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Petroleum Coke Gasification Sweeny ESweeny E--GasGas™™ ProjectProject

Michael CulliganManager, Sweeny Gasification Project Development

October 7, 2008

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Key Points

• ConocoPhillips believes gasification technology and CCS will expand low carbon energy supplies

• Sweeny E-Gas™ and Kentucky SNG Projects will be industry leading gasification and CCS projects

• E-Gas™ technology offers feedstock and product flexibility and brings an owner’s mentality

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ConocoPhillips Purpose and Objectives

U.S. natural gas supply and demand

DOE 2008 Energy Outlook (reference case)

IEA 2007 World Energy Outlook

Global oil demand• Increase and diversify energy/fuel supplies

• Develop and apply technology and innovative solutions

• Minimize environmental footprint

• Increase shareholder value

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Expanding Energy Supply via Technology

SNGSNGIGCCIGCC

CTLCTL

• Converting abundant coal and petcoke to SNG, power, fuels and chemicals expands and enhances the energy mix

• Gasification is competitive with unconventional and alternative resources– Competitive with conventional resources in a

carbon constrained world

– Cost increases have slowed projects

– Incentives can facilitate projects

• Solving environmental concerns a key to success– Cost effective technology solutions

– Clear rules and regulations for carbon capture and storage (CCS)

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Public Policy Positions and Engagement

• Engaged in development of Climate Change Policy

– Support a coherent, mandatory national framework

• Signal for cost of carbon• Paced to match technology• Equitable across sectors

– Leverage our skills to drive emerging technology

• Carbon capture and storage

• Supportive of a comprehensive energy policy

• Access to resources• Development of new supplies / fuels• Public education

• Water Management– Qatar Global Water Sustainability Center

Offering technical insight and economic realismOffering technical insight and economic realism

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Where is ConocoPhillips FocusedLargest AK Producer

Denali and McKenzie Delta Gas Pipelines

Largest Position in Canadian Oil Sands

EnCana JV

2nd Largest N.A. Gas Producer & Refiner

Legacy N. Sea Position Strong Refining Assets

Growing Positions in Asia, ME and Russia/Caspian

Origin Energy JV CBM to LNG*

Qatargas 3 LNGShah Sour Gas (UAE)

Saudi Refinery JV

20% owner of LUKOIL with joint projects

Potential Gasification and CCS Site/Area

SweenyKY SNG (w/ Peabody Energy)

Immingham

ConocoPhillips Asset Area

*CBM = coal bed methaneLNG = liquefied natural gas

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Approach to Developing Gasification Projects

• Global Energy Company– Natural gas and heavy oil focus– Strong in OECD countries

• Technology Developer and Licensor– Coking, desulfurization & biofuels– E-Gas™ gasification technology

• Experienced Major Project Manager and Operator– HSE a major priority– Reliability & efficiency

Company AttributeCompany Attribute

• Resource Development Focused– Expanding energy supplies– Complement existing assets

• Leverage and Improve Technology– Gain access to new resources– Continuously improve and speed

technology to market

• Predictable and Reliable Projects– Owner’s risk mentality– Disciplined approach

Gasification ApproachGasification Approach

Momentum is building to build and license EMomentum is building to build and license E--GasGas™™ projectsprojects

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Sweeny E-Gas™ Project - Overview

• Located adjacent to the Sweeny Refinery in Brazoria County, TX

• Conceptual engineering completed in June 2008

• Two concepts will be developed during the feasibility phase (FEL1)– SNG + H2 and IGCC + H2*

– Final concept selection in 2009

• CCS options, including enhanced oil recovery (EOR), are under development

• Bechtel Corporation (Houston) selected as primary FEL1 contractor

• Anticipated start-up 2014 - 2015*SNG = substitute natural gas (methane)IGCC = integrated gasification combined cycle+ H2 = hydrogen co-production

Census Data provided by ESRI ® Data & Maps 2005

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Sweeny Complex Overview

• Refinery processes 247 MBD crude oil– Produces about 5 MTD petroleum coke

– Natural gas and hydrogen pipelines

– Large site for expansion near petcoke storage

• Chevron Phillips Chemical Company LP– Processes 115 MBD NGL

– Produces 5.4 billion lb/yr ethylene and propylene

– Clemens underground storage facility that includes 2 BCF natural gas and 1 BCF hydrogen

– Shares utilities and common facilities

• 440 MW gas-fired cogen power plant– COP and GE 50% partners (SCLP)

– Provides steam and power to complex

– Excess power to ERCOT grid

Excellent location due to:Excellent location due to:•• petcoke supplypetcoke supply•• infrastructure synergyinfrastructure synergy•• energy/Henergy/H22 demand demand •• market accessmarket access•• COCO22 storage optionsstorage options•• experienced workforceexperienced workforce

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Sweeny E-Gas™ Project – Options Considered

Petcoke SyngasH2 + CO

CO2 Capture –EOR/Storage

Low Carbon Power/Steam

H2/CO Sales

Methanol/MTO

SNG - Pipeline

Fischer Tropsch

Syngas to Sweeny Cogen

New F Class IGCC (ERCOT)

Pipeline Sale

Sweeny Complex

Methanol

MTP/MTO

CTL/FT with Product Upgrade: 10 Mbpd

IGCC with Pilot FT 1 Reactor: 2 Mbpd

Sweeny Complex

Pipeline Sale

IGCC + HIGCC + H22 and SNG + Hand SNG + H22 chosen for more detailed feasibility studychosen for more detailed feasibility study

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Gasification IslandGasification Island• Air Separation Unit• E-Gas™ Technology• CO Shift• Acid Gas Removal• Sulfur Recovery Unit• Refinery Integration

Sweeny Petcoke

3rd Party Petcoke

Refinery Waste Water

SulfurSlag

Waste Water

Carbon Capture & StorageCarbon Capture & Storage• Incremental capture cost and utilities• CO2 Compression• CO2 Transportation

HydrogenHydrogen• PSA• Tail gas clean-up • H2 Compression

SNG/MethanationSNG/Methanation• Methanation• Steam Power• SNG Compression

IGCC/Power IGCC/Power • CO2 Capture• High H2 Power Block• Heat Recovery Steam

Generator/Turbine

oror

withwith

CO2

Syngas

Hydrogen to Gulf Coast pipelines &/or Sweeny complex

Power to ERCOT Grid

SNG to Sweeny complex

or HSC pipelines

CO2

to EOR or StorageN

Sweeny E-Gas™ Project FEL1 Scope

4 - 5 MMTe/yr

~100 MMscfd

~400 MW (net)

65 – 130 MMscfd

Concept selection based on FEL1 engineering results, Concept selection based on FEL1 engineering results, regulatory developments and market outlook in 2009regulatory developments and market outlook in 2009

Project LocationProject Location

COP Aerial Photo

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Sweeny E-Gas™ Project – CCS/EOR Options

Numerous EOR & storage options being workedNumerous EOR & storage options being worked

Denbury’s Resources Inc. ““Green PipelineGreen Pipeline””

Permits in progress & buying ROW – multiple fields planned for EORSaline

(Net Sand Grid from Gulf Coast Carbon Center, based on

Galloway et al., 1982)

Frio Saline Reservoir Net Sand Map

Offshore Storage

100 mi radius from the Sweeny Complex

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Key Challenges

• Hyper-inflation– Linkage between capital cost and product prices

• Climate change regulation– Impact on scope, prices, and schedule

• Stakeholder engagement– Gaining support or non-objection (especially for CCS)

Evolving effort to address all challenges and advance project Evolving effort to address all challenges and advance project

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Kentucky SNG Project Update

OxygenOxygen

CoalCoal

Petroleum CokePetroleum Coke

GASIFICATION

SYNGASCONDITIONING

METHANATION

COCO22 for future for future EOR or storageEOR or storage

60 BCFY of SNG60 BCFY of SNG

1.8 TCF over 30 year life1.8 TCF over 30 year life

SlaSlagg

Outside of Project Scope

SulfurSulfur

ASU

Mine

Refinery

StatusStatus• Completed

Feasibility Study (FEL1)

• Engaged key technology suppliers

• Funding KGS CO2 test well to be drilled Q1 2009

Continuing to advance project targeting operation by 2015Continuing to advance project targeting operation by 2015

ConocoPhillips and Peabody Energy are jointly progressing a mine-mouth coal and petcoke gasification project that would produce substitute natural gas (SNG) in western Kentucky

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Commercially proven on multiple coals and petcoke

Two stage design enhances process flexibility

E-Gas™ Technology UpdateTechnologyTechnology• Design & operational

enhancement from Wabash experience

• Increased throughput, efficiency and reliability

• Optimized cost• Process integration

improvements

LicensingLicensing• Continued focus on

key N.A. projects• Increased emphasis in

Asia – China office• Select opportunities

elsewhere

SlurryOxygen

SlurrySlurry

Oxygen

Raw Syngas~ 1900F

Slag

CharRecycle

First Stage 2600 FSlag QuenchWater

2nd

Stage

KEY FEATURESTwo Stage Design

Slurry Fed, Oxygen Blown

Entrained Flow

Refractory Lined

ADVANTAGESContinuous Slag Removal –

No Lockhoppers

Dry Char Recycle No Wastewater Generation

No Carbon Lost

Separate Fire-tube Syngas Cooler

Installed NG Start-Up Burners

Contact our EContact our E--GasGas™™ technology team for more information!technology team for more information!

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Summary

• ConocoPhillips believes gasification technology and CCS will expand low carbon energy supplies

• Sweeny E-Gas™ and Kentucky SNG Projects will be industry leading gasification and CCS projects

• E-Gas™ technology offers feedstock and product flexibility and brings an owner’s mentality

Thanks for your attention!Thanks for your attention!