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WBM Asia - IH2 Technology: Commercial Progress and Product Quality Update
- 1. IH2 Technology: Commercial Progress and Product Quality Update
- 2. Disclaimer 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, 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 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 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 forward-looking statements. Additional factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended December 31, 2013 (available at www.shell.com/investor and www.sec.gov ). These factors also should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, 17 June 2014 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.
- 3. Main Points • Why IH2 technology? • Integration with existing assets • Commercialization Process • Product Quality Update • Executive Summary
- 4. Why IH2 Technology? • Self-sufficient, self-contained and self-sustaining • Feedstock flexible, product yields 67-172 gal/ton (MAF) Spans gasoline, jet and diesel range No detectable oxygen or TAN • High GHG reductions • Integrates commercially proven equipment; Market Ready • Attractive economics (standalone or co-locate with existing assets) • Improved catalysts enhanced product yield & quality • Available exclusively from CRI Catalyst Company
- 5. Why IH2 Technology? Biogenic CO2 Hi Pressure Steam Distilled Hydrocarbon Clean Water Fertilizer BioChar Feed City Waste Crop Residue Wood/Forest Residue Energy Crops Algae Products 2) Fluidized Bed Proprietary Catalyst System Renewable H2 340-470C <500psig 4) SMR C1-C3 Gas 1st Stage 2nd Stage 1) Feed Conditioning Sizing , Drying & Feeding 3) Fixed Bed Proprietary Catalyst System Renewable H2 <500psig Renewable H2 Process 5) Cyclones Gasoline, Jet and Diesel Hydrocarbons (67-172 gal/ton) R100 Regular Gasoline (Wood) R100 Intermediate Gasoline (Wood) R100 Diesel (Wood)
- 6. Integration - Refinery Option 1: Full Standalone Location Flexibility, Minimum Environmental Impact Maximum GHG reduction Lowest CI product Highest Capital Cost No Fixed Cost Synergy Option 2: Integrated with Refinery HT Minimum Environmental Impact Lowest CI product Maximum GHG reduction Lower Capital Cost Some Fixed Cost Synergy Option 3 Integrated with Refinery H2 Higher Environmental Impact Reduced GHG reduction Higher CI product Lowest Capital Cost Capital ~25% lower than base case 9/23/2014 6
- 7. Cane Trash/ Sugar Cane Tops Integration – Sugar Mill IH2 Bagasse Unit Sugar Cane Sugar Factory Enhanced Energy Integration Hot water Char Co-Gen HP Steam 9/23/2014 7 Sale to grid Sugar Molasses Fuels Boiler LP Steam
- 8. Primary Product(s) Growth Harvest Extraction Residues HP Steam or HP Steam to Power CO2 NH3 / S / Ash LP Steam / Hot Water 9/23/2014 8 Fuel 100 gal/ton MAF 70% gasoline/ 30% diesel Integration – Algae Facility
- 9. Growth Harvest Extraction Whole Algae HP Steam or HP Steam to Power CO2 NH3 / S / Ash LP Steam / Hot Water 9/23/2014 9 Fuel 157 -172 gal/ton MAF (50% gasoline/ 50% diesel) Integration – Algae Facility
- 10. Integration – Paper Mill, “Soft Assets” • Wood Supply System – Procurement staff & buyer networks/intellectual capital – Fiber Supply Agreements – Landowner data: US RFS-2 “chain-of-custody” requirements • Contract data – ownership & legal description • Load tickets – link delivered loads to harvest location • Harvest location maps – spatial data • Fiber Accounting & Information Systems Integration • HSE Systems – Air & water permits – Sampling & reporting structure/agency interaction 9/23/2014 CRI & SHELL CONFIDENTIAL INFORMATION 10
- 11. Integration – Paper Mill, “Hard Assets” Heat LP Steam / Heat Power 9/23/2014 CRI & SHELL CONFIDENTIAL INFORMATION 11 Paper Process Digestion, refining, washing, paper machines Paper Fuel 90 gal/ton MAF 65% gasoline/ 35% diesel Char Boiler/ Co-Gen Wood Yard Handling, storage, chipping, drying, hammer milling LP Steam or Power to grid Biomass Feedstock Chips Char Multiple uses for low-grade heat or power Soft Assets LP Steam / Power
- 12. 0.02L/day Bangalore 1L/week Chicago, Bangalore 22L/day Chicago 2000L/day NanoScale EE HT tools GTI/CRI Design Basis Commercially Engineered Commercially Fabricated 1st Stage System 2nd Stage System On line analytical suite Up to 16 runs/day/system Chicago Unit GTI Design Basis GTI Built Bangalore Unit GTI/CRI Design Basis Commercially Engineered Commercially Fabricated Mixture online/offline Up to 3 runs/week GTI Design Basis Commercially Engineered Commercially Fabricated Mixture Online/Offline Up to 1 run/week GTI/CRI Design Basis Commercially Engineered Mixture Online/Offline Up to 3 runs/month Commercialization Process
- 13. Commercialization Process – 3D Render
- 14. Product Quality – MBU Scale Improve product yield, appearance and quality Total Liquid Product 2nd Gen Catalysts Lab Scale Hydrocarbon Water Total Liquid Product 1st Gen Catalysts Lab Scale Hydrocarbon Water Gas/Jet/Diesel Product 3rd Gen Catalysts Lab Scale 4Q09 “R5” 3Q10 “R25” 2Q12 “R60+” Jet/Diesel Product 4th Gen Catalysts Lab Scale 1Q14 “R100”
- 15. Product Quality – Pilot Scale Gasoline Product 3rd Gen Catalyst Drop In / Tank Ready US R100 Quality (RBOB) Jet/Diesel Product 3rd Gen Catalyst US R100 Diesel Water Product 3rd Gen Catalyst Clean, No Carbon Contains NH3/H2S (lacks commercial design water clean up )
- 16. Product Quality Summary US • Gasoline (from wood): R100 Meets ASTM D-4814-10b ~86 Octane S < 15-ppm Fully renewable premium RBOB • Diesel (from wood) R100 Meets ASTM D-975-11 Cetane Number 44 S < 10-ppm Europe: • Petrol (from wood) Petrol (from wood) EN 228: Petrol – Jan 2009 Octane Low S ~10-ppm • Diesel (from wood) EN 590:2009+A1:2010 Cetane # Low S ~15-ppm • 3rd Party Testing Underway in 2H2014 • More Upgrading Wood Product for EU Specs
- 17. Executive Summary • Self-sufficient, self-contained and self-sustaining • Feedstock flexible, product yields 67-172 gal/ton (MAF) Spans gasoline, jet and diesel range No detectable oxygen or TAN • High GHG reductions • Integrates commercially proven equipment; Market Ready • Attractive economics (standalone or co-locate with existing assets) • Improved catalysts enhanced product yield & quality • Available exclusively from CRI Catalyst Company
- 18. Thank You Learn more at http://www.cricatalyst.com/catalysts/renewables.html 9/23/2014 18
Editor's Notes
- Stand Alone or, Reduced capital cost options Existing hydrogen supply Idled assets or Rx’s that could be suitable for Second Stage Facilities have existing storage / distribution network for liquid hydrocarbons Provides Refiners with control to assure their supply of renewable fuel to meet mandate “License to operate” RFS-2 “each producer and importer of gasoline and diesel determines the minimum volume of renewable fuel that it must ensure is used in its transportation fuel,” according to EPA. Case could be made that the light ends from IH2 still end up being green moles of H2 because they came from a green source, but whether that would be “allowed” or could be counted/metered is debatable at this stage.
- Stand Alone or, Reduced capital cost options Existing hydrogen supply Idled assets or Rx’s that could be suitable for Second Stage Facilities have existing storage / distribution network for liquid hydrocarbons Provides Refiners with control to assure their supply of renewable fuel to meet mandate “License to operate” RFS-2 “each producer and importer of gasoline and diesel determines the minimum volume of renewable fuel that it must ensure is used in its transportation fuel,” according to EPA. Case could be made that the light ends from IH2 still end up being green moles of H2 because they came from a green source, but whether that would be “allowed” or could be counted/metered is debatable at this stage.
- Scenario 1. Integrating IH2 facility with algae facility using only post-extracted residues to make hydrocarbon fuels. You can still extract algae for your primary products as normal. The hydrocarbon yield from using residues only is approx. 100 gal/ton on MAF basis. CO2, NH3, S and hot water can be used to grow algae and the HP steam can be used for the whole algae facility. This will improve the site margin by monetizing the residues.
- Scenario II: Using the whole algae as feedstock for IH2 process. In this case the yield will be higher at as I mentioned 157 – 172 gal/ ton. The economics will have to be balanced depending on the value that you receive from your primary products.
- Soft Asset Integration represents significant value for Pulp & Paper co-location with IH2. Wood supply systems are complex. Procurement, contracting, and managing short-mid-and-long-term fiber supply agreements requires infrastructure and software that integrates accounting & payment processes, contract administration, and business processes. These processes run behind the scenes of truckloads of wood being delivered to the facility. Purchasing wood not only relies on knowledge and active participation in the local and regional timber markets, but also relationships with landowners and wood buyers. These are critical to managing inventories and optimizing pricing. The information technology systems behind the scenes integrate the scale-house data with the contract data, and purchase price to ensure the right landowner is paid the right amount on time for the products delivered from his property and that the inventory of wood at the facility is updated and kept current. These systems have evolved with the industry and many are “custom built” for a particular location – the value of an ongoing wood supply system should not be taken for granted. Environmental permits also represent a huge potential value. Many of these permits have also “grown” with the facility and often have “grandfathered” TMDL’s and Permit limits etc. that would be difficult to attain under current regulations – so amendments are typical with changing regulations . Each location certainly has its own set of limitation & opportunities, but the high level of sampling and environmental compliance required at paper mills has resulted in a culture of safety and environmental awareness, sampling, reporting & direct interaction with the regulatory agency personnel – these permits and processes can often be more easily amended than developed from the ground-floor.