verdis presentation - apr 2015 - customer
TRANSCRIPT
WE CONVERT FLARED GAS
INTO ULTRA-CLEAN DIESEL
THE VERDIS ALTERNATIVE CONVERT WASTED GAS INTO ULTRA-LOW SULFUR DIESEL
Our Gas to Diesel (GTD) conversion units will provide a profitable alternative to gas-flaring |
Operators can reduce carbon footprint & generate significant cash-flows from valuable
commodity | Produce Diesel, naphtha, aviation fuel
CAPITAL REQUIREMENTS
$5-10 million to get first units manufactured and fielded with companies already strongly
interested | If closer to $10 million: could start parallel work on larger units | Projected
revenues: +$40 million revenue, EBITA +$35 million, within 5 years.
EXECUTIVE SUMMARY
GLOBAL GAS FLARING A MASSIVE CHALLENGE
Oil and Gas operators annually flare or vent $30 billion worth of natural gas worldwide |
Precious energy wasted | 400 million tons of damaging CO2 emitted
OUR PATENTED CATALYST A DISTINCTIVE COMPETITIVE ADVANTAGE
Our Fischer-Tropsch process and cobalt-ruthenium catalyst boost diesel yield from 50 to 94% |
By-products: usable water, co-generated electricity | Customer breakeven point – 3 year
average based on wholesale value of diesel and water produced | Environmental benefits add
further value
ISSUE & OPPORTUNITYVERDIS & ITS TECHNOLOGYGTD UNIT SIZES & VALUE CREATIONCOMPETITIVE LANDSCAPE
Every day Oil & Gas operators are flaring and venting natural gas
The Greenhouse Gases emitted cause severe environmental
damage and have significant worldwide economic impact
THE FACTS: Flaring of Associated Gas. . .
• Releases 400M tonnes of Carbon Dioxide (CO2)
• Wastes $30.6B worth of natural gas (Methane, CH4) , equivalent to 8% of total
world supply
• Disproportionately impacts world’s most delicate areas – 42% of black
carbon in the Arctic comes from global gas flaring
Imagine if we could reduce those
emissions…and monetize that “waste”!
GAS FLARING A MASSIVE CHALLENGE
WHAT IS FREE ASSOCIATED PETROLEUM GAS?
Petroleum
(Complex mixture of liquid
hydrocarbons)
Free associated
petroleum gas
(Mixed gaseous hydrocarbons
mainly Methane, CH4)
Drilling rig
Anticline
Impervious rock
Gas flare stack
WHY IS GAS
FLARED?
• When crude oil
extracted from onshore
or offshore oil wells,
raw natural gas
produced as well
• When pipelines and
other transportation
infrastructure are
lacking, vast amounts
of such gas is deemed
unusable and is flared
or vented
• Flaring may occur at
top of a vertical flare
stack (as shown) or at
ground-level in an
earthen pit
Source Financial Times, Jan 2013: http://goo.gl/MXulda
• From a low base, US now fifth largest gas-flaring nation
• In North Dakota, USA: major spike in production due to shale gas boom and 30% of
associated gas now burned off at wellhead
• Gas flaring in this “Bakken formation” now visible from Space: burning $1B worth of
gas a year (enough energy to power all the homes in Chicago and Washington
combined
• Number of flaring permits issued in Texas has gone up six times from 2010 to 2012
GAS FLARING HAS TRIPLED IN THE US (SINCE 2008)
STOP FLARING. MONETIZE YOUR WASTE!
WHY DO COMPANIES STILL FLARE?
VERDIS SYNTHETIC FUELS
GAS-TO-LIQUIDS MOBILE PROCESSING UNITS
CONVERT NATURAL GAS TO
MARKET-READY ULTRA-CLEAN DIESEL
This is the VERDIS poster From the ADIPEC 2012 Oil & Gas Show in Abu Dhabi, UAE
They lack a profitable, practical, alternative . . .
. . . So VERDIS is going to give them one!
PRIORITY 1 - GAS FLARING
Current solutions target only extremely large gas deposits…
… leaving $20B+ market for S/M sized flares practically unexploited!
Our technology will provide Oil & Gas producers a profitable way to:
• Optimize their value chains as profit driver
• Reduce emissions to lighten environmental foot print
• Promote corporate image/CSR
• Comply with emissions reduction targets
PRIORITY 2 - STRANDED GAS RESERVOIRS / REMOTE LOCATIONS
• Large reserves remain unexploited for economic or technical reasons
• VERDIS units can do it, on land, offshore platforms, or boats & barges
PRIORITY 3 - GOVERNMENT OR NON-GOVERNMENT STAKEHOLDERS
• A less expensive fast-track to domestic diesel production (Israel, Leviathan field)
• To provide fuel, water & electricity to isolated communities with gas supplies
(Arctic region, desert communities)
• Provide an in-country supply of fuel for expeditionary, deployed, military forces
UNTAPPED MARKETS
REGULATORY TRENDS
• International efforts to curb carbon emissions began with 1990 Kyoto agreement. Attempts to set
global, binding, emission reduction targets continue to fail (2009 Copenhagen Climate Change
Summit)
• Some non-binding initiatives (2010 UN Global Climate Change Convention) to encourage emissions
trading gaining traction. EU, individual countries taking action domestically
• 2009 EU Energy Directive: binding participation in the Emissions Trading Scheme. Enables EU-
based companies with foreign subsidiaries to claim EU tax bill credits for foreign reductions
• US EPA to tighten air quality and diesel content standards. Some individual US states and
Canadian provinces looking to set up regional emissions trading schemes. Canada: in wake of
Keystone, promising new regulations within 2 years.
• Australia: carbon tax, emitters charged amount per ton of emissions. Others, like Mexico and
Colombia, are taking hybrid approaches.
ISSUE & OPPORTUNITYVERDIS & ITS TECHNOLOGYGTD UNIT SIZES & VALUE CREATIONCOMPETITIVE LANDSCAPE
VERDIS Synthetic Fuels, FZE
VERDIS Synthetic Fuels was founded in Sharjah, UAE,
in 2010
Subsidiary of our Calgary-based parent, Canada
Chemical Corporation (CCC)
Dedicated to commercializing CCC’s
groundbreaking Gas to Diesel (GTD) technology
Canada Chemical Corporation
CCC has long track record of oil & gas sector
innovation and R&D excellence
Recognized that within Gas to Liquids, no
technologies were producing market-ready diesel
It’s R&D staff, led by noted scientist Dr. Conrad
Ayasse, began work on GTD in the late 1990s
Filed the first set of patents
VERDIS FUELS & IT’S TECHNOLOGY
WHO ARE WE?
Rob AYASSE, MBACEO
Agata MATABUENA, MBA
Operations & Logistics
Renaud CLAUSSE, MBAFinance
Alan AYASSE, P.ENG
Engineering
Jorge GOMEZ, MBAStrategy & IT
Dr. Conrad AYASSEChief Scientist
We have gathered an experienced international management
team, and combined it with top-notch technical experts and scientists
VERDIS AMERICAS
R&D Lab | Canada
VERDIS EMEA
HQ in Sharjah | United Arab Emirates
VERDIS APAC
Finance | China
TEAM VERDIS
1998 THROUGH 2008
• Extensive R&D efforts, development of numerous
bench-scale units for concept validation
• Developped deep expertise in traditional syngas
creation (steam and autothermal)
• Worked on proprietary Fischer-Tropsch catalyst
• 2006: watershed deployment of a 25 MSCFD
prototype on landfill in Oklahoma City with partner
Alchem Field Services (actual photos on right)
• Provided Proof of Concept, prototype
decommissioned in 2008
2008 THROUGH 2014
• Data from protoype: filed updated patents in 2009
• VERDIS founded in 2010
• 2012: Partnered with Process Group International
(www.processgroupintl.com) to develop initial design
for 0.25 MMSCF/DAY mobile unit
• Result of design and costing: both autothermal &
steam reforming technically viable when paired with
VERDIS catalyst, BUT temps too high, efficiency too
low, to give excellence in customer value
• 2012-2014: intenisve search for optimal syngas
reformer solutions while further refining FT catalyst
• Focused on 2 emerging technologies: plasma &
CPOX
25 MSCF/day Prototype
Prototype Deployment
VERDIS FUELS & IT’S TECHNOLOGY
GTD TECHNOLOGY DEVELOPMENT BY CCC & VERDIS
We improved the Fischer-Tropsch process with our cobalt-rhenium
based patented catalyst: boosted diesel output from 45-50% to 94%!
(2n + 1) H2 + n CO → CnH(2n+2) + n H2O
METHANE DIESEL + WATER
FT CATALYTIC REACTION
PARAFFINIC SYNTHETIC DIESEL
0% Sulfur0% Aromatics
+
COMPETITIVE ADVANTAGE PROPRIETARY CATALYST
• Produces vehicle ready
diesel directly from FT
reactor
• No further refining
necessary
• Very high Cetane
number (78, versus
normal spec of 43)
• Zero sulfur or
aromatics content –
much cleaner
emissions
• Ideal blending stock
• Fischer-Tropsch based Gas to Liquids (GTL) process: key differentiation is
patented FT catalyst, potential pairing with novel Syngas production
• Only process on the market converting gas directly to ultra-clean diesel
at low-pressure, directly from the FT reactor, so no hydro-cracking or
further refining
• Significant savings in Capital & Operational cost (US DoE: up to 30%)
• By-products: industrial-use water (1.1:1 water to diesel), possibility of
surplus electricity, so units could provide surplus electricity after startup
(excellent for desert, arctic and offshore use)
• Process reviewed & endorsed by the World Bank Global Gas-Flaring
Reduction Partnership
VERDIS PROCESS ADVANTAGES
“The uniqueness and novelty lies in the . . . catalyst design and operation to realize the optimal, economic small-scale GTL process for production of a liquid fuel product containing high diesel and low wax yields. This is the type of process design for which the syngas conversion community has been searching. . .”
- Leading GTL Expert Prof. Calvin H. Bartholomew, Brigham Young University
PLASMA-BASED SYNGAS REFORMER VALIDATION: JULY 2014 CERAMATEC TEST
TEST OBJECTIVES
To validate potential of VERDIS catalyst combined with Ceramatec’s unique plasma-based
syngas reformer in a ¼ BBD GTL unit
TEST RESULTS
Exceeded all
expectations – best
Ceramatec has seen:
• 90% Diesel
(industry standard
45-55%)
• Only trace
amounts of wax
(0.08%)
• Predicted that
VERDIS 0.25
MSCFD unit would
achieve 10,000:1
conversion ratio,
beating even
Shell’s world-scale
‘Pearl’
VERDIS FUELS & IT’S TECHNOLOGY
VERDIS Mobile VERDIS Fixed VERDIS SPP
(4 MMSCFD)
400 US BBD (63,600 L)
Transported in several
trucks, fixed location
Medium-scale gas-flaring
or mid-sized stranded gas
deposits
(25+ MMSCFD)
2500 US BBD (397,500 L)
Small Petrochemical Plant
Large scale gas-flaring
sites, or to develop whole
stranded gas fields
(0.25 MMSCFD)
25 BBD (4000 L)
Fully mobile, designed for
truck/boat transport.
Small-scale gas flaring or
stranded gas deposits
PRODUCT ROADMAP
Synthetic Diesel (ULSD) is so clean
you can actually SEE the difference!
CUSTOMER VALUE PROPOSITION
Based on a gas to diesel conversion ratio of the smallest unit(10,000:1), for straight methane. Associated gas, with its mix ofhigher combustibles (ethane, propane) can yield up to 40% morediesel pr unit of gas converted.
• Table shows the customer breakeven point for a single VERDIS mobile conversion unit
in a cross-section of markets based exclusively on the wholesale value of diesel and
water it will produce
• Breakeven point in most markets: 3 years
• Indirect or intangible benefits
could include:
o Tax breaks or carbon
credits
o Public relations
benefits of reduced
flaring and carbon
emissions
o Compliance with
corporate goals,
national laws or global
conventions
o Excess electricity
produced which may
be sold back to the
grid
• Ancillary benefits may
be as valuable as direct
economic benefits
-4
-2
0
2
4
6
8
10
12
Israel Australia China Canada Nigeria Russia UK Mexico USA UAE Qatar
BREAKEVEN YEARS - SELECTED MARKETSFlared Gas vs. Henry Hub FMV
Breakeven YR - AG Breakeven YR - FMV
Feed gas
heater
Reformer
CoolerAir
cooler
Water
Knock-
out
Feed gas
heater
FT
reactor
Compressed Air
Compressed HC
gas Steam
100-200 psia
800 C 50 CCO+2 H2
Dry
Syngas
Steam
200-215 C
Heat
removalGlycol
cooler
Gas
Oil
Water
Flare or
combustor
Tail gas recycle (2x
raw feed)
Separator
4 C
VERDIS PROCESS SCHEMATIC
• Higher combustibles (ethane,
propane, etc.) improve diesel
production
• Inerts have no effect
• H2S degrades catalyst
performance and must be
removed, to a level >1 PPM
• This requires a standard gas
scrubber (SulfaTreat or zinc
oxide possible)
• OR: Canada Chemical
Corporation has a proprietary
Batch Oxidation technology
to convert H2S to elemental
sulfur
VERDIS PROCESS STEP 1 – INPUT GAS SCRUBBING
• A small amount of
hydrocarbon raw gas is
burned in the reformer
• This is used to pre-
heat the entire train.
• As delivered, the
Fischer-Tropsch
catalyst contains
cobalt oxide (the
metallic form is
pyrophoric when
exposed to air and
would be dangerous to
handle).
• To activate the catalyst
for FT syngas
conversion: catalyst
reduced to metallic
cobalt inside FT
reactor using
hydrogen
VERDIS PROCESS STEP 2 – GTD UNIT STARTUP
25K SCF/day Prototype
25K SCF/day Prototype
• Feed gas moves into a highly-advanced plasma-based
Syngas Reformer
• Required temperature and pressure (50PSI) is
achieved
• Gas fully prepared for conversion in next stage:
H2:CO ratio sought 2.0
• (Includes compressor, coolers, water knockout,
piping to storage)
VERDIS PROCESS STEP 3 – SYNGAS PRODUCTION
25K SCF/day Prototype
• FT Reactor tubes have optimized fin
shape to dissipate heat, enhance
reaction efficiency
VERDIS PROCESS STEP 4 – DIESEL PRODUCTION
25K SCF/day Prototype
• High capacity Fischer-Tropsch
reactor comprised of 4 inch catalyst
tubes
• Pressure <200PSI, cobalt catalyst
crystallite size 16NM
• Syngas converted into diesel, water,
naptha, tail gasses
• (Includes FT reactor, Dowtherm ®
coolant condenser, coolant
circulation equipment, synthesis gas
recycle loop)
Close-Up: FT Reactor with tail-
gas recycle
• FT Reactor products are separated and captured in one
‘cold trap’ and one ‘hot trap’
• They are then directed to different storage tanks on site,
waiting tanker trucks, or possibly pipelines, for further
distribution to end-users
• The process continues once started and 350 days of
uptime per year is anticipated
VERDIS PROCESS STEP 5 – PRODUCT COLLECTION
10-25 BBD Layout – Footprint: 15m L x 7m w x
11m h
Can be Scaled Up to 100BBD by Adding More
Vertical FT Reactors in the Available Space
ISSUE & OPPORTUNITYTECHNOLOGY & BENEFITSGTD UNIT SIZES & VALUE CREATIONCOMPETITIVE LANDSCAPE
CieQual
Lagos, Nigeria
• Seeking mobile solution to reduce flaring in the Niger Delta
• Provided a proposal for a 0.25 MMSCFD unit using plasma-based reformer paired with the
VERDIS FT catalyst
• Sent their COO to Salt Lake City to observe test at CERAMATEC
• Exploring how to import manufactured units withough punitive import tarrifs which
would erode customer value
VERDIS FUELS & IT’S TECHNOLOGY
CURRENT FOCUS & CUSTOMER ENGAGEMENTS – 0.25 MMSCFD
10-25 BBD Layout – Footprint: 15m L x 7m w x
11m h
Can be Scaled Up to 100BBD by Adding More
Vertical FT Reactors in the Available Space
Grenergy, LLC
Delaware, USA
• Seeking a large-scale, fixed, solution to convert some 15 MMSCFD of
Associated Gas in Iraq
• In December 2014 proposed a solution using 17 plasma-based
reformers (of 1 MMSCFD each) paired with the VERDIS FT catalyst
• Estimated CAPEX of USD112.5-135 million
• Waiting to hear if they wish to proceed to a feasibility/FEED study to
better assess potential, OPEX and CAPEX
• (Projections for the project as proposed follow)
VERDIS FUELS & IT’S TECHNOLOGY
CURRENT FOCUS & CUSTOMER ENGAGEMENTS – 15 MMSCFD
PROJECTIONS FOR 15 MMSCFD PLANT (Grenergy LLC)
COST: $112.5 Million
Breakeven Point: 19 months
Accumulated Profit & Loss (10 yrs): $607,173,750
Net Present Value (5% discount rate): $422,107,613
Internal Rate of Return: 63.5%
COST: $135 Million
Breakeven Point: 23 months
Accumulated Profit & Loss (10 yrs): $584,673,750
Net Present Value (5% discount rate): $400,679,041
Internal Rate of Return: 52.5%
1 2 3 4 5 6 7 8 9 10
$112.5M 60,717,37 121,434,7 182,152,1 242,869,5 303,586,8 364,304,2 425,021,6 485,739,0 546,456,3 607,173,7
$135M 58,467,37 116,934,7 175,402,1 233,869,5 292,336,8 350,804,2 409,271,6 467,739,0 526,206,3 584,673,7
0
100,000,000
200,000,000
300,000,000
400,000,000
500,000,000
600,000,000
700,000,000
Profit & Loss for 15MMSCFD GTD Plant
$112.5M
$135M
Aker Solutions
Tromso, Norway
• Flaring of Associated Gas on Norwegian Continental Shelf now illegal
• On behalf of 2 separate clients, Aker Solutions is seeking a solution to convert some 4
MMSCFD of Asssociated Gas on 2 new offshore oil platforms for the North Sea
• Provided a proposal for using using 5 plasma-based reformers (of 1 MMSCFD each)
paired with the VERDIS FT catalyst in a very tight configuration to minimze footprint
• 3 Aker process engineers fully assessed VERDIS technology for offshore use over 6
weeks
• For a sample of questions asked, please see the ‘Offshore’ Section of our Technology
FAQs (provided separately)
• In September 2014, Aker concluded its assessment: it fully endorsed VERDIS
technology as the optimum offshore solution to Associated Gas-Flaring in the North
Sea and recommended it to both their clients
• Both projects are currently working on more fundamental design issues at present but
expect to address Assosciated Gas treatment, and the VERDIS proposal, shortly
VERDIS FUELS & IT’S TECHNOLOGY
CURRENT FOCUS & CUSTOMER ENGAGEMENTS – 4 MMSCFD OFFSHORE OIL PLATFORMS
WHAT IS V-CPOX?
V-CPOX is Verdis’ catalytic partial oxidation
process designed for use on offshore platforms
1. Air blown, so do not need an oxygen plant
2. Low-pressure so just need air and gas blowers
3. Use of air versus oxygen increases spontaneous free gas
ignition temperature from 250 ºC to 582 ºC (safety)
4. Eliminates carbon formation by operating at low pressure
5. Catalyst is catalytically self-igniting so do not need feed
pre-heating, therefore
6. Do not need a tail gas heat exchanger (uses water quench)
7. Expected CO yield is 98% (2% CO2)30 Verdis Synfuels CONFIDENTIAL INFORMATION
1. Small footprint Yes
2. Low weight Yes
3. Low pressure 30 psig
4. High GHSV >100,000 hr-1
5. Low pressure drop Monolith with open flow channels
6. High gas conversion (>95%) 99%
7. High selectivity to CO (>95%) 99%
8. No water needed Only associated gas and air
9. No pure oxygen needed Uses air
10. No feed gas pre-heat needed Ignites at low temperature
11. No tail gas heat exchanger needed Water-Quench
12. Feasibility for some FT tail gas re-cycling Yes
V-CPOX: IDEAL SYNGAS PLANT FOR OFFSHORE PLATFORMS
V-CPOX
ALL 12 CRITERIA ARE MET BY V-CPOX
31
Verdis Synfuels CONFIDENTIAL INFORMATION32
Syngas
reactor
Water
Treatment
And
storage
Feed
Pre-
heat
Pressure Swing
Absorber
Air
Blower, 30
psig
CO2
recover
y
O2
H2O
O2, N2
Water
quench
UNIT OPERATIONS FOR V-CPOX
Tail gas
combustion
Air
compresso
r
CO2
Associated
gas
BLOWER, 30
psig
H2
removal
10MMSCFD OFFSHORE PLANT (MALAYSIAN FIELD)
COST: $70 Million
Breakeven Point: 13 months
Accumulated Profit & Loss (10 yrs): $576,069,470
Net Present Value (5% discount rate): $408,454,971
Internal Rate of Return: 92.2%
COST: $100 Million
Breakeven Point: 19 months
Accumulated Profit & Loss (10 yrs): $546,069,470
Net Present Value (5% discount rate): $379,883,542
Internal Rate of Return: 64.2%
125MMSCFD OFFSHORE PLANT (FPSO-Mounted)
COST: $875 Million
Breakeven Point: 15 months
Accumulated Profit & Loss (10 yrs): $5,968,956,250
Net Present Value (5% discount rate): $4,199,734,860
Internal Rate of Return: 78%
COST: $1.25 Billion
Breakeven Point: 22 months
Accumulated Profit & Loss (10 yrs): $5,593,956,250
Net Present Value (5% discount rate): $3,842,592,003
Internal Rate of Return: 54%
ISSUE & OPPORTUNITYTECHNOLOGY & BENEFITSGTD UNIT SIZES & VALUE CREATIONCOMPETITIVE LANDSCAPE
CARBON CAPTURE AND STORAGE (CCS)
THE PRIMARY ALTERNATIVE TO
GAS-FLARING
CC&S poses significant challenges
• Infrastructure Coal beds,
saline aquifers or appropriate oil
deposits must be close by and
available
• Expense Preparation of sites,
such as aquifers, can be costly,
as can the other piping and
process infrastructure to collect,
pump and inject CO2
• Output Reinjected CO2 can
boost yields and save some
modest costs, but CO2 injected
in aquifers incurs costs while
providing no revenue (unless
carbon credits are earned, or
carbon taxes avoided)
GAS TO LIQUIDS: UNIQUELY PLACED TO SAVE EMISSIONS
WHILE BOOSTING CASHFLOWS
• Plants are much smaller than those of
Shell and Sasol, but still not mobile
market space
• September 2013: selected by Pinto to
field 2800 BBD plant in Ohio, USA
• Pant will produce mix of waxes,
solvents and lubricants
• Outputs to make ultraclean
transportation fuels, will need further
refining
• 2006: partnership with Petrobas
• 2012: announced completion of
demonstration plant, processes 200,000
SCF/day of gas into around 20BBD
• According to World Bank Global-Gas Flaring
Reduction Partnership: they produce around
20BBD of crude oil with a heavy wax
content which must be further refined
through hydro-cracking.
• A few major oil & gas companies active in large-scale Gas to Liquids projects (Shell,
Sasol). Very few looking at smaller-scale, mobile solutions. VERDIS will target these.
• 2 main competitors. Competitive advantage: unlike them, we produce market-ready
diesel, with no need for further refining, in a single pass through our conversion unit,
which is low pressure and low temperature. Our process is therefore more efficient,
flexible, adaptable, and thus less expensive in both capital and operational costs.
COMPETITIVE ADVANTAGE: VERDIS
WE CONVERT FLARED GAS INTO ULTRA-CLEAN DIESEL
[email protected]://www.verdisfuels.com