BA Energy Inc' BAE Heartland Upgrader Project

1
BA Energy Inc. (BAE) Heartland Upgrader Project

• The right project
• in the right place
• at the right time to address . a market
  sensitized to
• Capital cost overruns eroded economics
• High cost of upgrading solutions
• Shortage of deep conversion refineries
• Widening differentials / gas price impacts

2
Value Creation Group of Companies Corporate
Profile

• Value Creation Inc. (VCI)... parent company
• Resource Lands
• Proprietary Technologies
• Techno-Economic Center
• BA Energy Inc. (BAE) implementing company
• Commercialize upgrader opportunities
• Vision To be a pre-eminent oil sands player

3
The Heartland Project .a Buyer / Seller
Opportunity

• Merchant Upgrader
• 226,000 BPD Bitumen Blend
• Constructed in 3 distinct phases
• Uses VCI proprietary technology
• First Phase
• 75,000 BPD Bitumen Blend
• Capital cost under CAN800 Million includes
  common utilities and offsite facilities
• Completion 2007

4
The BAE Upgrading Process

• Bitumen blend to a Diluent Recovery Unit
• Asphaltene removal in an Accelerated
  Decontamination ADCTM Unit
• Heavy Residue cracked in a Ultra Selective
  Pyrolysis USPTM Unit
• Quench Scrubber facilitates recovery of light
  products

5
The Project Schedule

• First Production Phase 75,000 BPD
• DBM and initial cost estimate - Completed
• EDS awarded to Jacobs Canada, supported by LT
  India for USP Unit - started 4Q04
• Regulatory Hearing April 2005
• EPCm contract - awarded to Jacobs Canada
• Start procurement enquiry process March 2005
• Completion during 2007, depending on EUB approval

6
Buyer Opportunities

• Low cost provider of Upgrading product
• Synthetic Diluent recovery possibility
• Gas and gas liquid products
• Light-sour Synthetic Crude Oil product
• Asphaltene product
• Spent Limestone product (with some coke fines)
• 3rd party local storage and pumping Terminal

7
Phase 1 - Seller Opportunities

• Conventional low to medium pressure refinery type
  equipment and associated bulk materials
  Value 300MM
• Fabrication of pipe, steelwork package
  facilities Value 50MM
• Process pipe rack modules Value
  50MM
• Construction direct indirect services
  Value 200MM
• Provision of Operators Maintenance personnel

8
Contracting Philosophy

• Overall EPCm execution responsibility with Jacobs
  Canada, supported by LT India
• Major equipment enquires starting April 2005
• Fixed price basis
• Bulk material enquires starting May 2005
• Unit rate / LS basis
• Process pipe rack modules
  Fixed price basis
• Construction - Managed Open Site philosophy
• Unit Rate / LS basis
• Feedstock and product storage by 3rd party

9
Seller Pre Qualification Process

• Basis for Approval
• Safety results and procedures
• Proven performance
• Capability
• Quality assurance program
• Financial stability
• Facilities
• Resources

10
Responsive Bid

• The Following are a Must
• Proven product
• Compliant bid
• Identify alternates with benefits
• Minimal exceptions (commercial / technical)
• Meet required schedule

11
Expected Performance

• To be Considered for Future Work
• Do what you say
• No surprises
• Handle changes seamlessly
• Proactive, accurate timely status reporting
• On time delivery
• Quality is as specified - no NCRs
• Absolute honesty and integrity

12
Project Awareness

• Know the Market Place
• When projects are being bid
• Who is competing
• The project team
• Provide supplier support
• Early involvement
• Appropriate follow-up

13
How to do Business with Jacobs for the BA
Heartland Upgrader

• Any Sellers who believe themselves qualified for
  the Heartland Upgrader Project are invited to
  contact Jacobs Heartland Upgrader Procurement
  Manager, Mr. Darrell Farkas using the following
  contact information
• darrell.farkas_at_jacobs.com
• Tel [phone]