This document discusses Blue%Fuel%Energy's plan to convert natural gas to low-carbon gasoline. It would take advantage of British Columbia's abundant natural gas resources and renewable electricity. The target market is the growing low-carbon fuels regulations on the west coast of North America. The process involves reforming natural gas to synthesis gas, converting it to methanol, and then dehydrating and reassembling the methanol into gasoline. Key is selecting proven technologies already in commercial use that differentiate outcomes and allow integrating renewables. With the right execution, an aggressive timeline could see the first plant start up as early as 2019.

1. Blue%Fuel%Energy…%
…conver(ng*natural*gas*to*
low*carbon*intensity*gasoline*
with*a*renewable*component*

2. The*genesis*of*the*opportunity*
! BC*has*abundant*resources*
! Electricity*in*BC*is*93%*renewable*
! Western*Canadian*gas*being*backedBout*of*US*market*
! Renewable*fuels*are*technically*feasible…**
*****…but*quite*challenging*in*today’s*market*
*
! Low*gas*prices*&*high*oil*prices*=*arbitrage*opportunity*
! Use*conven(onal*feedstock*to*establish*a*scalable*plaKorm*
! Select*process*technologies*to*enable*renewables*opportunity*
! Build*a*cornerstone*of*“social*license”*

3. The*target*market*segment*
! Low*carbon*fuels*regula(ons*in*Bri(sh*Columbia*
! Similar*regula(ons*in*substan(ally*larger*California*market*
! Oregon*recently*adopted*similar*standards*
! Washington*state*considering*the*same*
"*Opportunity*extends*to*full*west*coast*North*American*market*
*
! BC*regula(ons*require*10%*reduc(on*in*carbon*intensity**
! Gradual*phaseBin*with*full*implementa(on*by*2020*
! First*“compliance”*period*underway;*using*credits*
! Expect*credits*to*be*exhausted*by*2016*
! Ethanol*is*a*compe(ng*product*
! Believe*ethanol*is*less*desirable*than*a*fully*fungible*gasoline*

4. BFE*has*what*it*takes*to*deliver*a*successful*project*
! A*sound*idea*
! Executable*plans*
! A*growth*market*
! Robust*economics*
! Requisite*experience*
! Community*&*Government*support*
! Energy,*focus,*discipline*&*pragma(sm*
*
…and*a*pathway*to*renewables*that*means*its*capital*investment*
today*will*be*advantaged*(not*stranded,*and*can*respond*quickly)*
as*the*market*moves*to*a*more*sustainable*future.*

5. Gas*supply*
! Dry*gas*from*Spectra*
! Warm*gas*from*TCPL*
! Hot*gas*from*Montney*

6. Liquids*egress*
Gasoline*
! Rail*to*market*or**
*****coastal*port*
! Pembina*West*/**
*****Trans*Mountain*
LPG*&*NGL’s*
! Pembina*Peace*/*North*
Diluent*
! Pembina*Peace*

7. Dehydra1on%
&%reassembly%
%to%gasoline%
Proven*&*deliberate*technology*selec(ons*
! All*core*process*steps*already*in*commercial*opera(on*
! Purposeful*technology*selec(ons*differen(ate*outcomes*
! Unique*opportuni(es*with*Bri(sh*Columbia*resources*
! Renewables*imbedded*at*the*“synthesis*gas”*step*
Conversion%%
to%methanol%
Reforming%%
to%“synthesis%gas”%
Core%process%steps%
Mul1ple%internal%recycle%streams%%
to%enhance%efficiencies,%reduce%capital%and%simplify%opera1ons%
Electricity%
Gas%
%%%Water%
%%%Gasoline%
%%%Heat%
Air/oxygen%
%%%LPG%

8. The*“core”*of*the*natural*gas*conversion*process*

9. A*methanol*plant*

10. Turning*methanol*into*gasoline*
Methanol*is*passed*over*a*catalyst…*
…where*“water”*is*removed…*
…and*the*remaining*carbon*and**
hydrogens*are*combined*to*make**
gasolineBrange*hydrocarbons*

11. The*first*gasBtoBgasoline*plant*startedBup*in*NZ*in*1985*
GasLtoLMethanol%MethanolLtoLGasoline%

12. GasLtoLMethanol% MethanolLtoLGasoline%
The*NZ*gasBtoBgasoline*plant*looking*from*the*coast*

13. Dehydra1on%%
&%reassembly%
%to%gasoline%
The*underlying*chemistry…*
Conversion%%
to%methanol%
Reforming%%
to%“synthesis%gas”%
…is*deliberate*and*elegant*
Reforming*&*methanol*synthesis:*CH4*+*½O2*=*CH3OH*
Methanol*dehydra(on:*CH3OH*–*H2O*=*CH2*+*H2O*
Reassembly*to*gasoline:*(4B11)CH2*=*gasoline*
The*process*produces*water…*
…and*the*u(li(es*strategy*minimizes*water*demand*
*

14. Commissioning%%
&%Opera1ons%
Indica(ve*(meline*
Construc1on%
Engineering,%%%
gas/offLtake,%%%
&%financing%
Refine%scope%&%
execu1on%strategy%
**2014*
* * * ****Once*funded*
* * * ****1*year*dura(on*
* * * * * * * * *****3*year*dura(on*
* * * * * * * * * * * ******As*early*as*2019*
! Aggressive*targets*
! FID*achievable*in*2016*
! Cost*to*reach*FID*circa*$50m*
! Compe((on*for*construc(on*resources*(e.g.*LNG*&*shale*gas)*