TRIG : ADVANCED GASIFICATION TECHNOLOGY UTILIZING LOW RANK COALS FOR POWER Qianlin Zhuang Houston, Texas, USA

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1 The 12th European Gasification Conference March 10 13, 2014, Rotterdam, The Netherlands TRIG : ADVANCED GASIFICATION TECHNOLOGY UTILIZING LOW RANK COALS FOR POWER Qianlin Zhuang Houston, Texas, USA 2014 KBR, Inc. All Rights Reserved 1

2 KBR at a Glance Revenue: $7.9 Billion (FY2012) Backlog: $14.9 Billion (YE2012) Headquarters in Houston, Texas 4 Business Groups, 13 Business Units 27,000 employees; 70+ countries 2014 KBR, Inc. All Rights Reserved 2

3 KBR Power: Major Current/Recent Projects LCRA Fayette Power Project 2 x 600 MW Wet FGD s 2011 LG&E / KU Carbon Capture Study 2011 Dominion Kincaid Dry Sorbent Injection In Progress Sherwood H. Smith Energy Center 600 MW Combined Cycle 2011 Southern Co. Scherer SCR and WFGD Units 1&2 In Progress Barrow Wind, Eastern Irish Sea 90 MW Offshore Wind Farm 2006 National Grid United Kingdom Croydon & Hendon Cable Tunnels In Progress Dongguan Power, China 120 MW IGCC / TRIG Retrofit In Progress AGL Energy Macarthur Wind Farm 420MW In Progress LCRA Fayette Power Project Unit 3 FGD Rebuild 2010 Southern Co. Kemper County 582 MW IGCC / TRIG In Progress Solid Waste Authority 100 MW Wasteto-Energy Plant In Progress Palm Beach County, SWA Waste to Energy Retrofit 2012 Seminole Electric Coop Wet to Dry Ash Project In Progress Southern Co. Scherer 4 x 880 MW Baghouses 2010 Dominion Offshore Wind FEED In Progress SSE PMC Scotland $13 Billion Capital Program In Progress Jazan Refinery Saudi Arabia (5) 2x1F CTCC FEED finished August KBR, Inc. All Rights Reserved 3 3

4 KBR/Southern Company Alliance TRIG TRIG Technology available through KBR for all Industrial and Power applications Collaborative blending of skills and strengths of each company for global customers KBR leads all marketing and licensing activities globally 2014 KBR, Inc. All Rights Reserved 4

5 TRIG - Transport Integrated Gasification TRIG is a pressurized, partially-dried feed, dry ash (non-slagging) discharge and refractory lined gasification that operates under coal ash deformation temperature. TRIG is designed to process low quality, low cost, low heating value, low rank coal for syngas production. Economical Efficient Environmentally friendly Less water usage Reliable Transport operation mode Tolerant of large coal particle size, moisture level in fed coal Large single train capacity up to 5,000 TPD Flexibility with air-blown or O 2 -blown Proprietary dry feeding system without using feed injectors and continuous dry ash discharging system Dry syngas cleanup for particulate removal Good quality syngas 2014 KBR, Inc. All Rights Reserved 5

6 Coal Still Critical for Many Economies Country Coal Reserves, mm tons* % World Total* 2014 KBR, Inc. All Rights Reserved 6 % LRC* Reliance of Electricity on Coal 2011** United States 237, % 43.1% Russia 157, % 15.6% China 114, % 79.0% Australia 76, % 76.5% India 60, % 67.9% Germany 40, % 44.7% Ukraine 33, % 38.2% Kazakhstan 33, % 81.1% South Africa 30, % 92.7% Serbia 13, % 74.6% Colombia 6, % 3.5% Canada 6, % 12.0% Poland 5, % 86.5% Indonesia 5, % 44.4% Brazil 4, % 2.3% Greece 3, % 52.3% Bosnia and 2, Herzegovina 83% 70.7% Mongolia 2, % 95.1% Bulgaria 2, % 54.2% Turkey 2, % 28.9% *Source: * World Energy Council 2011; ** IEA website 2011 High reliance of power generation on coal Large low rank coal reserve Effective use of low rank coal remains as a challenge

7 Reactor Type Feed Discharge Licensor Coal Gasification Technologies in Marketplace CoP ECUST SES Quench PWR Single FI Syngas Cooler Ash Fusion Temp (AFT), Operating Range T 4 T 3 T 2 Slagging Agglomerating Entrained Bed Fluidized Bed Slagging T 1 Fixed/Moving Bed Transport Up-Flow Non-slagging 2014 KBR, Inc. All Rights Reserved 7

8 Non-Slagging TRIG Gasification Technology Good Poor Syngas Quality High Efficiency Low Low Single-Train Capacity High Low Coal Rank High AFT Oper. Range T 4 T 3 T 2 Slagging Agglomerating TRIG has these general characteristics: Good Syngas Quality (+) High Energy Efficiency (+) High Single-Train Capacity (+) Suitable for Low-Rank Low-Cost Coals (+) T 1 Non-slagging Developed for low rank coal, TRIG is operated as a non-slagging technology at a well-managed moderate temperature range that minimizes formation of hydrocarbons such as tars and oils. TRIG maintains positive aspects of slagging gasification technologies while avoiding negative aspects of other non-slagging technologies 2014 KBR, Inc. All Rights Reserved 8

10 Coal Remains Critical for China Low Rank Coals Cost Less Trade at a Discount As the world s largest coal producer and consumer: Economy largely depends on coal Prices of Crude oil and NG remains high in Asia Low rank coals trade at a lower cost than higher rank coals About 60% of coal consumed for power generation 758 GW installed generation capacity out of 1,140 GW in 2012 was from coal Minimizing emissions becomes a priority 2014 KBR, Inc. All Rights Reserved 10 China Energy Consumption Mix, % 1% 18% 7% 1% 68% *Source: BP Energy Database Utilization of low rank coal has been restricted by available technology that is cost effective, reliable, environmentally friendly, and reduces wastewater treatment.

11 China Cost Study: Low Rank Coal TRIG IGCC [Objective] Develop an advanced Low Rank Coal TRIG IGCC product, a solution for utility sector to unlock value of low rank coals. Develop China cost estimate of +/- 30% accuracy for the total plant. Provide a solid understanding of project economics. [Methodology for Cost Estimate] Collaborate with experienced local companies Follow local Codes and guidelines Power project approach Vendor quotes on major or critical equipment Maximum local supply Total scope approach Target efficiency: 43%, LHV. Target capex: < RMB10,000/kw 2014 KBR, Inc. All Rights Reserved 11

12 Basis for Design: Low Rank Coal TRIG IGCC - China Plant Design Considerations Inner Mongolia Low Rank Coal ( LRC ) Mine-mouth plant base-load plant, 7,500hrs annual 842 MW (net) power output Dedicated coal drying process Air blown gasification 5 ppm/sox, 25 ppm/nox without SCR; Mercury (Hg) removal included; CO 2 capture not required Two gasifiers to load two 9F class GT Light distillate for start-up Design Fuel: Inner Mongolia Low Rank Coal Item Unit As Rcv d As Fed LHV Kcal/kg 3,424 4,157 Element C wt.% H wt.% N wt.% S wt.% O wt.% Moisture wt.% Ash wt.% Volatile wt.% Fixed C. wt.% KBR, Inc. All Rights Reserved 12

13 Plot Plan: Low Rank Coal TRIG IGCC Water Treatment Gas Turbine Switch Yard Coal Storage Steam Turbine Coal Drying Gas Clean-up TRIG Gasification Cooling Tower N2 Plant Sulfur Block 2014 KBR, Inc. All Rights Reserved 13

15 Performance Summary: Low Rank Coal TRIG IGCC LRC TRIG IGCC is efficient using low rank coal ITEM UNIT VALUE Coal Consumption Rate, as received with 34% Moisture TPD 11,740 Coal Consumption Rate, as fed with 20% Moisture TPD 9,670 Power Output GT Output/unit MW 295 ST Output MW 409 Combined Cycle Output, Gross MW 999 Aux. Power Consumption MW 157 Power Output, Net MW 842 Net Heat Rate Of IGCC kj/kwh 8,360 Net Efficiency Of IGCC % 43.1 Note: Gas turbine performance is estimated based on vendor spec KBR, Inc. All Rights Reserved 15

16 Comparison with Advanced USC in China China made big strides building USC using good quality coal USC Deployment using low-rank coal is in planning stage LRC TRIG IGCC advanced and competitive Parameter Unit LRC TRIG IGCC 842 MW Ultra Supercritical, 1,000 MW (2) NGCC, 9FA Base (1) Coal or Fuel Lignite Lignite NG Heating Value as received, LHV kcal/kg 3,424 3,886 Moisture, as received %wt n/a Coal as fed %wt n/a Thermal Efficiency % Note: 1 - in operation; 2 - in early development phase 2014 KBR, Inc. All Rights Reserved 16

17 Emissions Regulation for New Unit IGCC able to make another big step in reducing emissions of SOx, Hg, PM China has made significant progress on emissions reduction Conventional technology faces challenges for further reduction Pollutant Unit TRIG IGCC Current Limits 9 Special Areas/Rest China 2004 Limits New Unit SO 2 mg/m / NOx mg/m / Mercury mg/m n/a Particulate Matter (PM) mg/m / SO 2 emission at HRSG stack, the total plant SO 2 averaged at mg/nm 3 (dry basis) % Hg removal assuming Hg content in coal at 0.13 mg/g (dry basis). 3. PM from baghouse vent sterams excluded KBR, Inc. All Rights Reserved 17

18 Water Usage Comparison TRIG IGCC: Minimum water usage relative to similar IGCCs Process Design minimizes water blow-down Majority of water makeup stems from cooling tower water loss Makeup Rate. ton/hr Comparison with Other IGCCs Current study Summer Winter BFW Cooling Tower 1, Drying (89) (89) Others 35 7 Total 1, Source: DOE NETL Study KBR, Inc. All Rights Reserved 18

19 Economic Analysis Assumptions Major Parameter Unit Construction Period Month 36 Annual Operating Hour Hour 7,500 Plant Staffing Person 317 Equity/Loan 20/80 Loan Interest Rate % 6.55 Depreciation Period Year 15 Standard Coal Price (Inc l taxes) RMB/ton 300 Water RMB/ton 1 O&M Base of Capital Investment % 4 Model uses China standard one for sector Routines for power project development followed Price guideline referenced Local prices used for utilities Note: RMB stands for Chinese Renminbi; ton in metric unit KBR, Inc. All Rights Reserved 19

20 Findings: Economic Analysis LRC TRIG IGCC meets project approval criteria in China Increased emissions compliance cost will make LRC TRIG IGCC an ideal clean coal technology Support of government policy will encourage its wide adoption ITEM Unit Total IRR 8% IGCC Net Output MW 999 Static Investment mm RMB 7,081.1 Loan Interest during construction mm RMB Liquidity mm RMB 89.3 Cost of Electricity w/o Tax RMB/MWh Cost of Electricity with Tax RMB/MWh IRR after Taxes % 8.1 Pay Back Period Year 12 Net Present Value mm RMB Project Internal Rate Of Return On Equity % 12.3 Internal Rate Of Return Of Investment % 9.31 Net Rate Of Return on Equity % KBR, Inc. All Rights Reserved 20

22 Kemper County TRIG IGCC Overview 2x1 Integrated Gasification Combined Cycle (IGCC) 2 Transport Gasifiers 2 Siemens SGT6-5000F CTs 1 Toshiba Steam Turbine 582 MW peak and 524 MW on syngas Heat Rate: 12,810 kj/kwh 32.1 % LHV Efficiency w/ CO2 control and >40% moisture coal UOP s Selexol Process for H2S and CO2 removal Haldor Topsøe s Wet Sulfuric Acid for H2SO4 production. 65% CO2 capture (~360 kg/mwh emission rate) Mine Mouth Lignite Owner & Operator: Mississippi Power By-Products (metric tonnes per year) 2,720,000 - Carbon dioxide used for EOR 122,000 - Sulfuric acid 18,000 - Ammonia Kemper Lignite Composition 2014 KBR, Inc. All Rights Reserved 22 Average Range LHV kcal/kg Mositure % Ash % Sulfur % Plant Site

23 Kemper County Plant Site IGCC Infrastructure ~112 km transmission Station energized ~ 96 km CO 2 pipeline (for EOR) 100% Complete ~8 km natural gas pipeline 100% Complete ~125 km 2 mine site. Placed in Service: June 2013 ~ 48 km treated effluent line 100% Complete Meridian New CO 2 Pipeline 2014 KBR, Inc. All Rights Reserved 23

24 Key Startup Milestones Completed Key Milestones Admin/Control Building - DCS Control System Functional Start Filling Treated Effluent Reservoir Station Service Energized Water Treatment Plant Commissioning Completion Cooling Tower Completion Fire Auxiliary Boiler First Fire Combustion Turbine A First Fire Combustion Turbine B Steam Turbine Sync To Grid First Gasifier Heatup Reliable Syngas To Combustion Turbine A Reliable Syngas To Combustion Turbine B Completion Date 21-Sep Oct-12 8-Nov Mar Apr-13 5-Aug Aug-13 4-Sep-13 5-Oct KBR, Inc. All Rights Reserved 24

25 Conclusion TRIG IGCC is an efficient, cost-effective clean coal technology to unlock the value of low rank coals. Superior environmental performance and low water usage address increasing need for many regions and countries TRIG IGCC can be designed to address CCS in European market, technologically and economically 2014 KBR, Inc. All Rights Reserved 25