Cellulosic Hydrocarbon Fuels from IH2 Technology – Fuel Quality Celeste McLeod CRI Catalyst Company 910 Louisiana Houston TX 77002Celeste McLeod, CRI Catalyst Company, 910 Louisiana, Houston, TX 77002

LARTC Presentation10 April 2013

Disclaimersc a eThis 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,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 statementsexpressing 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 couldsimilar 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 developmentsdeveloping 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 f d l ki t t t Additi l f t th t ff t f t lt t i d i R l D t h Sh ll’ 20 F f thforward-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, 10 April 2013 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.p g p

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Discussion Topicsp

• Introduce Gas Technology Institute (GTI) and CRI Catalyst (CRI)(GTI) and CRI Catalyst (CRI)

• IH2 Technology overview

• IH2 Technology product quality

• IH2 process economicsp

• IH2 Technology integration sugar/ethanol

• IH2 commercial deployment

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Gas Technology InstituteGas ec o ogy st tute

• Not-for-profit gas research & services organization with a 70+ year history• Capabilities that span the natural gas value chain• Current focus in diversified energy solutions• Facilities

– 18 acre Chicago campus – 28 specialized labs totaling 200,000 ft2

• Staff of 250 >1 200 patents• >1,200 patents

• 750 licenses granted & 500 products taken to market

Pil t S l G ifi ti C E & E i t l T h l C t

Offices& Labs

CRI is the partner for IH2

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Pilot Scale Gasification Campus Energy & Environmental Technology Center

CRI Catalyst CompanyC Cata yst Co pa y

• Catalyst Business with 50+ year history

• Houston based global business – Houston– London– Singapore

• Research Facilities Amsterdam– Amsterdam

– Bangalore – Houston

f• Manufacturing Facilities – US (3)– Germany – Belgium

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What is the IH2 Process?

• IH2 processCatalysts Hydrogen & Heat– Catalysts, Hydrogen & Heat

– Cost-effectively converts wide variety of biomass

– Directly produces hydrocarbon “drop in” fuels (R100) and/or high quality blend stock (>R50)

• IH2 Technology offers integration opportunities – Refinery, paper mill, ethanol plant,

agricultural, or recycling operations – Creates higher value from biomass

than afforded by heat and electrical power sales (NA basis)

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electrical power sales (NA basis)

IH2 Process (Simplified, Stand Alone) Process

( p , )

Biogenic CO2Feed

Products

HDO’d Vapors

4) SMR C1‐C3 GasRenewable H2

Di till d

Hi Pressure Steam

Crop Residue

City Waste

2) Fluidized Bed 

Proprietary  Catalyst

Renewable H2

3) Fixed Bed 

Proprietary Catalyst

Renewable H2

Distilled Hydrocarbon

Clean Water

Wood/ForestResidue

Gasoline, Jet and Diesel Range HCs

340‐470C<500psig

1st Stage 2nd Stage

370‐400C<500psig Fertilizer

Energy Crops

Algae

1) Feed ConditioningSizing , Drying & Feeding

BioChar

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IH2 Transformative Differentiators

• Fungible, high purity hydrocarbon fuel and/or blend stock productsstock products

• Nearly carbon neutral*

• Feedstock flexible w/ high product yields – 67-157 US gallons/US ton

• Attractive economics – ~ $2/gal; 500 dry MT/day wood; USGC– Low capex (4 major process steps, low pressure, non corrosive)– Low opex (feedstock predominates)

E th i ith 72% 86% bi• Exothermic process with 72% - 86% bioenergy recovery (wood)

• Market Ready! Combination of Available Technologies

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*>94% GHG reduction per Professor David Shonnard at MTU: http://services.lib.mtu.edu/etd/THESIS/2012/ChemicalEng/maleche/thesis.pdf

Evolution of IH2 Technologygy

Gasoline Product 3rd Gen Catalyst

Advanced catalysts improve product, Wood Example

Total Liquid Product 2nd Gen Catalyst Lab Scale

Total Liquid Product 1st Gen Catalyst Lab Scale

Gas/Jet/Diesel Product 3rd Gen Catalyst Lab Scale

Pilot Plant Scale

HydrocarbonHydrocarbon

Jet/Diesel Product 3rd Gen Catalyst Pilot Plant Scale

WaterWater

Water Product 3rd Gen Catalyst Pilot Plant Scale

4Q09 “R5” Quality 3Q10 “R25” Quality 2Q12 “R60+” Quality

“GOAL“ “GOAL“ Drop InDrop InStand Stand Alone Alone “R100”“R100”

Process & Catalyst R&D Continues

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R100R100

Comparison of Liquid Quality from Woody BiomassBiomass

Pilot plant Laboratory unit

% Carbon 88.20 88.40% Hydrogen 11.60 11.00

% Sulfur 0.02 0.02% Nitrogen <0.10 <0.10% Oxygen BDL BDL% Oxygen BDL BDL

Total acid number, mg KOH/g <0.05 <0.05

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IH2 Liquid Product Quality(Wood)

• 3rd generation gasoline– Gasoline Meets ASTM D-4814-10b

unleaded gasoline specificationsunleaded gasoline specifications– R100 RBOB Quality Economy &

Intermediate U.S.– Evaluating EU split v EN-228

• 3rd generation diesel– Passed all D-975-11 as No 2, general , g

purpose middle distillate fuel as R100– Except Cetane Index & Viscosity– Diesel aromatic, currently ~R50 Target

R100R100– Diesel (whole algae) likely R100 (in testing)– Evaluating EU split v EN-590

LA options for IH2 hydrocarbons: internal consumption or export

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LA options for IH hydrocarbons: internal consumption or export

IH2 Process Economics (USGC) NREL 09/12 Basis( )

29.6

Wood $71.97/dry ton

Other Op Costs: Catalyst,

Operating Costs Total $1.64/gal*4.7

17.7

Feed

1st Stage/2nd Stage

Installed Equipment Costs $127.5mln

91.31

2.14

17.3

5.9 Disposal, etc. Fixed Cost

Depreciation

Avg Income Tax

Avg ROI

4.0

55.02 8

2.8

40.5 Fractionation

HMU

Ammonium Sulfate

Absorption/Stripping

Utilities & Contingency

• Stand Alone/Green Field (US Gulf Coast basis)• 2000mt/d wood (50% moisture fed, dried to 10% moisture at 1st stage)Installed Equipment

Total Capital Investment $263mln

7.8 Avg ROI

*Includes $0.1884/gal coproduct credit

2.8 Utilities & Contingency @ 35%

• 60% financed at 8% interest, overall 10% IRR• Feed Stock ~55% of Operating Cost• No subsidies, tax, RIN or carbon credits included!• Minimum Fuel Selling Price – $0.433/L (2007) $0.476/L (2012)

R fi S /R fi H S l

127.5116.5

Costs

Land/Develop

Permits & S/U

Standard Project Add-In's**

** Prorated Expense (10%), H O & Construction (20%), Field Expense (10%), Working Capital (10%) , Project Contingency (30%)

• Refinery Synergy w/Refinery H2 Supply• Reduces TIC ~55.0MM$ • Estimated MFSP $0.359/L (2007) $0.394/L (2012)

• KBR FEL-3 underway• Opex validated by prospective clients

6.313.2

Add In s

• Opex validated by prospective clients

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Sugar/Ethanol Important Latin American Region

• ~38% World Sugar Cane (SC)• Brazil, Colombia, Argentina known SC Ethanol Producers; Guatemala, Jamaica,

Costa Rica, El Salvador export SC Ethanol

A P d ti P d ti it % f W ld

• Residual materials – Bagasse, Cane Trash, Filter Cake, Spent Wash, Molasses• Next Generation Biofuels – Brazil • IH2 w/Sugar/Ethanol Cellulosic Hydrocarbon

CountryArea Production Productivity % of World

Production(million ha) (million tons) (Tons/ha)

Brazil 5.343 386.2 72.3 29%India 4.608 289.6 62.8 22%

China 1.328 92.3 65.5 7%

Thailand 0.97 64.4 66.4 5%

Pakistan 1.086 52 47.9 4%

Mexico 0.639 45.1 70.6 3%Colombia 0.435 36.6 84.1 3%

Australia 0.423 36 85.1 3%

USA 0.404 31.3 77.5 2%

Philippines 0.385 25.8 67.1 2%ppIndonesia 0.35 25.6 73.1 2%

Cuba 0.654 22.9 35 2%South Africa 0.325 20.6 63.4 2%

Argentina 0.295 19.2 65.2 1%Myanmar 0.165 7.5 45.4 1%

Bangladesh 0.166 6.8 41.2 1%

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gWORLD 20.42 1333.2 65.2 100% Sugar Cane Production Data & Sugar Cane Growth Region Map http://www.sugarcanecrops.com/

IH2 Integration w/ Sugar/Ethanol

Sugar/Ethanol plant 160 t/hr SugarcaneExcess Bagasse: 41.8 t/hr; 147854t/yr*

Cogeneration

*Material Energy Balance provided by J.P.Mukherji Associates Pvt. Ltd. – India~150 days Operation, Bagasse @50% Moisture

IH2gSteam Electricity34.5 – 65 GW/yr**

Hydrocarbon & Steam*** Electricity

32.1 MML Hydrocarbon/yr** Location, Cogeneration Equipment Efficiency, Steam T P Distribution Losses etc impact final

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Steam T, P, Distribution Losses, etc. impact final GW available for sale to Grid *** 72% - 86% bioenergy recovery

IH2 Integration w/ Sugar/Ethanol High Level Evaluation C ti IH2Cogeneration

Steam Electricity34.5 – 65 GW/yr**

IH2

Hydrocarbon & Steam*** Electricity

32.1 MML Hydrocarbon/yr** Location, Cogeneration Equipment Efficiency, Steam T P Distribution Losses etc impact finalSteam T, P, Distribution Losses, etc. impact final GW available for sale to Grid *** 72% - 86% bioenergy recovery

• IH2 Liquid hydrocarbons benefit v Cogeneration

$40 00

$45.00

Bagasse Conversion Cogeneration v IH2 Hydrocarbon

• IH2 Location specific– Commodity Price– Conversion – Efficiency

IH2 C it l MFSP$20.00

$25.00

$30.00

$35.00

$40.00

mat

ed M

M$/

yr

– IH2 Capital MFSP

• IH2 Hydrocarbon Only• IH2 Feed Flexible

– Other Sugar/Ethanol $-

$5.00

$10.00

$15.00

Estim

residues – Local Alternative Feeds

World bank – gasoline base prices by country Business week – Electricity prices by country 08/12

IH2 Hydrocarbon @ Resale 75% of Retail IH2 Hydrocarbon @ Resale 50% of Retail Low - Electricity to Grid High - Electricity to Grid

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y p y y* Brazil has since reduced electricity price per KWH Average - Electricity to Grid

IH2 Technology Deployment• Bench Scale

– 02/2009 @ 0.5kg/hr

gy p y

• Pilot Scale– 02/2012 @ 50kg/d– Confirmed bench scale results

Fuels for EPA Registration– Fuels for EPA Registration– Fuels for ASTM Evaluation– Gasoline (wood) is R100

Pre Commercial Scale• Pre Commercial Scale– BDEP for 5mt/d cellulose done – 1st demonstration license awarded 12/2012, more expected

C i l S l• Commercial Scale– KBR is CRI’s exclusive basic engineering partner– FEED 500 & 1000mt/d wood (FEL-2 complete, FEL-3 underway)– Full Scale Deployment Target Q1 2014Full Scale Deployment Target Q1 2014

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Commercial Timeline, Current StatusCo e c a e e, Cu e t Status1Q10

2Q10

3Q10

Process Variables and

Semi-Continuous

Lab ScaleDemo Scale Units Only (11 units)

(Brownfield Construction; Date Basic Engineering Starts)Full

CommercialPilot Scale

Wood, 5-1000mt/d 3Q10

4Q10

1Q11

2Q11

3Q11

Continuous Operation

Construct 50kg/d Pilot Plant

Receive Unit

Crop Residues, 5-10mt/d

Micro Algae, 5mt/d

Mixed Paper/OCC/Urban Wood, 5mt/d

4Q11

1Q12

2Q12

3Q12

4Q12

Continuous Pilot Plant Operation

Shake Down

1Q13

2Q13

3Q13

4Q13

1Q14 5

mt/d

500

mt/d

100

0m t/

d

Today

y 5

mt/d

gin

5m

t/d

1Q14

2Q14

3Q14

4Q14 Construction

Basic/Detailed Engineering

FEL-

3 C

ompl

ete

FEL-

2 C

ompl

ete

FEL-

2 C

ompl

ete

FEL-

2 U

nder

wa y

FEE

D S

et to

beg

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Technology is:– Cost-effective process developed by GTI using CRI proprietary

catalystsConverts biomass directly to hydrocarbon fuels and/or high quality

Technology is:

– 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/outneeds only transport in/out

– Feedstock flexible– Nearly carbon-neutral – Integrated for potentially improved economics– Currently in FEED (FEL-2/-3) for multiple feed demonstrations– Available exclusively from CRI Catalyst Companyy y p y

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Assumptions, Credits, References ssu pt o s, C ed ts, e e e ces

1. Slide 3 Image credit: <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. Slide 6 Image credit: <a href='http://www.123rf.com/photo 14316634 the-big-question-silberblau.html'>styleuneed / 123RF Stock Photo</a>S de 6 age c ed t a e ttp // 3 co /p oto_ 3 663 _t e b g quest o s be b au t sty eu eed / 3 Stoc oto /a3. Slide 8 Transformative Differentiators *>94% GHG reduction per Professor David Shonnard at MTU:

http://services.lib.mtu.edu/etd/THESIS/2012/ChemicalEng/maleche/thesis.pdf4. Slide 8 Image credit: <a href='http://www.123rf.com/photo_12407917_butterflies-from-the-chrysalis.html'>kamonrat / 123RF Stock Photo</a>5. Slide 11 – Hart Energy’s international Fuels Quality Center – Sulfur Limit World Graphs for Diesel and Gasoline6. Slide 12 IH2 Process Economics (USGC) NREL 06/11 Basis http://www.osti.gov/bridge/servlets/purl/1059031/1059031.pdf7. Slide 13 - According to the Renewable Fuels Association, Jamaica, Costa Rica and El Salvador are respectively the second-, third- and fourth largest g p y g

exporters of fuel ethanol to the US. The region began exporting ethanol to the US under the Caribbean Basin Initiative, which allowed tariff-free exports of ethanol up to 7 percent of US ethanol production.

8. Slide 13 Data & Sugarcane Map via http://www.sugarcanecrops.com/9. Slide 13 Sugar Cane Photograph By Rufino Uribe (caña de azúcar) [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia

Commons10. Slide 14 Maximize Returns w/ IH2 Integration Sugar/Ethanol Material Energy Balance provided by J.P.Mukherji Associates Pvt. Ltd11 D t A ti d f Slid 15 M i i R t / IH2 I t ti S /Eth l11. Data Assumptions used for Slide 15 Maximize Returns w/ IH2 Integration Sugar/Ethanol

– http://www.businessweek.com/articles/2013-02-07/brazils-cheaper-electricity-comes-at-a-cost - Electricity Prices– http://data.worldbank.org/indicator/EP.PMP.SGAS.CD/countries?display=default – World Bank Gasoline Prices by Country (2010)– http://www.eia.gov/petroleum/marketing/monthly/pdf/pmmgraphic.pdf -- Discount Resale Gasoline Price U.S. Used to Adjust World Bank Values to Resale taken

at 75% of Retail based on U.S. reduction retail to resale taken from eia data. – Conservative estimate for IH2 hydrocarbon value was taken at reduced rate of 50% of retail for each country – http://www.bls.gov/data/inflation_calculator.htm CPI Inflation Calculation taken at 106% conversion 2010 to 2013$ – Economic benefits included are for illustration only. Further economic evaluation should be conducted on a site specific basis.– Electricity conversion was estimated based on Mass Balance provided by J.P. Mukherji Associates Pvt. Range of electricity conversion was assumed based on

internal values for conversion . Low end total GW produced assumed an 80% efficiency and high end assumed no losses. Estimated electricity price applied to calculation for the Low scenario assumed 80% of the retail electricity price was the selling rate per KWH back to the grid. High scenario assumed the selling rate per KWH was the same as retail price.

12. Slide 14 &15 electricity pylon Image credit: <a href='http://www.123rf.com/photo_9268750_electricity-pylon--tower-with-fluffy-white-clouds-and-blue-sky-background.html'>peteg / 123RF Stock Photo</a>

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Thank You Gracias & ObrigadaThank You, Gracias & Obrigada

Learn more at www.cricatalyst.com

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