Headwaters Coal-to-Liquids Technologies

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Headwaters Coal-to-LiquidsTechnologies

• Theo L.K. Lee
• Headwaters Technology Innovation Group
• 1501 New York Avenue
• Lawrenceville, NJ
• Nov 11/04 Washington D.C.

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Corporate Vision
At Headwaters Incorporated, our singular focus
is to create value through innovative
advancements in stewardship of natural resources
throughout the world.
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Headwaters at a Glance
Diversification Across the Coal Value Chain
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Corporate Fact Sheet

• Pro forma TTM revenues 30JUN04 834 million
• Market capitalization gt1 billion
• 4,000 employees
• Headquartered near Salt Lake City, Utah
• Publicly traded company (NASDAQ symbol HDWR)
• Website www.hdwtrs.com

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Headwaters Technology Innovation

• Heavy Oil Upgrading
• Efficiently upgrades heavy oils such as oil
  sand bitumen into light syncrude using a
  nanocatalyst
• Direct Coal Liquefaction
• End result of 3.6 billion US government
  funded RD programs to convert coal directly into
  oil
• Indirect Coal Liquefaction
• Fischer-Tropsch catalyst and process for
  converting
• coal into ultra-clean transportation fuel and
  chemical feedstocks
• Nanotechnology
• Nanocatalysts with extraordinary performance
  charact-
• eristics used in manufacturing chemicals,
  fuel cells and emissions control

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Direct Coal Liquefaction

• Convert low cost coals to clean transportation
  fuels and petrochemical feedstocks
• 1st license to Shenhua Groups Inner Mongolia
  pioneer plant (50,000 BPSP from12,800 TPSD of
  coal)
• 26 to 30/bbl equiv. crude oil price
• 2.2 billion capex
• 2nd project feasibility study for Oil India
  Ltd.
• Enquiries include
• South Africa, Mongolia, Philippines, United States

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Coal Derived Liquids
Properties Naphtha Diesel
Density, g/cm3 (20oC) Viscosity, mm2/s (20oC) Potential Aromatic, w S, ppm N, ppm Cetane No. Flash Point, oC Solidification Point, oC Cold Filter Plugging Point, oC Oxidation Sludge, mg/100ml 0.7641 - 68.8 lt0.5 lt0.5 lt0.3 0.8648 3.69 81.9 lt5 lt1 46.7 76 -26 -90
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Indirect Coal Liquefaction

• Gasification followed by Fischer Tropsch
  Synthesis to form ultra clean straight
  hydrocarbons
• Lower efficiency as a standalone plant
• Improved efficiency with poly-generation
  configuration
• License through FT Solutions LLC. (JV with
  Rentech, Inc.)
• Completed two feasibility studies for China
• Started FEED of an ammonia revamp project in
  Illinois
• Two other FS in progress in U.S.

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FT Diesel an ultra clean fuel
Cetane No. gt70 Zero Sulfur No aromatics
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FT Diesel Exhaust Emissionsare Lower than
Typical 2 Diesel
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Cost Estimates for FTD
Coal Coke
Current CARB Diesel
Natural Gas
63
FOB Diesel Cost ( Barrel)
42
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1.00
2.00
3.00
0.50
1.50
2.50
3.50
Feedstock Cost (/mmbtu)
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Under the current high oil price and unstable
supply scenario, coal-to-liquids is a viable
option for providing clean transportation fuels
and petrochemical feedstocks in the United States

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Pueblo, Colorado GTL Plant