Producing premium biofuels in Europe eni s perspective

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Rose Bell
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1 European Biofuels Seminar Geneva, April 15, 2015 Producing premium biofuels in Europe eni s perspective Giacomo Rispoli Executive Vice President

2 Highlights Scenario Eni strategy Eni/Honeywell UOP Ecofining TM technology Eni Green Refinery Looking to the future Conclusion

3 Refining Scenario European refining industry is living a major economic crisis high energy cost decrease of demand and unbalanced offer refining overcapacity and low operating margins environmental constraints old and small size refining system

4 European Legislation Scenario EU's Climate Change Package with EU targets by 2020: 20% reduction in greenhouse gas emissions, 20% improvement in energy efficiency, 20% share for renewable in the EU energy mix. EU Directives on biofuels : Renewable Energy Directive RED 2009/28/CE Fuel Quality Directive FQD 2009/30/CE 10% of renewable energy in the transportation sector. Second generation biofuels counted twice.

5 Biofuels Scenario BIODIESEL CONVENTIONAL PROCESS FAME (Fatty Acid Methyl Esters) Poor Heating Value Hygroscopic Properties High content of Oxygen Blending wall Blending limit of FAME at 7% max This constraint can be overcome by using new generation renewable Hydrotreated Vegetable Oil (HVO).

6 Eni vision Refining industry crisis Reducing refining overcapacity? EU biofuels scenario ECOFINING TM Technology Biorefinery Reinventing petroleum refinery!

7 Eni's strategy for biofuels Since the second half of 2005 eni and UOP decided to launch a R&D joint project to identify a new technology to produce high quality biofuels can overcome all the negative characteristics of traditional biofuels (FAME). This project was a success, and in 2007 a new technology, called Ecofining TM, was invented by eni and UOP. In subsequent years the realization of a new plant with Ecofining technology was held back by the high cost of construction. At the mean time the crisis of refining industry required to shutdown weaker refineries. In 2011 the Venice refinery, due to its simple process scheme and low capacity, was shut down to be converted in an oil depot.

8 Eni strategy for biofuels Eni was able to turn a critical situation into a great opportunity by investing in the innovative Green Refinery project for the conversion of a petroleum refinery into a Biorefinery. The Green Refinery idea is focused on the application of Eni/Honeywell UOP Ecofining TM technology and results from the long term Eni Green Strategy. That s the make option : eni entered the biofuels market, producing a new generation of very high quality biofuels starting from renewable feedstocks.

Eni Green Strategy results 2007 Eni/Honeywell UOP Ecofining TM patent 2012 2013 First Green Refinery Project starts Refinery conversion to a biorefinery Eni patent 2 nd half 2005 Eni and Honeywell

9 Eni Green Strategy results 2007 Eni/Honeywell UOP Ecofining TM patent First Green Refinery Project starts Refinery conversion to a biorefinery Eni patent 2 nd half 2005 Eni and Honeywell UOP started a joint R&D project on innovative Biofuels May 2014 Green fuels production starts from Venice Green Refinery Green fuels production increase in Venice and starts from new Gela Green Refinery

eni/honeywell UOP goal on biofuels Produce real drop-in biofuels, totally hydrocarbon, instead of fuel bio-additives. Focus on path toward new generation feedstocks.

10 eni/honeywell UOP goal on biofuels Produce real drop-in biofuels, totally hydrocarbon, instead of fuel bio-additives. Focus on path toward new generation feedstocks. Conventional Oxygenated Biofuels Hydrocarbon Biofuels Ethanol Biodiesel Other Oils: Camelina, Jatropha Diesel Jet Gasoline First Generation Advanced Generation Natural oils (vegetables, greases) Lignocellulosic biomass, algae oils

11 BIODIESEL CONVENTIONAL PROCESS: Biofuels process: conventional vs new generation Feed Process Product Methanol Biological feedstocks ECOFINING TM PROCESS : H 2 Biological feedstocks Transesterification Biodiesel HYDROTREATMENT Biodiesel FAME (Fatty Acid Methyl Esters) Glycerine Feed Process Product Green Diesel (HVO) Green Jet (HEFA-SPK) Green Naphtha Green GPL CO 2 /H 2 O LOW QUALITY LOW CAPEX HIGH QUALITY HIGH CAPEX Green Diesel: high quality product obtained by means of hydrotreating (HVO) with paraffinic composition (oxygen free).

12 ECOFINING TM technology Jointly developed by Eni and Honeywell s UOP to produce excellent biofuels, with high quality independent from the renewable feedstocks used, that can be of: 1st generation: edible vegetable oils; 2nd generation: tallow, used cooking oils; 3rd generation: oils from algae and waste.

13 Renewable Feedstocks Vegetable Oils Used cooking oil Animal Fats Oils from algae and waste ECOFINING TM technology Deoxygenation Isomerization Product Separation CO 2 Water Hydrogen Light Fuels Green Jet (HEFA SPK ) Green Diesel 1st stage 2nd stage

14 ECOFINING TM : typical yields Feedstock %wt Renewable oils 100 Hydrogen 1,5 3,8 Product %wt %v Propane Naphtha Diesel CO 2 and H 2 O are also produced by the deoxygenation reaction

15 Green Diesel quality Properties Fossil Diesel ULSD Conventional Biodiesel (FAME) ECOFINING TM Green Diesel BIO content Oxygen, % Specific gravity Sulphur, ppm <10 <1 <1 Heating Value, MJ/kg Cloud Point, C -5 From -5 to +15 Up to-20 Distillation range, C Polyaromatics, %w Nox emissions Standard + 10% -10% Cetane Oxydation stability Standard Pour Excellent

16 The eni-italian Navy Green Fleet Project eni and the Italian Navy defined an agreement, within the frame of the Navy Green Fleet Project, to formulate and produce a new military ship fuel, containing at least 50% of Green Diesel produced by means of the Ecofining TM Technology. The new fuel has been successfully tested for the very first time in Europe on the Italian Military Ship Comandante Foscari on January In the mid of 2015 the test will be extended to other ships, including an aircraft carrier and a submarine.

17 Eni Green Refinery The Green Refinery is the result of the first conversion of a petroleum refinery into a biorefinery by mean of the application of Ecofining TM technology. This innovative idea has been patent filed by Eni on September 2012 (n MI2012A001465). Revamping the existing units in Venice significantly reduces the required investment cost, estimated in 1/4 to 1/5 of a new Ecofining TM grass root unit of the same capacity and intensively sped up project timing.

18 Sept Aug Sep May 2014

in-house produced HVO The Eni Green Refinery project in Venice Wholly owned In

19 From Refinery to Biorefinery Overcapacity: use existing facilities for doing new business Sannazzaro Porto Marghera Livorno Taranto Milazzo Substitute FAME with in-house produced HVO The Eni Green Refinery project in Venice Wholly owned In partnership Gela The use of existing facilities allows a significant reduction of capital costs

Green Refinery Project: two steps Max throughput 400 kt/y (H2 balance limiting) Former Hydroskimming (H2 from catalytic reforming)) ECOFINING TM H2 Max throughput 560 kt/y (Existing equipment

20 Green Refinery Project: two steps Max throughput 400 kt/y (H2 balance limiting) Former Hydroskimming (H2 from catalytic reforming)) ECOFINING TM H2 Max throughput 560 kt/y (Existing equipment limiting) Steam Reformer & feedstock pretreatment Today, STEP 1: the Ecofining TM is operating in balance with the hydrogen from the refinery hydroskimming section. Tomorrow, STEP 2, on 2017: H 2 production from a new steam reformer will allow to maximize the Ecofining TM capacity.

21 A technology challenge New feedstock material: different handling due to the poor cold flow properties and organic acidity. Conversion of two existing diesel HDS units into the two reaction stages of the Ecofining TM process. Integrating the Ecofining TM unit into the previous refinery scheme (utilities, ancillaries, etc.). Separating for the 1st step of operation, the derived biological material from the fossil material still running in part of the hydroskimming section of the former petroleum refinery (different blow down, sewers, slop tanks, etc).

22 The start up: a successful experience The Eni Green Refinery start up in the new configuration was very smooth without any issues; The ECOFINING TM unit successfully started up in May 2014, producing high quality Green Diesel. The unit performance, its operation stability and its response to changes are overcoming expectations. The integration with the hydroskimming section and with the utilities, facilities and offsite of the previous refinery is successful.

23 Eni is looking for feeding the Green Refinery with additional advanced biofuel feedstocks: Tallow; Used cooking oils. Next improvement in compliance with the Annex 9 of the Proposal for a directive of the European Parliament and Council, amending the Directive 38/70/EC and 2009/28/EC. Focus on short supply chain: advanced feedstock from the region surroundings for improving the local economy.

24 Conversion of the refinery on the Venice model. Consumption of vegetable oils: 710 kton / year Expected production: 530 kton / year Next improvement Gela Green Refinery

25 Looking to the future (eni R&D) New biofuels: a new innovative process is under development for producing new 2nd generation biofuels. Bio-oils from microalgae: eni has a pilot plant operating since 2010 in the Gela refinery, Sicily, constituted by algae farm and oil recovery plant.

Conclusions The Green Refinery Project is the result of the LONG TERM ENI R&D GREEN STRATEGY made by continuous investment on R&D activities closely linked to the business aimed at developing

26 Conclusions The Green Refinery Project is the result of the LONG TERM ENI R&D GREEN STRATEGY made by continuous investment on R&D activities closely linked to the business aimed at developing innovative biofuel technology in advance of the regulations PROCESS INNOVATION 1st conversion in the world of a conventional petroleum refinery into a Biorefinery, by means of the Ecofining TM proprietary technology, which allowed to renew the obsolete Venice Refinery into a high innovative industrial process scheme. PRODUCT INNOVATION Launch on the market of new high quality biofuels: Green Diesel, Green jet, Green LPG and Green Naphtha. Green diesel, in particular, will be distinctive of eni Diesel fuel, assuring premium quality for stronger competition. INDUSTRY KEEPING By this strategy we can reduce traditional refining capacity without losing technical and scientific know-how and largely keeping the national refining industry structure.

27 Thank you

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