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  1. 1. Cellulosic Hydrocarbon Fuels from IH2 Technology – Fuel Quality Celeste McLeod CRI Catalyst Company 910 Louisiana Houston TX 77002Celeste McLeod, CRI Catalyst Company, 910 Louisiana, Houston, TX 77002 LARTC Presentation 10 April 2013
  2. 2. Disclaimersc a e This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results,expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘goals’’, ‘‘intend’’, ‘‘may’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘plan’’, ‘‘probably’’, ‘‘project’’, ‘‘risks’’, ‘‘seek’’, ‘‘should’’, ‘‘target’’, ‘‘will’’ and similar terms and phrases There are a number of factors that could affect the future operations of Royal Dutch Shell and couldsimilar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this presentation, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative fiscal and regulatory developmentsdeveloping countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on f d l ki t t t Additi l f t th t ff t f t lt t i d i R l D t h Sh ll’ 20 F f thforward-looking statements. Additional factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended December 31, 2011 (available at and ). These factors also should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, 10 April 2013 Neither Royal Dutch Shell nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this presentation.p g p 3/28/2013 2
  3. 3. Discussion Topicsp • Introduce Gas Technology Institute (GTI) and CRI Catalyst (CRI)(GTI) and CRI Catalyst (CRI) • IH2 Technology overview • IH2 Technology product quality • IH2 process economicsp • IH2 Technology integration sugar/ethanol • IH2 commercial deployment 3/28/2013 3
  4. 4. Gas Technology InstituteGas ec o ogy st tute • Not-for-profit gas research & services organization with a 70+ year history • Capabilities that span the natural gas value chain • Current focus in diversified energy solutions • Facilities – 18 acre Chicago campus – 28 specialized labs totaling 200,000 ft2 • Staff of 250 >1 200 patents• >1,200 patents • 750 licenses granted & 500 products taken to market Pil t S l G ifi ti C E & E i t l T h l C t Offices& Labs CRI is the partner for IH2 3/28/2013 4 Pilot Scale Gasification Campus Energy & Environmental Technology Center
  5. 5. CRI Catalyst CompanyC Cata yst Co pa y • Catalyst Business with 50+ year history • Houston based global business – Houston – London – Singapore • Research Facilities Amsterdam– Amsterdam – Bangalore – Houston f• Manufacturing Facilities – US (3) – Germany – Belgium 3/28/2013 5
  6. 6. What is the IH2 Process? • IH2 process Catalysts Hydrogen & Heat– Catalysts, Hydrogen & Heat – Cost-effectively converts wide variety of biomass – Directly produces hydrocarbon “drop in” fuels (R100) and/or high quality blend stock (>R50) • IH2 Technology offers integration opportunities – Refinery, paper mill, ethanol plant, agricultural, or recycling operations – Creates higher value from biomass than afforded by heat and electrical power sales (NA basis) 3/28/2013 6 electrical power sales (NA basis)
  7. 7. IH2 Process (Simplified, Stand Alone) Process ( p , ) Biogenic CO2 Feed Products HDO’d Vapors 4) SMR C1‐C3 GasRenewable H2 Di till d Hi Pressure  Steam Crop Residue City Waste 2) Fluidized Bed  Proprietary   Catalyst Renewable H2 3) Fixed Bed  Proprietary  Catalyst Renewable H2 Distilled  Hydrocarbon Clean Water Wood/Forest Residue Gasoline, Jet and Diesel Range HCs 340‐470C <500psig 1st Stage 2nd Stage 370‐400C <500psig Fertilizer Energy Crops Algae 1) Feed Conditioning Sizing , Drying & Feeding BioChar 3/28/2013 7
  8. 8. IH2 Transformative Differentiators • Fungible, high purity hydrocarbon fuel and/or blend stock productsstock products • Nearly carbon neutral* • Feedstock flexible w/ high product yields – 67-157 US gallons/US ton • Attractive economics – ~ $2/gal; 500 dry MT/day wood; USGC – Low capex (4 major process steps, low pressure, non corrosive) – Low opex (feedstock predominates) E th i ith 72% 86% bi• Exothermic process with 72% - 86% bioenergy recovery (wood) • Market Ready! Combination of Available Technologies 3/28/2013 8 *>94% GHG reduction per Professor David Shonnard at MTU:
  9. 9. Evolution of IH2 Technologygy Gasoline Product 3rd Gen Catalyst Advanced catalysts improve product, Wood Example Total Liquid Product 2nd Gen Catalyst Lab Scale Total Liquid Product 1st Gen Catalyst Lab Scale Gas/Jet/Diesel Product 3rd Gen Catalyst Lab Scale Pilot Plant Scale Hydrocarbon Hydrocarbon Jet/Diesel Product 3rd Gen Catalyst Pilot Plant Scale WaterWater Water Product 3rd Gen Catalyst Pilot Plant Scale 4Q09 “R5” Quality 3Q10 “R25” Quality 2Q12 “R60+” Quality “GOAL““GOAL“ Drop InDrop In StandStand AloneAlone “R100”“R100” Process & Catalyst R&D Continues 3/28/2013 9 R100R100
  10. 10. Comparison of Liquid Quality from Woody BiomassBiomass Pilot plant Laboratory unit % Carbon 88.20 88.40 % Hydrogen 11.60 11.00 % Sulfur 0.02 0.02 % Nitrogen <0.10 <0.10 % Oxygen BDL BDL% Oxygen BDL BDL Total acid number, mg KOH/g <0.05 <0.05 3/28/2013 10
  11. 11. IH2 Liquid Product Quality(Wood) • 3rd generation gasoline – Gasoline Meets ASTM D-4814-10b unleaded gasoline specificationsunleaded gasoline specifications – R100 RBOB Quality Economy & Intermediate U.S. – Evaluating EU split v EN-228 • 3rd generation diesel – Passed all D-975-11 as No 2, general, g purpose middle distillate fuel as R100 – Except Cetane Index & Viscosity – Diesel aromatic, currently ~R50 Target R100R100 – Diesel (whole algae) likely R100 (in testing) – Evaluating EU split v EN-590 LA options for IH2 hydrocarbons: internal consumption or export 3/28/2013 11 LA options for IH hydrocarbons: internal consumption or export
  12. 12. IH2 Process Economics (USGC) NREL 09/12 Basis( ) 29.6 Wood $71.97/dry ton Other Op Costs: Catalyst, Operating Costs Total $1.64/gal* 4.7 17.7 Feed 1st Stage/2nd Stage Installed Equipment Costs $127.5mln 91.31 2.14 17.3 5.9 Disposal, etc. Fixed Cost Depreciation Avg Income Tax Avg ROI 4.0 55.0 2 8 2.8 40.5 Fractionation HMU Ammonium Sulfate Absorption/Stripping Utilities & Contingency • Stand Alone/Green Field (US Gulf Coast basis) • 2000mt/d wood (50% moisture fed, dried to 10% moisture at 1st stage)Installed Equipment Total Capital Investment $263mln 7.8 Avg ROI *Includes $0.1884/gal coproduct credit 2.8 Utilities & Contingency @ 35% • 60% financed at 8% interest, overall 10% IRR • Feed Stock ~55% of Operating Cost • No subsidies, tax, RIN or carbon credits included! • Minimum Fuel Selling Price – $0.433/L (2007) $0.476/L (2012) R fi S /R fi H S l 127.5116.5 Costs Land/Develop Permits & S/U Standard Project Add-In's** ** Prorated Expense (10%), H O & Construction (20%), Field Expense (10%), Working Capital (10%) , Project Contingency (30%) • Refinery Synergy w/Refinery H2 Supply • Reduces TIC ~55.0MM$ • Estimated MFSP $0.359/L (2007) $0.394/L (2012) • KBR FEL-3 underway • Opex validated by prospective clients 6.313.2 Add In s • Opex validated by prospective clients 3/28/2013 12
  13. 13. Sugar/Ethanol Important Latin American Region • ~38% World Sugar Cane (SC) • Brazil, Colombia, Argentina known SC Ethanol Producers; Guatemala, Jamaica, Costa Rica, El Salvador export SC Ethanol A P d ti P d ti it % f W ld • Residual materials – Bagasse, Cane Trash, Filter Cake, Spent Wash, Molasses • Next Generation Biofuels – Brazil • IH2 w/Sugar/Ethanol Cellulosic Hydrocarbon Country Area Production Productivity % of World Production(million ha) (million tons) (Tons/ha) Brazil 5.343 386.2 72.3 29% India 4.608 289.6 62.8 22% China 1.328 92.3 65.5 7% Thailand 0.97 64.4 66.4 5% Pakistan 1.086 52 47.9 4% Mexico 0.639 45.1 70.6 3% Colombia 0.435 36.6 84.1 3% Australia 0.423 36 85.1 3% USA 0.404 31.3 77.5 2% Philippines 0.385 25.8 67.1 2%pp Indonesia 0.35 25.6 73.1 2% Cuba 0.654 22.9 35 2% South Africa 0.325 20.6 63.4 2% Argentina 0.295 19.2 65.2 1% Myanmar 0.165 7.5 45.4 1% Bangladesh 0.166 6.8 41.2 1% 3/28/2013 13 g WORLD 20.42 1333.2 65.2 100% Sugar Cane Production Data & Sugar Cane Growth Region Map
  14. 14. IH2 Integration w/ Sugar/Ethanol Sugar/Ethanol plant 160 t/hr Sugarcane Excess Bagasse: 41.8 t/hr; 147854t/yr* Cogeneration *Material Energy Balance provided by J.P.Mukherji Associates Pvt. Ltd. – India ~150 days Operation, Bagasse @50% Moisture IH2 g Steam Electricity 34.5 – 65 GW/yr** Hydrocarbon & Steam*** Electricity 32.1 MML Hydrocarbon/yr ** Location, Cogeneration Equipment Efficiency, Steam T P Distribution Losses etc impact final 3/28/2013 14 Steam T, P, Distribution Losses, etc. impact final GW available for sale to Grid *** 72% - 86% bioenergy recovery
  15. 15. IH2 Integration w/ Sugar/Ethanol High Level Evaluation C ti IH2 Cogeneration Steam Electricity 34.5 – 65 GW/yr** IH2 Hydrocarbon & Steam*** Electricity 32.1 MML Hydrocarbon/yr** Location, Cogeneration Equipment Efficiency, Steam T P Distribution Losses etc impact finalSteam T, P, Distribution Losses, etc. impact final GW available for sale to Grid *** 72% - 86% bioenergy recovery • IH2 Liquid hydrocarbons benefit v Cogeneration $40 00 $45.00 Bagasse Conversion Cogeneration v IH2 Hydrocarbon • IH2 Location specific – Commodity Price – Conversion – Efficiency IH2 C it l MFSP $20.00 $25.00 $30.00 $35.00 $40.00 matedMM$/yr – IH2 Capital MFSP • IH2 Hydrocarbon Only • IH2 Feed Flexible – Other Sugar/Ethanol $- $5.00 $10.00 $15.00 Estim residues – Local Alternative Feeds World bank – gasoline base prices by country Business week – Electricity prices by country 08/12 IH2 Hydrocarbon @ Resale 75% of Retail IH2 Hydrocarbon @ Resale 50% of Retail Low - Electricity to Grid High - Electricity to Grid 3/28/2013 15 y p y y * Brazil has since reduced electricity price per KWH Average - Electricity to Grid
  16. 16. IH2 Technology Deployment • Bench Scale – 02/2009 @ 0.5kg/hr gy p y • Pilot Scale – 02/2012 @ 50kg/d – Confirmed bench scale results Fuels for EPA Registration– Fuels for EPA Registration – Fuels for ASTM Evaluation – Gasoline (wood) is R100 Pre Commercial Scale• Pre Commercial Scale – BDEP for 5mt/d cellulose done – 1st demonstration license awarded 12/2012, more expected C i l S l• Commercial Scale – KBR is CRI’s exclusive basic engineering partner – FEED 500 & 1000mt/d wood (FEL-2 complete, FEL-3 underway) – Full Scale Deployment Target Q1 2014Full Scale Deployment Target Q1 2014 163/28/2013
  17. 17. Commercial Timeline, Current StatusCo e c a e e, Cu e t Status 1Q10 2Q10 3Q10 Process Variables and Semi- Continuous Lab Scale Demo Scale Units Only (11 units) (Brownfield Construction; Date Basic Engineering Starts) Full Commercial Pilot Scale Wood, 5-1000mt/d 3Q10 4Q10 1Q11 2Q11 3Q11 Continuous Operation Construct 50kg/d Pilot Plant Receive Unit Crop Residues, 5-10mt/d Micro Algae, 5mt/d Mixed Paper/OCC/Urban Wood, 5mt/d 4Q11 1Q12 2Q12 3Q12 4Q12 Continuous Pilot Plant Operation Shake Down 1Q13 2Q13 3Q13 4Q13 1Q14 5mt/d 500mt/d 1000mt/d Today y5mt/d gin5mt/d 1Q14 2Q14 3Q14 4Q14 Construction Basic/Detailed EngineeringFEL-3Complete FEL-2Complete FEL-2Complete FEL-2Underway FEEDSettobeg 3/28/2013 17
  18. 18. Technology is: – Cost-effective process developed by GTI using CRI proprietary catalysts Converts biomass directly to hydrocarbon fuels and/or high quality Technology is: – Converts biomass directly to hydrocarbon fuels and/or high quality blend stocks – Self-sufficient & self-sustaining w/ little lasting environmental impact, needs only transport in/outneeds only transport in/out – Feedstock flexible – Nearly carbon-neutral – Integrated for potentially improved economics – Currently in FEED (FEL-2/-3) for multiple feed demonstrations – Available exclusively from CRI Catalyst Companyy y p y 183/28/2013
  19. 19. Assumptions, Credits, Referencesssu pt o s, C ed ts, e e e ces 1. Slide 3 Image credit: <a href=' let.html'>iqoncept / 123RF Stock Photo</a> 2. Slide 6 Image credit: <a href=' 14316634 the-big-question-silberblau.html'>styleuneed / 123RF Stock Photo</a>S de 6 age c ed t a e ttp // 3 co /p oto_ 3 663 _t e b g quest o s be b au t sty eu eed / 3 Stoc oto /a 3. Slide 8 Transformative Differentiators *>94% GHG reduction per Professor David Shonnard at MTU: 4. Slide 8 Image credit: <a href=''>kamonrat / 123RF Stock Photo</a> 5. Slide 11 – Hart Energy’s international Fuels Quality Center – Sulfur Limit World Graphs for Diesel and Gasoline 6. Slide 12 IH2 Process Economics (USGC) NREL 06/11 Basis 7. Slide 13 - According to the Renewable Fuels Association, Jamaica, Costa Rica and El Salvador are respectively the second-, third- and fourth largestg p y g exporters of fuel ethanol to the US. The region began exporting ethanol to the US under the Caribbean Basin Initiative, which allowed tariff-free exports of ethanol up to 7 percent of US ethanol production. 8. Slide 13 Data & Sugarcane Map via 9. Slide 13 Sugar Cane Photograph By Rufino Uribe (caña de azúcar) [CC-BY-SA-2.0 (], via Wikimedia Commons 10. Slide 14 Maximize Returns w/ IH2 Integration Sugar/Ethanol Material Energy Balance provided by J.P.Mukherji Associates Pvt. Ltd 11 D t A ti d f Slid 15 M i i R t / IH2 I t ti S /Eth l11. Data Assumptions used for Slide 15 Maximize Returns w/ IH2 Integration Sugar/Ethanol – - Electricity Prices – – World Bank Gasoline Prices by Country (2010) – -- Discount Resale Gasoline Price U.S. Used to Adjust World Bank Values to Resale taken at 75% of Retail based on U.S. reduction retail to resale taken from eia data. – Conservative estimate for IH2 hydrocarbon value was taken at reduced rate of 50% of retail for each country – CPI Inflation Calculation taken at 106% conversion 2010 to 2013$ – Economic benefits included are for illustration only. Further economic evaluation should be conducted on a site specific basis. – Electricity conversion was estimated based on Mass Balance provided by J.P. Mukherji Associates Pvt. Range of electricity conversion was assumed based on internal values for conversion . Low end total GW produced assumed an 80% efficiency and high end assumed no losses. Estimated electricity price applied to calculation for the Low scenario assumed 80% of the retail electricity price was the selling rate per KWH back to the grid. High scenario assumed the selling rate per KWH was the same as retail price. 12. Slide 14 &15 electricity pylon Image credit: <a href=' clouds-and-blue-sky-background.html'>peteg / 123RF Stock Photo</a> 3/28/2013 19
  20. 20. Thank You Gracias & ObrigadaThank You, Gracias & Obrigada Learn more at 3/28/2013 20