Return-Path: Received: from server.64xmedia.com by server.64xmedia.com with LMTP id AQRBNizTmGIgUgAAdUq3JA (envelope-from ); Thu, 02 Jun 2022 11:11:40 -0400 Return-path: Envelope-to: directory@aicenergycorp.com, rgrimes@aicenergycorp.com Delivery-date: Thu, 02 Jun 2022 11:11:40 -0400 Received: from mta-131a.oxsus-vadesecure.net ([135.148.117.228]:42049 helo=nmtao101.oxsus-vadesecure.net) by server.64xmedia.com with esmtps (TLS1.2) tls TLS_ECDHE_RSA_WITH_AES_128_GCM_SHA256 (Exim 4.95) (envelope-from ) id 1nwmU8-0005Sc-KL; Thu, 02 Jun 2022 11:11:40 -0400 DKIM-Signature: v=1; a=rsa-sha256; bh=Ig2uXbn677IbWJ5Vy7EKdu/avfmx+ZZe3NTB56 XD3i0=; c=relaxed/relaxed; d=webcom.xion.oxcs.net; h=from:reply-to: subject:date:to:cc:resent-date:resent-from:resent-to:resent-cc: in-reply-to:references:list-id:list-help:list-unsubscribe: list-subscribe:list-post:list-owner:list-archive; q=dns/txt; s=mail1; t=1654182639; x=1654787439; b=SDSzFTjqSMhjOpm0dQCZ2ThaWuiCf6G4n+VSEYAMJ VBC3Yacagwk4OOlr6zBWthdJ38F4Tzpw27Z/e+s0C6DkqMfLZwcdusgP7gtpt9aGQ9A/75R TDCopWgMJgjFFExzoRS9P3UJn11CnIIScjbrkM8goxr9K0dDTX1yzhvxedqKdsTikcsEDoy rdQrNDmVk1AYPz1XlovnX5DeWjs1X8VaPfwD5yXeWO5A/bezM5a266K8g88vuNDFSd3gYLs WBl8yXQhM5Arpz4c7g9CFNShjiyvBLVxlFeQ0/Bxt04QkIx8UHajz2ZKgECbpF5x2BdmXaH TMbGsf9Lf2bSIXhfA== Received: from proxy-5.proxy.cloudus.ewr.xion.oxcs.net ([24.230.175.2]) by smtp.oxsus-vadesecure.net ESMTP oxsus1nmtao01p with ngmta id ccebee16-16f4d6586d6b3625; Thu, 02 Jun 2022 15:10:39 +0000 From: To: Cc: , "Phil Stack @Keitu" , "Kris Keller @Keitu" , "Roger Grimes @AIC" References: <000001d87685$47bd8400$d7388c00$@keitu.com> In-Reply-To: <000001d87685$47bd8400$d7388c00$@keitu.com> Subject: RE: Naphtha Yields Date: Thu, 2 Jun 2022 10:13:44 -0500 Message-ID: <001b01d87693$5aca3120$105e9360$@keitu.com> MIME-Version: 1.0 Content-Type: multipart/alternative; boundary="----=_NextPart_000_001C_01D87669.71F588B0" X-Mailer: Microsoft Outlook 16.0 Thread-Index: AQJ9XqQz2fr6lrlec5QT0dE9LB/98avyZ48g Content-Language: en-us Authentication-Results: oxsus-vadesecure.net; auth=pass smtp.auth=49@428034 smtp.mailfrom=kspilman@keitu.com; X-Spam-Status: No, score= X-Spam-Score: X-Spam-Bar: X-Ham-Report: X-Spam-Flag: NO This is a multipart message in MIME format. ------=_NextPart_000_001C_01D87669.71F588B0 Content-Type: text/plain; charset="us-ascii" Content-Transfer-Encoding: 7bit Important to know that the plant will have a naphtha splitter so we can recycle the "least valuable" naphtha back to make hydrogen out of it. We may just have one naphtha sales tank to start and split only what we need to. But if we could find a specific market, we can add segregated tankage later if we can monetize the difference in another way. Kathye From: Phillip Sent: Thursday, June 2, 2022 8:33 AM To: Matt.Alexander@Truecos.com Cc: kspilman@keitu.com; directory@aicenergycorp.com Subject: Naphtha Yields Hi Matt, Attached is a copy of the naphtha outlet streams from the mass and energy balances provided to AIC by Haldor Topsoe. Currently, Haldor Topsoe planned to not utilize the onsite naphtha splitter in 100% jet mode, but rather sell the entire naphtha as just full range naphtha (Stream 4360). In 100% diesel mode (and the 50/50 mode) the naphtha splitter is operational. In those cases, the heavy naphtha stream (5045) is sold, while the light naphtha stream (6050) is sent to the hydrogen plant as a feedstock to the SMR. The light naphtha stream is currently sent to the hydrogen plant to lower the carbon intensity of the fuel, a key factor in selling to the California (and other West Coast) markets due to the ability to generate LCFS credits. However, carbon intensity at this time does not overly impact the federal incentives or sales to the DoD (even in states like California). The hydrogen plant has three feedstocks (not including the utility side) - light hydrocarbons (C1 to C5ish) from the RFU, light naphtha from the RFU, and externally sourced natural gas. The light hydrocarbons are always sent to the hydrogen plant as there is currently no real storage planned for them at the site. There is always some trim natural gas as well (mainly to ensure reliability and control). The light naphtha is flexible though. As briefly mentioned before, 100% jet mode sells the light naphtha (in the full range naphtha stream) as the mode makes enough light hydrocarbons to supply all the necessary feedstock. However, the 100% diesel and 50/50 modes do not make enough light hydrocarbons to supply all the necessary feedstock. Therefore, the remainder needs to be made up with either light naphtha or more natural gas. The decision will come down to the economics between the profit made from the increase of the number of LCFS credits generated by naphtha, renewable diesel, and commercial SAF sold (SAF to the military generates no LCFS credits) versus the profit made from the selling price of the light naphtha and replacing the light naphtha feedstock to the hydrogen plant with natural gas. Given AIC's plan to sell SAF to the DoD, it is possible they would sell the light naphtha stream. Additionally, since the naphtha splitter is onsite, it might be more profitable to split the light and heavy naphtha when running in 100% jet mode. Likewise, it would be possible to sell the light and heavy naphtha streams from the 100% diesel and 50/50 modes as full range naphtha (similar to the 100% jet mode case). We, at Keitu, have not looked into the profitability of separating or combining the naphtha streams contrary to Haldor Topsoe's mass and energy balances. I hope the explanation above helps to clarify the naphtha situation. Though please feel free to reach out with any questions. Sincerely, Phillip Stack ------=_NextPart_000_001C_01D87669.71F588B0 Content-Type: text/html; charset="us-ascii" Content-Transfer-Encoding: quoted-printable

Important to know that the = plant will have a naphtha splitter so we can recycle the “least = valuable” naphtha back to make hydrogen out of it.  We may = just have one naphtha sales tank to start and split only what we need = to.  But if we could find a specific market, we can add segregated = tankage later if we can monetize the difference in another = way.

 

Kathye

 

From: Phillip = <pstack@keitu.com>
Sent: Thursday, June 2, 2022 8:33 = AM
To: Matt.Alexander@Truecos.com
Cc: = kspilman@keitu.com; directory@aicenergycorp.com
Subject: = Naphtha Yields

 

Hi = Matt,

 

Attached is a copy of the naphtha outlet streams from = the mass and energy balances provided to AIC by Haldor = Topsoe.


Currently, Haldor Topsoe = planned to not utilize the onsite naphtha splitter in 100% jet mode, but = rather sell the entire naphtha as just full range naphtha (Stream = 4360).  In 100% diesel mode (and the 50/50 mode) the naphtha = splitter is operational.  In those cases, the heavy naphtha stream = (5045) is sold, while the light naphtha stream (6050) is sent to the = hydrogen plant as a feedstock to the SMR.  The light naphtha stream = is currently sent to the hydrogen plant to lower the carbon intensity of = the fuel, a key factor in selling to the California (and other West = Coast) markets due to the ability to generate LCFS credits.  = However, carbon intensity at this time does not overly impact the = federal incentives or sales to the DoD (even in states like = California).

 

The hydrogen plant has three feedstocks (not including = the utility side) – light hydrocarbons (C1 to C5ish) from the RFU, = light naphtha from the RFU, and externally sourced natural gas.  = The light hydrocarbons are always sent to the hydrogen plant as there is = currently no real storage planned for them at the site.  There is = always some trim natural gas as well (mainly to ensure reliability and = control).  The light naphtha is flexible though.  As briefly = mentioned before, 100% jet mode sells the light naphtha (in the full = range naphtha stream) as the mode makes enough light hydrocarbons to = supply all the necessary feedstock.  However, the 100% diesel and = 50/50 modes do not make enough light hydrocarbons to supply all the = necessary feedstock.  Therefore, the remainder needs to be made up = with either light naphtha or more natural gas.  The decision will = come down to the economics between the profit made from the increase of = the number of LCFS credits generated by naphtha, renewable diesel, and = commercial SAF sold (SAF to the military generates no LCFS credits) = versus the profit made from the selling price of the light naphtha and = replacing the light naphtha feedstock to the hydrogen plant with natural = gas.  Given AIC’s plan to sell SAF to the DoD, it is possible = they would sell the light naphtha stream.

 

Additionally, since the naphtha splitter is onsite, it = might be more profitable to split the light and heavy naphtha when = running in 100% jet mode.  Likewise, it would be possible to sell = the light and heavy naphtha streams from the 100% diesel and 50/50 modes = as full range naphtha (similar to the 100% jet mode case).  We, at = Keitu, have not looked into the profitability of separating or combining = the naphtha streams contrary to Haldor Topsoe’s mass and energy = balances.

 

I hope the explanation above helps to clarify the = naphtha situation.  Though please feel free to reach out with any = questions.

 

Sincerely,

Phillip = Stack

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