Pulverized Petroleum Coke As a Fuel

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Pulverized Petroleum CokeAs a Fuel

• DTE PetCoke, LLC December 2007

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DTE Energy Overview
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Petroleum Coke (Petcoke)

• In North America, Fuel Grade (Sgt4) Petcoke is
  used by
• Power Plants
• Supplemental Fuel in Pulverized Coal Plants
• Primary Fuel in Circulating Fluidized Bed (CFB)
  Boilers
• Cement Kilns
• Brick Kilns, Other Industrial
• Paper Mill Lime Kilns (currently 16 locations)
• 3 mills for 20 years
• 13 additional mills since 2004, 6 expected
  startups in 2008
• Additional 3 active 1 planned test burn in Q1
  2008

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Petcoke use Pulp Paper Lime Kilns - Southeast
US Pre-2004
Domtar, Hawesville KY
PeTroCoke, Owensboro KY
X
X
IP, Prattville AL
X
PeTroCoke, Campti LA
Weyerhaeuser, Campti LA
Only 3 mills burning petcoke for 20 years,
either self-pulverizing or served by small,
dedicated pulverizers
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Petcoke use Pulp Paper Lime Kilns - Southeast
US December 2007
Domtar, Hawesville KY
PeTroCoke, Owensboro KY
X
NewPage, Wickliffe KY
Domtar, Bennettsville SC
Potlatch, McGehee AR
X
Oxbow, Tuscaloosa AL
Weyerhaeuser, Valliant OK
X
IP, Prattville AL
DTEPC, Vicksburg MS
Weyerhaeuser, Pine Hill AL
X
Smurfit-Stone, Hodge LA
Alabama River, Perdue Hill AL
GP, Monticello MS
X
PeTroCoke, Campti LA
Boise, Jackson AL
Weyerhaeuser, Campti LA
GP, New Augusta MS
Tembec, St.Francisville, LA
X
Pine Hill
Boise, DeRidder LA
Temple, Bogalusa LA
GP, Port Hudson LA
Startup of larger merchant petcoke pulverizers,
advances in burner technology, and high gas/oil
prices lead to rapid increase in petcoke use in
pulp mill lime kilns
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Historical Fuel Prices
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Projected Savings vs. Natural Gas
Incremental Mill Costs Caustic/Lime
Makeup Electricity Dead Load Kiln Maint. Addl
Evap Load
Transportation
Typical Lime Kiln will save 1MM - 2MM per
year Capital Payback 1 2 years
Pulverized Petcoke FOB
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Petcoke Composition(Typical Properties - Dry
Basis)
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DTE PetCokeVicksburg, MS Facility

• Commercial Ops in May, 2005
• Currently serving 8 full time customers and 3
  test firing customers (references available)
• Truck and rail car loading capability
• 250,000 TPY design capacity
• 120,000 TPY contracted

Barge unloading to 10,000 ton covered storage
1,400 Ton pulverized petcoke storage silo

• Future
• East Coast facility Q3 2008, 250K TPY
• Essential equipment purchased/in storage
• Expand to 1MM TPY as needed
• Other Markets? (NE, NW, Midwest, W.Canada?)

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Why is DTE in the pulverizedpetcoke business?

• DTE Energy Services familiar with the pulp
  paper industry
• Operator and 50 owner of MESC, an onsite
  facility that supplies steam and electricity to a
  Kimberly-Clark tissue mill in Mobile, Alabama
• Developing other onsite energy projects to serve
  the pulp paper industry
• DTE coal pulverizing experience
• Detroit Edison pulverizing coal at its power
  plants for decades
• DTE Energy Services owns and operates facilities
  that supply pulverized coal to steel industry
  blast furnaces
• River Rouge, Michigan US Steel
• River Rouge, Michigan Severstal Steel
• Sparrows Point, MD Mittal Steel
• DTE Energy Services is developing
• Additional coal and petcoke pulverizing projects
• New fuel switching applications for pulverized
  solid fuels
• DTE Coal Services solid fuel procurement and
  transportation experience
• One of the top three coal marketers and
  transporters in North America
• 60 million tons / year moved across the country
  including Detroit Edisons 21 million tons
• 8000 railcars

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What value does DTE bring?

• DTE solid fuel procurement, transportation and
  pulverizing expertise
• Advantages of central pulverizing facilities
• Provide pulverized petcoke at lower cost than
  customer-pulverize
• Economies of scale on capital expenditures and
  OM most users require relatively small volumes
• Petcoke sourcing
• Water delivery
• Buying power
• Customer site impact and permitting minimized
• Eliminates need for customer-site facilities for
  unloading, raw storage, pulverizing, and
  conveying
• Petcoke supply logistics handled by DTE
• Reduces customer capital requirement
• DTEPCs goal - make firing pulverized petcoke as
  easy as firing gas almost
• DTEPC provides customers
• Technical assistance
• Permitting assistance

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New Application Black Liquor Recovery Boilers

• Black Liquor Recovery Boiler supplemental firing
  with pulverized petcoke
• New use of pulverized petcoke by paper mills
  demand roughly equal to kiln at mills where
  applicable
• Indirect substitution for gas/oil - Add petcoke
  to black liquor to produce more steam in BLRB
  allowing turndown of power boiler
• DTEPC commissioned laboratory tests in 2005 by
  IPST/Georgia Tech
• Southeastern test March June 2006
• Second test under development
• IPST/Ga. Tech conducting additional lab studies

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North American / Caribbean Cokers
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Western N.A. Pulp PaperPetcoke in lime kiln
potential
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Edmonton, AB Pulverizing SitePotential lime kiln
demand
DTE PetCoke typically builds pulverizing
operations in 250K tpy increments, with both
truck and rail distribution. DTE PetCoke,
Vicksburg MS built with a gt500K tpy market
potential.
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Western N.A. SummaryDTE PetCoke perspective

• Pulverized petcoke market potential for pulp mill
  lime kilns is smaller than DTEPCs previous
  merchant ventures
• Majority of mills would need to commit to
  pulverized petcoke use to make business sense for
  DTEPC to purchase, install and operate a merchant
  pulverizer
• Rail would be primary mode of transportation
• DTEPC can conduct trials using product from
  Vicksburg pulverizer via rail delivery, but this
  is expensive
• Black Liquor Recovery Boiler application could
  double the market potential for pulverized petcoke