The Future of Oxy Fuel Systems for CO 2 Sourcing

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1 The Future of Oxy Fuel Systems for CO 2 Sourcing CO 2 Conference Week CO 2 Workshop Dec Midland, TX Christopher Peters VP Business Development CES 3035 Prospect Park Dr. Suite 150 Rancho Cordova, CA 95670

2 Agenda CES Introduction Milestones 2012 What was said in 2011 The CES/SIEMENS Oxy Fuel Turbine, OFT 900/SXT 150 Development The CES Component Portfolio CO 2 Generation Concepts to Accelerate the Expansion of CO 2 EOR Project Drivers Summary 2

3 Clean Energy Systems, Inc. Introduction 3

4 Company Background History and Recent Developments Founded in Sacramento, California by former Aerojet (a GenCorp company) aerospace engineers; incorporated in 1996 CES technology portfolio 20 MWt 4ʺ GG has completed over 2,000 hours of running and is now insurable 200 MWt 12ʺ GG has been successfully tested on more than 500 starts MWe oxy turbine has successfully produced power in less than 10 seconds on more than 50 starts 30 patents issued on zero emissions oxy combustion technology power cycles, 36 patents pending Owner of two power plants 5 MWe Kimberlina power plant (R&D site) 120 MWe Placerita power plant (commercial facility) 4

5 CES Overview Equity and Strategic Partners Equity Partners Paxton Corporation is an energy focused company based in Calgary, Alberta; aggregator of technologies including CES oxy fuel combustor for use in the extraction of hydrocarbons; significant equity position currently held by the largest shareholder of Paramount Resources Ltd. Southern California Gas Company (a subsidiary of Sempra Energy; $16.0 B+ market capitalization) sells, distributes, and transports natural gas in the United States. The AES Corporation ($8.5 B+ market capitalization) is a global power company with generation and distribution businesses. Strategic Partners Maersk Oil (subsidiary of A.P, Møller Maersk A/S. with a $29 B+ market capitalization) is an international oil and gas company with operated production of about 625,000 barrels of oil (equivalent) per day. Siemens Aktiengesellschaft ($80 B+ market capitalization) is a diversified international electrical and engineering company that provides solutions to the energy and other sectors. Paramount Resources Ltd. ($2 B+ market capitalization) is an independent energy company that engages in the exploration, development, and production of natural gas, crude oil, and natural gas liquids in North America. US Department of Energy works together with the country s private sector to develop and foster new technologies to ensure America s long term energy security. LM Alternatives Inc. and its sister companies have been providing quality parts and related services to turbo machinery users in industrial, utility and aviation applications for more than four decades. 5

6 CES Technology: Platelet Based Fuel Injectors Hundreds of individual platelets are photo etched to form 3 D channels Precisely stacked the platelets get pressure bonded into monolithic structures Intricate pathways channel bulk fuel, oxygen, and water into hundreds of combustors Intimate, stoichiometric mixing for complete combustion CES Technology Platelets 6

7 CES Technology: Oxy Fuel Combustors Gaseous hydrocarbon fuels Natural gas, associated gas, recycle CO 2 High CO 2 content natural gas Intimate mixing of fuel and oxygen to provide clean and complete combustion Producing only steam and highpurity CO 2 CES Technology Oxy Fuel Combustion Gas Generator 7

8 CES 12 GG 200MW th capacity 15 25MMscfd of CO 2 from natural gas Up to 500,000lbs/hr of drive gas Unparalleled fuel flexibility Full power in seconds Combustor: 6 length/12 dia. Packaged in 40 x11 x11 container CES Technology Oxy Fuel Combustion Gas Generator 8

9 CES Technology The Oxyfuel Process 9

10 2012 Developments Milestones 10

11 Oxy-Fuel Turbomachinery Development Cooperative Agreement Department of Energy Task 2.10: Develop Oxy-Fuel Reheater System Task 2.11: Finalization of Oxy-Fuel Turbine Design Task 2.12: Design OFT Test Site Task 2.13: Upgrade Test Site Task 2.14: Purchase & Inspect SGT-900 Task 2.15: Manufacture & Assemble OFT Task 2.16: Test Oxy-Fuel Turbine Page Copyright Siemens AG All rights reserved

12 Task 2.14: Purchase & Inspect SGT-900 Disassemble & Inspect Page Copyright Siemens AG All rights reserved

13 Task 2.15: Manufacture & Ship OFT Component Manufacture Kick-Off New components manufacture kick off May 27, 2011 Sub task activities reviewed included: Program management Quality planning Manufacturing schedule Supply chain strategy FWD Upper Half Casting FWD Lower Half Machined Page Copyright Siemens AG All rights reserved

14 Manufacturing and Installation of the OFT 900 Rotor Work Including Removal of Air Compressor: January

15 Manufacturing and Installation of the OFT 900 Turbine Shaft With Power Turbine Blades Re Installed: May

16 Manufacturing and Installation of the OFT 900 Manufacturing of OFT 900 Components: March 2012 Inlet Plenum Inlet Housing Cover 16

17 Manufacturing and Installation of the OFT 900 Construction of OFT 900 Foundation at Kimberlina: May

18 Installing and Testing the CES Re Heaters OFT 900 Re Heater Test Stand: May

19 Manufacturing and Installation of the OFT 900 Completion and Shipping of the OFT 900: July

20 Manufacturing and Installation of the OFT 900 Arrival of the OFT 900 in Bakersfield: August

21 Manufacturing and Installation of the OFT 900 Completed the OFT 900 Installation: September

22 Manufacturing and Installation of the OFT 900 Completed the OFT 900 Installation: September

23 CES Component Portfolio Enabling of Unique and Unconventional Solutions for EOR OFJ 79 43MW e OFT 12 in GG 200MW th OFT CES Re Heater 30MW th RHC SXT MW e OFT G 2 S 2 4 in GG 20MW th OFT 23

24 CO 2 Generation Concepts to Accelerate the Expansion of CO 2 EOR 24

25 Project Drivers for CO 2 On Site Solutions CO 2 EOR US Lower 48 Cumulative US CO 2 EOR Production (2010): 1.5 billion bbl CO 2 EOR accounted for 4.8% of US daily crude oil production Daily CO 2 EOR Production (2010): 0.28 million BOPD US daily crude production: 5.47 million BOPD US daily petroleum consumption: million BOPD 2030 forecasts predict at least 11% of US domestic crude production from CO 2 EOR Between and million BOPD from CO 2 EOR o Not including potential Residual Oil Zone (ROZ) production o The limitations are seen due to difficulties of connecting sources and sinks in adequate volumes Total daily US crude and NGL production forecasted at million BOPD by 2030 For 100 BBbls, 33 BN MT CO 2 are needed, 3 BN MT CO 2 of natural supply! 1 EIA Annual Energy Outlook 2012 Early Release 2 Natural Resources Defense Council modeling 25

26 Market and Application CO 2 EOR Infrastructure 26

27 CES Component Portfolio Enabling of Unique and Unconventional Solutions for EOR Coal Bed Methane Incremental Oil Pipeline Natural Gas OFT 43 MW e SXT 150 MW e CO 2 Supply Off Spec Raw Gas CO 2 EOR Recycle 200 MW th Gas Generator 30 MW th Re Heater Power Water UCG Gas 20 MW th Gas Generator 50,000 lb/h G 2 S 2 Steam/Heat CO 2 Contaminated NG Wet Gas 50,000 lb/h PHRSG Dry Gas Conversion NG Liquids Recovery 27

28 Strategic Drivers for CO 2 On Site Solutions CO 2 supply alternatives and shortages Infrastructure limitations Fuel flexibility Fuel sourcing alternatives / resource asset strategy Gas and recycle gas treatment NG liquid recovery, dry gas utilization 28

29 Oxy Fuel Solutions Typical CES/SIEMENS Oxy Fuel Cycle for ZEPP / CO 2 EOR Natural Gas/ Contaminated Gas/ Associated Gas Air ASU RH LP Power Output Natural Gas/ Contaminated Gas/ Associated Gas Power Output GG HP OFT CO 2 CW CW Excess Water 29

30 CO 2 supply alternatives and shortages Infrastructure limitations Fuel flexibility Fuel sourcing alternatives / resource asset strategy Gas and recycle gas treatment NG liquid recovery, dry gas utilization CO 2 Recycle Gas Processing Facility Commercial Exploitation of HC Content in Recycle Gas CO 2 Commodity Facility 50,000MScfd+ CO 2, 200MW e, 500k gpd, 7 8,000BOEPD Incremental Off Infrastructure EOR Anchor Reservoir CO 2 Power Water Direct Use of Off Spec or Stranded Natural Gas Resource High CO 2 Content, CBM, UCG, etc Project Drivers for CO 2 On Site Solutions 30

31 The End 31