CAPITALIZING ON THE ABUNDANCE OF ETHANE IN MARCELLUS/UTICA

Presentation for Ben Franklin Shale Gas Innovation Contest

Aither Chemicals, LLC

May 22, 2012

MATRIC/AiTHERAiTHER

The Aither Story - Can an old line business like the Petrochemical industry suffer a disruptive technology change?

o Union Carbide Engineers proved the efficacy of catalytic cracking in 1980s

o Pricing for oil based feedstock compared to natural gas failed to make a compelling case to move to commercialization

o The pricing advantage of natural gas liquids (NGL) as a feedstock relative to oil has changed everything for the petrochemical industry

o This sustainable competitive advantage can make Pennsylvania a world leader in Petrochemical production

o Aither is perfectly positioned to seize this competitive advantage in our region, and anywhere in the world where NGLs are present

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MATRIC/AiTHERAiTHER

Ethane: AiTHER’s Abundant Feedstock

• By 2014, annual ethane production is estimated to be over 11 billion pounds per year.

• There is currently no outlet/market/use for ethane in our region!

• There are many markets for ethane-derived petrochemicals.

*Source: NiSource

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23%

48%

5%

15%9%

Projected 2014 Ethane

Dominion

Mark West

Caimen

Equitable

KYWV

-

2,000,000,000

4,000,000,000

6,000,000,000

8,000,000,000

10,000,000,000

12,000,000,000

2010 2011 2012 2013 2014 2015

Projected Total Pounds of Ethane per Year

Total Pounds per Year

MATRIC/AiTHERAiTHER

Competitive Advantage – Why Aither is Disruptive

• Aither has the lowest capital cost in the industry for the development of a world class cracker – our Catalytic cracker is roughly 25% of the equivalently sized cost of a traditional steam cracker

• Aither has the lowest-cost process to make petrochemicals• Aither’s scalable technology can meet local ethane supply availability,

local market demand for chemical products, and available local land area and employee resources

• Aither can take pure ethane or a mixture of methane and ethane, simplifying delivery of feedstock

• Aither's technical team is the best in the world

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MATRIC/AiTHERAiTHER

Aither Technology – Comparing to a Steam Cracker

– Aither Catalytic Cracking compared to Steam Cracking(Steam cracking is the old, conventional technology)o 25% of the capital cost compared to steam crackero Significantly less ethane needed for outputo Lower operating costo 80% Lower energy inputo 88% Lower CO2 outputo Shorter time to commercial operation possible due to less complexityo Scalable

– Start small, and grow with ethane production– Meet local market demand

o Simpler process to produce higher-value products– Fewer by-products

o No flare due to no unwanted heavy byproducts.

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MATRIC/AiTHERAiTHER

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Ethane gas In

High-Value Polyethylene Chemicals Out

Beyond Ethylene

AiTHER PROCESS: POLYETHYLENE EXAMPLE

Ethane gas to

Ethylene gas“Catalytic Cracking”

Ethylene gas to

Polyethylene solid“Conversion” to a “Downstream” Chemical

Aither Process

George Keller, Ph.D.• More than 40 years of R&D experience (Union Carbide, MATRIC)

– Chemical separations science and technology– Distillation, pervaporation, membrane separations,

extraction, and adsorption– Chemical process fundamentals– Renewable raw materials– Process heat integration and efficiency improvement

• Commercialization of innovative technology– Many distillation and related processes– Most advanced technology for producing oxygen via miniature adsorption units

in the homes of people with severe lung problems– World’s largest pervaporation facility

• Elected to National Academy of Engineering• Recently announced on AIChE’s list of 100 Chemical Engineers of the

Modern Era.

Madan Bhasin, Ph.D.• Expertise in heterogeneous catalysis and surface

science, applied and fundamental• More than 45 years of experience

– Senior Research Scientist at Dow Chemical and Corporate Fellow at Union Carbide

– Member, U.S. National Academy of Engineering– Recipient of the Dow Chemical Two Highest Awards: H. H. Dow Gold Medal & President’s

Award ( a First for R&D )– Recipient of “Citation of Recognition“ in Congressional Record of U.S. Senate 1988

• Discovered, developed, led, and assisted in commercialization of eleven generations of improved efficiency ethylene oxide catalysts which have contributed, per year, $30 to $60 million(for 30+ years) income without additional investment. Reduced CO2 emissions by ~70%.

• Developed and applied a variety of surface analytical techniques (Auger, XPS, SIMS, ISS, High Resolution Scanning Auger) for characterization of various commercial and developmental catalysts.

• Vast experience in other “game-changing” catalytic technologies

MATRIC/AiTHERAiTHER

Why is Aither’s Technology Important for Shale Gas?

There are Three Ways to Make More Profit as a Gas Producero Decrease lifting costso Increase the Price of the Commodity (virtually impossible as a

price-taker)o Find New Markets for Co-Products

Of the 12 Outstanding Finalists, only 5 innovations increase the market for products produced by Shale Gas Producers.

Of those 5 products, only one feeds into a global business with total sales in excess of $13 trillion.

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MATRIC/AiTHERAiTHER

Aither’s Economic Impact

• Aither will create jobs in Pennsylvania– 1000 construction jobs– 200 permanent direct jobs– >1000 indirect permanent jobs

• Aither will keep value added assets in the Region– No need to ship ethane to Canada or the Gulf– Eliminates the need for expensive piping infrastructure

• Aither’s cracker technology can reinvigorate the petrochemical industry in Pennsylvania.

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MATRIC/AiTHERAiTHER

NO OTHER FINALIST, AS OUTSTANDING AS THEY MAY BE, CAN MAKE THAT CLAIM!

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