-1-Praxair Canada Inc. – Calgary, Alberta, Canada

July 16, 2009July 16, 2009

HydrogenReliabilitySalt Cavern Case Study

HydrogenReliabilitySalt Cavern Case Study

Oil Sands & HeavyOil Technologies

Oil Sands & HeavyOil Technologies

-2-Praxair Canada Inc. – Calgary, Alberta, Canada

About PraxairAbout Praxair

Largest Industrial Gas Company in North andSouth America, one of the largest worldwide– 27,000 employees

– 2008 sales: $10.8 Billion USD

– Global Fortune 300 company listed on NYSE (PX)

– Holds almost 3,000 patents

Praxair's primary products are:– atmospheric gases (oxygen, nitrogen, argon and rare gases)

– process & specialty gases (carbon dioxide, helium, hydrogen,semiconductor process gases, acetylene)

www.praxair.com

-3-Praxair Canada Inc. – Calgary, Alberta, Canada

Presentation OverviewPresentation Overview

Gulf Coast hydrogen infrastructure– 310 mile pipeline

Praxair H2 storage cavern– Overview

– Benefits

Alberta Cavern Development– Heartland hydrogen demand

– Cavern Potential

– Cavern supply model

– Integration to existing Praxair network

-4-Praxair Canada Inc. – Calgary, Alberta, Canada

HYDROGEN SOURCES

CAVERN STORAGE

Gulf Coast Hydrogen InfrastructureGulf Coast Hydrogen Infrastructure

Cavern and Pipeline system connected to 11 out of 14 refineriesCavern and Pipeline system connected to 11 out of 14 refineries

-5-Praxair Canada Inc. – Calgary, Alberta, Canada

Praxair’s H2 Cavern OverviewPraxair’s H2 Cavern Overview

H2 from PX

H2 to Customers

SaltDome

Cap Rock

H2 from PX

H2

Storage

Design BasisStorage Capacity 2.5 Billion CFWorking Capacity 1.4 Billion CFMax Storage Pressure 2200 psigWorking Pressure 800 - 2200 psigFill Rate ~ 75 MMCFDWithdrawal Rate pressure

dependentCommissioned Q4 2007

Cavern Consists of:– Injection compressor with

ancillary equipment

– Hydrogen product dryer

– Associated metering andcontrol equipment

-6-Praxair Canada Inc. – Calgary, Alberta, Canada

Cavern Commercialization GoalsCavern Commercialization Goals

Safe injection / withdrawal of hydrogen

“Real-time” operation– add value for supply-system optimization and peak demand

Establish operational procedures– informed, timely decision making around sales, withdrawals and

injections

Key value creation streams:– Reliability sales (sales within firm volume)

– Operational and sourcing optimization

– Spot sales (sales outside of firm volume)

Added flexibility for both Praxair and refiners!Added flexibility for both Praxair and refiners!

-7-Praxair Canada Inc. – Calgary, Alberta, Canada

Cavern Support InfrastructureCavern Support Infrastructure

More than just a hole in the ground…More than just a hole in the ground…

-8-Praxair Canada Inc. – Calgary, Alberta, Canada

Cavern BenefitsCavern Benefits

Instant Sales Capability– Planned customer turnaround

– Unplanned customer outage

– 3rd party supply interruptions

Superior System Reliability– Praxair facility turnaround

– Praxair equipment outages

– Feedstock / Utility interruptions

Operational Considerations– Enable steady state operations

– Provide low demand “sink”

– Improved pipeline operability

Time

MM

SC

FD

Peak Demand - WITHDRAW

Excess Supply – FILL Cavern

-9-Praxair Canada Inc. – Calgary, Alberta, Canada

Crude Unit

Crude

LPG

Light Naphtha

NaphthaReformer

Alky

LPG

Alkylate

Fm FCC

Vacuumunit

Cokerunit

Lubesunit

KeroHDS

DieselHDS

G.O.HT

FCC Gasoline

PP

Kero/Jet

Gasoline blend

Coke

Diesel

50 mmscfd H2

Daily PurchaseX mmscfd H2

OUTAGE

Cavern Supply

Cavern Supply Can Help Avoid Cutback of Profitable UnitsCavern Supply Can Help Avoid Cutback of Profitable Units

Example: Customer BackupExample: Customer Backup

-10-Praxair Canada Inc. – Calgary, Alberta, Canada

Cavern Benefit ExamplesCavern Benefit Examples

Praxair H2 Product Availability– 11 Praxair sources on the network

– Backup supply mitigates risk of H2 production unit outage

Hydrogen back up on instantaneous basis– Unexpected outages at customer sites

– On purpose H2 production units / byproduct sources / third party

Operational Flexibility– Startup / shutdown of world scale SMRs can be avoided

– Coverage of SMR type demand for short 24 hour type periods withoutcalling on an SMR for start up

» Example: waiting for demand of large user to stabilize before cycling aworld scale reformer for start up

– Sink for excess H2

-11-Praxair Canada Inc. – Calgary, Alberta, Canada

85.00%86.00%87.00%88.00%89.00%90.00%91.00%92.00%93.00%94.00%95.00%96.00%97.00%98.00%99.00%

100.00%

1/1/

2005

7/1/

2005

1/1/

2006

7/1/

2006

1/1/

2007

7/1/

2007

1/1/

2008

7/1/

2008

1/1/

2009

Praxair H2 System AvailabilityPraxair H2 System Availability

Hurricane RitaCavern

Commercialized

US Gulf Coast Pipeline (BAPOC) 2005-present

HurricanesIke and Gustav

Cavern provides ability to ramp up production unitsCavern provides ability to ramp up production units

-12-Praxair Canada Inc. – Calgary, Alberta, Canada

What About Alberta?What About Alberta?

Dynamic H2 Market– Existing large demand

– Need for reliable supply

– New upgrading / refiningprojects proposed

Existing Infrastructure– Salt Cavern storage of

hydrocarbons

– Multiple Praxair facilities

– Praxair H2 Pipeline

Similar to US Gulf CoastSimilar to US Gulf Coast

Praxair Infrastructure:

ASU Complex

CO2 / Dry Ice Facility

PDI Cylinder Depot

Hydrogen Pipeline

Nitrogen Pipeline

NORTHERNLIGHTS -TOTAL

AGRIUM

NORTH WESTUPGRADING

FORT HILLS(PETRO

CANADA)

DEGUSSA

SHELLSCOTFORD

KINDERMORGAN

BAENERGY

STATOILHYDRO

ATCO

TOTAL

DOW EXISTINGPRAXAIR H2

PIPELINEAGRIUM

SHERRITT

TRANSCANADA

SUNCOR

GULFCHEM.

SUNCOR

TEXACO

CPRAIL

CPRAIL

ENBRIDGE

CNRAIL

KEYERA

GEMINI

STATOILHYDRO

AUXSABLE

SUNWESTENERGY

IMPERIALPIPELINE

CNRAIL

PROVIDENTENERGY

ACCESSPIPELINE

CP RAIL

CP RAIL

CP RAIL

STURGEON COUNTY

STRATHCONA COUNTY

FORTSASKATCHEWAN

PETROCANADA

ALCAN

ENBRIDGEPIPELINES

GIBSONENERGY

ALBERTAENVIROFUELS

KINDERMORGAN

PEMBINAPIPELINESIMPERIAL

OIL

PDI

EDMONTON

21 KM

Drawing not to scale– representation only

-13-Praxair Canada Inc. – Calgary, Alberta, Canada

H2 Demand Profile

-135270405540675810945

1,0801,2151,3501,4851,6201,7551,8902,0252,160

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

MM

SC

FD

H2 Demand – Industrial Heartland & Edmonton AreaH2 Demand – Industrial Heartland & Edmonton Area

Petrochemical volumes not included in abovePetrochemical volumes not included in above

Proposed Projects(new project demand)

Existing Hydrogen Demand

Figures above based on existing demand and Project Applications

-14-Praxair Canada Inc. – Calgary, Alberta, Canada

By-product Hydrogen (non-SMR) is reliability-challenged and baseassumption in creation of reliability model

Reliability model developed to assess impact of different modes ofoperation on the facility when operating ‘non-ideally’

Unit #1

Upgrader / RefineryProduction

Time

Unit #2 HydrogenProduction

Flow

Ideal Upgrader / Refinery OperationIdeal Upgrader / Refinery Operation

Ideal but unrealisticIdeal but unrealistic

-15-Praxair Canada Inc. – Calgary, Alberta, Canada

2917 60 0 60 120.0 116 4 3352918 60 0 60 120.0 116 4 3402919 60 0 60 120.0 116 4 3442920 0 60 60 90.0 116 -26 318

1890 60 60 0 120.0 116 4 453

1891 60 60 0 120.0 116 4 4581892 0 60 60 90.0 116 -26 4321893 0 0 60 30.0 116 -86 346

Input Data Only Into Cells Highlighted in Yellow!!

74% 66% 55% 0% Reliability 1 Reliability 2 Reliability 3 Reliability 4

Days Train 1 Train 2 Train 3 Train 4 Total Sales Storage 90.0% 90.0% 90.0% 80.0% Reliability

1 60 60 0 120.0 116 4 323 9 8 7 8 Shutdowns/year2 60 60 0 120.0 116 4 327 40.6 45.6 52.1 45.6 Cycle length3 60 60 0 120.0 116 4 331 36.0 41.0 46.0 36.0 Days On-Line4 60 60 0 120.0 116 4 336 4.0 4.0 6.0 9.0 Days Off-line

5 60 60 0 120.0 116 4 340 360 360 364 360

6 60 60 0 120.0 116 4 344 Train 1 Train 2 Train 3 Train 4

7 60 60 0 120.0 116 4 349 90% 90% 90% 80% Reliability (%)

8 60 60 0 120.0 116 4 353 9 8 7 8 Shutdowns per year9 60 60 0 120.0 116 4 357 0 0 0 0 Initial Delay (Days)

10 60 60 0 120.0 116 4 362 60 60 60 60 Capacity (MMscfd)

11 60 60 0 120.0 116 4 366

12 60 60 0 120.0 116 4 370 Initial Cavern Volume (MMscf) No. of Trains Longest Run length Delay Gasifier 1 Start13 60 60 0 120.0 116 4 375 318 3 46.0 No

14 60 60 0 120.0 116 4 379 Insert Yes or No to stagger start-up of Gasifier 1

15 60 60 0 120.0 116 4 383 Avg Daily Sales

16 60 60 0 120.0 116 4 388 115.7 MMscfd Spare Operation

17 60 60 0 120.0 116 4 392 Yes

18 60 60 0 120.0 116 4 396 Simulation LengthSwitch H2 Loss (% of

gasifier output)

2nd Day Upgrader Impact (%

of 1st day)

Insert Yes or No to allow4th Train Standby Option

19 60 60 0 120.0 116 4 401 2920 Days 50 0

20 60 60 0 120.0 116 4 405 2920 Maximum (increments of 10) (increments of 10)

21 60 60 0 120.0 116 4 409 Cavern Max Vol 666 1st Yr Availability22 60 60 0 120.0 116 4 413 Cavern Min Vol 293 97.0%

23 60 60 0 120.0 116 4 418 Working Vol 373 2nd Yr Availability24 60 60 0 120.0 116 4 422 Cavern Size 666 96.3%

25 60 60 0 120.0 116 4 426 Max Cavern Inflow 4 Cavern - 2.5 bscf size 8 Yr Availability Avg26 60 60 0 120.0 116 4 431 Max Cavern Outflow (116) 96.4%

27 60 60 0 120.0 116 4 43528 60 60 0 120.0 116 4 43929 60 60 0 120.0 116 4 44430 60 60 0 120.0 116 4 44831 60 60 0 120.0 116 4 45232 60 60 0 120.0 116 4 45733 60 60 0 120.0 116 4 46134 60 60 0 120.0 116 4 46535 60 60 0 120.0 116 4 47036 60 60 0 120.0 116 4 47437 0 60 60 90.0 116 -26 448

Working Cavern

Vol

Vol (MMscfd)

N+1 Gasifier Reliability

Multi-Train Gasifier Volumes

0.0

50.0

100.0

150.0

1 31 61 91 121 151 181 211 241 271 301 331 361

Days

Vo

lM

MS

CF

D

Incl. Switching Losses

• time-series probability model

• scenario analysis

• time-series probability model

• scenario analysis

2917 60 0 60 120.0 116 4 3352918 60 0 60 120.0 116 4 3402919 60 0 60 120.0 116 4 3442920 0 60 60 90.0 116 -26 318

1890 60 60 0 120.0 116 4 453

1891 60 60 0 120.0 116 4 4581892 0 60 60 90.0 116 -26 4321893 0 0 60 30.0 116 -86 346

Input Data Only Into Cells Highlighted in Yellow!!

74% 66% 55% 0% Reliability 1 Reliability 2 Reliability 3 Reliability 4

Days Train 1 Train 2 Train 3 Train 4 Total Sales Storage 90.0% 90.0% 90.0% 80.0% Reliability

1 60 60 0 120.0 116 4 323 9 8 7 8 Shutdowns/year2 60 60 0 120.0 116 4 327 40.6 45.6 52.1 45.6 Cycle length3 60 60 0 120.0 116 4 331 36.0 41.0 46.0 36.0 Days On-Line4 60 60 0 120.0 116 4 336 4.0 4.0 6.0 9.0 Days Off-line

5 60 60 0 120.0 116 4 340 360 360 364 360

6 60 60 0 120.0 116 4 344 Train 1 Train 2 Train 3 Train 4

7 60 60 0 120.0 116 4 349 90% 90% 90% 80% Reliability (%)

8 60 60 0 120.0 116 4 353 9 8 7 8 Shutdowns per year9 60 60 0 120.0 116 4 357 0 0 0 0 Initial Delay (Days)

10 60 60 0 120.0 116 4 362 60 60 60 60 Capacity (MMscfd)

11 60 60 0 120.0 116 4 366

12 60 60 0 120.0 116 4 370 Initial Cavern Volume (MMscf) No. of Trains Longest Run length Delay Gasifier 1 Start13 60 60 0 120.0 116 4 375 318 3 46.0 No

14 60 60 0 120.0 116 4 379 Insert Yes or No to stagger start-up of Gasifier 1

15 60 60 0 120.0 116 4 383 Avg Daily Sales

16 60 60 0 120.0 116 4 388 115.7 MMscfd Spare Operation

17 60 60 0 120.0 116 4 392 Yes

18 60 60 0 120.0 116 4 396 Simulation LengthSwitch H2 Loss (% of

gasifier output)

2nd Day Upgrader Impact (%

of 1st day)

Insert Yes or No to allow4th Train Standby Option

19 60 60 0 120.0 116 4 401 2920 Days 50 0

20 60 60 0 120.0 116 4 405 2920 Maximum (increments of 10) (increments of 10)

21 60 60 0 120.0 116 4 409 Cavern Max Vol 666 1st Yr Availability22 60 60 0 120.0 116 4 413 Cavern Min Vol 293 97.0%

23 60 60 0 120.0 116 4 418 Working Vol 373 2nd Yr Availability24 60 60 0 120.0 116 4 422 Cavern Size 666 96.3%

25 60 60 0 120.0 116 4 426 Max Cavern Inflow 4 Cavern - 2.5 bscf size 8 Yr Availability Avg26 60 60 0 120.0 116 4 431 Max Cavern Outflow (116) 96.4%

27 60 60 0 120.0 116 4 43528 60 60 0 120.0 116 4 43929 60 60 0 120.0 116 4 44430 60 60 0 120.0 116 4 44831 60 60 0 120.0 116 4 45232 60 60 0 120.0 116 4 45733 60 60 0 120.0 116 4 46134 60 60 0 120.0 116 4 46535 60 60 0 120.0 116 4 47036 60 60 0 120.0 116 4 47437 0 60 60 90.0 116 -26 448

Working Cavern

Vol

Vol (MMscfd)

N+1 Gasifier Reliability

Multi-Train Gasifier Volumes

0.0

50.0

100.0

150.0

1 31 61 91 121 151 181 211 241 271 301 331 361

Days

Vo

lM

MS

CF

D

Incl. Switching Losses

• time-series probability model

• scenario analysis

• time-series probability model

• scenario analysis

Reliability ModelReliability Model

-16-Praxair Canada Inc. – Calgary, Alberta, Canada

Facility Lags HydrogenFacility Lags Hydrogen

-17-Praxair Canada Inc. – Calgary, Alberta, Canada

H2 fromNetwork

Production LevelsMaintained

Upgrader / RefineryProduction

Time

Flow

Unit #2

Unit #1

HydrogenSupply

Cavern / Pipeline Supply

Cavern/pipeline backup adds flexibility, smoothes H2 supply

– self supporting – store hydrogen during periods of max production

– allows capture of hydrogen during periods of surplus

– allows for import of 3rd party hydrogen (and sale of surplus H2)

Hydrogen BackupHydrogen Backup

Cavern / pipeline integration maximizes reliabilityCavern / pipeline integration maximizes reliability

-18-Praxair Canada Inc. – Calgary, Alberta, Canada

Upgrading Impact – Gasifier Example

0.0

100.0

200.0

300.0

1 31 61 91 121151181211241271301331361391421451481511541571601631661691721

Days

Vo

lM

MS

CF

D H2 Supply

-

20,000

40,000

60,000

80,000

100,000

0 100 200 300 400 500 600 700

Time (Days)

Up

gra

din

g(b

bl/

da

y)

No Cavern Support

Cavern Supported

Upgrader Throughput

Days

6% loss in capacity without cavern backup2% loss in capacity if self-supported via cavern

0% loss in capacity with 3rd party back-up plus cavern

6% loss in capacity without cavern backup2% loss in capacity if self-supported via cavern

0% loss in capacity with 3rd party back-up plus cavern

-19-Praxair Canada Inc. – Calgary, Alberta, Canada

Alberta Cavern DevelopmentAlberta Cavern Development

Complements Praxair’sexisting network

Complements Praxair’sexisting network

Pre-feasibility completed– Desktop study

– Preliminary location identified

– Working with ATCO Energy Solutionson Cavern development

– Non-invasive testing performed

Lead-time ~3 yrs for 1st cavern– Additional year for 2nd cavern

Financial options– Tolling fee / Dedicated volume

– Joint venture

CAVERNSITE

-20-Praxair Canada Inc. – Calgary, Alberta, Canada

Praxair - Oilsands CapabilitiesPraxair - Oilsands Capabilities

Upgrading / RefiningUpgrading / Refining

H2

O2

ASUASU

CO2

CylindersCylinders

Utility Nitrogen /Oxygen

Utility Nitrogen /Oxygen

Vessel &Pipeline Purging

Vessel &Pipeline Purging

GasifierGasifier

Mine / SAGDMine / SAGD

ASU - OxyfuelASU - Oxyfuel

Photo: http://news.bbc.co.uk

Steam

SMRSMR

CO2

Compression

CO2

CompressionCO2

Capture

CO2

Capture

ReliabilityReliability

Purging, Cylinders, N2, O2…Purging, Cylinders, N2, O2…

EOR /Sequestration

EOR /Sequestration

Upstream, downstream and in between…Praxair is your full service Industrial Gas Supplier!

H2

H2 CavernH2 Cavern

H2 PipelineH2 Pipeline

Energy StudiesEnergy Studies

-21-Praxair Canada Inc. – Calgary, Alberta, Canada

Praxair Alberta Value PropositionPraxair Alberta Value Proposition

Jim McKayJim McKayOilsands Business Development

Calgary, Alberta

(O) 403(O) 403--385385--23482348

(C) 403(C) 403--462462--57685768

jim_s_mckay@praxair.com

- Air Separation Unit

- Bulk Industrial Gases

- CO2 Capture and Compression

- Cylinders, Welding Supplies

& Related Equipment

- Energy Studies

- High Performance Coatings

- Hydrogen Supply

- Leak Detection

- Oxyfuel Burners

- Sulphur Recovery Unit Oxygen

- Vessel and Pipeline Purging Services