IH2 Technology Economics Update Pat Leung, CRI Catalyst Company, 910 Louisiana, Houston, TX 77002

ARTC Presentation

6 March 2013

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Main Points

• Introduce Gas Technology Institute (GTI) and CRI Catalyst (CRI)

• What is the IH2 process?

• Why does IH2 technology transform renewable fuels processing?

• IH2 process economics

• Where is IH2 in the commercial deployment?

3/21/2013 3

Technology Heritage - GTI Snapshot

• Not-for-profit gas research & services organization founded as IGT in 1941

• Capabilities that span the natural gas value chain

• Current focus is in diversified energy solutions

• Facilities – 18 acre Chicago campus

– 28 specialized labs totaling 200,000 ft2

• Staff of 250

• >1,200 patents and 750 licenses

• ~500 products commercialized with partners

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Pilot Scale Gasification Campus Energy & Environmental Technology Center

Offices& Labs

CRI is the partner for IH2

Technology Heritage - CRI Snapshot

• Catalyst Business with 50+ year history

• Houston based global business – Houston (One Shell Plaza)

– London (Fareham)

– Singapore (Tiong Bahru)

• Research & Technology Facilities – Amsterdam

– Bangalore

– Houston

• Manufacturing Facilities – US (3)

– Germany

– Belgium

3/21/2013 5

What is the IH2 Process?

• The IH2 process uses catalysts, hydrogen and heat to cost-effectively

convert a wide variety of biomass directly into high purity hydrocarbon

“drop in” fuels (i.e. B100) and/or high quality blend stock (e.g. >B50)

3/21/2013 6

• The IH2 process takes only minutes to convert biomass to

hydrocarbons—Nature requires millions of years…

• The IH2 process can be integrated into existing refinery, mill, ethanol

plant, agricultural, or recycling operations to create higher value from

biomass than afforded by heat and electrical power sales (NA basis)

• The IH2 process is NOT Gasification/Fischer Tropsch

2) Fluidized Bed

Proprietary Catalyst

Renewable H2

340-470C <500psig

1) Feed Conditioning Sizing , Drying & Feeding

1st Stage 2nd Stage

3) Fixed Bed

Proprietary Catalyst

Renewable H2

370-400C <500psig

HDO’d Vapors

4) SMR C1-C3 Gas Renewable H2

Process

3/21/2013 7

IH2 Process (Simplified, Stand Alone)

Distilled Hydrocarbon

Hi Pressure Steam

Clean Water

Fertilizer

BioChar

Biogenic CO2

Crop Residue

City Waste

Wood/Forest Residue

Energy Crops

Algae

Gasoline, Jet and Diesel Range HCs B100 Regular Gasoline (Wood) B100 Intermediate Gasoline (Wood) B60 + Diesel (Wood)

Feed

Products

Not Gasification / Fischer Tropsch!

Technology Differentiators

• Fungible, high purity hydrocarbon fuel and/or blend stock products

- Gasoline produced from wood passes ASTM specs (i.e. B100) for economy & mid octane

- Diesel produced from wood too aromatic, currently ~B60, target is to get to B100

- Diesel produced from whole algae likely B100 (in testing)

• Nearly carbon neutral*

• Feedstock flexible with high product yields (67-157 US gal/US ton MAF)

• Attractive economics (~ $2/gal for 500 dry MT/day wood feed USGC pricing) - Low capex (only 4 major process steps, low pressure, non corrosive) - Low opex (predominated by feedstock)

• Exothermic process with 72% - 86% bioenergy recovery (wood)

• No engineering miracles required! Ready for market

*93% - 98% GHG reduction per Professor David Shonnard at MTU: http://services.lib.mtu.edu/etd/THESIS/2012/ChemicalEng/maleche/thesis.pdf

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Techno-economic Analysis by NREL

• NREL (National Renewable Energy Laboratory) is a primary

laboratory of the US Department of Energy (DOE) for Renewable

Energy and Energy Efficiency research & development

• Comparing economics of different technologies on a similar set of

assumptions such as: - nth plant

- 2000 mt of dry biomass per day

- 30-year plant life

- 40% equity financing with 10% IRR

- 60% debt financed at 8% interest rate

• MFSP (Minimum Fuel Selling Price) can then be used to assess the

cost-competitiveness of each technology

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4.7

17.7

6.8

44.0

36.6

Feed

1st Stage HP/ 2ndStage HC

Fractionation

HMU

Utilities & Contingency@ 35%

Installed Equipment Costs $112.6mln

112.6

5.7 11.7

102.7

Installed EquipmentCosts

Land/Develop

Permits & S/U

Standard ProjectAdd-In's**

Total Capital Investment $232.8mln

91.31

7.8

2.14

17.3

5.9

29.6

Wood $71.97/dry ton

Other Op Costs: Catalyst,Disposal, etc.

Fixed Cost

Depreciation

Avg Income Tax

Avg ROI

Operating Costs Total $1.60/gal*

*Includes $0.093/gal coproduct credit

** Prorated Expense (10%), H O & Construction (20%), Field

Expense (10%), Working Capital (10%) , Project Contingency (30%)

• Stand Alone/Green Field (US Gulf Coast basis)

• 2000mt/d wood (30% moisture fed, dried to 10% moisture at 1st stage)

• Equipment cost - HMU is largest @ $44mln ~40% TIC

• Feed Stock ~55% of Operating Cost

• No subsidies, tax, RIN or carbon credits included!

• Minimum Fuel Selling Price – $0.423/L (2007) $0.465/L (2012)

$1.60/gal $1.76/gal

• Refinery Synergy w/Refinery H2 Supply

• Estimated MFSP $0.359/L (2007) $0.394/L (2012)

$1.36/gal $1.49/gal

• NREL TIC validated by KBR pointing to higher HMU cost

• Opex validated by prospective clients

IH2 Process Estimates (USGC) NREL 06/11 Basis

3/21/2013 10

http://www.osti.gov/bridge/servlets/purl/1059031/1059031.pdf

4.7

17.7

4.0

55.0 2.8

2.8

40.5

Feed

1st Stage/2nd Stage

Fractionation

HMU

Ammonium Sulfate

Absorption/Stripping

Utilities & Contingency@ 35%

Installed Equipment Costs $127.5mln

** Prorated Expense (10%), H O & Construction (20%), Field

Expense (10%), Working Capital (10%) , Project Contingency (30%)

• Stand Alone/Green Field (US Gulf Coast basis)

• 2000mt/d wood (30% moisture fed, dried to 10% moisture at 1st stage)

• Equipment cost - HMU is largest @ $55mln ~45% TIC

• Feed Stock ~55% of Operating Cost

• No subsidies, tax, RIN or carbon credits included!

• Minimum Fuel Selling Price – $0.433/L (2007) $0.476/L (2012)

• $1.64/gal $1.80/gal

• Refinery Synergy w/Refinery H2 Supply

• Estimated MFSP $0.359/L (2007) $0.394/L (2012)

$1.36/gal $1.49/gal

• KBR FEED underway (FEL-2 complete , FEL-3 underway)

• Opex validated by prospective clients

IH2 Process Estimates (USGC) NREL 09/12 Basis

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127.5

6.3 13.2

116.5

Installed EquipmentCosts

Land/Develop

Permits & S/U

Standard ProjectAdd-In's**

Total Capital Investment $263mln

91.31

7.8

2.14

17.3

5.9

29.6

Wood $71.97/dry ton

Other Op Costs: Catalyst,Disposal, etc.

Fixed Cost

Depreciation

Avg Income Tax

Avg ROI

Operating Costs Total $1.64/gal*

*Includes $0.1884/gal coproduct credit

• Bench Scale

– Since 02/2009 @ 0.5kg/hr

• Pilot Scale

– Since 02/2012 @ 50kg/d

– Confirmed bench scale results

– Producing fuels for EPA Registration

– Producing fuels for ASTM Qualification

– Wood derived gasoline is B100!

• Pre Commercial Scale

– BDEP for 5mt/d cellulose done

– 1st demonstration license awarded 12/2012, more expected in Q1 2013

• Commercial Scale

– KBR is CRI’s exclusive engineering partner for BDEP >330 t/d

– BDEP 500 & 1000mt/d wood (FEL-2 and -3 underway)

– Target Q1 2014 for full scale commercial deployment

IH2 Technology Deployment

12 3/21/2013

Commercial Timeline, Current Status

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1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

Process

Variables and

Semi-

Continuous

Operation

Lab Scale Demo Scale Units Only (11 units)

(Brownfield Construction; Date Basic Engineering Starts) Full

Commercial

Construction

Basic/Detailed

Engineering

Construct 50kg/d

Pilot Plant

Receive Unit

Pilot Scale

Continuous Pilot

Plant Operation

Shake Down

Wood, 5-1000mt/d

Crop Residues, 5-10mt/d

Micro Algae, 5mt/d

Mixed Paper/OCC/Urban Wood, 5mt/d

Basic

Engin

eering

5m

t/d

Basic

Engin

eering

Began 5

00m

t/d

Basic

Engin

eering

Began 1

000m

t/d

Today

Executive Summary

The IH2 technology is

– a cost-effective process developed by GTI with US Dept of Energy

co-funding that converts biomass directly to high purity hydrocarbon

fuels and/or blend stocks using proprietary catalysts

– self-sufficient and self-sustaining with little unsustainable impact on

the surrounding environment needing only transport in/out of the site

– feedstock agnostic, able to consume broad range of biomass

straight, but feed can be mixed and changed routinely without

process refinement

– NOT gasification/Fischer-Tropsch

– nearly carbon-neutral (LCA >93% GHG* reduction)

– currently in basic engineering for multiple feed demonstrations

– available exclusively from CRI

14 3/21/2013

Thank You

3/21/2013 15

Learn more at

www.cricatalyst.com/renewables