Corrosion Monitoring System YESTERDAY’S EXPERIENCE… TODAY’S TECHNOLOGY

1. Corrosion Monitoring SystemYESTERDAY’S EXPERIENCE…TODAY’S TECHNOLOGY

2. Today's Outline • Who is TXINS • Corrosion Market Drivers • General Corrosion • Corrosion & Corrosion-Assisted Cracking • Hydrogen Damage • Corrosion Inhibitors • How TXINS’s Monitor Works • Overview of the TXINS System • Applications • Installation • Data Acquisition & Reporting • Benefits, Limitations & Costs • Common Questions Asked

3. Who is TXINS? TXINS : • Corrosion Monitors • NACE Inspectons • Industrial Coating Specifications TXINS is a group of individuals dedicated to the Corrosion Protection Industry with well over 100 years of experience. TXINS takes years of experience coupled with today’s technology and produces accurate, real-time, cost savings for their clients.

4. What’s Driving the Market Approach to Corrosion Monitoring? • Corrosion expenditures increasing • Major drivers: • Aging infrastructure • Higher pressures and temperatures • Higher concentrations of acid gases (e.g., CO2, H2S, Cl-) • Environmental costs associated with leaks or spills and lost production & commodity

5. What’s Driving the Market Approach to Corrosion Monitoring? • (cont.) • Drilling in environmentally sensitive areas under stringent regulations & environmental impact legislation. • Integrity management programs costs • $2.8 – $4.6 billion annually, about 10 – 15% of • company’s maintenance expenditures.

6. Internal Corrosion is #1 Issue for Production Pipelines 57.7% Total # of Releases 12191, Pipeline Releases by Cause for all years combined

7. What’s Driving the Market to Change its Approach to Corrosion Monitoring? • Current corrosion detection methods employed are reactive • High-resolution “smart pigging”, measures wall loss, “REACTIVE” • Hydrostatic testing, integrity of the pipe wall “PRO-ACTIVE” • Direct assessments, visual inspection, “REACTIVE” • Corrosion Coupons, weight loss, “REACTIVE” • FSM-IT inspection, again wall loss, “REACTIVE” • Liquid and Gas sampling, “PRO-ACTIVE, but limited to sampling areas is an intrusive technology” • TXINS Monitoring, “PRO-ACTIVE”, monitors the change in the production of hydrogen directly proportional to the corrosion rate.

8. Corrosion Monitor Comparison

9. Corrosion Monitor Comparison

10. General Corrosion • This term is reserved for straightforward dissolution of a metal in corrosive water • Example: dissolution of steel in HCl. Simple systems like this serve to demonstrate the electrochemical basis of corrosion reactions, e.g.:anodic reaction: Fe ----> Fe++ + 2 e- (e = electron)cathodic reaction: 2 H+ + 2 e- ----> H2 (hydrogen gas)

11. Corrosion and Corrosion-Assisted Cracking • Depending on the reservoir composition, • carbon dioxide (CO2) • hydrogen sulfide (H2S), or a combination of both can be present in hydrocarbons. • The terms "sweet" and "sour" are used in the oil and gas industry to identify hydrocarbons that contain CO2 and H2S, respectively.

12. Corrosion and Corrosion-Assisted Cracking • In the oil and gas industry, water is the catalyst for corrosion. When water is combined with CO2 or H2S the environments form the following reactions: • H2CO3 Reaction:Fe+H2CO3->FeCO3+H2 • H2S Reaction:Fe+H2S+H2O->FeS+2H • Or combination if both gases are present

13. Hydrogen Damage • Hydrogen may enter a metal surface by the cathodic reduction of hydrogen or water: • 2H+ + 2e- → 2H Absorbed (acidic waters) 2H2O + 2e- → 2H Absorbed + 2OH- (neutral waters) • Normally, the absorbed hydrogen at the surface recombines to form hydrogen gas: • 2H Absorbed → H2 • Sulfide (S2-), prevents Hydrogen gas from forming.

14. Hydrogen Damage Hydrogen Induced Cracking (HCI), or Blisters. H2 Outside Metal Surface H H Inside Metal Surface Corrosive Environment

15. Hydrogen Damage • Hydrogen may enter a metal surface by the cathodic reduction of hydrogen or water: • 2H+ + 2e- → 2H absorbed (acidic waters) 2H2O + 2e- → 2H absorbed + 2OH- (neutral waters) • Normally, the absorbed hydrogen at the surface recombines to form hydrogen gas: • 2HAbsorbed → H2 • Sulfide (S2-), prevents Hydrogen gas from forming.

16. Corrosion Inhibitors d ?

17. Satellite Monitoring equipment, above ground level Liquid Epoxy Adhesive TXINS Monitoring Systems Vessel - Cap under vacuum External Pipe wall H 0 H2 H 0 H2 H 0 H 0 H 0 H 0 Pipe Wall H 0 Anodic Area Cathode Area H 0 Cathode Area H 0 e- H 0 e- e- e- e- OH- OH- OH- Fe ++ Fe ++ H 0 Internal gas/liquid Environment Fe ++ H 0 H 0 H 0 H2 H 0 Fe(OH)2 H 0 Inhibitor film How TXINS’s Monitor Works

18. Permeation Rates of H0 VS Carbon Steel Thickness

19. Table of Corrosion Scenarios Hydrogen Permeability of Steels

20. TXINS T-1 or T-2 System Remote Communications Via Satellite TXINS’s T-1 or T-2 Monitor Non Intrusive Hydrogen monitoring Cap ATOMIC HYDROGEN FROM CORROSION

21. Applications Any metal substrate where hydrogen is being produced as a result of the corrosion process. • Pipelines (Natural Gas) • Pipelines (Condensate) • Treaters • Vessels • Amine Towers • Refinery • Pipelines (Sour) • Pipeline (Sweet) • Gas Plants • Water Disposal • Petrochemical • Water Floods • Closed or Sealed Rolling Stock (rail cars or tanker trucks)

22. ApplicationsGas and Oil Production (H2S) • Oil/Gas Gathering and Transmission Lines • Oil/Gas Well Heads • Sour Water Flood Lines • Underground Gas Storage Facilities

23. ApplicationsGas-Oil Separation Plants and Gas Plants (H2S) • Amine Units – Inlets, Outlets, transfer lines • Contactors • Absorbers • Flash Drums • Wash Columns and Drums • Blow down Drums • Flare Lines • Sour Water Strippers • Sour Gas Gathering Lines • Fractionators • Catalytic Cracker – overhead recovery system • Hot Wells • High and Low pressure sour gas separators

24. ApplicationsRefinery HF Alkylation Units • Acid Settler Tanks • Accumulators • Condensors • Depropanisers • Transfer Lines • Recontactors

25. Installation of the Equipment • Site preparation – hand tool only to white metal • Bonding the vessel to the pipe - Liquid epoxy • Mechanically clamp the vessel to the pipe • Mount monitoring equipment to a pole above ground or to secured area on the rolling stock

26. Reporting • Graphical representation of corrosive activity • Programming alarms can be set by Client • All client information is password protected for their use only

27. Graph Showing 2 Corrosion Events ABC Co. 2nd Event 1st Event

28. Re-evacuate Re-evacuate Re-evacuate Re-evacuate Re-evacuate Re-evacuate Customer #2

29. Customer #2

30. Benefits • Real time data • Records • Non-intrusive • Low maintenance • Remote capability • Coordinates corrosion programs • Cost effective

31. Benefits (cont.) • No down time • Works in Conjunction with other Technologies • Early Corrosion Detection • High Risk Remote Areas Can be Monitored • Low Installation and Operating Costs • High Temperature Installations (200˚C) “Can be placed on higher temperature if welded”

32. Limitations of the Technology • No correlation of TXINS data to intrusive probes or corrosion coupons • Does not work in fully oxygenated water systems or ponds • Each system has to be looked at individually, no comparison

33. Costs • Standard Satellite Unit costs will vary dependent on how many transducers are included • Remote Satellite data collection and download of data at competitive rates $75-100/month/unit • Remote Cellular data collection and download of data at competitive rates • Installation costs will vary as a result of location and number of units to be installed

34. Commonly Asked Questions and Answers Q1: Does your Hydrogen Vessel work in Sweet and Sour Gas Systems? A1: Yes

35. Commonly Asked Questions and Answers Q2: Does the internal process pressure affect the hydrogen flux process? A2: No Q3: Does temperature influence the monitor’s accuracy? A3: No and yes

36. Commonly Asked Question and Answers Q4: Can the TXINS monitor environments containing bacterial corrosion or iron sulfide deposits? A4: Yes Q5: Does the formation of Hydrogen polarization film caused by cathodic protection on the external of the pipe affect the TXINS monitor? A5: No

37. Commonly Asked Questions and Answers Q6: Is the TXINS monitoring system capable of monitoring internal environments that have been internally coated? A6: Yes Q7: Where do you typically install the TXINS caps? A7: Each application will be different

38. Commonly Asked Questions and Answers Q8: Can the TXINS monitor help in evaluating the effectiveness of my corrosion inhibitors? A8: Yes Q9: Can the results of the TXINS monitor give me a metal loss per year (“MPY”) value? A9: Yes and No

39. Commonly Asked Questions and Answers Q10: Will the TXINS monitor work in all my corrosive environments? A10: No Q11: Will the TXINS monitor work in a high ph environment? A11: Yes

40. Conclusion • TXINS Monitor is: • Non-intrusive • Pro-active corrosion monitor • Cost effective • Remote communication and installations • TXINS gives the flexibility required to meet all our customers, corrosion monitoring needs.

41. Thank you for your time. If you require any further information, please contact: Corrosion Monitors Fred Roberts- 713-269-9674