wbm netherlands ih2 presentation
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IH2 Technology – Biomass to Hydrocarbon ConversionEmerging Advanced Technology Pathways Session; 5 March 2014CRI Catalyst Company
IH2 is a trademark of Gas Technology Institute.
DisclaimerThis 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, 2011 (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, March 5, 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.
Session Questions & IH2 Technology • What are the hot emerging
technologies? • IH2 Technology Overview
• Can new technologies disrupt the advanced biofuels technologies of today?
• IH2 Products, Product Quality, GHG Reduction & Economics
• Does the industry have the appetite to invest in new technologies?
• When will these technologies to be deployed at a commercial scale?
• IH2 Commercial Status
Insert Image Here
<a href='http://www.123rf.com/photo_10846628_a‐group‐of‐illustrated‐3d‐people‐are‐arranged‐in‐a‐circle‐around‐the‐words‐let.html'>iqoncept / 123RF Stock Photo</a>
2) Fluidized Bed
Proprietary Catalyst SystemRenewable H2
340‐470C<500psig
1) Feed ConditioningSizing, Drying & Feeding
1st Stage 2nd Stage
3) Fixed Bed
Proprietary Catalyst System
Renewable H2
<500psig
4) SMR C1‐C3 GasRenewable H2
Process
5) Cyclones
4
Distilled Hydrocarbon
Hi Pressure Steam
Clean Water
Fertilizer
BioChar
Biogenic CO2
Crop Residue
City Waste
Wood/ForestResidue
Energy Crops
Algae
Gasoline, Jet and DieselHydrocarbons (67‐172 gal/ton)US R100 Regular Gasoline (Wood)US R100 Intermediate Gasoline (Wood) US R60 + Diesel (Wood) / Approaching R100
Feed
Products
What is the IH2 Process
What is the IH2 Process ?
<a href='http://www.123rf.com/photo_14316634_the‐big‐question‐silberblau.html'>styleuneed / 123RF Stock Photo</a>
IH2 Technology 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 (>90%) GHG reductions* (low carbon fuel)
• Integrates commercially proven equipment; Market Ready
• Attractive economics (< $2.25/gal; 2000 dry mt wood/day USGC pricing)• $450mln TCI ex KBR; 60% financed @ 8%; 20% overall IRR; $72/dry ton feed• No RINs, No Carbon or Blending Credits, No Subsidies of any kind included
• Improved catalysts enhanced product yield & quality
* > 94% GHG reduction per Professor David Shonnard at MTU; Feedstock Dependent: http://services.lib.mtu.edu/etd/THESIS/2012/ChemicalEng/maleche/thesis.pdf
U.S. Product Quality – Wood(Baseline) Gasoline
• R100 Meets ASTM D‐4814‐10b
• ~87 Octane• S < 15‐ppm
Diesel• Approaching R100
• ASTM D‐975‐11 • Derived Cetane # 36‐40
• S < 10‐ppm
Kerosene • Aromatics Reduction Improved Smoke Point
• Evaluating Jet A1 Blends
EU Product Quality – Wood(Baseline)
Petrol• EN 228: Petrol – Jan 2009
• Octane Low • S ~10‐ppm
3rd Party Testing in Progress 2014
More Upgrading Wood Product for EU Specs
EU Specific R&D
Diesel• EN 590:2009+A1:2010
• Cetane # Low• S ~15‐ppm
GHG Reduction Influence Technology Selection
Renewable Fuel Category
DefinitionRIN D Code
Pathway
Cellulosic Ethanol/Gasoline
Derived from cellulosewith a 60% GHG reduction relative to petroleum fuels displaced.
3 M
Biomass Based Diesel
Biodiesel or renewable diesel with a 50% GHG reduction relative to petroleum fuels displaced.
4
Advanced BiofuelAny renewable fuel other than corn ethanol with 50% GHG reduction relative to petroleum fuels displaced.
5
Renewable FuelBiomass based fuel with 20% GHG reduction relative to petroleum fuels displaced.
6
Cellulosic Diesel/JetCellulosic diesel, jet fuel, or heating oil with 60% reduction relative to petroleum fuels displaced.
7 L
• U.S. Centric Illustration; EPA Definitions ‐ Source: 40 CFR 80.1426
• Globally, additional regulations w/ GHG reduction components • 3rd Party assessment Life Cycle Associates of IH2 Products, pending issue
Attractive Economics • Stand Alone/Green Field (US Gulf Coast basis)• 2000mt/d wood (50% moisture fed, dried to 10%
moisture at 1st stage)• 60% financed at 8% interest, overall 10% IRR• Feed Stock ~55% of Operating Cost• No subsidies, tax, RIN or carbon credits included• KBR FEL‐3 underway• Opex validated by prospective clients
• Minimum Fuel Selling Price –$0.433/L (2007) $0.476/L (2012)
• Refinery Synergy w/Refinery H2 Supply• Reduces TIC ~55.0MM$ • Estimated MFSP $0.359/L (2007) $0.394/L (2012)
91.31
7.8
2.14
17.3
5.929.6
Wood $71.97/dry ton
Other Op Costs: Catalyst, Disposal, etc.
Fixed Cost
Depreciation
Avg Income Tax
Avg ROI
Operating Costs Total $1.64/gal*
*Includes $0.1884/gal coproduct credit
4.7
17.74.0
55.02.82.8
40.5
Feed
1st Stage/2nd Stage
Fractionation
HMU
Ammonium Sulfate
Absorption/Stripping
Utilities & Contingency @35%
NREL Estimated Installed Equipment Costs $127.5mln
http://www.osti.gov/scitech/biblio/1059031
NREL Estimated Operating Costs Total $1.64/gal*
Commercialization Progress More on the Horizon
High Interest Regions
ShowcaseLicenses Signed
2 – NA ‘13
CommercialLicenses Signed1 EU & 1 NA ‘13
Lab Scale‘09 & Expansions ‘13
Pilot Plant‘12
<a href='http://www.123rf.com…tion‐a‐metallic‐world‐map.html'>spectral / 123RF Stock Photo</a>
Session Questions & IH2 Technology Wrap‐up
• Is IH2 Technology “hot & emerging”?
• Can IH2 Technology disrupt the advanced biofuels technologies of today?
• Does the industry have the appetite to invest in IH2 Technology?
• Based on the IH2 Technology Differentiators and License Agreements signed to date, we have confidence that the answer appears to be yes to these questions.
• Ultimately, investors in the renewable fuels market will determine, based on local needs, resources & regulations and respective due diligence processes.
Technology is:
• Cost‐effective process developed by GTI using CRI proprietary catalysts• Converts biomass directly to hydrocarbon fuels and/or high quality blend
stocks• Self‐sufficient & self‐sustaining w/ little lasting environmental impact,
needs only transport in/out • Feedstock flexible• Nearly carbon‐neutral • Integrates for potentially improved economics• Currently in FEED (FEL‐2/‐3)• Available from CRI Catalyst Company
Thank You
Learn more at: http://www.cricatalyst.com/catalysts/renewables.html
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