The Commercial Development The Commercial Development of the GTL Industryof the GTL Industry

6 June 2006John F. AlvarezSasol Chevron

Agenda

• Who is Sasol Chevron?

• The GTL Process – keeping it simple

• Why GTL?

- Potential demand outstrips supply

- It’s clean and environmentally better

- It’s versatile

• Building GTL projects – it’s happening!

Proven GTL Technology

Operating Experience

GTL Marketing Experience

International Presence

Marketing Expertise

E&P Experience

Sasol and Chevron are positionedto lead a growing Gas to Liquids industry

The GTL process converts natural gas into easily-transportable liquid products

N2 to atmosphere

natural gas

oxygen

O2

CH4

Natural Gas

Reforming

syngas

CO

H2

Fischer-TropschConversion

waxysyncrudeProduct Upgrading

GTLDiesel

GTLnaphtha

H2Oby-product

GTL produces premium quality products into global markets

20

20 40 60 80

30

40

50

60

70

80

90

100

10

automotive diesel13,500,000 bpd

base oils780,000 bpd

waxes42,000 bpd

Ach

ieva

ble

yiel

d (%

)

Value (USD per barrel)Value (USD per barrel)

jet fuel5,000,000 bpd

petrochemicalnaphtha

5,400,000 bpd

(With oil price at USD 20 per bbl)(With oil price at USD 20 per bbl)0

0

GTL Diesel Supply is Small vs. Diesel Demand

Notes: Road diesel estimated as 2/3 of Gasoil/Dist illate. GTL Diesel supply from public announcemen ts, generally assuming diesel is 70% of plant capacity. Diesel f orecasts from Purvin & Gertz.

0.0%

0.5%

1.0%

1.5%

2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

GTL Diesel as Percent of Road Diesel

0%

2%

4%

6%

8%

10%

2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

GTL Increase as Percent of Diesel Increase

… and GTL Diesel Fits in Incremental Demand

GTL diesel offers a pathway to more efficient, cleaner economies

Urban AirUrban AirQuality BenefitsQuality Benefits

CNGCNG

Spa

rkS

park

Igni

tion

Igni

tion

Com

pres

sion

Com

pres

sion

Igni

tion

Igni

tion

ConventionalConventional AlternativeAlternative

LPGLPG

dieseldiesel

gasolinegasoline

GTLGTLdieseldiesel

Fuel Economy,Fuel Economy,CO2 efficiencyCO2 efficiency

Can be used in Can be used in existing and futureexisting and future

diesel enginesdiesel engines

Sulphur < 5ppmSulphur < 5ppmCetane > 70Cetane > 70

Aromatics < 1%Aromatics < 1%

“Emission factors for the combustion of fuels in road vehicles”, IFEU Heidelberg, December 2004 – GTL Diesel compared with a low-sulphur reference fuel.

Light-Duty Vehicles

0

10

20

30

40

50

60

70

80

90

THC NOx PM CO CO2

Per

cent

Red

uctio

n

EURO 1EURO 2EURO 3EURO 4EURO 4 w PF

Heavy-Duty Vehicles

0

10

20

30

40

50

60

70

80

90

THC NOx PM CO CO2

Environmental benefits of GTL diesel:cleaner fuel = cleaner exhaust

High quality translates to substantial emissions reductions(relative benefits depend on engine, exhaust reduction devices, and comparative fuels)

Daimler Chrysler engine tests indicatethat GTL blending benefits are non-linear

20

40

60

80

100

120

20 40 60 80 100 120

Relative NOx, %

Relative Soot, %

GTL 100%

GTL 50%

GTL 20%

Reference:EU-Diesel

- 35% NOx- 35% Soot

20

40

60

80

100

120

20 40 60 80 100 120

Relative NOx, %

Relative Soot, %

GTL 100%

GTL 50%

GTL 20%

Reference:EU-Diesel

- 35% NOx- 35% Soot

Increased GTL content:- Reduces aromatics

(easier oxidation)- Increases cetane

number (reduced injection delay produces a smoother burn)

• Current diesel engines have compression ratios and injection timings set for conventional fuels. Most benefits can be achieved with ~ 50% GTL in the blend

• Further benefits are possible if diesel engines are retuned or redesigned for GTL

Adv. Grid Con Hybrid Adv. Grid Con Hybrid LDVsLDVs (20)(20)

Electric Battery LDVElectric Battery LDV

Gasoline Fuel CellGasoline Fuel Cell

Methanol Fuel CellMethanol Fuel Cell

Direct H2 Fuel CellDirect H2 Fuel Cell

Biodiesel (2%)Biodiesel (2%)

Fischer Tropsch dieselFischer Tropsch diesel

LNG for Heavy Duty VehiclesLNG for Heavy Duty Vehicles

CNG for Heavy Duty VehiclesCNG for Heavy Duty Vehicles

CNG for Med. Duty VehiclesCNG for Med. Duty Vehicles

E85 for Flex Fuel VehiclesE85 for Flex Fuel Vehicles

LPG for Light Duty VehiclesLPG for Light Duty Vehicles

CNG for Light Duty VehiclesCNG for Light Duty Vehicles

Cumulative (2002Cumulative (2002--2030) Direct Net Benefits (Billion 2001US$)2030) Direct Net Benefits (Billion 2001US$)

00 22 44--22--44--66--88--1010--1212

Source: California Energy Commission and California Air Resources Board 2003, Reducing California’s Petroleum Dependence , California US

Fuel substitution:Fuel Compatibility is Worth Money

takes advantage oftakes advantage ofexisting engines and existing engines and fuelling infrastructurefuelling infrastructure

GTL diesel marketing strategy

Short term Short term

Longer termLonger termNeat ApplicationsNeat Applications

BlendstockBlendstock

Crude oilCrude oil

PremiumPremium

RegularRegular

GTL dieselGTL diesel

Maximum performance and emission benefitMaximum performance and emission benefit

Conventional Refining Conventional Refining

Sasol Chevron’s strategy is to find a few, substantial locations worldwide

Gas Reserves

GTL Markets

• Establish 3 or 4 footprint plants, followed by expansions

• Focus is on Nigeria, Qatar, Algeria, and Australia

GTL Project Status - Oryxh 34,000 barrels/day of liquid productsh Under constructionh Inauguration 6 June 2006h 51% Qatar Petroleum, 49% Sasolh Sasol Chevron is marketing diesel and naptha

GTL Project Status - EGTLh 34,000 barrels/day of liquid productsh EPC Contract Awarded to Team JKS,

a consortium of JGC, KBR and Snamprogetti

h Startup 2009h 75% Chevron Nigeria Ltd

25% NNPC

Closing Remarks

• The GTL process is commercial today

• GTL is driven by both supply push (reserves monetization with strong market demand) and demand pull (premium qualities)

• GTL products offer attractive properties

• 2006 is an important milestone, with the start of the Oryx plant in Qatar

This year … GTL becomes a commercial reality!