1. Strictly Private & Confidential
Established requirement for low carbon fuel cannot be met by existing resources
Each of British Columbia (“BC”) and California has mandated 10% carbon intensity reductions by 2020 (vs. 2010 baseline)
BFE has targeted a growth segment in an otherwise mature industry, and has requisite experience and capability to deliver
BFE gasoline is expected to have a carbon intensity of at most ~78 gCO2e / MJ, offering a ~10% improvement relative to
conventional gasoline at 87.3 gCO2e / MJ; and BFE has identified opportunities to reduce its carbon intensity even further
BFE gasoline would be utilized as a needed part of a portfolio of solutions to meet the low carbon fuel standard, either as a
finished and fully fungible fuel, or working in complement to existing partial solutions such as ethanol and biodiesel
We competitively produce gasoline at a margin that provides a return to investors without including ancillary value
Use of proven, commercialized and familiar technologies in a verified process flow sheet minimizes technical risk
Business model ensures low cash costs, accesses the arbitrage between natural gas and refined product prices and
achieves market access by providing a solution to (as opposed to competing with) industry incumbents
Core economics do not consider value upside provided to industry incumbents or longer-term replacement of fossil fuels
We have social licence with the communities, First Nations, local and provincial governments, and with our supply
partners to build our enterprise
Strong, demonstrated local support from communities and key stakeholders, which is critical to doing business in BC
We have a carbon reduction capability that is flexible and can be increased as the market / requirements evolve
Key technology and access to BC Hydro’s predominantly renewable electricity provides unique carbon intensity reductions
Process designed to supply low carbon gasoline from the outset, with ability to further reduce carbon intensity and introduce
greater renewable component (e.g. hydrogen from electrolysis) as market demand and/or economics dictate
Process also provides opportunity to recover and sell intermediate products should market conditions be attractive
Our team is experienced and possesses a skill set ideally suited to this enterprise
Extensive experience developing new businesses; and financing, constructing, and operating major capital projects
Juergen Puetter (Chairman & CEO) has demonstrated success converting innovative concepts into successful businesses:
Bionaire (air purification), Hydroxyl (water purification), and Aeolis Wind (wind power)
Michael Macdonald (President) and Dr. Ron Britton (Chief Technology Officer) have deep executive experience from
Methanex – initial step in BFE’s process is production of methanol from natural gas
Michael Macdonald also led development and implementation of the US$1 billion EMethanex project (commissioned
2011) in Egypt for Methanex and was involved in the Synfuel gas-to-methanol-to-gasoline project
Glenn Kowalsky (VP, Engineering) has over 20 years of oil and gas experience and is an accomplished facilities developer
July 2015
While the information contained herein is believed to be accurate and reliable, none of Blue Fuel Energy Corporation (“BFE” or “Company”), RBC Dominion Securities Inc. (“RBC”), a member company of RBC
Capital Markets, or their employees, officers, directors or shareholders, makes any representations or warranties, express or implied, as to the accuracy or completeness of such information embodied herein
and none of them shall have any liability for such information, nor for the accuracy, reliability or completeness of such information. This document is provided solely for the limited purpose described below and
is not intended to assist any person in making an investment decision. It is not meant to be and should not be distributed to any other parties. In furnishing this document, RBC reserves the right to amend or
replace the document at any time and undertakes no obligation to provide the recipient with access to any additional information. In all cases, prospective investors should conduct their own investigation and
analysis of the Company and the data described herein. This document, as well as other materials that subsequently may be provided by the Company, and any copies of such documents and materials, are to
be returned promptly upon request by the Company or RBC. Except where otherwise noted, all references to “$” are to “US$”.
Strictly Private and
Confidential
1
Investment Highlights
US$55 million Private Placement Equity Offering
Opportunity Overview
Blue Fuel Energy Corporation (“BFE”) is a Sidney, BC-based company that is developing Sundance, a clean fuels project to
produce low carbon intensity gasoline from natural gas and renewable electricity approx. 20 km east of Chetwynd, BC
BFE has selected technologies to minimize carbon intensity today and allow a transition away from fossil fuels in the future
BFE is currently raising $55 million of equity funding to complete the engineering phases and requisite commercial and
project financing arrangements to allow it to reach a Final Investment Decision as early as the end of 2016
Design and construction is expected to take 36 months after achieving the final investment decision
Sundance would produce ~240 million gallons of gasoline annually (~20% of BC demand) from ~135 MMcf/d of natural gas
www.bluefuelenergy.com
2. Strictly Private & Confidential
2
BC and California – Significant Markets with a Regulated Requirement for Low Carbon Fuels
BFE Gasoline is the Superior Alternative for Meeting Low Carbon Fuel Standards
Conventional
Gasoline
BFE Gasoline Ethanol Biodiesel or HDRD
Advantage for
Blue Fuel
Description
Gasoline produced
from crude oil
Fully fungible low CI
gasoline produced from
natural gas by BFE
Ethanol produced from
organic sources
Diesel-like fuel derived
from plant oils
Carbon
Intensity
87.3 g CO2 / MJ 77.6 g CO2 / MJ
53.1 g CO2 / MJ to 72.9
g CO2 / MJ
22.3 g CO2 / MJ to 45.4
g CO2 / MJ
Volume / CI
Reduction
Limitations
n/a None
~15% ethanol Blend
Wall
~20% diesel Blend Wall
Energy
Content
34.69 MJ / L
Equal to conventional
refinery gasoline
23.58 MJ / L
36.94 MJ / L (Biodiesel)
36.51 MJ / L (HDRD)
Fuel vs. Food
Exposure
None None Significant Significant
Other
Considerations
Sustained trend
towards low carbon
intensity fuels(1)
Completely fungible with
conventional gasoline
Subject to regulated
blending limitations of
10%(2)
Diesel pool volumes
significantly smaller
than gasoline pool –
thus, biodiesel and
HDRD impact on total
fuel CI limited(2)
British Columbia
California
(1) In BC, legislated carbon penalties for failing to achieve carbon intensity targets are C$200 per tonne of emissions above target; and in the EU, €470 per tonne
(2) Even if ethanol or biodiesel blend limits were increased, the “blend wall” prevents these products from delivering the requisite carbon intensity reduction
The BC market represents approximately 4.7 million gallons of fuel
sales per day
In 2008, the Province of British Columbia enacted the Renewable and
Low Carbon Fuel Requirements Regulation to reduce carbon intensity
and increase renewable content in transportation fuels
Part 2 of Regulation outlines renewable content required in
transportation fuels
Part 3 of Regulation sets guideline for 10% reduction in carbon
intensity of transportation fuels by 2020 (vs. a 2010 baseline)
Deficiencies to the annual reduction targets will be penalized at the rate
of C$200 per tonne of CO2 equivalent emissions
The California market represents approximately 47.8 million gallons of
fuel sales per day
In 2007, California adopted the first low carbon fuel standard mandate
with specific targets effective January 2011
Requires that all fuels sold in California have 10% lower carbon
intensity by 2020 (vs. a 2010 baseline)
Deficiencies to the annual reduction target must be covered through the
purchase of offsetting carbon credits
Value of carbon credits are determined via market-based approach
-
1,000
2,000
3,000
4,000
5,000
6,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Thousandgallonsperday
Diesel Gasoline
-
10,000
20,000
30,000
40,000
50,000
60,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Thousandgallonsperday
Diesel Gasoline
Source: U.S. Department of Transportation; California Board of Equalization
Source: CANSIM Table 405-0002
Low carbon fuel requirements create an imperative for market
participants to source and sell low carbon fuels
3. Strictly Private & Confidential
Refining
3
BFE Integrates Seamlessly into the Existing Gasoline Value Chain
BFE Will Use Proven Technologies at a Site with Substantial Infrastructure in Place
– and will outsource certain aspects of the project to manage scope and capital
Exploration
Development
& Production
Transport to
Refinery
Distribution &
Marketing
Upstream Midstream Downstream
Blue Fuel – Sundance Property
Site Overview
Blue Fuel has an option on a 1,055 acre site in the southwest corner of the prolific Montney shale gas basin,
approximately 20 km east of Chetwynd
Blue Fuel will hold title to, and full control over, the property
Gas supply
infrastructure
Site near existing Spectra and TransCanada Pipeline gas infrastructure
No major pipeline development required to obtain natural gas feedstock
Electric
infrastructure
BC Hydro has ample electric generation capacity to supply facility; BFE in discussion with BC Hydro and a 3rd
party to construct a new transmission line to deliver electricity to the Sundance site
BC Hydro BC produces ~91.2%(1) of electricity from renewable hydroelectric and wind generation
Liquids transport
/ off-take
infrastructure
Site has rail spur with access to domestic markets and port facilities
Pembina West / Trans Mountain pipeline potential alternatives for gasoline off-take
Ample existing
transportation
infrastructure for
natural gas
supply and
potential for a
direct pipeline
(depending on
supplier)
Ample existing
transportation
infrastructure for
off-take, or a
group of off-
takers facing
increasingly
stringent carbon
reduction targets
BFE will seek to sign long-term oil or
refined product linked pricing supply
arrangements with natural gas producer(s)
Significant natural gas resource being
developed in the Montney (close to BFE’s
site) – BFE will take no natural gas
production or delivery risk
(1) StatsCan CANSIM (Table 127-0009)
Methanol-to-Gasoline Production Overview
At its core, Blue Fuel’s project converts natural gas into vehicle-ready gasoline or gasoline blendstock
The Blue Fuel process starts by converting natural gas, water and oxygen to a mixture of hydrogen and carbon oxides,
which are subsequently converted to crude methanol
At the scale selected, the preliminary engineering for the Gas-to-Methanol process requires ~135 MMcf/d of natural gas
Johnson Matthey: BFE has a licence letter of intent under discussion with Johnson Matthey for Gas-to-Methanol
production components; Johnson Matthey is a global leader in sustainable technologies (>£3 billion in annual sales)
The methanol mixture is subsequently processed to produce either a gasoline blendstock or finished gasoline
Engineering studies show the Methanol-to-Gasoline process will yield ~16,000 bpd of gasoline and ~3,000 bpd of LPG
ExxonMobil: BFE is in discussions with ExxonMobil to license Methanol-to-Gasoline production components
The core process consumes ~9 Mcf per barrel of gasoline produced, ~100 MW/h of electricity and ~2,500 tpd of oxygen
4. Strictly Private & Confidential
Fort St John
Mackenzie
SPECTRAT-NORTH
52
97
29
97
97
Tumbler
Ridge
97
Taylor
Chetwynd
29
Dawson Creek
Gas Pipeline Infrastructure
BC Hydro Transmission Lines Major Highways
CN Railways
Sundance Site
BC / AB Border
Proposed Sundance Natural Gas-to-Gasoline Plant
4
For further information, please contact:
Robert Nicholson*
Managing Director
(416) 842-3824
robert.nicholson@rbccm.com
Michael Scott
Managing Director
(403) 299-6944
michael.scott@rbccm.com
Cameron Bossert*
Associate
(403) 299-5268
cameron.bossert@rbccm.com
Andrew Kaye
Analyst
(416) 842-4064
andrew.kaye@rbccm.com* Identifies key contact person
Process Overview
RBC is currently qualifying potential investors to participate in a private placement process and is inviting potential investors
to review the information contained herein solely for the purpose of determining whether they are interested in participating
in the process. Interested parties should contact RBC to schedule a management presentation.
Interested parties should not contact the Company or any of its affiliates, directors, officers, employees, shareholders or
representatives directly regarding any aspect of their interest in a transaction. The process will be managed in accordance
with procedures that will be established and communicated to interested parties from time to time. All inquiries or
communications, including any requests for additional information, should be directed to one of the following individuals at
RBC.