Gas To Liquids Test Facility Good morning my name is Shane O’Leary and I’m the GTL Program Manager for BP’s Gas To Liquids program here in Alaska. What I would like to today is give you an update on the construction of the TF – some of you have been or are going on the field visit and will get a first hand view Also a little bit about where the GTL option fits with the other options we are looking at for gas monetization in Alaska

GTL Process Process Chemistry BP GTL Program

GTL Background BP has been working to advance GTL technology since mid-1980s. BP’s primary focus reduces reformer cost via Compact Reformer design ( 60% of total GTL cost) . Next step: Complete demonstration of new technology at GTL Facility. Now some brief background on our GTL program $300 MM to date BP GTL Program

Gas Commercialization LNG, Re-injection, Power, Pipeline (CH4) Acetic acid SYNGAS Formaldehyde (CO + H2) MTBE Diesel Additives Methanol Syncrude Hydrogen Fuel Cells Ultimate goal – low cost syngas. If we can make syngas cost effectivelt, it could open up all kinds of possibilities arouind gas (not just FT syncrude), and a whole new commercializtion optio to complement, LNG, pipelines, reinjection. Our focus very much syngas – not FT per se. Ammonia Olefins Fuel Cells Green Fuels DME Urea Acrylonitrile Diesel Fuel Polyethylene Power Generation Ethylene Glycol Alpha-olefins LPG Alternative BP GTL Program

Environmental Benefits of GTL Products Diesel No sulfur No Nox No aromatics – reduces soot Naphtha Almost purely paraffinic, low aromatics Excellent chemical feedstock Jet Fuel No aromatics No sulphur Energy density lower than conventional jet fuel, need further testing BP GTL Program

GTL Test Facility Objective To demonstrate BP/Kvaerner new technologies (Compact Reformer & F-T Catalyst) to provide confidence for building commercial scale GTL facilities. Project Scope Converts ~ 3 mmscfd of natural gas to 300 bpd of syncrude. Process consists of: Compact Reformer (proprietary BP/Kvaerner design produces syngas). Fischer-Tropsch Converter (proprietary BP catalyst produces paraffin wax). Hydro-cracker (commercially available technology produces syncrude). BP GTL Program

GTL Reformer Size Comparison with Conventional Steam Reformer Blue: World-scale reformer Red: Equivalent Compact Reformer BP GTL Program

GTL Test Facility Environmental aspects – trees buffer/transplant. Recylcling excess H2 BP GTL Program

Convertor BP GTL Program

Compact Reformer BP GTL Program

BP GTL Program

GTL Test Facility Cost Schedule Total Project Cost of $86 million with about $64 million spent through July 2001. Schedule Started process unit work in Feb. 2001 (permits received). Plant start-up planned for 1Q / 2Q 2002. 5 Year Plant Life Estimated – maybe longer to test new technologies BP GTL Program

GTL Test Facility Benefits to Local Economy About $40 million of expenditures are expected to be spent in Alaska: Permanent plant equipment and materials Facility construction (Labor, Materials, Construction Equipment, etc.) Additional BP/Kvaerner Staff At peak construction, anticipate creating between 150 to 200 jobs. During Operations Phase, approximately 20 Operations and Testing Team Staff, Maintenance and Trucking personnel. BP GTL Program

BP GTL Program

Beyond GTL-TF SOFC Status Agreement signed with Seimans Westinghouse to purchase 250kw natural gas fuel cell. $ 6.5 MM project Located at GTL-TF / Power Administration and Warehouse Buildings 100kw to Homer Grid $2 MM DOE grant There are about 35 TCF of proven reserves on the north slope. Most of these are at prudhoe (26 TCF) and Pt Thompson (8tcf) BP’s share is about 30 percent with Phillips and ExxonMobil holding most of the balance. Important to remember that there has been no exploration for gas over the past 30 years – because no way to monetize the gas. Prudhoe gas reinjected for pressure maintenance. As a gas export project becomes a reality, More gas will be explored for. BP GTL Program