PANEL 1

INTERNATIONAL PROGRESS ON CCS PROJECTS Len Heckel – Shell Quest Laura Miller – Summit Power Hans Schoenmakers – ROAD

QUEST CCS PROJECT PROGRESSGlobal CSS Institute (GCCSI)

International Members Meeting

Calgary

October 10, 2012

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Len Heckel – Quest Venture Manager

October 10, 2012 3 Quest Progress: GCCSI International Members Meeting

Alberta

Canada

Quest Fort Saskatchewan

Fort McMurray

Edmonton

Calgary

Quest Location

October 10, 2012 4 Quest Progress: GCCSI International Members Meeting

General Features

Quest CCS Project - fully integrated CCS (capture, transport & storage)

Project Approval – Sept 2012

JV among Shell (60%); Chevron (20%); and Marathon (20%)

Located at Scotford Upgrader Complex

35% reduction of Upgrader CO2

emissions

Uses existing technology

Capacity to capture over one million tonnesof CO2 per year for 25 years

Equiv to emissions from175,000 cars

Quest Progress: GCCSI International Members Meeting

October 10, 2012 5

Hardware

SALT SEALS

Cement

SHALE SEALS

TARGET FORMATION

Quest CCS Project CO2 capture plant located in Fort Saskatchewan, approx 50 km N.E. of Edmonton

Capture at the Scotford Upgrader from 3 Hydrogen Manufacturing Units

CO2 transported by 12 inch pipeline to storage, with 6 inch laterals

The pipeline will travel approx. 65 km north of the Scotford Upgrader to the chosen injection locations

Route selected to meet stakeholder requirements: 28 km follows existing ROW Drilled under North Saskatchewan River 30+ re-routes to accommodate landowner wishes

Base plan: 3 injection wells and associated monitoring

October 10, 2012 6 Quest Progress: GCCSI International Members Meeting

Project Approval Critical Features

Safe and secure storage complex

Capture technology fit to base facility

Degree of economic robustness

Clarity in regulatory environment

Extensive stakeholder engagement

October 10, 2012 7 Quest Progress: GCCSI International Members Meeting

Project Approval Critical Features

Safe and secure storage complex

Capture technology fit to base facility

Degree of economic robustness

Clarity in regulatory environment

Extensive stakeholder engagement

October 10, 2012 8 Quest Progress: GCCSI International Members Meeting

Storage

7

SALT SEALS

Intermediate Casing

Main Injection Casing

Cement

Surface Casing

Tubing

SHALE SEALS

TARGET FORMATION

PackerAssembly

Perforations allow CO2 to penetrate the formation

Saline aquifer storage

Basal Cambrian Sands (BCS) selected

Storage zone is a formation called Basal Cambrian Sands (BCS) 2,300 m, Prairies deepest sandstone

Multiple caprock and salt seal layers, no significant faulting visible from wells or seismic

The BCS is well below hydrocarbon bearing formations and potable water zones in the region

Relatively few wells drilled into the BCS, none within 10 km of the proposed storage site

Wells and Drilling

3 well plan, 5 more if required

Conventional drilling methods

Multiple steel casings for wells, 3 in freshwater zone, all cemented to surface

October 10, 2012 9 Quest Progress: GCCSI International Members Meeting

Geological Formation – BCS Complex

Basal Cambrian Sand (BCS)

Complex Location

October 10, 2012

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Quest Progress: GCCSI International Members Meeting

Pore space area required to ensure no pressure front interference

Geological Formation Area of Interest (AOI)

DeltaPKpa

CO2 Saturation

October 10, 2012 11 Quest Progress: GCCSI International Members Meeting

CO2 Containment Loss Risk and Mitigation Diagram

Bulls-eye hazard assessment diagram – left: possible causes; centre: event; right: consequences

MMV Framework - Containment Risk Bowtie Analysis

October 10, 2012 12 Quest Progress: GCCSI International Members Meeting

Comprehensive plan developed – entire biosphere and lifecycle

Independently (DNV) certified MMV and storage plan

Measurement, Monitoring and Verification (MMV Plan)

October 10, 2012 13 Quest Progress: GCCSI International Members Meeting

Project Approval Critical Features

Safe and secure storage complex

Capture technology fit to base facility

Degree of economic robustness

Clarity in regulatory environment

Extensive stakeholder engagement

October 10, 2012 14 Quest Progress: GCCSI International Members Meeting

Capture Design

Shell ADIP-X Amine process (99%+ pure CO2),1.2 MTPa capacity Mutlistage centrifugal compressor to 8.5 Mpa (supercritical state) TEG dehydration unit

Capture 3D Model – HMU 1&2

October 15, 2012 10Quest: PTAC Clean Energy Production Forum 2012

Amine Absorbers (HMU 1 & 2)

Amine Stripper

Compressor & Dehydration System

October 10, 2012 15 Quest Progress: GCCSI International Members Meeting

October 10, 2012 16 Quest Progress: GCCSI International Members Meeting

Project Approval Critical Features

Safe and secure storage complex

Capture technology fit to base facility

Degree of economic robustness

Clarity in regulatory environment

Extensive stakeholder engagement

Quest Progress: GCCSI International Members Meeting

October 10, 2012 17

Costs/ Revenues and Funding Agreements

SALT SEALS

Cement

SHALE SEALS

TARGET FORMATION

Total cost of Quest – Approx. Cdn$1.4 billion Includes Pre FID, capital and 10 years opex Capital Ratio: 80% Capture, 10% pipeline, 10% wells

Revenues – GHG offsets (credits) Net amount – stored CO2, less direct and indirect emissions Credits to be used first by Shell’s Alberta assets for regulatory compliance Additional credits as early developer

Government Funding Support – Cdn$865 million Cdn$120 million Canadian Federal Government (Pre FID) Cdn$745 million Alberta Province (Construction, Startup and 10 years operation) Extensive knowledge sharing Stringent monitoring (MMV) plan NPV Zero commitment

October 10, 2012 18 Quest Progress: GCCSI International Members Meeting

Project Approval Critical Features

Safe and secure storage complex

Capture technology fit to base facility

Degree of economic robustness

Clarity in regulatory environment

Extensive stakeholder engagement

October 10, 2012 19 Quest Progress: GCCSI International Members Meeting

Provincial GHG framework established November 2010 – CCS Act passed, establishing overall structure

May 2011 – Pore space regulations set – Quest acquires required area

March 2012 – ERCB Public Hearing

July 2012 – ERCB Decision Report Issued – conditional approval

August 2012 – Quest License granted with Ministers Approval

September 2012 – Well License approvals granted

December 2012 – Expected completion of Regulatory Framework Assessment work

Regulatory Framework and Timeframe

October 10, 2012 20 Quest Progress: GCCSI International Members Meeting

Project Approval Critical Features

Safe and secure storage complex

Capture technology fit to base facility

Degree of economic robustness

Clarity in regulatory environment

Extensive stakeholder engagement

October 10, 2012 21 Quest Progress: GCCSI International Members Meeting

Extensive and continuous public engagement 1st public project disclosure: Oct 2008 (booklet, news release and open house)

Stakeholder consultation program initiated Jan 2010

All landowners within 450 of either side of pipeline right of way

All landowners in storage AOI

All Landowners within 5 km of Scotford

Municipal districts/ local authorities

Industry stakeholders

Provincial / Federal regulators

Aboriginal communities

Open Houses: March, November 2010, September 2011 and planned November 2012

Quest Café’s: June, October 2011

Bi-annual County and Town Council updates

Quest phone line, e-mail address and web site available for project questions

Stakeholder Engagement

October 10, 2012 22 Quest Progress: GCCSI International Members Meeting

Community Open Houses Q4, 2012

Well Program Q4 2012 2 additional injection wells

Associated deep monitoring and groundwater wells

Capture & Pipeline in Execute phase Capture at 90% model review stage

Capture construction underway with foundation work Q4 2012

Pipeline construction begins Q3 2013

Operations Handover Q2 2015

Full production Q3 2015

Timeline and Upcoming Activities

Thank You