Introducing the Qpinch Chemical Heat Transformer. A breakthrough innovation to boost plant efficiency and your company s EBITDA.

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1 INDUSTRIAL ENERGY FROM WASTE HEAT Introducing the Qpinch Chemical Heat Transformer. A breakthrough innovation to boost plant efficiency and your company s EBITDA. EUROPEAN REFINING TECHNOLOGY CONFERENCE 07, ATHENS ERIK VERDEYEN, CHIEF MARKETING OFFICER Energy consumption in the industrial sector The industrial sector consumes a quarter of all energy in the EU; the EU Emissions Trading System (ETS) accounts for almost half of all greenhouse gas (GHG) emissions in the union. In light of the 00 and 050 targets, one could argue that this puts a considerable burden on corporate board rooms to keep their promises of reducing carbon footprint. Contrary to general public belief, the bulk of our energy is consumed while generating heat, not electricity. This is particularly true for process industries, where heat is pervasive in the processes that produce the feedstock for the industrial sector as well as finished products for the consumer market. Surprisingly, when we introduced Qpinch at McKinsey s 07 SRP Summit in Stockholm, some of the attendees were equally astonished to learn that the industrial energy mix is very much biased towards natural gas and other fuels not electricity. International Energy Agency Governing Board Chairman Noé van Hulst pointed out in his commentary to the release of the agency s Energy Efficiency Market Report 06 that energy efficiency is [the] energy resource that all countries have in abundance. The Oil & Chemical industries, which are by far the largest industrial consumers of primary energy used for process heat, account for the biggest reservoir of waste heat. Faced with substantially higher gas prices compounded by regulatory limitations and probable increases in carbon taxation in the foreseeable future, EU-based industrial companies have much to gain from energy efficiency and its financial upside. This is especially true for commodity businesses with low margins as well as for operations where energy accounts for a sizeable part of the overall production cost. So why is so much heat still being wasted? The unforgiving pinch line The first law of thermodynamics states that energy cannot be created nor can it be destroyed. Heat, i.e. energy, that is going into processes must come out one way or another. Some of it is used to transform products, e.g. chemical reactions that require energy. Part of it dissipates in the process and is emitted in the atmosphere. The rest is either reused it is recovered via energy efficiency measures such as heat exchangers or heat pumps or it has become residual heat that needs to be disposed of. In essence, the main reason why waste heat is released into the environment directly or through cooling is that its temperature is too low to be of any use. It has fallen below the so-called pinch line of the plant and is therefore not exploitable. But that s only half the story. Many solutions to further exploit waste heat already exist, either by raising its temperature, lifting it over the pinch line and turning it into process heat useful for the plant, or by repurposing it in another way, e.g. for power generation. So why are they not applied on a larger scale? Arguably the only reason why such a recovery is currently not happening is because of technical limitations or because doing so makes no sense from a business perspective. THE ECONOMICS OF PROCESS HEAT The main cost components for process heat usually steam produced with primary energy are: Gas Cost Replacement value + transport cost to site + Water Cost Boiler feed water cost + Taxes CO and other regulatory factors + Other Costs e.g. steam network, cooling, = Steam Cost $5 - $0/MWh CURRENT STEAM COST SEP 07, WESTERN EUROPE

2 Challenges of converting waste heat into process heat The bulk of process heat in the Oil & Chemical industries lies between 0 and 0 C. Waste heat starts at 50 C all the way down to ambient temperature. Roughly speaking, many plants have large amounts of waste heat at 0 C and below, even after having exploited its potential to further raise the efficiency of their processes. This is indeed the vast reservoir of untapped energy the IEA s Chairman is referring to in his article if only there were a way to tap into it When recovering the energy in waste heat, the primary challenge lies in sufficiently raising its temperature, which often involves an increase of dozens of degrees to bring it back into the required high temperature zones where it is of value. In other words, it needs to be lifted above the pinch line. IMPACT ON YOUR BUSINESS Depending on pricing power, geography, steam network efficiency and other costs associated with steam production, Qpinch generates direct annual savings per MW of: UP TO $ OUTPUT INDUSTRIAL HEAT INPUT WASTED HEAT For Oil & Chemical applications, Qpinch achieves temperature lifts up to 00 C / 80 F delivering process heat of up to 0 C / 6 F 0 C 6 F 000 TONNES OF CO 0 C 8 F 80 C 76 F Other barriers that have to be overcome: Maximum operational revenue Fixed and variable costs should be minimal. Existing solutions that consume a lot of electrical energy come with an important fixed fee/reservation cost to connect to the grid, high costs associated with their consumption, as well as maintenance costs. Relevance The sheer amount of waste heat available and obviously the need for massive levels of process heat is such that solutions need to be on the megawatt-scale to have a noticeable impact on the EBITDA of a plant, which would make them worth implementing. This requires solutions on the scale of dozens of megawatts per unit, preferably at a decreasing cost per MW. 0 C 66 F High availability Some technologies require duplication of units to ensure high availability, which instantly kills the business case. Flexibility Solutions need to be able to cope with fluctuations inherent to processes or seasonal influences. Easy to integrate and operate The biggest and immediate potential lies in existing assets that can be retrofitted easily. MW PROCESS HEAT IN INDUSTRY Energy efficiency is the energy resource that all countries have in abundance Noé van Hulst Chairman of the Governing Board International Energy Agency

3 The breakthrough: A solution inspired by nature Qpinch does not rely on legacy solutions. Instead, we looked at nature, namely how living cells store and release energy. This process, the so-called ATP ADP cycle, was used as the inspiration to design our heat transformer. By scaling up the principles to industrial size and using inorganic chemistry, we provide a solution that often makes it both technically and economically viable to recover much of the energy currently lost through waste heat but without the drawbacks from existing heat pump technologies. This new approach overcomes the hurdles that limit other approaches. OUR KEY USPs Large temperature increases, which allows it to deliver process heat in most heat ranges required by the Oil & Chemical industries. Marginal electrical energy consumption: marginal Opex and the ability to transform dozens of megawatts of waste heat into process heat without large Capex for electrical energy. Attractive paybacks starting at years Built with chemical industry standard components: marginal maintenance costs and built by your trusted EPC(M). Scales from to 00+ MW: Generates savings that have an impact on the plant level and on the corporate balance sheet when rolled out in your global assets. High availability AWARDS AWARD 05 Winner of the Emerging Technologies Competion Royal Society of Chemistry, London, UK 06 nd Place in the Port of Antwerp Sustainability Award, Belgium Finalist essenscia Innovation Award, Belgium 07 rd Place in Sibur s IQ-CHem Competition, Moscow, Russia WASTE HEAT How it works STEAM IN Closed loop between reactors containing phosphates and water OUT WATER Waste heat hydrocarbon vapors, steam, condensate, and hot liquids is introduced in the first heat exchanger; the so-called cold reactor. The endothermic polymerization reaction captures the energy in the waste heat. Water is separated in the process. The liquid polymers and the water are transferred separately to the second heat exchanger the hot reactor. In the hot reactor, the reverse reaction releases the energy used to produce process heat. Compounds exiting the hot reactor are transferred to the cold reactor where the cycle repeats. Qpinch consumes only a marginal amount of electricity ( % of output duty) a key factor that contributes to its high efficiency and applicability on a large megawatt scale.

4 Rolling out first units in Oil & Business cases from Oil & range between and 0 MW of waste heat. In all of these cases, Qpinch is able to return approximately 50% as process heat, usually steam. COMING TO A PLANT NEAR YOU Waste Heat input to Qpinch Process Heat (steam) produced with Qpinch Yearly savings Process steam 6 C MW 65 C 6 MW $.5 M 97 C MW 55 C 6 MW $.6 M C MW 5 C 7 MW $.8 M Steam and condensate Various sources 6 MW 75 C 8 MW $.9 M Refinery Steam and condensate Condensate Hydrocarbon vapors Various sources 90 C 0 C 9 MW 0 MW MW 8 C C 05 C 0 MW 0 MW MW $. M $.8 M $5. M Founded by BASF veteran Wouter Ducheyne in 0 as a Ghent University spin-off, Qpinch is now rolling out its heat transformer with first clients in Oil & Chemical industries. Refinery Hydrocarbon vapors CONCLUSION C 5 C 7 MW MW 6 C 80 C 6 MW 6 MW $8.7 M $5. M The Qpinch Chemical Heat Transformer is a breakthrough innovation that enables Oil & Chemical companies to tap into the vast reservoir of waste heat in order to produce process heat, and enjoy significant savings in primary fuel, emissions and water. Our first industrial-scale installation in the Port of Antwerp in 06 acted as a showcase. Dozens of Oil & Chemical industry plant and energy managers based in Antwerp, Rotterdam, and other regions in the EU visited the first commercial unit. It was also witnessed by the Belgian government agency VITO (a leading European independent research and technology organization), which delivered its final report in Q of 06. With a one-time investment and an attractive payback, the Qpinch Heat Transformer generates important cash savings, provides extra plant capacity through steam and cooling debottlenecking, with the added bonus of providing a hedge against rising fuel prices and emission taxation. Carrying virtually no Opex, these savings go straight to your bottom line. With its double-digit impact on EBITDA and margins, Qpinch empowers commodity businesses to maintain or increase market leadership.

5 5 Get in touch If you have 500+ MW waste heat in your global assets, or if your company is interested in integrating our technology in its solutions, we are happy to connect at ERTC 07 in Athens or contact us via mail or phone. Qpinch BVBA Rijnkaai Antwerp Belgium marketing@qpinch.com Qpinch.com Facebook.com/Qpinch Twitter.com/QpinchEnergy Linkedin.com/company/Qpinch Join us at ERTC Tuesday th November 07 We present at 5:5 in Stream C Transforming waste heat to new process heat with the Qpinch Heat Transformer The biggest and most important event for the European downstream industry Erik Verdeyen, Qpinch Chief Marketing Officer Footnotes Source: ec.europa.eu/eurostat/statistics-explained/index.php/consumption_of_energy Source: World Energy Statistics 07, International Energy Agency Source: