Beyond Fischer Tropsch

16th IMPCA 13 Asian Conference Gas to Liquids: - Beyond Fischer Tropsch - Beyond LNG - U.S. Oil and Gas Reserves Through the Ages or How to Talk to a Gas Producer Philip E. Lewis, P.E. Chief Technology Officer ZEEP Ltd. 16 th Annual IMPCA Asian Conference 13 Beyond Fischer Tropsch

16th IMPCA 13 Asian Conference GTL Type Process Natural Gas Syngas Generation (reformer) CH H O + Heat H + CO + 3 Fischer Tropsch Reactor ( n 1) H + nco C H + nh O + n (n+ ) Synthesis + CO CH OH H 3 Ethanol Synthesis + CO C H OH + H O H 5 Ethanol to sales Naphtha to refinery Diesel to sales to sales to gasoline to DME to olefins to ethanol 13 IMPCA Asian Conference GTL: Beyond FT, LNG / U.S. Reserves Fischer Tropsch Scale vs. Gas to Scale Table 1 Fischer Tropsch Commercial Scale Plants in Operation or Announced Operator / Plant / Location Capacity, Year started Feedstock boe/d (expected) Sasol / Sasol I / Sasolburg, S. Africa 15, Coal 1955 / 1966 / 1975 Sasol / Sasol II / Secunda, S. Africa 55, Coal 198 Sasol / Sasol III / Secunda, S. Africa 55, Coal 1983 Shell / MDS / Bintulu, Malaysia 1, NG 1993 Sasol / Oryx / Qatar 3, NG 7 Shell / Pearl GTL / Qatar 1, NG 11 Sasol / / Louisiana, USA 96, NG (18) Sasol / / Alberta, Canada 96, NG () 13 IMPCA Asian Conference GTL: Beyond FT, LNG / U.S. Reserves 3

16th IMPCA 13 Asian Conference and Fischer Tropsch Plant Populations 1 18 methanol plants < 5 BDE / day Plant Count 8 6 Mth Fischer Tropsch < 5 1,, 5, 1,, 3, 5, 6, B/day, diesel equiv. 13 IMPCA Asian Conference GTL: Beyond FT, LNG / U.S. Reserves Global and Liquid Fuels Consumption Growth Worldwide Growth Year Liquid Fuels 8 % -1.6% 9 5%.3% 1 9% 5% 3.1% 3.6% 11 13% 1.% 1 1%.% 13 IMPCA Asian Conference GTL: Beyond FT, LNG / U.S. Reserves 5

16th IMPCA 13 Asian Conference Beyond LNG (from the U.S.) LNG vs. exports from U.S. Gulf Coast Delivery to Japan 1 1 1 11.7.6 9.3.59 Recent 1 landed 13.11 price: $15.65 3.37 1 1 1.8.9 1.51 1.9 1.15 13.96 3.5 Equivalent to $3 / MT Cost range $ per MMBtu 8 6 5.33 1.18.16 1.57 3. LNG 9.75 8 6 5.33 1.18.16.61 1.71 Minimum cost Feedgas Liquefaction Shipping Ex-Ship Note: Bars represent the range of expected cost for that part of the value chain. Source: IHS CERA, ZEEP Funded Studies 13 IMPCA Asian Conference GTL: Beyond FT, LNG / U.S. Reserves Feedgas Synthesis Shipping Ex-Ship 7

16th IMPCA 13 Asian Conference is a Fungible Commodity Chinese Ports that can Handle Ocean Going Ships Basuo Bei Hai BZ 3 Terminal Chiwan Dalian Dandong Fangcheng Guangzhou Haikou Haimen (part load) Hong Kong Huizhou Jiangyin Jinzhou Jiuzhou Lanshan Lianyungang Liuhua Terminal Longkou Lufeng Nanjing Nantong Ningbo Panyu Oil Terminal FPSO & SPM Qingdao Qinhuangdao Qinzhou Quanzhou Raoping Rizhao Sanya Shanghai Shantou Shuidong Taicang Taizhou Takubar Tangshan Tianjin Wei Hai Wenzhou Wuhan Wuhu Xiamen Xijiang Xiuyu Yang Jiang Yang Pu Yangzhou Yantai Yantian Ying Kou Zhangjiagang Zhanjiang Zhangzhou Zhapu Zhenjiang Zhoushan Zhuhai about 6....LNG is not. Chinese LNG Regasification Terminals Dapeng Fujian Shanghai Dalian Ningbo Rudong 6. No other known announced 13 IMPCA Asian Conference GTL: Beyond FT, LNG / U.S. Reserves 8 U.S. Oil and Gas Reserves Through the Ages 13 IMPCA Asian Conference GTL: Beyond FT, LNG / U.S. Reserves 9

16th IMPCA 13 Asian Conference Philip Lewis ZEEP Ltd. Industrial Revolution U.S. Oil and Gas Reserves Through the Ages 8 197 Oil Embargo U.S. Oil + Gas U.S. Oil China Oil + Gas Dark Ages Classical Period Oil Equivalent Reserves b O billion bbl 1 6 19 19 19 196 198 U.S. Regains Status as Biggest Producer Stone Age Data through 11. BOE reserves at the end of 1 likely surpassed previous all time high, set years earlier. Note that reserves during Industrial Revolution are rising faster than during Classical Period. 13 IMPCA Asian Conference GTL: Beyond FT, LNG / U.S. Reserves 1 Shale is a Mass Production Operation What does it take to make the Shale Play work? Gas-rich shale Roads Pipes People Water Sand Trucks Private property rights And a little technology How many service companies can you name? How many service companies are there in the United States? Pipeline Pop Quiz 35, miles of natural gas transmission pp pipelines in the U.S. ((actual)) 15, miles of transmission pipelines in China by 15 (claimed) How many total miles of pipelines are there in the United States? Answers: 1, U.S. oil & gas service and supply companies;. million total miles of natural gas pipelines in the United States Sources: American Petroleum Institute, U.S. Dept. of Energy, China Natural Gas Map 13 IMPCA Asian Conference GTL: Beyond FT, LNG / U.S. Reserves 11

16th IMPCA 13 Asian Conference Slide 1 Gas to Liquids: - Beyond Fischer Tropsch - Beyond LNG - U.S. Oil and Gas Reserves Through the Ages My Paper thanks # Paper to IMPCA Title Presenter & ZEEP Name Ltd. for the opportunity to make this presentation. Philip E. Lewis, P.E. Chief Technology Officer ZEEP Ltd. 16 th Annual IMPCA Asian Conference 13