1. © 2008 Capstone Turbine Corporation www.capstoneturbine.com MicroTurbine Applications for the Oil and Gas Industry Lee Richards - Director of Sales for Oil & Gas, Capstone Turbine Corp Bryan Hensley - VP Sales, Pumps & Service 15 July 2008

2. © 2008 Capstone Turbine Corporation www.capstoneturbine.com What is a MicroTurbine? Power generator driven by a small scale gas turbine Electrical Efficiency of 26-33% Combined with CHP can achieve thermal efficiency of 80%+ Wide range of fuels – 350 btu to 2500 btu Up to 7% H 2 S with C30 Extremely Low Emissions - <9 ppm NOx Air Bearings No Oils or Lubricants Air Cooled No Antifreeze or Coolants Variable Speed 45,000 to 96,000 RPM

3. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Air Bearings Spring Foil Shaft Boundary Air Spring Foil Shaft

4. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Inside the Capstone MicroTurbine Combustion chamber Exhaust output Recuperator Fuel injector Air bearings Compressor Generator Air intake Cooling fins Turbine No gearbox, pumps, or other mechanical components Recuperated Engine Permanent magnet alternator Lean premix combustion Air Bearings Air Cooled

5. © 2008 Capstone Turbine Corporation www.capstoneturbine.com No moving parts Variable Voltage 400-480 volts Variable Frequency 10-60 Hz Voltage & Current source Inverter “Electronic” Gearbox Built in Fault protection Power Electronics

6. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Inverter Based Electronics

7. © 2008 Capstone Turbine Corporation www.capstoneturbine.com MultiPac & Grid Connect

8. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Capstone Products C30 & C65 Available with gas & liquid fuels C200 & C200 CHP C65 CHP

9. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Capstone Products C30 & C65 Class I Div 2 ATEX Zone 2 C30 & C65 SS

10. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Performance C30C65C200 Rated Power 30 kw65 kw200 kw Full Load Efficiency 26%28%33% Heat Rate 12,200 Btu/kWh (12,800 kJ) 11,000 Btu/kWh (11,600 kJ) 10,300 Btu/kWh (10,900 kJ) Liquid Fuel D2, 1-K, Jet A, JP- 8, JP-5 D2In Development Gas Fuel (HHV) 325-2131 Btu/scf325-2550 Btu/scf Output Current 46 Amps RMS100 Amps RMS310 Amps RMS Nominal Voltage 400 to 480 VAC Exhaust Gas Temp 530 F (275 C)588 F (309 C)535 F (280 C) NOx Emissions Gas : <9 ppm Liquid : <35 ppm Gas: <9 ppm <5 ppm CARB Gas: <9 ppm <5 ppm CARB Acoustics 65 dBA

11. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Packaged Solution C600C800C1000 Rated Power 600 kw800 kw1000 kw Full Load Efficiency 33% Heat Rate 10,300 Btu/kWh (10,900 kJ/kWh) 10,300 Btu/kWh (10,900 kJ/kWh) 10,300 Btu/kWh (10,900 kJ/kWh) Output Current 930 Amps RMS1240 Amps RMS1550 Amps RMS Nominal Voltage 400 to 480 VAC Exhaust Gas Temp 535 F (280 C) Exhaust Energy 4,050,000 BTU/hr 5,400,000 BTU/hr6,750,000 BTU/hr (3), (4), or (5) C200 Units Stackable Footprint 30’ Enclosure with ISO Footprint Load control from 100% to idle Flexible Maintenance Parts redundancy with C200

12. © 2008 Capstone Turbine Corporation www.capstoneturbine.com C1000 ISO Efficiency High Part Load Efficiency

13. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Installation 60 kw MicroTurbine 20 kw Recip Package Height (ft)Width (ft)Depth (ft)Weight (lbs) C30 Industrial6.42.55.01271 C30 C1D27.73.17.02475 C65 Industrial6.93.17.02471 C65 C1D28.23.17.03600 C2008.25.5127000 C10009.68.02828,500

14. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Typical Site Layout

15. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Oil & Gas Experience Units Sold O&G Installations C303350285 C601282122 C65360135 C200452 Total>5037>544 Mexico 36 Units in Offshore Oil Production Flare Gas Fuel NE United States Pipeline 31 Units in Gas Transmission CHP Applications Russia Pipeline 50 Units in Remote Gas Transmission South America Pipeline 65 Units in Gas Transmission More than 60 O&G customers worldwide More than 70 packages installed offshore 80% of all Microturbines Sold Worldwide are Capstone

16. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Certification California CARB 2007 Listed UL 2200, the latest generator safety standard, and UL 1741, the national grid interconnect standard MicroTurbines were the first generators of ANY type state- approved by New York and by California (“Rule 21”) for direct-to -grid interconnection Also compliant with NFPA, IEEE519, CE, NEC, CSA, ATEX and other internationally recognized safety standards

17. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Capstone: A Big Small Company Founded 1988 First to introduce microturbine energy products ten years later 100% microturbine focused The world leader in microturbines >5000 production units sold and shipped ISO 9001:2000 and 14001:2004 UL-certified Offices in LA, NYC, Mexico, Milan, Bath, Shanghai and Tokyo Distributors located world wide Capstone Corporate Headquarters Chatsworth, California

18. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Preventative Maintenance Servicing injectors at 20,000 hrs on an offshore platform 8,000 Hours Air FiltersClean/Replace Fuel FilterReplace IgniterReplace 20,000 Hours InjectorsReplace Battery PackReplace ThermocoupleReplace 40,000 Hours Engine & Generator Exchange Typical Maintenance cost of $0.016 kWh Typical Maintenance cost of $0.016 kWh Average of 6 Hours of Planned Maintenance per year Average of 6 Hours of Planned Maintenance per year Capstone will guarantee cost of planned and unplanned maintenance through Factory Protection PlanCapstone will guarantee cost of planned and unplanned maintenance through Factory Protection Plan

19. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Oil & Gas Specific Applications

20. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Key O&G Objective Primary Uses Generate Power Eliminate Flare/Vent Combine Heat/Power Use power for applications Prime site power Black start power Back-up power Peaking Supplemental power Reduce utility costs Generate power from fuel sources such as Casing gas from oil production Condensate gas from liquid processing Gas too rich or too lean to meet pipeline standards Sour gas with H 2 S – up to 7% 3-pack on oil flare gas in New Mexico

21. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Low Installed Cost Short Commissioning Period Easy Interconnects to Local Grid or Bus Very Low Maintenance Ease of Operations No Lubricants or Coolants Small Footprint, Light Weight < 65dBA Acoustic Emissions Ultra-low NOx emissions with no post-combustion devices or chemicals Accepts 350-2500 Btu w/up to 7% H 2 S (C30) Benefits of MicroTurbines in O&G Test prior to platform deployment, Netherlands

22. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Integrated Heat Exchanger

23. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Exhaust Heat Utilization - CHP Source: EPA and DOE, see notes page for specific references 33% av. utility efficiency 33% av. utility efficiency 80% av. boiler efficiency 80% av. boiler efficiency 120 kWth 65 kWe 160 kW waste 345 kW fuel 130 kW waste 30 kW waste 195 kW fuel 150 kW fuel 40 kW waste 230 kW fuel 65 kWe 120 kWth 80% average total efficiency 0.15 lb/MWh NO x & 1,540 lb/MWh CO 2 80% average total efficiency 0.15 lb/MWh NO x & 1,540 lb/MWh CO 2 54% average total efficiency 3.4 lb/MWh NO x & 2,320 lb/MWh CO 2 54% average total efficiency 3.4 lb/MWh NO x & 2,320 lb/MWh CO 2 Traditional Approach Capstone ICHP

24. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Exhaust Heat Utilization - CHP Heat to glycol or hot oil systems Preheat fuel gas to larger turbines or engines Preheat water to steam boilers Direct heat to oil/water separators Supplemental heat to regas LNG or other liquid regas process Building or utility heat Various gas plant and amine plant applications Refrigerant based systems

25. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Exhaust Heat Utilization Microturbines also generate voluminous exhaust heat C65 Generates 561,000 BTU/hr (591,000 kJ/hr) at 588F (309C) Heat from two C30s running on untreated wellhead gas goes to “heater/treater” separator

26. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Example Applications

27. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Cathodic Protection Example Installation by Pumps & Service Client – Major US Gas Transmission Company Project - Gas Pipeline Cathodic Protection Requirements - Customer required extremely reliable power source at low current in very remote applications. Alternative Solutions Grid power – would require several miles of power lines installed Recip Generators – would require regular maintenance intervals Thermal Electric Generators (TEG) – unreliable

28. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Cathodic Protection Solution – Single C30 installed along pipeline as required Benefits Minimal maintenance requiring site visits only once each 6 months Remote monitoring and diagnostics to verify operational quality Extremely low emissions for installation in national forest

29. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Primary Power for Remote Site Example Installation by Pumps & Service Client:Major US Production Company Project:Primary Power for Salt Water Disposal Requirements:Needs reliable, cost-effective power in remote location Alternative Solutions Grid Power – Not available Re-Power – Eventually same problems with high maintenance cost, high emissions, and excessive down time. Reciprocating generators – Same as re-power

30. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Primary Power for Remote Site Solution - Multi-pac of 3-C30 installed in a control room fabricated for this site. Benefits Lowered maintenance cost Improved reliability of site Improved flexibility to control and maintain pressures and flow rates P&S Later designed New SWD in 2006 with Capstone because of success

31. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Primary Power for Oil Pipeline Example Installation by Pumps & Service Client:Large US Oil Pipeline Project:Transfer pumps for a major Oil Pipeline in Remote Location Requirements:Reliable Power because of extremely high cost for down time as well as being on a very remote location Alternative Solutions Grid Power – Not available Reciprocating Generators – regular maintenance schedules, unplanned down time (low oil, high engine temp..) and reliability.

32. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Primary Power for Oil Pipeline Solution:(15) C65 installed as the power supply for location Benefits: Minimal maintenance requiring planned site visits on semiannual schedule Remote monitoring and diagnostics to verify operation Reliability. No unacceptable downtime

33. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Offshore Resource Recovery The Solution: A Capstone microturbine, UL certified for hazardous oil and gas applications The microturbine runs on onsite unprocessed wellhead gas which is normally flared, providing a power source to the platform The microturbine cut maintenance time by ~95% compared to reciprocating engine generators The microturbine ran almost non-stop for 25,000 Capstone has microturbines running on other platforms in the Gulf of Mexico, Gulf of Alaska, Bay of Campeche, the North Sea, Mediterranean Sea, and South China Sea The Issues: Provide a reliable power source in a hazardous oil and gas application on an offshore platform in the Gulf of Mexico Recover value from onsite flare gas which is normally lost to the environment

34. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Offshore Installations Deployed in the Gulf of Mexico

35. © 2008 Capstone Turbine Corporation www.capstoneturbine.com Conclusions Ideal power generation for oil & gas installations, onshore and offshore More than 5,000 Capstone MicroTurbines sold and 19+ million operating hours Fuel Gas from 350 BTU – 2500 BTU with up to 7% H2S Low emissions of less than 9 ppm NOx Lowest maintenance cost of 0.016 $/kWh with 6 hours/year of planned maintenance No lubricants or coolants

36. © 2008 Capstone Turbine Corporation www.capstoneturbine.com