Coal to Liq Westinghouse Flint ApegAnl Presentn09

7/29/2019 Coal to Liq Westinghouse Flint ApegAnl Presentn09

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FOX CREEK COAL TO LIQUIDS PROJECT:GREEN FUELS FOR THE FUTURE

Presented by:

en n , . ng., . . - ro ec anager

APEGGA Professional Development DaysTELUS Convention Centre

Cal ar Alberta

Friday April 24, 2009


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Inexpert use of data in this presentation

could be harmful to your companys bottom line,and may shorten an otherwise promising career !

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Agenda

Alter NRG Cor orate Overview &

how the Fox Creek Coal-to-Liquids Projectgot started

Fox Creek Project Overview

Focus on Key Environmental Challenges- Carbon and Water Management

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Who is Alter NRG?

Alter NRG is a publicly traded (TSX: NRG; OTCQX: ANRGF) Canadian companyrovidin clean ener throu h asification

Right Assets Industry-leading Westinghouse plasma gasification technologyLarge coal resource (40,000 bbls/d for 50 years)

Right People

Experienced management and technical team

Track record of on-time, on-budget delivery

Staged growth

Right Plan

Strategic partnerships with industry leadersNumerous growth opportunities technology and energy revenues

Environmental concerns

Right Time

Our vision is to be a senior energy producer by becoming the worlds leading supplier

ncreas ng ong- erm g o a eman or energySpecial financing and tax incentives for clean energy projects

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of plasma gasification technology and developing environmentally sustainable and

economically viable gasification projects


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Target Markets

Large size Strong economic returns

Competitive advantage

Waste-To-Energy (WTE)

nv ronmen a a van age

onvert ng waste nto c ean energy power an steam an or transportat on ue w e re uc ngharmful air emissions and the need for landfills.

Power Plant Retrofi t

Converting coal and biomass into clean syngas prior to combustion, to meet all environmental

em ss ons s an ar s, an prov e eca es o a ona annu y ncome.Petroleum Coke

Converting the energy rich by-product of upgrading (petroleum coke) to useable energy such aspower, or liquid fuels.

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Coal-To-Liquids (CTL)

Converting our large coal asset into high-value liquid fuels like diesel, and naphtha.


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Gasification 101 continued

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Carbon Monoxide & Hydrogen

. building blocks to many-

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Gasification 101

Liquids (e.g. diesel, naphtha)

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What is Plasma?

Plasma is a highly ionized gas

By controlling gas through the plasma torch and with the aid of a magneticfield, energy from the electric arc is transferred to the process gas

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What is Plasma Gasification?

What are the advantages of plasma gasification?

control provides:

- Ability to gasi fy blended feedstocks includingwaste

- High-quality syngas-- Better environmental performance

Energy efficient Plasma Torches use 2% to 5% of the energy input Facili ty Exports 80% of the energy input to clean

syngas

Alter NRG owns Westinghouse Plasma Corp. -

30 years and over $100 million of R&D throughWestinghouse

Proprietary IP with 22 active patents worldwide Performed hundreds of pilot tests on numerous feedstocks

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s tp p ot ac ty ocate n a son,PA


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Plasma Technology Milestones

Industry-leading Technology Worlds 1st Commercial-Scale Plasma Gasifier

Mihama Mikata operational in 2002Plasma technology used since 1989 by GM, Alcan, etc.- over 500,000 hours of industrial use

Worlds Largest Plasma Gasifier for WTEAdding Commercial Facilities

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Utashinai operational in 2003Pune being commissioned in 2008-09


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Our Competitive Advantage

Our Value: Provide clean energy at low cost ($2 to $4 per MMBtu) from cheap andabundant feedstocks includin waste biomass coal and etroleum coke.

Environmentally Responsible Plasma gasification can

reduce CO , NOx, SOx & PM

Commercially Proven

Two facilities in commercialoperation for more thanfive years

and other harmful emissions

Somerset power plant retrofitwill be the largest renewableenergy project in Mass.

Commercially operatingplasma torches for ~ 20 years

Independent third-party tech

reviews RW Beck, Hatch,AECOM, Juniper, Golder, etc.

Project size $50 - $300 million

reduced financingrequirements and quicker

time to com letion

Worlds only commercialplasma gasification WTEfacilities processing MSW

Worlds lar est hazardous

Multitude of feedstock inputs

Variety of outputs: syngas,steam, baseload power &liquid fuels

waste plasma gasificationfacility being commissioned

World-class plasmagasification pilot facility

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A Scalable & Flexible TechnologyIndustry-leading Technology


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Fox Creek Coal to Liquids Project

Location

Other Western Canada Gasification-based Projects

The Fox Creek Project Highlights and Economics

The Environmental Challenges- Carbon Capture & Storage- Managing Water Demand

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CTL Value PropositionHow Fox Creek Got Started

Capitalizing on the SpreadBetween Coal and Oil

High Value Diesel & Naphtha

Market Opportunity

CTL via gasification commercial for more than 30 years

addingvalue

Value per tonne

700

800

900

1000

Crude Oil (WTI)

Natural Gas (Nymex)

Coal Bi Sand Bar e

AddingValue

Netback over $70/ barrel ( US$80WTI) Enough low cost coal for40,000 bbls/d for 50 years

Coal Resource Specifically Suited For Gasification 200300

400

500

Close to major light oilfields forCO2 sequestration andto infrastructure, refineries and end markets

Execution PlanSource: World Coal Institute

0

2000 2001 2002 2003 2004 2005 2006 2007 2008

since 2008

Target operation by 2015 2016

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1 tonne coal = 1.5 bbls diesel


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Polygeneration Options

Low value added / No local marketSyngas as Clean Fuelm e 2 cap ure po en a

Synthetic Natural Gas Low value addedVery high CO2 yield vs. market

owerCO2 capture more costly

Hydrogen Good value on paper/ merchant market

Good CO2 capture economics

Liquid HC Fuels Highest value added outside of pet chemGood CO2 capture economics/EOR area

Ethanol Under investigation

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Fox Creek Coal to Liquids Project

Location of Coal Reserves

Fox Creek

Coal Resource

Grande

Prairie

Fox Creek

Coal Resource

Grande

Prairie

Edmonton

Calgary

Edmonton

Calgary

56,000 acres

850 mega-tonnes in place

468 mega-tonnes resources

close to existing road, rail &pipeline infrastructure

close to future EOR sites forconventional oil & gas

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Other Projects in Western CanadaUsing Gasification

ar ous o san s p an s heavy bitumen residues to hydrogen, CO2/CCS

- Coal to hydrogen, CO2 / CCS

(Belle Plaine, Sask.) Alberta / Sask Pet Coke to power, CO2 / CCS

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Fox Creek CTL Project Highlights

Extract coal using established surface mining technology

Produce diesel fuel and naphtha through gasification andconversion of synthesis gas ( syngas) to liquids

Capture and store the majority of the CO2 (CCS)

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Addressing ImportantStrategic Goals for Alberta

for Alberta Utilization of low rank coal resources in an environmentall

responsible manner

Conversion to clean, high-value energy, especially diesel fuel -

Carbon capture and storage part of the plan

Extension of conventional oil field life throu h enhanced oil

recovery (EOR)

New approaches to water management

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The Value Chain

Extraction Transportation/Processing F-T Processing

Cost to Mine & Process Coal = $43/tonne

Revenue = $165/tonne

CO2 Capture and Sale Naphtha

Approximate Gross Margin =

Sulphur Free Diesel (>70 cetane)

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Note: Assumptions based on 2015 under the 20,000 bbl case, Cost to process coal include all operating costs and sustaining capital

$122/tonne


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Preliminary Project Economics

Projected Leveraged Rates of Return Using Constant Pricing

Assumptions: IRR is based on a constant pricing with constant expenses. Leverage is based 50%debt, 7% interest rate.

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Main Project Metrics

UltimateInitial Phase

,

Make Up water, t/day*

,

5,000

,

10,000 moredetailslater

Products, b/dayDiesel

Naphtha

16,500

3,500

33,000

7,000

CO2 , t/daymmscfd

11,500220

23,000440

detailslater

owern erna

gen.n erna

gen.

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a preliminary estimate of best in class performance for CTL plants


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Surface Coal Mine

Dragline mininginvolves a series of

parallel open pits

5-35 metre overburden

As mining advances,

overburden excavated

is backfilled into thepreviously mined pit

n ng tec n ques arerelatively conventional

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Coal Properties, Reserves & Cost

FOX CREEK PROJECTASSAY OF RUN OF MINE COAL

Component % Weight

Carbon 41.59

-place

468 mega-tonnesresource at estimated

y rogen .

Oxygen 9.70

Nitrogen 1.05

$10/tonne cost

One tonne will convert to

1.5 barrels of l iquidSulphur 0.32

Ash 25.00

Moisture 20.00

wil l support 40,000 b/dliquids for 50 years

Total 100.00Heating Value,MJ/kg (btu/#)

16.2 (6,950)

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Other Project Elements

Coal Transportation, Preparation and Storage

Coal is trucked to a storage area at the coal-to-liquids plant Coal is conditioned for gasification

operations or land reclamation

Coal-to-Liquids Plant Coal gasified to syngas mixture of hydrogen and carbon monoxide

Syngas is processed to form a mixture of hydrocarbons, then

Steam & Fuel gas by-products used to generate steam/power

Co-product CO2 captured for EOR or other storage

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Coal to Liquids Plant

only main streams shown

AirAir

SeparationUnit

CO2

to EORincl. all H2S

Naphtha

& Diesel

process water

Coal from

Fox Creekmine

Gasifier

CO shift &

Gas cooling

rawsyngas

Gas

cleanup Productupgrading

Hydrogen sepn.

Fischer-Tropschs nthesis

Slag to disposal

fired heater

wastesteam

fuel gasquench water

make upwater

steam turbines

power exportto grid

internaluse

FOX CREEKCOAL PROJECT

LF J an 14,2008

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Where are we now?

Partner Selection & Discussion

Interested in those that bring technology or operating know-how

Other investors are also being sought

Commenced May 2008; one year

2010: Environmental Assessment and Project application

onsu a on

Stakeholder Consultation plan in place and already underway

Pre-Design Basis Work

Short-listing gasification, gas cleanup and FT technologies Enter into appropriate NDA agreements

Also use this period to confirm capital costs

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Confirming CO2 and water plans also key


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Market for Products

Diesel

Transportation fuels are increasingly in short supply across North America

and diesel demand is growing Expected start-up diesel production (13,500 barrels per day) represents

a ou o curren es ern ana a supp y

Diesel product is a very high quality (>70 cetane) blending stock, that can be

used to upgrade lower value stocks (e.g. oil sands products)

Naphtha

Used as a diluent to transport heavy crude oil in pipelines

Diluent is in short su l in Alberta and demand is rowin

Carbon Dioxide

Gasification captures 85% of plant CO2 in form suitable for nearby EOR

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t er storage opt ons or a ance o pro uct on vs. eman


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Project Schedule

2008 2009 2010 2011 2012 2013

Preliminary Disclosure (complete)

2014 2015

Terms Of Reference

Baseline Environmental Work

EIA / Project ApplicationMinesCoal to Liquids Plant

Regulatory Process Review

Approvals issued

Key Technology/Licensor Review

Engineering, Construction & Startup

MinesCoal to Liquids Plant

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Environmental Opportunities

Optimizing Water Supply & Net Use

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Carbon Dioxide Emissions

Comparing various sources - kg CO2 / m3 transportation fuelCO only. Other CO E not included except for LNG

kg/m340 APIcrude 20 APIcrude

Coker based refinery

Bitumen RecoveryUpgrading and Refining

low high

CTL

6,000

5,000 Dilute CO2

Captureready CO2

4,000

LNG

3,000 ProductionRefiningBy-Products

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, End use

Sources: T.J.McCann & Associates, LENEF Consulting, NETL, SAE/Argonne Lab - Figures do not include other GHG gases


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Carbon Capture & Sequestration

capacity, Mega-tonnes CO2

Coal Bed

Methane

gas & oilpools

9,00015,000

10,000

2,000 EOR

aquifers

sto rage @ 100 M-t/year = 360 years top 240 oil pools

capacity, Mega-tonne CO2

2,580

Source: CERI / T.J.McCann & Associates

top 350 gas pools

,

cost to sequester

$

/tonne

100

50

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Source: CERI 0 50 100 M-t/year


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Sequestration Options Considered

EOR market 2012 estimated

at 27,000 t/day for ~20 years

,but need alternatives tocover for EOR demandvariations

eep sa ne aqu ers

depleted gas reservoirs

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C i F C k d


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Comparing Fox Creek andDakota - Weyburn

Make no mistake about i tthe CCS and oil contribution aspects

Compare with the well known Dakota Gas Plant (ND) - Weyburn (Sask)heavy oil field link

Coal mined, t/day 18,000 (lignite) 13,500 (sub-bit)

Dakota - Weyburn Fox Creek - Local Fields

e y startup

Liquids Produced, b/day 28,000 (NG-boe) 20,000

,

EOR potential, mmboil 130 550years 10-15 25-30

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CO2 sequestered, Mega-t/year 1.8 4


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The Water Challenge

Carbon Capture & Sequestration

Optimizing Water Supply & Net Use

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The Water Challenge

recall this map

from a

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Main Factors Driving Water Policy

A Key Environmental Consideration in Alberta .

Reliable source of water for process is required, but river 30 miles

distance/$100 million plus environmental approval headacheswe do not need

s s e us ness an nanc a ncen ve o ge crea ve

Optimize water conservation

maximum recycle & reuse - zero river water critical review of demand vs. acceptable quality maximize air cooling; water for trim control only

For make up: potential sources of groundwater and surface waterarebeing investigated from mine operations; also investigating use ofbrackish/saline sources

In shortriver water is a last resort!

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Water management under investigationbut here is a work-in-progress plan!


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Water Demand Schematic

Boiler Feed Water180BFW make up 910

Water flows tonne/day or cubic metre/day

for 20,000 b/day case

Gasifier-Shift-Rx

CO2 recovery

Amine 320

Steam (240)Quench Twr 380blowdown 410 HRSG

blowdown

deaerator

Shift-FT

ma e up

Quench Twr 380

make up

Trim Water Coolin 200

CW

Compressor 140

scrubber drains

brine

Slag CoolingQuench 3650

1970

Cooler 1080

200

?

issue: keeping it cool

Waterin slag Waste Water

Collection-Treatment

600

ow own

2002080

40

1880treated water return

Mine & Surface Water

Brackish/Saline Watermake up


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Analyzing Water Balance Further

Water flows tonne/day or cubic metre/day

for 20 000 b/da case

Real Net Losses

c ua a e p ows

Rx Section 700Slag Cooling 3650

Gasifer-FT-Rx (net) 350Slag Cooling 2570

BFW Deaerator 180

a e pCW Make Up 200

5460

Brine 80Trim Cooling/W-W 400

3580

Sources

Recycled 1880

Mine & Surface * 2000Brackish/Saline ** 15805460

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* Not yet confirmed ** Supply virtually unlimitedno contingency included!

S


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Matching Needs to Sources

Water flows tonne/day or cubic metre/day for 20,000 b/day case

Slag Cooling 3650 Brackish/Saline Water (1580)

+ Plant Recycle and/or Mine water (2100)How much treatment needed ?

o ow own s reams nee any rea men

Reactor Section(non steam)

700 Use balance of Recycle stream (850)

Exact source will depend on treatment needed

BFW Make Up 910 Plant Recycle and/or Mine waterExact source will depend on treatment needed

Cooling WaterMake Up 200 Plant Recycle and/or Mine waterExact source will depend on treatment needed

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we need to get creative and no cooling towers!


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do we have a water back up plan?

Id kind of hoped

be further down the

list than Plan B !

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Summary

An important future-oriented coal opportunity for Alberta

Key Minister approvals-in-principle: April, 2008

Consistent with some important Alberta government drivers onAlberta CO2 policy & maximized value added in Alberta

,

Public Disclosure & Proposed Terms of Reference issued:June-October, 2008

Mine & CTL shows sound economics (>20% ROE)

Opportunity for project enhancements/redirection with partners

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S


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Summary

The environmental challenges in CO2 and water are ont e ront urner or ot t e government an s

85% of the project CO2 emissions will be captured andseques ere

We are getting creative to avoid water draw from rivers

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thank you!

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Coal to Liq Westinghouse Flint ApegAnl Presentn09

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