1. Bechtel Consulting Working Group 3 Meeting - 1st December 1998 AUTO OIL II PROGRAMME - FUELS TECHNOLOGY STUDY PRESENTATION TO WORKING GROUP 3 - 1st December 1998 - Neil Richardson Pieter du Preez

2. Bechtel Consulting Working Group 3 Meeting - 1st December 1998 AUTO OIL II PROGRAMME - FUELS TECHNOLOGY STUDY CENTRAL OBJECTIVE To determine the incremental capital and operating costs to the EU oil refining industry of implementing the Auto Oil II provisions

3. Bechtel Consulting Working Group 3 Meeting - 1st December 1998 AUTO OIL II PROGRAMME - FUELS TECHNOLOGY STUDY METHODOLOGY 2000 the Base Year Consider 2005 and 2010 Fix mandated product specifications Vary other selected specifications as will improve air quality Evaluate cost Iterative process

4. Bechtel Consulting Working Group 3 Meeting - 1st December 1998 AUTO OIL II PROGRAMME - FUELS TECHNOLOGY STUDY LINEAR PROGRAMMING For multi-variable problems Variables must be linearly related An optimisation technique Can maximise/minimise a given parameter, e.g. cost Widely used throughout the downstream oil industry

5. Bechtel Consulting Working Group 3 Meeting - 1st December 1998 AUTO OIL II PROGRAMME - FUELS TECHNOLOGY STUDY INPUTS Product demands and specifications Crude oil availability and prices Plant capacities Plant building options and costs

6. Bechtel Consulting Working Group 3 Meeting - 1st December 1998 AUTO OIL II PROGRAMME - FUELS TECHNOLOGY STUDY OUTPUTS Incremental plant building required and its cost Refinery fuel requirement Impact on product price differentials Pressure points in the refining system

7. Bechtel Consulting Working Group 3 Meeting - 1st December 1998 AUTO OIL II PROGRAMME - FUELS TECHNOLOGY STUDY OUR APPROACH Consultative Collaborative Flexible Independent

8. Bechtel Consulting Working Group 3 Meeting - 1st December 1998 AUTO OIL II PROGRAMME - FUELS TECHNOLOGY STUDY Refinery Types Hydroskimming FCC Hydrocracker FCC plus Hydrocracker

9. Bechtel Consulting Working Group 3 Meeting - 1st December 1998 AUTO OIL II PROGRAMME - FUELS TECHNOLOGY STUDY Gasoline 2000Model Vap. PresskPa6048 E100/E150% v/v46/7550/90 Olefins% v/v188 Benzene% v/v10.7 Oxygen% m/m2.74.0

10. Bechtel Consulting Working Group 3 Meeting - 1st December 1998 AUTO OIL II PROGRAMME - FUELS TECHNOLOGY STUDY Diesel 2000Model Cetane No5158 DensityKg/m 3 845820 Distillation 95% °C 360310 PAH% m/m112

11. Bechtel Consulting Working Group 3 Meeting - 1st December 1998 AUTO OIL II PROGRAMME - FUELS TECHNOLOGY STUDY Meeting Gasoline Specifications Vapour PressureRemoval of C 4 and C 5 DistillationCutpoint and cracking OlefinsEthers and alkylate BenzeneFractionation and reformate treatment OxygenPurchase & production of oxygenates

12. Bechtel Consulting Working Group 3 Meeting - 1st December 1998 AUTO OIL II PROGRAMME - FUELS TECHNOLOGY STUDY Meeting Diesel Specifications Hydrotreating Aromatic saturation Dewaxing Hydrocracking Changing cutpoints Changing blend components

13. Bechtel Consulting Working Group 3 Meeting - 1st December 1998 AUTO OIL II PROGRAMME - FUELS TECHNOLOGY STUDY Capital Costs Assume an average size for new plant required and estimate cost Calculate the capital cost per tonne of feed Input to model annual capital recovery charge yielding a target rate of return

14. Bechtel Consulting Working Group 3 Meeting - 1st December 1998 AUTO OIL II PROGRAMME - FUELS TECHNOLOGY STUDY Other Issues Fuel composition and heating value Fuel and Loss Carbon Dioxide Sulphur Dioxide