Mini-to-Medium Scale LNG – A Profitable & Environmentally

Sustainable Solution for Flared or Stranded Gas

Matt BARCLAY

Director, Energy Resources Group

Presentation overviewThe Agenda

• Introduction to Prometheus Energy • Small-Scale LNG Production from Flare Gas or

Non-Conventional Sources• Applicable Purification & Liquefaction Requirements• Why Small-to-Medium Scale Projects Work & What’s Driving

the Market• Niche LNG Market Opportunities & Future Demand Sources• Summary & Conclusions

Prometheus Energy CompanyCompany Background

• Vertically Integrated LNG Production and Supply Company

–Design, Own, Operate LNG Project Development Capabilities

–LNG Supply to Vehicle, Industrial and Utility Customers• Non-Traditional LNG Supply Sources

–Landfills, Coalmines, Associated Gas Wells & Digesters• Corporate Offices in Seattle & London

–Publicly Listed on London Stock Exchange (PEC.L)

What is small-to-medium scale LNG?An Overview of the Existing Market

• Numerous Small/Medium Scale LNG plants in operation around the world

–Plants sized for 2.5-100M scf/d–Produce between 1/50th and 1/500th the capacity of global-

scale liquefaction facilities–Niche Market Supply Focus

• Utility Peakshaving–Over 100 production/storage sites in US

• Other LNG Production Sources–NRU’s and/or Liquid Helium Plants–Non-Conventional LNG Plants (Prometheus)

Non-conventional Gas Source ComparisionA Comparision of Component Concentations and Other Properties

Methane (CH4), % 90-99 75-99 50-65 35-55Ethane + Propane, % 1-5 2-15 0 0

Water Vapor, % <0.01 1-3 1-10 1-10

Carbon Dioxide, % 0-5 .01-10 35-50 25-45

Nitrogen, other inerts, % 0-2 1-40 0-5 0-20

Hydrogen sulfide, ppm 0-15 0-300 100-3000 5-600

Higher heating value, (btu/ft3) 950-1,050 760-1150 505-655 350-550

Gas Source Pressure, (psig) 80-1000 50-1200 1-2 1-2

Chlorine in organic compounds, micrograms per liter

Digester or Wastewater

BiogasLandfill

Gas

Condensable hydrocarbons (NMOCs) ppmv 250-3,001 250-3,000

0 0 1-100 250-3,000

ComponentPipeline

Gas

0 1-1000

Associated or Stranded Well Gas

Technologies For Gas Purification A Suite of Technologies Exist for Gas Clean Up

• Trace Contaminants– Filtration – Chilling; Phase change– Absorption

• Water• Chemical Solutions

• Liquid CO2

– Adsorption• Activated Carbon/Zeolites• Batch or Regenerative

– TSA– PSA

• CO2 Removal– Water scrubbing– Chemical Absorption

• Amines of various types• Cold methanol

– Adsorption (PSA)– Membrane– Cryogenic

• Distillation using ethane• Freezing with sublimation

• Nitrogen Removal – Phase equilibria

• Batch or dynamic

Distributed Scale LNG Production A Solution for Otherwise Flared or Stranded Gas

Bowerman Landfill Gas-to-LNG Project Project Application: A 11M Scf/Day Flaring Reduction Project

Existing LNG Vehicle MarketsThe World LNG Vehicle Markets Continue to Grow

Refuse

Heavy Duty Fleet

Mass Transit

Paratransit & Shuttle Vans

Other Niche LNG Market Opportunites Existing Applications for LNG Utilization

Propane & Heating Oil Displacement

Residential supply

Pipeline Outage

Utility Peak-Load Shaving

Future LNG Demand ProspectsFuture Utilization in Heavy Fuel Demand Markets

Source: Tupolev

Comparision Of Alternative Fuel Prices Economics Ultimately Drive the Market

Prometheus Retail LNG with Federal Excise Tax Included

Other Alternative Fuel Retail Price

DOE - Alternative Fuel Price Report, June 2006

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

Gasoline CNG Propane Ethanol(E85)

No. 2Diesel

Biodiesel(B20)

Biodiesel(B99-100)

Pric

e P

er G

allo

n E

quiv

alen

t

46% 19% 47% 59% 41% 40% 53%

(GGE) (GGE) (GGE)

(GGE) (DGE) (DGE) (DGE)

GGE: Gasoline Gallon EquivalentDGE: Diesel Gallon Equivalent

Air Quality Benefits Of Alternatve Fuel Use Reductions in Ground Level Ozone Emissions can be Substantial

+2%

+10%

-53%

-15%

-47%

-85%

-20%

-48%

-89%

-100%

-80%

-60%

-40%

-20%

0%

20%

NOx

PM

CO

CNG, LNGBiodiesel 100Biodiesel 20

Source: 2005 NREL Technical Report 540-36355; Puget Sound Clean Air Agency Biodiesel Fact Sheet

Ozone Forming Emission Reduction % by Fuel Type and Pollutant

LNG & Related Green House Gas ReductionsThe Use of LNG Can Lead to Lower Greenhouse Gas Emissions

• While natural gas vehicles do emit minor amounts of methane, this slight amount of unburned methane is more than offset by a substantial reduction in carbon dioxide emissions compared to other fuels

CO2

Emissions

1913

176

2089

3295

0

500

1000

1500

2000

2500

3000

3500

Net CO2

Equivalent Emissions from 2004

Natural Gas Transit Bus

CO2

Equivalent of Unburned

Methane Emissions

CO2

Emissions from 2004

Diesel Transit Bus

When compared to diesel, natural gas transit buses are shown to

reduce greenhouse gas emissions by as much as 37%.

Source: 2005 NREL Technical Report 540-36355

Emissions of CO2 & CO2 Equivalent from Model Year 2004 Transit Buses

(grams/mile traveled)

+ =

Bowerman LNG Project Emissions BenefitsThe Beneficial Use of Flared Gas can have Substantial Environmental Benefits

• Emission Reductions and Environmental and Energy Benefits for Frank R. Bowerman Landfill Gas-to-LNG Project

7,600 standard cubic feet per minute (scfm)

tons CH4/yr tons CO2/yr

42,242 104,461Equivalent to any one of the following annual benefits:

Environmental Benefits

• Removing emissions equivalent to __ vehicles: 173,957

• Planting __ acres of forest: 247,888

• Preventing the use of __ barrels of oil: 2,109,687

• Displacing the use of __ gallons of gasoline: 99,155,286

Total Equivalent Emissions Reduced[Total = Direct + Avoided]

0.8995

MMTCO2E/yrmillion metric tons of carbon dioxide equivalents per year

tons of methane per year

tons of carbon dioxide per year

Presentation Conclusion And Key FindingsWhere Does the Market Go from Here?

• Continued strong world-wide growth of LNG supply & demand

– Market growth driven by economic & environmental factors

• Growing use of LNG in the transportation fuel market

– New, much larger NGV markets for 400+ HP NG engines

• New global role for LNG produced from stranded or waste gas

– Look for over 100 small/medium LNG projects to develop in next 10 years and for non-traditional sources of supply to play a significant role