODUCTS** Fuel 2.17 1.91 2.72 2.87 2.44 2.61 4.74 Alkylate (2) 57.13 59.04 67.03 66.25 48.89 59.52 96.56 Total Products 59.30 60.95 69.76 69.12 51.33 62.14 101.31 **CASH MARGIN** 0.83 (0.96) (6.07) (2.87) (2.79) (5.37) (6.11) **PREM-REG SPREAD, ACTUAL SPOT (3)** 5.40 4.57 3.97 3.89 4.13 4.11 3.60 **PREM-REG SPREAD NEEDED FOR CASH BREAKEVEN** 4.81 5.25 8.28 5.92 6.11 7.91 7.93 **CASH BREAKEVEN "OCTANE PREMIUM" (4) (0.59)**  **0.68 4.31**  **2.03 1.98**  **3.80 4.33**  **ADD ALKYLATION INVESTMENT** Needed Margin @ 25% ROI (5) 4.89 5.02 5.14 5.27 5.40 5.42 5.55 **PRE-REG SPREAD NEEDED FOR ROI** 8.27 8.81 11.92 9.66 9.94 11.75 11.86 **"ROI OCTANE PREMIUM" (6) 2.87**  **4.23 7.95**  **5.77 5.81**  **7.64 8.26** 

(1) Includes direct labor, supervisory & administative staff, maintenance, supplies, property taxes and insurance. (2) Alkylate value derived from vapor pressure and octane blending calculations versus gasoline at 8 RVP and 93 R+M/2. (3) Annual average spot price spread between 93 R+M/2 premium conventional gasoline and 87 R+M/2 regular conventional gasoline. (4) Additional premium - regular gasoline price spread required to produce cash breakeven economics (zero net cash flow). (5) Simple before-tax return on alkylation investment only; no further return on pre-existing dehydro and isomerization facilities assumed. (6) Additional premium-regular gasoline price spread required to produce 25% BTROI on new alkylation equipment investment.

### 8

10 12 14 16 18**C E** **N T** **S P** **E R** **G A** **L L** **O N**  

# FIGURE 4

**USGC V AL**  **UES FOR**  **AL KYLA** 

**TE FROM DEHYDRO PLA**  **NTS**

REQUIRED FOR 25% BTROI ON NEW A LKY INVESTMENT

REQUIRED FOR CASH COST BREAK EVEN DELTA VERSUS PREMIUM GASOLINE

0 2 4 6

1994 1995 1996 1997 1998 1999 2000**C E** **N T** **S P** **E R** **G A** **L L** **O N** 



### ACTUAL BLEND VALUE PERFORMANCE (OCTANE & RVP)

### 8

10 12 14**C E** **N T** **S P** **E R** **G A** **L L** **O N**  

# FIGURE 5

**USGC PREMIUM -**  **REGULA R GA**  **SOLINE PRICE SPREA DS** 

TO ATTRACT ALKYLATE FROM DEHYDRO PLANTS

REQUIRED FOR 25% BTROI ON NEW A LKY INVESTMENT

REQUIRED FOR CASH COST BREAK EVEN

2 4 6

1994 1995 1996 1997 1998 1999 2000**C E** **N T** **S P** **E R** **G A** **L L** **O N** 



### ACTUAL PRICE SPREADS