Mike Stewart Manager, Carbon Group

1. Global Petcoke Outlook Here today but … where tomorrow? Mike Stewart Manager, Carbon Group

3. Petroleum Coke Quarterly www.petcokes.com A Publication of Jacobs Consultancy Inc. Coal Tar Pitch Report World Outlook Annual Report www.petcokes.com A Publication of Jacobs Consultancy Inc. Jacobs Consultancy

4. Jacobs Consultancy • Formerly The Pace Consultants Inc. - practice founded in 1957 • Refining, petrochemicals, natural gas and power generation • Parent – Jacobs Engineering Group (NYSE: JEC) • The Carbon Group – Providing a market and technical consulting serviceto the worldwide petroleum coke and binder pitch markets • Since 1983, the authoritative and unique source on petroleum coke and other carbon products • Pace Petroleum Coke Quarterly (PCQ) & petcokes.com services • Focused Multi-Client Reports (Calcined Petroleum Coke, Coal Tar Pitch) • Private Single-Client Studies • Carbon Conferences

5. Points for Today • Where we are • Where we’re heading • Where we could be going

6. 2008 Global Refining Capacity Source: January 2008 Oil & Gas Journal

7. 2015 Global Refining Capacity Source: January 2008 Oil & Gas Journal, Jacobs Consultancy

8. Announced Refinery & Upgrader Spending: 2008-2015

9. Jacobs’ Thoughts on Refining • Announced refining capacity • ~ 27 MMBPD (29 w/ upgraders) • Represents $600 billion in Capex • Without upgraders, ~$487 billion • Probability weighted, more likely: • 10.8 MMBPD • $201 billion • Nearly 2/3 built in Asia and Middle East

10. Petcoke Yield for Various Crude Streams

11. World Petcoke Production – 2007* Total Production ~ 88 million DMT Fuel- Grade Calcined Calcined = 22.8 million DMT Fuel-Grade = 68.4 million DMT *Estimated

12. World Petcoke Production – 2007

13. Forecast World Petcoke Production – 2015 Total World Petcoke Production ~ 145 million DMT

14. Petcoke Demand –Cement Production • Cement industry – from secondary fuel to preferred fuel • Many kilns use 100% petcoke • Ash in fuel becomes part of clinker • Supply certainty important • Coal supplier dependability concerns

15. Petcoke Demand –Power & Gasification • US state GHG regulations can hurt, not help, gasification projects • CFB boiler technology still dominates for power • Guacolda – Guacolda 3 • Formosa Plastics – Point Comfort • Cleco – Rodemacher • Entergy – Little Gypsy • NRG Energy – Big Cajun I

16. U.S. Gasification Projects

17. Petcoke Demand –Power & Gasification • Europe Power – lots of unmet demand • U.K. – Ratcliffe & Drax • Others • Gasification very much alive • Other products – H2, SNG, methanol, F-T liquids • Big projects – typically 1.8+ million MT/yr • CCS for EOR being incorporated in some projects • Project finance – adapting to petcoke market

18. The World as We See it Today • Supply limited • Clean fuels regulations in place • Climate change regulations 1-2 years away • Waiting for technology, economics , elections to catch up • High sulfur petcoke ↑ • Low sulfur petcoke ↓ →

19. Likely Impact on Petcoke Markets (2010–2013) • Biggest fuel-grade petcoke production growth areas: • Midwest/St. Lawrence Seaway market • Canada • China • USGC/Caribbean market • USGC production increases by 24% • Many petcoke fueled gasification/power projects being developed • “Timing conundrum” • “Organic” demand growth important but often unrecognized

20. World we wish to see World we will likely see World as it is today World we hope not to see Where Do We Go From Here?

21. The World We Wish to See • Supply / demand balanced, and growing • Science fact prevails • Economics trump politics • Gasification makes sense • Cokers built for capacity, IMO, fuel oil • More for everyone • High sulfur petcoke ↑ • Low sulfur petcoke ↑

22. The World We Likely Will See • Both supply and demand constrained • New cokers start up • High sulfur petcoke ↑ • Low sulfur petcoke ↓ • IMO emission regulations • CO2: cap / trade or carbon tax • Viable Carbon Capture Sequestration (CCS) technology? • Politics are always wrong, and we’ll change and/or pay for it later IMO = International Maritime Organization

23. The World We Hope Not to See • A “No carbon” world • Low carbon fuels • Refining – BAD • Wind, solar, corn cobs – GOOD • Cokers needed, but to sequester carbon? • Gasification is the answer, but NIMBYs and economics prevent from happening • “No sulfur” petcoke? NIMBY = Not in my back yard

24. What Are the Wild Cards? • New government regulations • Greenhouse gases (CO2) • MARPOL VI low sulfur bunker fuels • Oil use reduction standards or vehicle mileage standards • Alternative fuels • Ethanol, biodiesel, gas to liquids, coal to liquids • Global and regional economies • Recession will push projects back • Major political upheaval

25. Potential Impact of MARPOL VI Cost to shippers = $120 B Cost to refiners = $125 B Impacts petcoke supply & quality No impact to petcoke

26. MARPOL – Impact for Petcoke • What could be the ultimate impact if ships can’t burn bunkers? • Assume Arab Light as crude oil source • 55+ cokers (50,000 bpd each) • Potential petcoke production of 55 million DMT / year

27. A Take-away:What Should You Watch? • Political winds – who gets elected • Continuing government involvement • New emissions regulations • Permitting • Economy • China, India, US are key markets – continuing strong economies will allow projects to go forward • Resources • Shop space, materials, labor will be a cap on everything getting done on budget, within schedule • Funding – a critical issue • Projects with deep pocket sponsors will get funded and built • When the price tag gets too big, even deep pockets will scale back or rethink

29. Questions? Comments? Zingers and barbs?