Intensified smaller scale GTL process

Laura BarrioPIN-24, Newcastle, 21st June 2016

• Our business

• Our technology at a glance— Catalyst— Microchannel technology

• Commercialising our offer— Development tools &

scale-up methodology

• Current & future projects

2

Overview

• Leader in smaller scale gas-to-liquids technology— 15 years and >$300 million invested in product development— Exhaustive global patent protection— Robust technology

>1.3 million hours of laboratory scale tests>26,000 hours testing at the pilot/demonstration scale

• First class partners offering a complete GTL solution: Haldor Topsøe, Ventech,Hatch, Mourik, SGS, Shiloh

• Commercial roll-out underway— ENVIA Energy project under construction— Ashtabula GTL— Red Rock Biofuels

• International presence— Commercial center in Houston, Texas; technical centers near Columbus, Ohio

and Oxford, UK— Permanent pilot plant in Ohio

The company at the forefront of smaller scale GTL

3

Velocys

Our business: the gas-to-liquids (GTL) processChemical conversion of natural gas to refined products

Reforming Fischer-Tropsch (FT)

Naturalgas

Syncrude(syntheticcrude oil)

Hydro-processing

Syngas(carbon monoxide

+ hydrogen)

Clean syntheticfuels & chemicals

(diesel, jet fuel,Lubricants, waxes

etc.)

4

Field size(TCF)

0.1-0.25

73

347

719

1,043

3,922

ConventionalLNG / GTL

>50

5-50

1-5

0.5-1

0.25-0.5

<0.1

337

Distr. of conv. gas fields outside US

gas fields

VelocysGTL

4

Distributed scale GTLopportunity size (mmbpd)Unconventional gas* 18

Associated gas 2.7

Stranded gas* 4.8

Total > 25

* Assumes monetisation over 100 yrsSmaller scale GTL:1,500 – 15,000 bpd

Velocys’ technology at a glanceSuper-active catalyst & microchannelreactors

Velocys catalyst is an order of magnitude more productivethan competitive FT catalysts

6

Key catalyst criterion: super-active catalyst

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

Conventional fixed bed Slurry bubble column Velocys

Cat

alys

t pro

duct

ivity

[kgC

5+/l-

cat/h

r]

At muchhigher

pressure

• Traditional catalystmanufacturing— Produces broad distribution

of cobalt particle sizes

• OMX catalyst manufacturing— Produces optimized and

more uniform cobalt particlesizes

— Higher activity fromsmaller particles

— Greater stability fromnarrower particle sizedistribution

Origin of exceptional catalyst performancePatented organic matrix combustion (OMX) method

Cobalt particles

Cobalt particles

Silica support

Silica support

Traditionalmanufacturing

OMX

7

Key reactor criterion: reaction intensificationMicrochannels intensify chemical processes

Velocys FT reactorTube length 2 feet (0.6 meters)

Conventional FT reactorTube length 30+ feet (9+ meters)

Microchannel

Enhancedmass and

heattransfer

~ 25-37 mm

~ 0.1-10 mm

Shell-and-tube

8

• Microchannel coolantand process channelsmore effectivelytransfer heat out of thecatalyst bed givingbetter control andperformance

• Tubular reactorsoperate with a greatertemperature gradientfrom the center of thetube to the tube wall,risking thermalinstability

Key reactor criterion: exceptional heat removalMicrochannels keep the catalyst bed more isothermal

9

Large-scale economics at smaller scales

10

Thinking smaller is bringing GTL to the mainstream

Velocys Fischer-Tropsch reactor

Conventional Fischer-Tropsch reactor

Note: Reactor capacities differ considerably

Commercialising our offerDevelopment tools & scale-upmethodology

Ensure performance is maintained at commercial scaleCommercial catalyst manufacturing

1 2 3 4

Lab scalegram quantities producedmultiple runs

Pilot scaleMultiple runs yieldinga combined 1.5 MT

Developmental scalekg quantities producedmultiple runs

Commercial scaleFull commercial lotsized produced by 2manufacturers.QA/QC established

4-year commercialisation program

12

13

LaboratoryMultiple tests andexperiments to determine• Impact of catalyst

composition onperformance (optimalformulation and QA/QC)

• Parameters used instatistical and flowmodelling

• Procedure forregenerating the catalystand discharge

• Impact of deviations fromnormal operation

Pilot Plant• A pilot plant reactor was

operated for a completerun, prepared fordischarge, discharged, re-loaded and restartedsuccessfully – all withincommerciallyacceptable timeconstraints

• Measured performanceand validated models

• Demonstrated efficacy ofour procedures andmethods for loading anddischarge

Commercial• Commercially produced

cores are used forextensive long term lifecycle tests

• Demonstration plantsinclude Gussing andPetrobrass

• A full scale (3-core)commercial unit was usedto develop catalyst loadingprocedures

• A single core commercialvariant is used to improveand innovate new catalysthandling techniques

From lab-scale to commercial reality

• Designed experiments to coverwide range of FT operations

• Independent variation ofparameters: e.g. Pco, PH2

• >60 data points— Close monitoring of outlet

H2:CO ratio and COconversion

— Product sample at each point

• Assessment of ageing andregeneration on processresponse

• Field demonstration unit datain agreement with modelprediction

14

Developing tools for engineering studiesProcess model development

Inlet pressure: 200 – 450 psigInerts: 10% – 70%Contact time: 150 – 500 msFeed H2:CO ratio: 1.4 – 4.5Temperatures: 175 – 235 °C

Verified performance and scale up methodology

15

Labo

rato

ry

Catalyst testing

Multiple regenerations

Modeling

16

PilotPlant

Labo

rato

ry

Sustained stable operation

Verified performance and scale up methodology

Field model demonstration

17

PilotPlant

Labo

rato

ry

Demonstration

Commercial

Verified performance and scale up methodology

18

PilotPlant

Labo

rato

ry

Demonstration

Commercial

Commercial Commercial Commercial

Verified performance and scale up methodology

Duplicate reactors and trains for commercial facilities

Performance of the microchannel reactor and catalystdemonstrated in the Velocys Pilot Plant (VPP)

FT performance

FTreactor

Waxdrum

Steamdrum

19

• Successful piloting ofcommercially producedcatalysts

• Continuous improvementwithout changing ourtechnology basis

• Process intensificationresults in significant capitalcost improvement

Process intensification

20

Pilot plant runs in the 18 months to November 2015

Pilot plant run

Rel

ativ

e ca

paci

ty

Reduced start-up time: minimising reactor downtime

21

Pilot plant runs in the 18 months to November 2015

Commercial roll-out underway

ENVIA Energy’s plant being builtAdjacent to WM East Oak landfill in Oklahoma City, USA

23

ENVIA Energy - Oklahoma City project

• Landmark for GTL• Landfill gas & natural gas as feedstock• Major companies committing to smaller scale

GTL• Construction underway

— Manufacture of FT catalyst and reactorscompleted in 2015

— Fabrication of modules complete— All modules, including those incorporating

Velocys’ reactors, set in place on site• Will be our commercial reference plant – a

major milestone— Demonstrate parallel operation of full-scale

Velocys reactors

Significance and progress

24

Some of the FTmodules

26

ENVIA Energy’s Oklahoma City GTL plantAll major process units on site

Landfill gas inlet

Steam methane reformer

View of GTL plant from landfillsite

Syngas compression

LFTL and HFTL columns

CO2 wash column

Laura BarrioPrincipal Chemistlaura.barrio@velocys.com

Oxford, UK office+44 1235 841 721

www.velocys.com

"Velocys", the Velocys logo and "Think Smaller" are trademarks of Velocys 27

Thank you

®

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