Presentation from 2009 Heavy Oil Technologies Conference - Calgary, AB, Canada

1. Hydrogen
Reliability
Salt Cavern Case Study
Oil Sands & Heavy
Oil Technologies
July 16, 2009
Praxair Canada Inc. – Calgary, Alberta, Canada -1-

2. About Praxair
 Largest Industrial Gas Company in North and
South America, one of the largest worldwide
– 27,000 employees
– 2008 sales: $10.8 Billion USD
– Global Fortune 300 company listed on NYSE (PX)
– Holds almost 3,000 patents
 Praxair's primary products are:
– atmospheric gases (oxygen, nitrogen, argon and rare gases)
– process & specialty gases (carbon dioxide, helium, hydrogen,
semiconductor process gases, acetylene)
Praxair Canada Inc. – Calgary, Alberta, Canada www.praxair.com
-2-

3. Presentation Overview
 Gulf Coast hydrogen infrastructure
– 310 mile pipeline
 Praxair H2 storage cavern
– Overview
– Benefits
 Alberta Cavern Development
– Heartland hydrogen demand
– Cavern Potential
– Cavern supply model
– Integration to existing Praxair network
Praxair Canada Inc. – Calgary, Alberta, Canada -3-

4. Gulf Coast Hydrogen Infrastructure
HYDROGEN SOURCES
CAVERN STORAGE
Cavern and Pipeline system connected to 11 out of 14 refineries
Cavern and Pipeline system connected to 11 out of 14 refineries
Praxair Canada Inc. – Calgary, Alberta, Canada -4-

5. Praxair’s H2 Cavern Overview
Design Basis
Storage Capacity 2.5 Billion CF
H2 to Customers Working Capacity 1.4 Billion CF
Max Storage Pressure 2200 psig
H2 from PX H2 from PX Working Pressure 800 - 2200 psig
Fill Rate ~ 75 MMCFD
Withdrawal Rate pressure
dependent
Cap Rock Commissioned Q4 2007
 Cavern Consists of:
– Injection compressor with
ancillary equipment
– Hydrogen product dryer
H2
Salt Storage
– Associated metering and
Dome control equipment
Praxair Canada Inc. – Calgary, Alberta, Canada -5-

6. Cavern Commercialization Goals
 Safe injection / withdrawal of hydrogen
 “Real-time” operation
– add value for supply-system optimization and peak demand
 Establish operational procedures
– informed, timely decision making around sales, withdrawals and
injections
 Key value creation streams:
– Reliability sales (sales within firm volume)
– Operational and sourcing optimization
– Spot sales (sales outside of firm volume)
Added flexibility for both Praxair and refiners!
Praxair Canada Inc. – Calgary, Alberta, Canada -6-

7. Cavern Support Infrastructure
More than just a hole in the ground…
Praxair Canada Inc. – Calgary, Alberta, Canada -7-

8. Cavern Benefits
 Instant Sales Capability
– Planned customer turnaround
Excess Supply – FILL Cavern
– Unplanned customer outage
MMSCFD
– 3rd party supply interruptions
 Superior System Reliability
– Praxair facility turnaround
– Praxair equipment outages Peak Demand - WITHDRAW
– Feedstock / Utility interruptions Time
 Operational Considerations
– Enable steady state operations
– Provide low demand “sink”
– Improved pipeline operability
Praxair Canada Inc. – Calgary, Alberta, Canada -8-

9. Example: Customer Backup
Daily Purchase
LPG Light Naphtha
X mmscfd H2 Fm FCC
Cavern Supply
50 mmscfd H2 Alky
LPG Alkylate
Naphtha E Gasoline blend
G
UTA
Reformer
O
Kero
HDS Kero/Jet
Crude Unit
Diesel Diesel
Crude HDS
G.O. PP
HT
FCC Gasoline
Lubes
Vacuum unit
unit
Coker
unit
Coke
Cavern Supply Can Help Avoid Cutback of Profitable Units
Cavern Supply Can Help Avoid Cutback of Profitable Units
Praxair Canada Inc. – Calgary, Alberta, Canada -9-

10. Cavern Benefit Examples
 Praxair H2 Product Availability
– 11 Praxair sources on the network
– Backup supply mitigates risk of H2 production unit outage
 Hydrogen back up on instantaneous basis
– Unexpected outages at customer sites
– On purpose H2 production units / byproduct sources / third party
 Operational Flexibility
– Startup / shutdown of world scale SMRs can be avoided
– Coverage of SMR type demand for short 24 hour type periods without
calling on an SMR for start up
» Example: waiting for demand of large user to stabilize before cycling a
world scale reformer for start up
– Sink for excess H2
Praxair Canada Inc. – Calgary, Alberta, Canada -10-

11. Praxair H2 System Availability
US Gulf Coast Pipeline (BAPOC) 2005-present
100.00%
99.00%
98.00%
97.00%
96.00%
95.00%
94.00%
93.00%
92.00%
91.00%
90.00%
89.00%
88.00%
87.00% Cavern Hurricanes
86.00% Hurricane Rita Commercialized Ike and Gustav
85.00%
5 5 6 6 7 7 8 8 9
00 00 00 00 00 00 00 00 00
/2 /2 /2 /2 /2 /2 /2 /2 /2
1/1 7/1 1/1 7/1 1/1 7/1 1/1 7/1 1/1
Cavern provides ability to ramp up production units
Praxair Canada Inc. – Calgary, Alberta, Canada -11-

12. What About Alberta? CP RAIL
NORTHERN
LIGHTS -
TOTAL
CP RAIL CP RAIL
AGRIUM
CP
 Dynamic H2 Market
RAIL
SUNCOR FORT HILLS
(PETRO
CANADA) NORTH WEST
UPGRADING IMPERIAL
PIPELINE
DEGUSSA STATOIL TEXACO
HYDRO
– Existing large demand
KINDER
ACCESS
PIPELINE MORGAN
BA
ENBRIDGE
ENERGY CP
PROVIDENT
RAIL
– Need for reliable supply
ENERGY
SUNWEST
SHELL ENERGY
CN SCOTFORD
RAIL
ATCO STATOIL
– New upgrading / refining STURGEON COUNTY HYDRO
SUNCOR
GULF TRANS
CHEM.
projects proposed
CANADA
CN
Drawing not to scale AUX
SABLE
TOTAL
RAIL STRATHCONA COUNTY
– representation only
GEMINI
 Existing Infrastructure
KEYERA
FORT
DOW
EXISTING
SASKATCHEWAN
AGRIUM PRAXAIR H2
– Salt Cavern storage of SHERRITT
PIPELINE
hydrocarbons 21 KM
ALCAN
EDMONTON
– Multiple Praxair facilities
PETRO
Praxair Infrastructure:
– Praxair H2 Pipeline GIBSON
ENERGY
KINDER
CANADA
ASU Complex
MORGAN
PEMBINA
IMPERIAL
OIL
PIPELINES ENBRIDGE
PIPELINES
CO2 / Dry Ice Facility
PDI Cylinder Depot
Similar to US Gulf Coast Hydrogen Pipeline
PDI
Praxair Canada Inc. – Calgary, Alberta, Canada -12-
ALBERTA
ENVIRO Nitrogen Pipeline
FUELS

13. H2 Demand – Industrial Heartland & Edmonton Area
2
H2 Demand Profile
2,160
2,025
1,890
1,755
1,620 Proposed Projects
1,485
MMSCFD
1,350 (new project demand)
1,215
1,080
945
810
675
540 Existing Hydrogen Demand
405
270
135
-
9 0 1 2 3 4 5 6 7 8 9 0
200 201 201 201 201 201 201 201 201 201 201 202
Figures above based on existing demand and Project Applications
Petrochemical volumes not included in above
Praxair Canada Inc. – Calgary, Alberta, Canada -13-

14. Ideal Upgrader / Refinery Operation
Flow
Unit #2 Hydrogen
Production
Unit #1
Upgrader / Refinery
Production
Time
 By-product Hydrogen (non-SMR) is reliability-challenged and base
assumption in creation of reliability model
 Reliability model developed to assess impact of different modes of
operation on the facility when operating ‘non-ideally’
Ideal but unrealistic
Praxair Canada Inc. – Calgary, Alberta, Canada -14-

15. Reliability Model
N+1 Gasifier Reliability Incl. Switching Losses Input Data Only Into Cells Highlighted in Yellow!!
74% 66% 55% 0% Vol (MMscfd) Working Cavern Reliability 1 Reliability 2 Reliability 3 Reliability 4
Days Train 1 Train 2 Train 3 Train 4 Total Sales Storage Vol 90.0% 90.0% 90.0% 80.0% Reliability
1 60 60 0 120.0 116 4 323 9 8 7 8 Shutdowns/year
2 60 60 0 120.0 116 4 327 40.6 45.6 52.1 45.6 Cycle length
3 60 60 0 120.0 116 4 331 36.0 41.0 46.0 36.0 Days On-Line
4 60 60 0 120.0 116 4 336 4.0 4.0 6.0 9.0 Days Off-line
5 60 60 0 120.0 116 4 340 360 360 364 360
6 60 60 0 120.0 116 4 344 Train 1 Train 2 Train 3 Train 4
7 60 60 0 120.0 116 4 349 90% 90% 90% 80% Reliability (%)
8 60 60 0 120.0 116 4 353 9 8 7 8 Shutdowns per year
9 60 60 0 120.0 116 4 357 0 0 0 0 Initial Delay (Days)
10 60 60 0 120.0 116 4 362 60 60 60 60 Capacity (MMscfd)
11 60 60 0 120.0 116 4 366
12 60 60 0 120.0 116 4 370 Initial Cavern Volume (MMscf) No. of Trains Longest Run length Delay Gasifier 1 Start
13 60 60 0 120.0 116 4 375 318 3 46.0 No
14 60 60 0 120.0 116 4 379 Insert Yes or No to stagger start-up of Gasifier 1
15 60 60 0 120.0 116 4 383 Avg Daily Sales
16 60 60 0 120.0 116 4 388 115.7 MMscfd Spare Operation
17 60 60 0 120.0 116 4 392 Yes
Switch H2 Loss (% of 2nd Day Upgrader Impact (% Insert Yes or No to allow
18 60 60 0 120.0 116 4 396 Simulation Length gasifier output) of 1st day) 4th Train Standby Option
19 60 60 0 120.0 116 4 401 2920 Days 50 0
20 60 60 0 120.0 116 4 405 2920 Maximum (increments of 10) (increments of 10)
21 60 60 0 120.0 116 4 409 Cavern Max Vol 666 1st Yr Availability
22 60 60 0 120.0 116 4 413 Cavern Min Vol 293 97.0%
23 60 60 0 120.0 116 4 418 Working Vol 373 2nd Yr Availability
24 60 60 0 120.0 116 4 422 Cavern Size 666 96.3%
25 60 60 0 120.0 116 4 426 Max Cavern Inflow 4 Cavern - 2.5 bscf size 8 Yr Availability Avg
26 60 60 0 120.0 116 4 431 Max Cavern Outflow (116) 96.4%
27 60 60 0 120.0 116 4 435
28 60 60 0 120.0 116 4 439 Multi-Train Gasifier Volumes
29 60 60 0 120.0 116 4 444 150.0
Vol MMSCFD
30 60 60 0 120.0 116 4 448
100.0
31 60 60 0 120.0 116 4 452
32 60 60 0 120.0 116 4 457 50.0
33 60 60 0 120.0 116 4 461
34 60 60 0 120.0 116 4 465 0.0
35 60 60 0 120.0 116 4 470 1 31 61 91 121 151 181 211 241 271 301 331 361
36 60 60 0 120.0 116 4 474 Days
37 0 60 60 90.0 116 -26 448
1890 60 60 0 120.0 116 4 453
1891 60 60 0 120.0 116 4 458
1892 0 60 60 90.0 116 -26 432
1893 0 0 60 30.0 116 -86 346
• •time-series probability model
time-series probability model
2917 60 0 60 120.0 116 4 335
2918 60 0 60 120.0 116 4 340
2919
2920
60
0
0
60
60
60
120.0
90.0
116
116
4
-26
344
318
• •scenario analysis
scenario analysis
Praxair Canada Inc. – Calgary, Alberta, Canada -15-

16. Facility Lags Hydrogen
Praxair Canada Inc. – Calgary, Alberta, Canada -16-

17. Hydrogen Backup
Flow
H2 from Unit #2 Hydrogen
Network Supply
Unit #1
Cavern / Pipeline Supply
Production Levels
Upgrader / Refinery
Maintained Production
Time
 Cavern/pipeline backup adds flexibility, smoothes H2 supply
– self supporting – store hydrogen during periods of max production
– allows capture of hydrogen during periods of surplus
– allows for import of 3rd party hydrogen (and sale of surplus H2)
Cavern / pipeline integration maximizes reliability
Praxair Canada Inc. – Calgary, Alberta, Canada -17-

18. Upgrading Impact – Gasifier Example
300.0 H2 Supply
U p g r a d in g ( b b l/d a y ) Vol MMSCFD
200.0
100.0
0.0
1 31 61 91 121151181211241271301331361391421451481511541571601631661691721
100,000 Upgrader Throughput
Days
80,000
60,000
40,000
No Cavern Support
20,000
Cavern Supported
-
0 100 200 300 400 500 600 700
Time (Days)
Days
6% loss in capacity without cavern backup
6% loss in capacity without cavern backup
2% loss in capacity if self-supported via cavern
2% loss in capacity if self-supported via cavern
0% loss in capacity with 3rd party back-up plus cavern
0% loss in capacity with 3rd party back-up plus cavern
Praxair Canada Inc. – Calgary, Alberta, Canada -18-

19. Alberta Cavern Development
 Pre-feasibility completed
– Desktop study
– Preliminary location identified
– Working with ATCO Energy Solutions
on Cavern development
CAVERN
– Non-invasive testing performed SITE
 Lead-time ~3 yrs for 1st cavern
– Additional year for 2nd cavern
 Financial options
– Tolling fee / Dedicated volume
– Joint venture
Complements Praxair’s
existing network
Praxair Canada Inc. – Calgary, Alberta, Canada -19-

20. Praxair - Oilsands Capabilities
Mine // SAGD
Mine SAGD Upgrading // Refining
Upgrading Refining Reliability
Reliability
H2 Steam
H2 Cavern
H2 Cavern
H2
Gasifier
Gasifier SMR
SMR H2 Pipeline
H2 Pipeline
Photo: http://news.bbc.co.uk O2 Energy Studies
Energy Studies
CO2
Utility Nitrogen //
Utility Nitrogen
CO2
CO2 CO2
CO2 EOR //
Oxygen
Oxygen ASU
ASU EOR
Capture Compression
Capture Compression Sequestration
Sequestration
Vessel &
Vessel &
Pipeline Purging
Pipeline Purging
Cylinders
Cylinders
ASU - Oxyfuel
ASU - Oxyfuel Purging, Cylinders, N2, O2…
Purging, Cylinders, N2, O2…
Upstream, downstream and in between…
Praxair Canada Inc. – Calgary,is your full service Industrial Gas Supplier!
Praxair Alberta, Canada -20-

21. Praxair Alberta Value Proposition
- Air Separation Unit
- Bulk Industrial Gases
- CO2 Capture and Compression
- Cylinders, Welding Supplies
Jim McKay & Related Equipment
Oilsands Business Development - Energy Studies
Calgary, Alberta - High Performance Coatings
- Hydrogen Supply
(O) 403-385-2348 - Leak Detection
- Oxyfuel Burners
(C) 403-462-5768 - Sulphur Recovery Unit Oxygen
- Vessel and Pipeline Purging Services
jim_s_mckay@praxair.com
Praxair Canada Inc. – Calgary, Alberta, Canada -21-