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VERDIS Presentation - APR 2015 - CUSTOMER

Verdis converts flared natural gas into ultra-clean diesel using their patented Gas to Diesel (GTD) conversion technology. Their Fischer-Tropsch process and cobalt-ruthenium catalyst boost diesel yield from 50% to 94%. Capital requirements for initial units are $5-10 million to manufacture the first units. Projected revenues within 5 years are over $40 million with EBITA of $35 million.

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WE CONVERT FLARED GAS INTO ULTRA-CLEAN DIESEL
THE VERDIS ALTERNATIVE CONVERT WASTED GAS INTO ULTRA-LOW SULFUR DIESEL Our Gas to Diesel (GTD) conversion units will provide a profitable alternative to gas-flaring | Operators can reduce carbon footprint & generate significant cash-flows from valuable commodity | Produce Diesel, naphtha, aviation fuel CAPITAL REQUIREMENTS $5-10 million to get first units manufactured and fielded with companies already strongly interested | If closer to $10 million: could start parallel work on larger units | Projected revenues: +$40 million revenue, EBITA +$35 million, within 5 years. EXECUTIVE SUMMARY GLOBAL GAS FLARING A MASSIVE CHALLENGE Oil and Gas operators annually flare or vent $30 billion worth of natural gas worldwide | Precious energy wasted | 400 million tons of damaging CO2 emitted OUR PATENTED CATALYST A DISTINCTIVE COMPETITIVE ADVANTAGE Our Fischer-Tropsch process and cobalt-ruthenium catalyst boost diesel yield from 50 to 94% | By-products: usable water, co-generated electricity | Customer breakeven point – 3 year average based on wholesale value of diesel and water produced | Environmental benefits add further value
ISSUE & OPPORTUNITY VERDIS & ITS TECHNOLOGY GTD UNIT SIZES & VALUE CREATION COMPETITIVE LANDSCAPE
Every day Oil & Gas operators are flaring and venting natural gas The Greenhouse Gases emitted cause severe environmental damage and have significant worldwide economic impact THE FACTS: Flaring of Associated Gas. . . • Releases 400M tonnes of Carbon Dioxide (CO2) • Wastes $30.6B worth of natural gas (Methane, CH4) , equivalent to 8% of total world supply • Disproportionately impacts world’s most delicate areas – 42% of black carbon in the Arctic comes from global gas flaring Imagine if we could reduce those emissions…and monetize that “waste”! GAS FLARING A MASSIVE CHALLENGE
WHAT IS FREE ASSOCIATED PETROLEUM GAS? Petroleum (Complex mixture of liquid hydrocarbons) Free associated petroleum gas (Mixed gaseous hydrocarbons mainly Methane, CH4) Drilling rig Anticline Impervious rock Gas flare stack WHY IS GAS FLARED? • When crude oil extracted from onshore or offshore oil wells, raw natural gas produced as well • When pipelines and other transportation infrastructure are lacking, vast amounts of such gas is deemed unusable and is flared or vented • Flaring may occur at top of a vertical flare stack (as shown) or at ground-level in an earthen pit
Source Financial Times, Jan 2013: http://goo.gl/MXulda • From a low base, US now fifth largest gas-flaring nation • In North Dakota, USA: major spike in production due to shale gas boom and 30% of associated gas now burned off at wellhead • Gas flaring in this “Bakken formation” now visible from Space: burning $1B worth of gas a year (enough energy to power all the homes in Chicago and Washington combined • Number of flaring permits issued in Texas has gone up six times from 2010 to 2012 GAS FLARING HAS TRIPLED IN THE US (SINCE 2008)
STOP FLARING. MONETIZE YOUR WASTE! WHY DO COMPANIES STILL FLARE? VERDIS SYNTHETIC FUELS GAS-TO-LIQUIDS MOBILE PROCESSING UNITS CONVERT NATURAL GAS TO MARKET-READY ULTRA-CLEAN DIESEL This is the VERDIS poster From the ADIPEC 2012 Oil & Gas Show in Abu Dhabi, UAE They lack a profitable, practical, alternative . . . . . . So VERDIS is going to give them one!
PRIORITY 1 - GAS FLARING Current solutions target only extremely large gas deposits… … leaving $20B+ market for S/M sized flares practically unexploited! Our technology will provide Oil & Gas producers a profitable way to: • Optimize their value chains as profit driver • Reduce emissions to lighten environmental foot print • Promote corporate image/CSR • Comply with emissions reduction targets PRIORITY 2 - STRANDED GAS RESERVOIRS / REMOTE LOCATIONS • Large reserves remain unexploited for economic or technical reasons • VERDIS units can do it, on land, offshore platforms, or boats & barges PRIORITY 3 - GOVERNMENT OR NON-GOVERNMENT STAKEHOLDERS • A less expensive fast-track to domestic diesel production (Israel, Leviathan field) • To provide fuel, water & electricity to isolated communities with gas supplies (Arctic region, desert communities) • Provide an in-country supply of fuel for expeditionary, deployed, military forces UNTAPPED MARKETS
REGULATORY TRENDS • International efforts to curb carbon emissions began with 1990 Kyoto agreement. Attempts to set global, binding, emission reduction targets continue to fail (2009 Copenhagen Climate Change Summit) • Some non-binding initiatives (2010 UN Global Climate Change Convention) to encourage emissions trading gaining traction. EU, individual countries taking action domestically • 2009 EU Energy Directive: binding participation in the Emissions Trading Scheme. Enables EU- based companies with foreign subsidiaries to claim EU tax bill credits for foreign reductions • US EPA to tighten air quality and diesel content standards. Some individual US states and Canadian provinces looking to set up regional emissions trading schemes. Canada: in wake of Keystone, promising new regulations within 2 years. • Australia: carbon tax, emitters charged amount per ton of emissions. Others, like Mexico and Colombia, are taking hybrid approaches.
ISSUE & OPPORTUNITY VERDIS & ITS TECHNOLOGY GTD UNIT SIZES & VALUE CREATION COMPETITIVE LANDSCAPE
VERDIS Synthetic Fuels, FZE  VERDIS Synthetic Fuels was founded in Sharjah, UAE, in 2010  Subsidiary of our Calgary-based parent, Canada Chemical Corporation (CCC)  Dedicated to commercializing CCC’s groundbreaking Gas to Diesel (GTD) technology Canada Chemical Corporation  CCC has long track record of oil & gas sector innovation and R&D excellence  Recognized that within Gas to Liquids, no technologies were producing market-ready diesel  It’s R&D staff, led by noted scientist Dr. Conrad Ayasse, began work on GTD in the late 1990s  Filed the first set of patents VERDIS FUELS & IT’S TECHNOLOGY WHO ARE WE?
Rob AYASSE, MBA CEO Agata MATABUENA, MBA Operations & Logistics Renaud CLAUSSE, MBA Finance Alan AYASSE, P.ENG Engineering Jorge GOMEZ, MBA Strategy & IT Dr. Conrad AYASSE Chief Scientist We have gathered an experienced international management team, and combined it with top-notch technical experts and scientists VERDIS AMERICAS R&D Lab | Canada VERDIS EMEA HQ in Sharjah | United Arab Emirates VERDIS APAC Finance | China TEAM VERDIS
1998 THROUGH 2008 • Extensive R&D efforts, development of numerous bench-scale units for concept validation • Developped deep expertise in traditional syngas creation (steam and autothermal) • Worked on proprietary Fischer-Tropsch catalyst • 2006: watershed deployment of a 25 MSCFD prototype on landfill in Oklahoma City with partner Alchem Field Services (actual photos on right) • Provided Proof of Concept, prototype decommissioned in 2008 2008 THROUGH 2014 • Data from protoype: filed updated patents in 2009 • VERDIS founded in 2010 • 2012: Partnered with Process Group International (www.processgroupintl.com) to develop initial design for 0.25 MMSCF/DAY mobile unit • Result of design and costing: both autothermal & steam reforming technically viable when paired with VERDIS catalyst, BUT temps too high, efficiency too low, to give excellence in customer value • 2012-2014: intenisve search for optimal syngas reformer solutions while further refining FT catalyst • Focused on 2 emerging technologies: plasma & CPOX 25 MSCF/day Prototype Prototype Deployment VERDIS FUELS & IT’S TECHNOLOGY GTD TECHNOLOGY DEVELOPMENT BY CCC & VERDIS
We improved the Fischer-Tropsch process with our cobalt-rhenium based patented catalyst: boosted diesel output from 45-50% to 94%! (2n + 1) H2 + n CO → CnH(2n+2) + n H2O METHANE DIESEL + WATER FT CATALYTIC REACTION PARAFFINIC SYNTHETIC DIESEL 0% Sulfur 0% Aromatics + COMPETITIVE ADVANTAGE PROPRIETARY CATALYST • Produces vehicle ready diesel directly from FT reactor • No further refining necessary • Very high Cetane number (78, versus normal spec of 43) • Zero sulfur or aromatics content – much cleaner emissions • Ideal blending stock
• Fischer-Tropsch based Gas to Liquids (GTL) process: key differentiation is patented FT catalyst, potential pairing with novel Syngas production • Only process on the market converting gas directly to ultra-clean diesel at low-pressure, directly from the FT reactor, so no hydro-cracking or further refining • Significant savings in Capital & Operational cost (US DoE: up to 30%) • By-products: industrial-use water (1.1:1 water to diesel), possibility of surplus electricity, so units could provide surplus electricity after startup (excellent for desert, arctic and offshore use) • Process reviewed & endorsed by the World Bank Global Gas-Flaring Reduction Partnership VERDIS PROCESS ADVANTAGES “The uniqueness and novelty lies in the . . . catalyst design and operation to realize the optimal, economic small-scale GTL process for production of a liquid fuel product containing high diesel and low wax yields. This is the type of process design for which the syngas conversion community has been searching. . .” - Leading GTL Expert Prof. Calvin H. Bartholomew, Brigham Young University
PLASMA-BASED SYNGAS REFORMER VALIDATION: JULY 2014 CERAMATEC TEST TEST OBJECTIVES To validate potential of VERDIS catalyst combined with Ceramatec’s unique plasma-based syngas reformer in a ¼ BBD GTL unit TEST RESULTS Exceeded all expectations – best Ceramatec has seen: • 90% Diesel (industry standard 45-55%) • Only trace amounts of wax (0.08%) • Predicted that VERDIS 0.25 MSCFD unit would achieve 10,000:1 conversion ratio, beating even Shell’s world-scale ‘Pearl’ VERDIS FUELS & IT’S TECHNOLOGY
VERDIS Mobile VERDIS Fixed VERDIS SPP (4 MMSCFD) 400 US BBD (63,600 L) Transported in several trucks, fixed location Medium-scale gas-flaring or mid-sized stranded gas deposits (25+ MMSCFD) 2500 US BBD (397,500 L) Small Petrochemical Plant Large scale gas-flaring sites, or to develop whole stranded gas fields (0.25 MMSCFD) 25 BBD (4000 L) Fully mobile, designed for truck/boat transport. Small-scale gas flaring or stranded gas deposits PRODUCT ROADMAP Synthetic Diesel (ULSD) is so clean you can actually SEE the difference!
CUSTOMER VALUE PROPOSITION Based on a gas to diesel conversion ratio of the smallest unit (10,000:1), for straight methane. Associated gas, with its mix of higher combustibles (ethane, propane) can yield up to 40% more diesel pr unit of gas converted. • Table shows the customer breakeven point for a single VERDIS mobile conversion unit in a cross-section of markets based exclusively on the wholesale value of diesel and water it will produce • Breakeven point in most markets: 3 years • Indirect or intangible benefits could include: o Tax breaks or carbon credits o Public relations benefits of reduced flaring and carbon emissions o Compliance with corporate goals, national laws or global conventions o Excess electricity produced which may be sold back to the grid • Ancillary benefits may be as valuable as direct economic benefits -4 -2 0 2 4 6 8 10 12 Israel Australia China Canada Nigeria Russia UK Mexico USA UAE Qatar BREAKEVEN YEARS - SELECTED MARKETS Flared Gas vs. Henry Hub FMV Breakeven YR - AG Breakeven YR - FMV
Fe ed ga s he at er Reformer Cooler Air cooler Water Knock- out Feed gas heater FT reactor Compressed Air Compressed HC gas Steam 100-200 psia 800 C 50 CCO+2 H2 Dry Syngas Steam 200-215 C Heat removalGlycol cooler Gas Oil Water Flare or combustor Tail gas recycle (2x raw feed) Separator 4 C VERDIS PROCESS SCHEMATIC
• Higher combustibles (ethane, propane, etc.) improve diesel production • Inerts have no effect • H2S degrades catalyst performance and must be removed, to a level >1 PPM • This requires a standard gas scrubber (SulfaTreat or zinc oxide possible) • OR: Canada Chemical Corporation has a proprietary Batch Oxidation technology to convert H2S to elemental sulfur VERDIS PROCESS STEP 1 – INPUT GAS SCRUBBING
• A small amount of hydrocarbon raw gas is burned in the reformer • This is used to pre- heat the entire train. • As delivered, the Fischer-Tropsch catalyst contains cobalt oxide (the metallic form is pyrophoric when exposed to air and would be dangerous to handle). • To activate the catalyst for FT syngas conversion: catalyst reduced to metallic cobalt inside FT reactor using hydrogen VERDIS PROCESS STEP 2 – GTD UNIT STARTUP 25K SCF/day Prototype 25K SCF/day Prototype
• Feed gas moves into a highly-advanced plasma-based Syngas Reformer • Required temperature and pressure (50PSI) is achieved • Gas fully prepared for conversion in next stage: H2:CO ratio sought 2.0 • (Includes compressor, coolers, water knockout, piping to storage) VERDIS PROCESS STEP 3 – SYNGAS PRODUCTION 25K SCF/day Prototype
• FT Reactor tubes have optimized fin shape to dissipate heat, enhance reaction efficiency VERDIS PROCESS STEP 4 – DIESEL PRODUCTION 25K SCF/day Prototype • High capacity Fischer-Tropsch reactor comprised of 4 inch catalyst tubes • Pressure <200PSI, cobalt catalyst crystallite size 16NM • Syngas converted into diesel, water, naptha, tail gasses • (Includes FT reactor, Dowtherm ® coolant condenser, coolant circulation equipment, synthesis gas recycle loop) Close-Up: FT Reactor with tail- gas recycle
• FT Reactor products are separated and captured in one ‘cold trap’ and one ‘hot trap’ • They are then directed to different storage tanks on site, waiting tanker trucks, or possibly pipelines, for further distribution to end-users • The process continues once started and 350 days of uptime per year is anticipated VERDIS PROCESS STEP 5 – PRODUCT COLLECTION 10-25 BBD Layout – Footprint: 15m L x 7m w x 11m h Can be Scaled Up to 100BBD by Adding More Vertical FT Reactors in the Available Space
ISSUE & OPPORTUNITY TECHNOLOGY & BENEFITS GTD UNIT SIZES & VALUE CREATION COMPETITIVE LANDSCAPE
CieQual Lagos, Nigeria • Seeking mobile solution to reduce flaring in the Niger Delta • Provided a proposal for a 0.25 MMSCFD unit using plasma-based reformer paired with the VERDIS FT catalyst • Sent their COO to Salt Lake City to observe test at CERAMATEC • Exploring how to import manufactured units withough punitive import tarrifs which would erode customer value VERDIS FUELS & IT’S TECHNOLOGY CURRENT FOCUS & CUSTOMER ENGAGEMENTS – 0.25 MMSCFD 10-25 BBD Layout – Footprint: 15m L x 7m w x 11m h Can be Scaled Up to 100BBD by Adding More Vertical FT Reactors in the Available Space
Grenergy, LLC Delaware, USA • Seeking a large-scale, fixed, solution to convert some 15 MMSCFD of Associated Gas in Iraq • In December 2014 proposed a solution using 17 plasma-based reformers (of 1 MMSCFD each) paired with the VERDIS FT catalyst • Estimated CAPEX of USD112.5-135 million • Waiting to hear if they wish to proceed to a feasibility/FEED study to better assess potential, OPEX and CAPEX • (Projections for the project as proposed follow) VERDIS FUELS & IT’S TECHNOLOGY CURRENT FOCUS & CUSTOMER ENGAGEMENTS – 15 MMSCFD
PROJECTIONS FOR 15 MMSCFD PLANT (Grenergy LLC) COST: $112.5 Million Breakeven Point: 19 months Accumulated Profit & Loss (10 yrs): $607,173,750 Net Present Value (5% discount rate): $422,107,613 Internal Rate of Return: 63.5% COST: $135 Million Breakeven Point: 23 months Accumulated Profit & Loss (10 yrs): $584,673,750 Net Present Value (5% discount rate): $400,679,041 Internal Rate of Return: 52.5% 1 2 3 4 5 6 7 8 9 10 $112.5M 60,717,37 121,434,7 182,152,1 242,869,5 303,586,8 364,304,2 425,021,6 485,739,0 546,456,3 607,173,7 $135M 58,467,37 116,934,7 175,402,1 233,869,5 292,336,8 350,804,2 409,271,6 467,739,0 526,206,3 584,673,7 0 100,000,000 200,000,000 300,000,000 400,000,000 500,000,000 600,000,000 700,000,000 Profit & Loss for 15MMSCFD GTD Plant $112.5M $135M
Aker Solutions Tromso, Norway • Flaring of Associated Gas on Norwegian Continental Shelf now illegal • On behalf of 2 separate clients, Aker Solutions is seeking a solution to convert some 4 MMSCFD of Asssociated Gas on 2 new offshore oil platforms for the North Sea • Provided a proposal for using using 5 plasma-based reformers (of 1 MMSCFD each) paired with the VERDIS FT catalyst in a very tight configuration to minimze footprint • 3 Aker process engineers fully assessed VERDIS technology for offshore use over 6 weeks • For a sample of questions asked, please see the ‘Offshore’ Section of our Technology FAQs (provided separately) • In September 2014, Aker concluded its assessment: it fully endorsed VERDIS technology as the optimum offshore solution to Associated Gas-Flaring in the North Sea and recommended it to both their clients • Both projects are currently working on more fundamental design issues at present but expect to address Assosciated Gas treatment, and the VERDIS proposal, shortly VERDIS FUELS & IT’S TECHNOLOGY CURRENT FOCUS & CUSTOMER ENGAGEMENTS – 4 MMSCFD OFFSHORE OIL PLATFORMS
WHAT IS V-CPOX? V-CPOX is Verdis’ catalytic partial oxidation process designed for use on offshore platforms 1. Air blown, so do not need an oxygen plant 2. Low-pressure so just need air and gas blowers 3. Use of air versus oxygen increases spontaneous free gas ignition temperature from 250 ºC to 582 ºC (safety) 4. Eliminates carbon formation by operating at low pressure 5. Catalyst is catalytically self-igniting so do not need feed pre-heating, therefore 6. Do not need a tail gas heat exchanger (uses water quench) 7. Expected CO yield is 98% (2% CO2)30 Verdis Synfuels CONFIDENTIAL INFORMATION
1. Small footprint Yes 2. Low weight Yes 3. Low pressure 30 psig 4. High GHSV >100,000 hr-1 5. Low pressure drop Monolith with open flow channels 6. High gas conversion (>95%) 99% 7. High selectivity to CO (>95%) 99% 8. No water needed Only associated gas and air 9. No pure oxygen needed Uses air 10. No feed gas pre-heat needed Ignites at low temperature 11. No tail gas heat exchanger needed Water-Quench 12. Feasibility for some FT tail gas re-cycling Yes V-CPOX: IDEAL SYNGAS PLANT FOR OFFSHORE PLATFORMS V-CPOX ALL 12 CRITERIA ARE MET BY V-CPOX 31
Verdis Synfuels CONFIDENTIAL INFORMATION32 Syngas reactor Water Treatment And storage Feed Pre- heat Pressure Swing Absorber Air Blower, 30 psig CO2 recover y O2 H2O O2, N2 Water quench UNIT OPERATIONS FOR V-CPOX Tail gas combustion Air compresso r CO2 Associated gas BLOWER, 30 psig H2 removal
10MMSCFD OFFSHORE PLANT (MALAYSIAN FIELD) COST: $70 Million Breakeven Point: 13 months Accumulated Profit & Loss (10 yrs): $576,069,470 Net Present Value (5% discount rate): $408,454,971 Internal Rate of Return: 92.2% COST: $100 Million Breakeven Point: 19 months Accumulated Profit & Loss (10 yrs): $546,069,470 Net Present Value (5% discount rate): $379,883,542 Internal Rate of Return: 64.2%
125MMSCFD OFFSHORE PLANT (FPSO-Mounted) COST: $875 Million Breakeven Point: 15 months Accumulated Profit & Loss (10 yrs): $5,968,956,250 Net Present Value (5% discount rate): $4,199,734,860 Internal Rate of Return: 78% COST: $1.25 Billion Breakeven Point: 22 months Accumulated Profit & Loss (10 yrs): $5,593,956,250 Net Present Value (5% discount rate): $3,842,592,003 Internal Rate of Return: 54%
ISSUE & OPPORTUNITY TECHNOLOGY & BENEFITS GTD UNIT SIZES & VALUE CREATION COMPETITIVE LANDSCAPE
CARBON CAPTURE AND STORAGE (CCS) THE PRIMARY ALTERNATIVE TO GAS-FLARING CC&S poses significant challenges • Infrastructure Coal beds, saline aquifers or appropriate oil deposits must be close by and available • Expense Preparation of sites, such as aquifers, can be costly, as can the other piping and process infrastructure to collect, pump and inject CO2 • Output Reinjected CO2 can boost yields and save some modest costs, but CO2 injected in aquifers incurs costs while providing no revenue (unless carbon credits are earned, or carbon taxes avoided) GAS TO LIQUIDS: UNIQUELY PLACED TO SAVE EMISSIONS WHILE BOOSTING CASHFLOWS
• Plants are much smaller than those of Shell and Sasol, but still not mobile market space • September 2013: selected by Pinto to field 2800 BBD plant in Ohio, USA • Pant will produce mix of waxes, solvents and lubricants • Outputs to make ultraclean transportation fuels, will need further refining • 2006: partnership with Petrobas • 2012: announced completion of demonstration plant, processes 200,000 SCF/day of gas into around 20BBD • According to World Bank Global-Gas Flaring Reduction Partnership: they produce around 20BBD of crude oil with a heavy wax content which must be further refined through hydro-cracking. • A few major oil & gas companies active in large-scale Gas to Liquids projects (Shell, Sasol). Very few looking at smaller-scale, mobile solutions. VERDIS will target these. • 2 main competitors. Competitive advantage: unlike them, we produce market-ready diesel, with no need for further refining, in a single pass through our conversion unit, which is low pressure and low temperature. Our process is therefore more efficient, flexible, adaptable, and thus less expensive in both capital and operational costs. COMPETITIVE ADVANTAGE: VERDIS
WE CONVERT FLARED GAS INTO ULTRA-CLEAN DIESEL info@verdisfuels.com http://www.verdisfuels.com

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VERDIS Presentation - APR 2015 - CUSTOMER

  • 1.
    WE CONVERT FLAREDGAS INTO ULTRA-CLEAN DIESEL
  • 2.
    THE VERDIS ALTERNATIVECONVERT WASTED GAS INTO ULTRA-LOW SULFUR DIESEL Our Gas to Diesel (GTD) conversion units will provide a profitable alternative to gas-flaring | Operators can reduce carbon footprint & generate significant cash-flows from valuable commodity | Produce Diesel, naphtha, aviation fuel CAPITAL REQUIREMENTS $5-10 million to get first units manufactured and fielded with companies already strongly interested | If closer to $10 million: could start parallel work on larger units | Projected revenues: +$40 million revenue, EBITA +$35 million, within 5 years. EXECUTIVE SUMMARY GLOBAL GAS FLARING A MASSIVE CHALLENGE Oil and Gas operators annually flare or vent $30 billion worth of natural gas worldwide | Precious energy wasted | 400 million tons of damaging CO2 emitted OUR PATENTED CATALYST A DISTINCTIVE COMPETITIVE ADVANTAGE Our Fischer-Tropsch process and cobalt-ruthenium catalyst boost diesel yield from 50 to 94% | By-products: usable water, co-generated electricity | Customer breakeven point – 3 year average based on wholesale value of diesel and water produced | Environmental benefits add further value
  • 3.
    ISSUE & OPPORTUNITY VERDIS& ITS TECHNOLOGY GTD UNIT SIZES & VALUE CREATION COMPETITIVE LANDSCAPE
  • 4.
    Every day Oil& Gas operators are flaring and venting natural gas The Greenhouse Gases emitted cause severe environmental damage and have significant worldwide economic impact THE FACTS: Flaring of Associated Gas. . . • Releases 400M tonnes of Carbon Dioxide (CO2) • Wastes $30.6B worth of natural gas (Methane, CH4) , equivalent to 8% of total world supply • Disproportionately impacts world’s most delicate areas – 42% of black carbon in the Arctic comes from global gas flaring Imagine if we could reduce those emissions…and monetize that “waste”! GAS FLARING A MASSIVE CHALLENGE
  • 5.
    WHAT IS FREEASSOCIATED PETROLEUM GAS? Petroleum (Complex mixture of liquid hydrocarbons) Free associated petroleum gas (Mixed gaseous hydrocarbons mainly Methane, CH4) Drilling rig Anticline Impervious rock Gas flare stack WHY IS GAS FLARED? • When crude oil extracted from onshore or offshore oil wells, raw natural gas produced as well • When pipelines and other transportation infrastructure are lacking, vast amounts of such gas is deemed unusable and is flared or vented • Flaring may occur at top of a vertical flare stack (as shown) or at ground-level in an earthen pit
  • 6.
    Source Financial Times,Jan 2013: http://goo.gl/MXulda • From a low base, US now fifth largest gas-flaring nation • In North Dakota, USA: major spike in production due to shale gas boom and 30% of associated gas now burned off at wellhead • Gas flaring in this “Bakken formation” now visible from Space: burning $1B worth of gas a year (enough energy to power all the homes in Chicago and Washington combined • Number of flaring permits issued in Texas has gone up six times from 2010 to 2012 GAS FLARING HAS TRIPLED IN THE US (SINCE 2008)
  • 7.
    STOP FLARING. MONETIZEYOUR WASTE! WHY DO COMPANIES STILL FLARE? VERDIS SYNTHETIC FUELS GAS-TO-LIQUIDS MOBILE PROCESSING UNITS CONVERT NATURAL GAS TO MARKET-READY ULTRA-CLEAN DIESEL This is the VERDIS poster From the ADIPEC 2012 Oil & Gas Show in Abu Dhabi, UAE They lack a profitable, practical, alternative . . . . . . So VERDIS is going to give them one!
  • 8.
    PRIORITY 1 -GAS FLARING Current solutions target only extremely large gas deposits… … leaving $20B+ market for S/M sized flares practically unexploited! Our technology will provide Oil & Gas producers a profitable way to: • Optimize their value chains as profit driver • Reduce emissions to lighten environmental foot print • Promote corporate image/CSR • Comply with emissions reduction targets PRIORITY 2 - STRANDED GAS RESERVOIRS / REMOTE LOCATIONS • Large reserves remain unexploited for economic or technical reasons • VERDIS units can do it, on land, offshore platforms, or boats & barges PRIORITY 3 - GOVERNMENT OR NON-GOVERNMENT STAKEHOLDERS • A less expensive fast-track to domestic diesel production (Israel, Leviathan field) • To provide fuel, water & electricity to isolated communities with gas supplies (Arctic region, desert communities) • Provide an in-country supply of fuel for expeditionary, deployed, military forces UNTAPPED MARKETS
  • 9.
    REGULATORY TRENDS • Internationalefforts to curb carbon emissions began with 1990 Kyoto agreement. Attempts to set global, binding, emission reduction targets continue to fail (2009 Copenhagen Climate Change Summit) • Some non-binding initiatives (2010 UN Global Climate Change Convention) to encourage emissions trading gaining traction. EU, individual countries taking action domestically • 2009 EU Energy Directive: binding participation in the Emissions Trading Scheme. Enables EU- based companies with foreign subsidiaries to claim EU tax bill credits for foreign reductions • US EPA to tighten air quality and diesel content standards. Some individual US states and Canadian provinces looking to set up regional emissions trading schemes. Canada: in wake of Keystone, promising new regulations within 2 years. • Australia: carbon tax, emitters charged amount per ton of emissions. Others, like Mexico and Colombia, are taking hybrid approaches.
  • 10.
    ISSUE & OPPORTUNITY VERDIS& ITS TECHNOLOGY GTD UNIT SIZES & VALUE CREATION COMPETITIVE LANDSCAPE
  • 11.
    VERDIS Synthetic Fuels,FZE  VERDIS Synthetic Fuels was founded in Sharjah, UAE, in 2010  Subsidiary of our Calgary-based parent, Canada Chemical Corporation (CCC)  Dedicated to commercializing CCC’s groundbreaking Gas to Diesel (GTD) technology Canada Chemical Corporation  CCC has long track record of oil & gas sector innovation and R&D excellence  Recognized that within Gas to Liquids, no technologies were producing market-ready diesel  It’s R&D staff, led by noted scientist Dr. Conrad Ayasse, began work on GTD in the late 1990s  Filed the first set of patents VERDIS FUELS & IT’S TECHNOLOGY WHO ARE WE?
  • 12.
    Rob AYASSE, MBA CEO AgataMATABUENA, MBA Operations & Logistics Renaud CLAUSSE, MBA Finance Alan AYASSE, P.ENG Engineering Jorge GOMEZ, MBA Strategy & IT Dr. Conrad AYASSE Chief Scientist We have gathered an experienced international management team, and combined it with top-notch technical experts and scientists VERDIS AMERICAS R&D Lab | Canada VERDIS EMEA HQ in Sharjah | United Arab Emirates VERDIS APAC Finance | China TEAM VERDIS
  • 13.
    1998 THROUGH 2008 •Extensive R&D efforts, development of numerous bench-scale units for concept validation • Developped deep expertise in traditional syngas creation (steam and autothermal) • Worked on proprietary Fischer-Tropsch catalyst • 2006: watershed deployment of a 25 MSCFD prototype on landfill in Oklahoma City with partner Alchem Field Services (actual photos on right) • Provided Proof of Concept, prototype decommissioned in 2008 2008 THROUGH 2014 • Data from protoype: filed updated patents in 2009 • VERDIS founded in 2010 • 2012: Partnered with Process Group International (www.processgroupintl.com) to develop initial design for 0.25 MMSCF/DAY mobile unit • Result of design and costing: both autothermal & steam reforming technically viable when paired with VERDIS catalyst, BUT temps too high, efficiency too low, to give excellence in customer value • 2012-2014: intenisve search for optimal syngas reformer solutions while further refining FT catalyst • Focused on 2 emerging technologies: plasma & CPOX 25 MSCF/day Prototype Prototype Deployment VERDIS FUELS & IT’S TECHNOLOGY GTD TECHNOLOGY DEVELOPMENT BY CCC & VERDIS
  • 14.
    We improved theFischer-Tropsch process with our cobalt-rhenium based patented catalyst: boosted diesel output from 45-50% to 94%! (2n + 1) H2 + n CO → CnH(2n+2) + n H2O METHANE DIESEL + WATER FT CATALYTIC REACTION PARAFFINIC SYNTHETIC DIESEL 0% Sulfur 0% Aromatics + COMPETITIVE ADVANTAGE PROPRIETARY CATALYST • Produces vehicle ready diesel directly from FT reactor • No further refining necessary • Very high Cetane number (78, versus normal spec of 43) • Zero sulfur or aromatics content – much cleaner emissions • Ideal blending stock
  • 15.
    • Fischer-Tropsch basedGas to Liquids (GTL) process: key differentiation is patented FT catalyst, potential pairing with novel Syngas production • Only process on the market converting gas directly to ultra-clean diesel at low-pressure, directly from the FT reactor, so no hydro-cracking or further refining • Significant savings in Capital & Operational cost (US DoE: up to 30%) • By-products: industrial-use water (1.1:1 water to diesel), possibility of surplus electricity, so units could provide surplus electricity after startup (excellent for desert, arctic and offshore use) • Process reviewed & endorsed by the World Bank Global Gas-Flaring Reduction Partnership VERDIS PROCESS ADVANTAGES “The uniqueness and novelty lies in the . . . catalyst design and operation to realize the optimal, economic small-scale GTL process for production of a liquid fuel product containing high diesel and low wax yields. This is the type of process design for which the syngas conversion community has been searching. . .” - Leading GTL Expert Prof. Calvin H. Bartholomew, Brigham Young University
  • 16.
    PLASMA-BASED SYNGAS REFORMERVALIDATION: JULY 2014 CERAMATEC TEST TEST OBJECTIVES To validate potential of VERDIS catalyst combined with Ceramatec’s unique plasma-based syngas reformer in a ¼ BBD GTL unit TEST RESULTS Exceeded all expectations – best Ceramatec has seen: • 90% Diesel (industry standard 45-55%) • Only trace amounts of wax (0.08%) • Predicted that VERDIS 0.25 MSCFD unit would achieve 10,000:1 conversion ratio, beating even Shell’s world-scale ‘Pearl’ VERDIS FUELS & IT’S TECHNOLOGY
  • 17.
    VERDIS Mobile VERDISFixed VERDIS SPP (4 MMSCFD) 400 US BBD (63,600 L) Transported in several trucks, fixed location Medium-scale gas-flaring or mid-sized stranded gas deposits (25+ MMSCFD) 2500 US BBD (397,500 L) Small Petrochemical Plant Large scale gas-flaring sites, or to develop whole stranded gas fields (0.25 MMSCFD) 25 BBD (4000 L) Fully mobile, designed for truck/boat transport. Small-scale gas flaring or stranded gas deposits PRODUCT ROADMAP Synthetic Diesel (ULSD) is so clean you can actually SEE the difference!
  • 18.
    CUSTOMER VALUE PROPOSITION Basedon a gas to diesel conversion ratio of the smallest unit (10,000:1), for straight methane. Associated gas, with its mix of higher combustibles (ethane, propane) can yield up to 40% more diesel pr unit of gas converted. • Table shows the customer breakeven point for a single VERDIS mobile conversion unit in a cross-section of markets based exclusively on the wholesale value of diesel and water it will produce • Breakeven point in most markets: 3 years • Indirect or intangible benefits could include: o Tax breaks or carbon credits o Public relations benefits of reduced flaring and carbon emissions o Compliance with corporate goals, national laws or global conventions o Excess electricity produced which may be sold back to the grid • Ancillary benefits may be as valuable as direct economic benefits -4 -2 0 2 4 6 8 10 12 Israel Australia China Canada Nigeria Russia UK Mexico USA UAE Qatar BREAKEVEN YEARS - SELECTED MARKETS Flared Gas vs. Henry Hub FMV Breakeven YR - AG Breakeven YR - FMV
  • 19.
    Fe ed ga s he at er Reformer Cooler Air cooler Water Knock- out Feed gas heater FT reactor Compressed Air CompressedHC gas Steam 100-200 psia 800 C 50 CCO+2 H2 Dry Syngas Steam 200-215 C Heat removalGlycol cooler Gas Oil Water Flare or combustor Tail gas recycle (2x raw feed) Separator 4 C VERDIS PROCESS SCHEMATIC
  • 20.
    • Higher combustibles(ethane, propane, etc.) improve diesel production • Inerts have no effect • H2S degrades catalyst performance and must be removed, to a level >1 PPM • This requires a standard gas scrubber (SulfaTreat or zinc oxide possible) • OR: Canada Chemical Corporation has a proprietary Batch Oxidation technology to convert H2S to elemental sulfur VERDIS PROCESS STEP 1 – INPUT GAS SCRUBBING
  • 21.
    • A smallamount of hydrocarbon raw gas is burned in the reformer • This is used to pre- heat the entire train. • As delivered, the Fischer-Tropsch catalyst contains cobalt oxide (the metallic form is pyrophoric when exposed to air and would be dangerous to handle). • To activate the catalyst for FT syngas conversion: catalyst reduced to metallic cobalt inside FT reactor using hydrogen VERDIS PROCESS STEP 2 – GTD UNIT STARTUP 25K SCF/day Prototype 25K SCF/day Prototype
  • 22.
    • Feed gasmoves into a highly-advanced plasma-based Syngas Reformer • Required temperature and pressure (50PSI) is achieved • Gas fully prepared for conversion in next stage: H2:CO ratio sought 2.0 • (Includes compressor, coolers, water knockout, piping to storage) VERDIS PROCESS STEP 3 – SYNGAS PRODUCTION 25K SCF/day Prototype
  • 23.
    • FT Reactortubes have optimized fin shape to dissipate heat, enhance reaction efficiency VERDIS PROCESS STEP 4 – DIESEL PRODUCTION 25K SCF/day Prototype • High capacity Fischer-Tropsch reactor comprised of 4 inch catalyst tubes • Pressure <200PSI, cobalt catalyst crystallite size 16NM • Syngas converted into diesel, water, naptha, tail gasses • (Includes FT reactor, Dowtherm ® coolant condenser, coolant circulation equipment, synthesis gas recycle loop) Close-Up: FT Reactor with tail- gas recycle
  • 24.
    • FT Reactorproducts are separated and captured in one ‘cold trap’ and one ‘hot trap’ • They are then directed to different storage tanks on site, waiting tanker trucks, or possibly pipelines, for further distribution to end-users • The process continues once started and 350 days of uptime per year is anticipated VERDIS PROCESS STEP 5 – PRODUCT COLLECTION 10-25 BBD Layout – Footprint: 15m L x 7m w x 11m h Can be Scaled Up to 100BBD by Adding More Vertical FT Reactors in the Available Space
  • 25.
    ISSUE & OPPORTUNITY TECHNOLOGY& BENEFITS GTD UNIT SIZES & VALUE CREATION COMPETITIVE LANDSCAPE
  • 26.
    CieQual Lagos, Nigeria • Seekingmobile solution to reduce flaring in the Niger Delta • Provided a proposal for a 0.25 MMSCFD unit using plasma-based reformer paired with the VERDIS FT catalyst • Sent their COO to Salt Lake City to observe test at CERAMATEC • Exploring how to import manufactured units withough punitive import tarrifs which would erode customer value VERDIS FUELS & IT’S TECHNOLOGY CURRENT FOCUS & CUSTOMER ENGAGEMENTS – 0.25 MMSCFD 10-25 BBD Layout – Footprint: 15m L x 7m w x 11m h Can be Scaled Up to 100BBD by Adding More Vertical FT Reactors in the Available Space
  • 27.
    Grenergy, LLC Delaware, USA •Seeking a large-scale, fixed, solution to convert some 15 MMSCFD of Associated Gas in Iraq • In December 2014 proposed a solution using 17 plasma-based reformers (of 1 MMSCFD each) paired with the VERDIS FT catalyst • Estimated CAPEX of USD112.5-135 million • Waiting to hear if they wish to proceed to a feasibility/FEED study to better assess potential, OPEX and CAPEX • (Projections for the project as proposed follow) VERDIS FUELS & IT’S TECHNOLOGY CURRENT FOCUS & CUSTOMER ENGAGEMENTS – 15 MMSCFD
  • 28.
    PROJECTIONS FOR 15MMSCFD PLANT (Grenergy LLC) COST: $112.5 Million Breakeven Point: 19 months Accumulated Profit & Loss (10 yrs): $607,173,750 Net Present Value (5% discount rate): $422,107,613 Internal Rate of Return: 63.5% COST: $135 Million Breakeven Point: 23 months Accumulated Profit & Loss (10 yrs): $584,673,750 Net Present Value (5% discount rate): $400,679,041 Internal Rate of Return: 52.5% 1 2 3 4 5 6 7 8 9 10 $112.5M 60,717,37 121,434,7 182,152,1 242,869,5 303,586,8 364,304,2 425,021,6 485,739,0 546,456,3 607,173,7 $135M 58,467,37 116,934,7 175,402,1 233,869,5 292,336,8 350,804,2 409,271,6 467,739,0 526,206,3 584,673,7 0 100,000,000 200,000,000 300,000,000 400,000,000 500,000,000 600,000,000 700,000,000 Profit & Loss for 15MMSCFD GTD Plant $112.5M $135M
  • 29.
    Aker Solutions Tromso, Norway •Flaring of Associated Gas on Norwegian Continental Shelf now illegal • On behalf of 2 separate clients, Aker Solutions is seeking a solution to convert some 4 MMSCFD of Asssociated Gas on 2 new offshore oil platforms for the North Sea • Provided a proposal for using using 5 plasma-based reformers (of 1 MMSCFD each) paired with the VERDIS FT catalyst in a very tight configuration to minimze footprint • 3 Aker process engineers fully assessed VERDIS technology for offshore use over 6 weeks • For a sample of questions asked, please see the ‘Offshore’ Section of our Technology FAQs (provided separately) • In September 2014, Aker concluded its assessment: it fully endorsed VERDIS technology as the optimum offshore solution to Associated Gas-Flaring in the North Sea and recommended it to both their clients • Both projects are currently working on more fundamental design issues at present but expect to address Assosciated Gas treatment, and the VERDIS proposal, shortly VERDIS FUELS & IT’S TECHNOLOGY CURRENT FOCUS & CUSTOMER ENGAGEMENTS – 4 MMSCFD OFFSHORE OIL PLATFORMS
  • 30.
    WHAT IS V-CPOX? V-CPOXis Verdis’ catalytic partial oxidation process designed for use on offshore platforms 1. Air blown, so do not need an oxygen plant 2. Low-pressure so just need air and gas blowers 3. Use of air versus oxygen increases spontaneous free gas ignition temperature from 250 ºC to 582 ºC (safety) 4. Eliminates carbon formation by operating at low pressure 5. Catalyst is catalytically self-igniting so do not need feed pre-heating, therefore 6. Do not need a tail gas heat exchanger (uses water quench) 7. Expected CO yield is 98% (2% CO2)30 Verdis Synfuels CONFIDENTIAL INFORMATION
  • 31.
    1. Small footprintYes 2. Low weight Yes 3. Low pressure 30 psig 4. High GHSV >100,000 hr-1 5. Low pressure drop Monolith with open flow channels 6. High gas conversion (>95%) 99% 7. High selectivity to CO (>95%) 99% 8. No water needed Only associated gas and air 9. No pure oxygen needed Uses air 10. No feed gas pre-heat needed Ignites at low temperature 11. No tail gas heat exchanger needed Water-Quench 12. Feasibility for some FT tail gas re-cycling Yes V-CPOX: IDEAL SYNGAS PLANT FOR OFFSHORE PLATFORMS V-CPOX ALL 12 CRITERIA ARE MET BY V-CPOX 31
  • 32.
    Verdis Synfuels CONFIDENTIALINFORMATION32 Syngas reactor Water Treatment And storage Feed Pre- heat Pressure Swing Absorber Air Blower, 30 psig CO2 recover y O2 H2O O2, N2 Water quench UNIT OPERATIONS FOR V-CPOX Tail gas combustion Air compresso r CO2 Associated gas BLOWER, 30 psig H2 removal
  • 33.
    10MMSCFD OFFSHORE PLANT(MALAYSIAN FIELD) COST: $70 Million Breakeven Point: 13 months Accumulated Profit & Loss (10 yrs): $576,069,470 Net Present Value (5% discount rate): $408,454,971 Internal Rate of Return: 92.2% COST: $100 Million Breakeven Point: 19 months Accumulated Profit & Loss (10 yrs): $546,069,470 Net Present Value (5% discount rate): $379,883,542 Internal Rate of Return: 64.2%
  • 34.
    125MMSCFD OFFSHORE PLANT(FPSO-Mounted) COST: $875 Million Breakeven Point: 15 months Accumulated Profit & Loss (10 yrs): $5,968,956,250 Net Present Value (5% discount rate): $4,199,734,860 Internal Rate of Return: 78% COST: $1.25 Billion Breakeven Point: 22 months Accumulated Profit & Loss (10 yrs): $5,593,956,250 Net Present Value (5% discount rate): $3,842,592,003 Internal Rate of Return: 54%
  • 35.
    ISSUE & OPPORTUNITY TECHNOLOGY& BENEFITS GTD UNIT SIZES & VALUE CREATION COMPETITIVE LANDSCAPE
  • 36.
    CARBON CAPTURE ANDSTORAGE (CCS) THE PRIMARY ALTERNATIVE TO GAS-FLARING CC&S poses significant challenges • Infrastructure Coal beds, saline aquifers or appropriate oil deposits must be close by and available • Expense Preparation of sites, such as aquifers, can be costly, as can the other piping and process infrastructure to collect, pump and inject CO2 • Output Reinjected CO2 can boost yields and save some modest costs, but CO2 injected in aquifers incurs costs while providing no revenue (unless carbon credits are earned, or carbon taxes avoided) GAS TO LIQUIDS: UNIQUELY PLACED TO SAVE EMISSIONS WHILE BOOSTING CASHFLOWS
  • 37.
    • Plants aremuch smaller than those of Shell and Sasol, but still not mobile market space • September 2013: selected by Pinto to field 2800 BBD plant in Ohio, USA • Pant will produce mix of waxes, solvents and lubricants • Outputs to make ultraclean transportation fuels, will need further refining • 2006: partnership with Petrobas • 2012: announced completion of demonstration plant, processes 200,000 SCF/day of gas into around 20BBD • According to World Bank Global-Gas Flaring Reduction Partnership: they produce around 20BBD of crude oil with a heavy wax content which must be further refined through hydro-cracking. • A few major oil & gas companies active in large-scale Gas to Liquids projects (Shell, Sasol). Very few looking at smaller-scale, mobile solutions. VERDIS will target these. • 2 main competitors. Competitive advantage: unlike them, we produce market-ready diesel, with no need for further refining, in a single pass through our conversion unit, which is low pressure and low temperature. Our process is therefore more efficient, flexible, adaptable, and thus less expensive in both capital and operational costs. COMPETITIVE ADVANTAGE: VERDIS
  • 38.
    WE CONVERT FLAREDGAS INTO ULTRA-CLEAN DIESEL info@verdisfuels.com http://www.verdisfuels.com