MicroTurbine Applications for the Oil and Gas Industry

1. MicroTurbine Applications for the Oil and Gas Industry Lee Richards - Director of Sales for Oil & Gas, Capstone Turbine Corp Bryan Hensley - VP Sales, Pumps & Service 15 July 2008

2. What is a MicroTurbine? Power generator driven by a small scale gas turbine • Electrical Efficiency of 26-33% • Combined with CHP can achieve thermal efficiency of 80%+ • Wide range of fuels – 350 btu to 2500 btu • Up to 7% H2S with C30 • Extremely Low Emissions - <9 ppm NOx • Air Bearings • No Oils or Lubricants • Air Cooled • No Antifreeze or Coolants • Variable Speed • 45,000 to 96,000 RPM

3. Air Bearings Spring Spring Foil Shaft Shaft Boundary Air Foil

4. Cooling fins Exhaust output Recuperator Fuel injector Air intake Combustion chamber Generator Compressor Air bearings Turbine Inside the Capstone MicroTurbine • No gearbox, pumps, or other mechanical components • Recuperated Engine • Permanent magnet alternator • Lean premix combustion • Air Bearings • Air Cooled

5. No moving parts Variable Voltage 400-480 volts Variable Frequency 10-60 Hz Voltage & Current source Inverter “Electronic” Gearbox Built in Fault protection Power Electronics

6. Inverter Based Electronics

7. MultiPac & Grid Connect

8. Capstone Products Available with gas & liquid fuels C30 & C65 C200 & C200 CHP C65 CHP

9. Capstone Products C30 & C65Class I Div 2ATEX Zone 2 C30 & C65 SS

10. Performance

11. Packaged Solution • (3), (4), or (5) C200 Units • Stackable Footprint • 30’ Enclosure with ISO Footprint • Load control from 100% to idle • Flexible Maintenance • Parts redundancy with C200

12. C1000 ISO Efficiency High Part Load Efficiency

13. Installation 20 kw Recip Package 60 kw MicroTurbine

14. Typical Site Layout

15. Oil & Gas Experience • Mexico • 36 Units in Offshore Oil Production • Flare Gas Fuel • NE United States Pipeline • 31 Units in Gas Transmission • CHP Applications • Russia Pipeline • 50 Units in Remote Gas Transmission • South America Pipeline • 65 Units in Gas Transmission • More than 60 O&G customers worldwide • More than 70 packages installed offshore 80% of all Microturbines Sold Worldwide are Capstone

16. Certification • California CARB 2007 Listed • UL 2200, the latest generator safety standard, and UL 1741, the national grid interconnect standard • MicroTurbines were the first generators of ANY type state-approved by New York and by California (“Rule 21”) for direct-to-grid interconnection • Also compliant with NFPA, IEEE519, CE, NEC, CSA, ATEX and other internationally recognized safety standards

17. Capstone: A Big Small Company • Founded 1988 • First to introduce microturbine energy products ten years later • 100% microturbine focused • The world leader in microturbines • >5000 production units sold and shipped • ISO 9001:2000 and 14001:2004UL-certified • Offices in LA, NYC, Mexico, Milan, Bath, Shanghai and Tokyo • Distributors located world wide Capstone Corporate Headquarters Chatsworth, California

18. Preventative Maintenance • Typical Maintenance cost of $0.016 kWh • Average of 6 Hours of Planned Maintenance per year • Capstone will guarantee cost of planned and unplanned maintenance through Factory Protection Plan Servicing injectors at 20,000 hrs on an offshore platform

19. Oil & Gas Specific Applications

20. Primary Uses Generate Power Eliminate Flare/Vent Combine Heat/Power Use power for applications Prime site power Black start power Back-up power Peaking Supplemental power Reduce utility costs Generate power from fuel sources such as Casing gas from oil production Condensate gas from liquid processing Gas too rich or too lean to meet pipeline standards Sour gas with H2S – up to 7% Key O&G Objective 3-pack on oil flare gas in New Mexico

21. Benefits of MicroTurbines in O&G • Low Installed Cost • Short Commissioning Period • Easy Interconnects to Local Grid or Bus • Very Low Maintenance • Ease of Operations • No Lubricants or Coolants • Small Footprint, Light Weight • < 65dBA Acoustic Emissions • Ultra-low NOx emissions with nopost-combustion devices or chemicals • Accepts 350-2500 Btu w/up to 7% H2S (C30) Test prior to platform deployment, Netherlands

22. Integrated Heat Exchanger

23. Exhaust Heat Utilization - CHP Traditional Approach Capstone ICHP 120 kWth 120 kWth 65 kWe 30 kW waste 150 kW fuel 80% av. boiler efficiency 230 kW fuel 65 kWe 345 kW fuel 160 kW waste 40 kW waste 33% av. utility efficiency 130 kW waste 195 kW fuel • 54% average total efficiency • 3.4 lb/MWhNOx & 2,320 lb/MWh CO2 • 80% average total efficiency • 0.15 lb/MWh NOx & 1,540 lb/MWh CO2 Source: EPA and DOE, see notes page for specific references

24. Exhaust Heat Utilization - CHP • Heat to glycol or hot oil systems • Preheat fuel gas to larger turbines or engines • Preheat water to steam boilers • Direct heat to oil/water separators • Supplemental heat to regas LNG or other liquid regas process • Building or utility heat • Various gas plant and amine plant applications • Refrigerant based systems

25. Microturbines also generate voluminous exhaust heat C65 Generates 561,000 BTU/hr (591,000 kJ/hr) at 588F (309C) Exhaust Heat Utilization Heat from two C30s running on untreated wellhead gas goes to “heater/treater” separator

26. Example Applications

27. Cathodic Protection Example Installation by Pumps & Service Client – Major US Gas Transmission Company Project - Gas Pipeline Cathodic Protection Requirements - Customer required extremely reliable power source at low current in very remote applications. Alternative Solutions Grid power – would require several miles of power lines installed Recip Generators – would require regular maintenance intervals Thermal Electric Generators (TEG) – unreliable

28. Cathodic Protection Solution – Single C30 installed along pipeline as required Benefits Minimal maintenance requiring site visits only once each 6 months Remote monitoring and diagnostics to verify operational quality Extremely low emissions for installation in national forest

29. Primary Power for Remote Site • Example Installation by Pumps & Service • Client: Major US Production Company • Project: Primary Power for Salt Water Disposal • Requirements: Needs reliable, cost-effective power in remote location • Alternative Solutions • Grid Power – Not available • Re-Power – Eventually same problems with high maintenance cost, high emissions, and excessive down time. • Reciprocating generators – Same as re-power

30. Primary Power for Remote Site Solution - Multi-pac of 3-C30 installed in a control room fabricated for this site. Benefits Lowered maintenance cost Improved reliability of site Improved flexibility to control and maintain pressures and flow rates P&S Later designed New SWD in 2006 with Capstone because of success

31. Primary Power for Oil Pipeline • Example Installation by Pumps & Service • Client: Large US Oil Pipeline • Project: Transfer pumps for a major Oil Pipeline in Remote Location • Requirements: Reliable Power because of extremely high cost for down time as well as being on a very remote location • Alternative Solutions • Grid Power – Not available • Reciprocating Generators – regular maintenance schedules, unplanned down time (low oil, high engine temp..) and reliability.

32. Primary Power for Oil Pipeline Solution: (15) C65 installed as the power supply for location Benefits: Minimal maintenance requiring planned site visits on semiannual schedule Remote monitoring and diagnostics to verify operation Reliability. No unacceptable downtime

33. Offshore Resource Recovery • The Issues: • Provide a reliable power source in a hazardous oil and gas application on an offshore platform in the Gulf of Mexico • Recover value from onsite flare gas which is normally lost to the environment • The Solution: • A Capstone microturbine, UL certified for hazardous oil and gas applications • The microturbine runs on onsite unprocessed wellhead gas which is normally flared, providing a power source to the platform • The microturbine cut maintenance time by ~95% compared to reciprocating engine generators • The microturbine ran almost non-stop for 25,000 • Capstone has microturbines running on other platforms in the Gulf of Mexico, Gulf of Alaska, Bay of Campeche, the North Sea, Mediterranean Sea, and South China Sea

34. Offshore Installations Deployed in the Gulf of Mexico

35. Conclusions • Ideal power generation for oil & gas installations, onshore and offshore • More than 5,000 Capstone MicroTurbines sold and 19+ million operating hours • Fuel Gas from 350 BTU – 2500 BTU with up to 7% H2S • Low emissions of less than 9 ppm NOx • Lowest maintenance cost of 0.016 $/kWh with 6 hours/year of planned maintenance • No lubricants or coolants