Proposal: Refinery

February 25, 2014

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 Contents

Technical Proposal 3130806 Rev. A ........................................................................................................... 4

1. UNIT DESCRIPTION: ........................................................................................................................ 4

2. CRUDE ANALYSIS (BASIS OF DESIGN) ...................................................................................... 4

3. PROCESS DESCRIPTIONS ......................................................................................................... ...... 5

3.1 Atmospheric Distillation Unit .............................................................................................. .5

3.1.1 Process Flow Diagram - ADU .......................................................................................6
3.1.2 Technical Description ................................................................................................... .7
3.1.3 Plant Controls ................................................................................................................ .7
3.1.4 Recorders....................................................................................................................... .8
3.1.5 Alarms & Controls ........................................................................................................ .8
3.2 Catalytic Reformer Unit ...................................................................................................... ..9
3.2.1 Process Flow Diagram - CRU ......................................................................................10
3.3 Distillate Hydrodesulfurization Unit ...................................................................................11
3.3.1 Process Flow Diagram - DHDS ...................................................................................12
3.4 Naptha Hydrodesulfurization Unit ......................................................................................13
3.4.1 Process Flow Diagram - NHDS ...................................................................................14

4. CODES & STANDARDS ............................................................................................................ ..... 15

5. EXCEPTIONS & EXCLUSIONS ..................................................................................................... 16

6. ENVIRONMENTAL IMPACT ......................................................................................................... 17

7. YIELDS ....................................................................................................................... ...................... 17

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Commercial Proposal 3130806 Rev. A ..................................................................................................... 18

1. BASIS OF PROPOSAL:.................................................................................................................... 18

2. BUDGETARY PRICE (+/-20%): .................................................................................................... .. 18

3. DELIVERY: .................................................................................................................... .................. 18

4. VALIDITY: .................................................................................................................... ................... 18

5. NOTES/EXCEPTIONS: ............................................................................................................ ........ 18

6. PAYMENT: ..................................................................................................................... .................. 19

7. TERMS & CONDITIONS:.......................................................................................................... ...... 19

8. ADDITIONAL SCOPE: ............................................................................................................ ........ 20

9. COMPANY CERTIFICATION: ....................................................................................................... 20

10. CONFIDENTIALITY: ...................................................................................................................... 20

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 Technical Proposal 3130806 Rev. A
Our International Company is pleased to forward the following information for your consideration:

1. UNIT DESCRIPTION:

Our proposes one standard designed refinery package with all equipment and
components mounted, piped and wired on skids as noted and designed to provide 300,000
MT/year (6,000 bpd) combined total of Summer and Winter diesel (grade Euro 5), Benzin
(gasoline) - Russian grade 92-95 (API 87-93).

This design features a modularized design that minimizes the interconnecting piping
between the skids and the shipped loose items for the proposed system.

Refinery:

 7,000 bpd CDU

 Semi-regen catalytic reformer
 3,000 bpd Naphtha Hydrotreater with semi-regen catalytic reformer
 1,500 bpd Distillate Hydrotreater with splitter for kerosene
 Emergency flare
 Flare,
 Alloy construction for corrosive crude oil service.

Items not included, subject to FEED study:

 Desalter
 An off-gas treating unit
 Sulfur recovery.
 Hydrocracker

2. CRUDE ANALYSIS (BASIS OF DESIGN)

RUSSIAN GOST 51858-2002

Density – 20C (kg/m) 860

Fractional Composition:
Boiling Point 30
13% distillation under C 100
16.5% 120
24.5% 150
25.5% 160
29% 180

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 33.5% 200
37% 220
41% 240
48.5% 280
53% 300
56% 340

Pressure of saturated steam 55.8

Sulfur 0.78
Water 0.8
Mechanical additions 0.005
Chloride salt (mg/gm3) 70
Paraffin 1.98%
Freeze Point -28C

3. PROCESS DESCRIPTIONS
3.1 Atmospheric Distillation Unit
Petroleum crude oils contain hundreds of different hydrocarbon compounds: paraffins, naphthenes
and aromatics as well as organic sulfur compounds, organic nitrogen compounds and some
oxygen containing hydrocarbons such as phenols. Although crude oils generally do not contain
olefins, they are formed in many of the processes used in a petroleum refinery.

The crude oil fractionator does not produce products having a single boiling point, rather, it
produces fractions having boiling ranges. For example, the crude oil fractionator produces an
overhead fraction called "naphtha" which becomes a gasoline component after it is further
processed.

The naphtha cut, as that fraction is called, contains many different hydrocarbon compounds.
Therefore it has an initial boiling point of about 35 °C and a final boiling point of about 200 °C. Each
cut produced in the fractionating columns has a different boiling range.

At some distance below the overhead, the next cut is withdrawn from the side of the column and it
is usually the jet fuel cut, also known as a kerosene cut. The boiling range of that cut is from an
initial boiling point of about 150 °C to a final boiling point of about 270 °C, and it also contains
many different hydrocarbons.

The next cut further down the tower is the diesel oil cut with a boiling range from about 180 °C to
about 315 °C. The boiling ranges between any cut and the next cut overlap because the distillation
separations are not perfectly sharp.

After these come the heavy fuel oil cuts and finally the bottoms product, with very wide boiling
ranges. All these cuts are processed further in subsequent refining processes.

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3.1.1 Process Flow Diagram ‐ ADU

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3.1.2 Technical Description

The crude oil charge pump feeds crude oil from storage to the ADU. The raw crude oil flows
through the tube side of the heat exchanger train and is heated to 446 0F. A flow control valve
controls the crude oil flow rate to the process unit. The heater is a direct-fired heater.

The crude oil exits the heater at approximately 680 0F and enters the flash zone of the crude tower.
A temperature controller maintains the heater outlet temperature setpoint by adjusting the flow of
fuel to the burners thereby increasing or decreasing the firing rate of the heater.

The two-phase stream enters the flash zone of the crude tower. The residuum is the liquid part of
this two-phase stream and flows to the bottom of the tower. The vapor part of the stream flows
upward through the tower producing the remaining diesel, kerosene and naphtha products. The
diesel and kerosene is fractionated as a liquid from the crude through vaporization and
condensation based on the boiling range of the different products. The trays in the tower facilitate
this fractionation or separation process. The naphtha, the lightest of the products, exits the top of
the tower as a vapor. A reflux of liquid naphtha through a temperature control valve is used to
maintain the 176 0F temperature at the top of the tower.

The tower bottoms pump moves the 669° F residuum (also called reduced crude or residual fuel
oil) from the bottom of the tower through the crude/resid exchangers and the air cooler thereby
cooling the stream to a final temperature of 250 0F. The residuum level in the bottom of the tower
is controlled by a level control valve. A small slip stream of hot residuum is pumped through the
tube side of the diesel stripper reboiler for re-boiling diesel.

Diesel is drawn from the tower through the level control valve into the diesel stripper at 553 0F.
The vessel is re-boiled to remove or strip light ends from the diesel to increase the flash point of
the diesel. These light ends are returned to the tower. The remaining diesel is pumped from the
bottom of the stripper through the crude/diesel exchanger and air cooler to storage at 125 0F. Flow
is controlled by a flow control valve.

Kerosene is drawn from the tower through a level control valve into the kerosene stripper. An
electric emersion heater provides heat to strip the light ends from the kerosene product. The light
ends are returned to the tower. The kerosene is pumped from the stripper through the
kerosene/crude exchanger and air cooler to storage at 100 0F. Flow is controlled by a flow control
valve.

The naphtha vapor from the top of the tower is cooled to 100 0F as it flows through the overhead
condenser into the reflux accumulator. Uncondensed vapor is routed to the heater and used as
fuel. Naphtha is pumped from the accumulator to the tower as reflux and to storage.

A minimal volume of water is produced based on the water content (maximum 0.5% volume) of the
crude oil. This water accumulates in the water boot at the bottom of the accumulator and is
automatically drained using an interface level controller. The water flows to storage.

3.1.3 Plant Controls

The plant is equipped with two types of instrumentation control loops:

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 1. Process control computer instruments: Those which control a process variable from the
control computer in the control room. Typical installations have included an Allen Bradley
Control System. The entire process control computer instrument "Loops" are electronic-
type.

2. Local control instruments: Instrument loops, which are located on the process skids, i.e., a
control function which is not controlled from the process control computer. All of the local
control devices are pneumatic-type.

3.1.4 Recorders
In addition to the process control instruments located on the process control computer, the
following process variables are monitored and historically recorded on the software:

Temperature Indicators: Multi-Point Indicator – Several important process temperatures

are monitored by the human-machine interface (HMI) software and hardware.

 Motor Run Lights : Each of the motors in the process units is equipped with a motor-run
light located on the HMI. The status of any one of the motors can be determined
visually in the control room by observation of these indicators. Each pump and other
motor-driven equipment item which is "running" is indicated by an indicator on the HMI.
The indicator is not "on" if the motor is idle.

 Local Control Instruments: Each of the process variables which is not provided with the
control instrumentation on the main HMI is set and controlled by local control
instrumentation which is located on the process skids ("field control instruments"). Most
of the local control functions pertain to ancillary processes or utilities in the process
units. These variables do not require frequent change.

3.1.5 Alarms & Controls

 An alarm is a visual and audible display of changing conditions in the operation of the plant.
This display calls the operators attention to the change as soon as it occurs.
 Alarm set points and annunciations are set in HMI and output to audible devices in the
process area thru the field mounted programmable logic controllers (PLC).

 The visual indication of an alarm is a flashing icon on the HMI screen together with an
audible signal from the alarm horn located at the topping plant.

The ADU is operated with the following controls:

 the crude feed pump is a rotary pump. The rate is controlled by an automatic flow control
valve ;
 an automatic temperature controller in the control panel controls the heater outlet
temperature;

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  the kerosene side draw product is controlled by an automatic level controller in the control
panel that controls the flow rate of the kerosene side draw by monitoring the level in the
side stripper;
 the diesel side draw product is controlled by an automatic level controller in the control
panel that controls the flow rate of the diesel side draw by monitoring the level in the side
stripper;
 an automatic temperature controller controls the tower top temperature by controlling the
reflux flow rate;
 an automatic temperature controller in the control panel controls the kerosene reboiler
temperature;
 an automatic temperature controller in the control panel controls the diesel reboiler
temperature;
 an automatic level controller controls the tower bottoms level by varying the flow rate of the
bottoms;
 an automatic level controller controls the stripper bottoms level by varying the flow rate of
the diesel and kerosene products;
 an automatic level controller controls the naphtha accumulator level by varying the flow rate
of the naphtha stream; and
 for sub-zero weather, the air cooler temperature is controlled manually by opening and
closing recirculation louvers.

3.2 Catalytic Reformer Unit

In order to produce motor gasoline, sub-octane naphtha (usually around 60 octane R+M/2)
produced by the atmospheric distillation unit (ADU) must be further processed with a catalytic
reformer unit (CRU) to reform normal paraffins and naphthenes into isoparaffins and aromatics that
have much higher octane numbers. Excess hydrogen is produced as a result of the reforming
process and is utilized elsewhere in the refinery as necessary, especially in hydro-desulfurization
(HDS) units. CRU feedstock is typically treated in a HDS prior to introduction to a CRU.

We utilizes a semi-regenerative catalyst model for its CRUs. The CRU has three reactors, each
with a fixed catalyst bed. The catalyst is usually bi-metallic (platinum and rhenium), and requires
regeneration during planned shutdowns which occur approximately once every 12 to 24 months.
The process flow diagram below depicts a typical semi-regenerative CRU.

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3.2.1 Process Flow Diagram ‐ CRU

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The liquid feed is pumped up to the reaction pressure (usually 15 to 30 bar) and is joined by a
stream of hydrogen-rich recycle gas. The resulting liquid-gas mixture is preheated by flowing
through the feed/effluent heat exchanger. The preheated feed mixture is then totally vaporized and
heated to the reaction temperature (495 to 520° C) before the vaporized reactants enter the first
reactor. As the vaporized reactants flow through the fixed bed catalyst in the reactor,
dehydrogenation of naphthenes to aromatics occurs. This reaction is highly endothermic and
results in a large temperature decrease between the inlet and outlet of the reactor. To maintain the
required reaction temperature and rate of reaction, the vaporized stream is reheated in the second
fired heater before it flows through the second reactor. The temperature again decreases across
the second reactor and the vaporized stream must again be reheated in the third fired heater
before it flows through the third reactor. As the vaporized stream proceeds through the three
reactors, the reaction rates decrease and the reactors therefore become progressively larger. At
the same time, the amount of reheat required between the reactors becomes smaller. Usually,
three reactors are required to provide the desired performance of the CRU.

The hot effluent from the third reactor is partially cooled by flowing through the feed/effluent heat
exchanger air cooler, and water-cooled trim cooler before entering the product separator.

Most of the hydrogen-rich gas from the product separator vessel returns to the suction of the
recycle hydrogen gas compressor and the net production of hydrogen-rich gas from the reforming
reactions is fed to the HDS units and consumed in the hydrotreating processes.

The liquid from the product separator vessel is routed to the stabilizer. The overhead off-gas
product from the stabilizer contains methane, ethane, propane and butane gases produced by the
hydrocracking reactions. The overhead liquid is a mixed LPG stream, and the bottoms product
from the stabilizer is the high-octane reformate that is a component of the refinery's gasoline
product.

3.3 Distillate Hydrodesulfurization Unit

The following is a general simplified process description of the attached process flow schematic.
Hydrotreating plays a key role in meeting environmental regulations and/or product specifications.
Hydrotreating refers to selective removal of objectionable materials from petroleum compounds by
reacting the molecules that contain these materials with hydrogen in a reactor at relatively high
temperatures at moderate pressures. These objectionable materials include, but are not solely
limited to, sulfur, nitrogen, olefins, and aromatics. The removal and/or conversion of these
materials result in improved properties of the streams (kerosene smoke point, diesel cetane
number, sulfur content, etc.) as well as storage stability.

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3.3.1 Process Flow Diagram ‐ DHDS

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The process flow scheme for the hydrotreating process consists of a higher-pressure reactor
section and a lower pressure stripper section. The reactor section consists of the following major
pieces of equipment: feed/effluent exchanger, reactor charge heater, reactor, reactor effluent air
cooler, reactor effluent water-cooled trim cooler, products separator, and recycle gas compressor.

The feed from storage enters the surge drum and is pumped through the reaction process. The
feed and the recycle and make-up hydrogen are preheated by the reactor effluent in the
feed/effluent exchanger before entering the reactor charge heater. This exchanger recovers as
much heat as possible from the heat of reaction. Hydrogen originates from the separation of gas
and liquid phases in the products separator and make-up. The recycle gas stream contains
hydrogen sulfide that reduces the hydrogen partial pressure and thus suppresses the catalyst
activity. Make-up hydrogen from the CRU reduces the effect of the recycle gas.

Once the feed and recycle gas have been heated to the desired temperature, the reactants enter
the top of the reactor. As the reactants flow downward through the catalyst bed, various
exothermic reactions occur and the temperature increases. Specific reactor design will depend
upon several variables. Depending on the expected heat of reaction, cold recycle gas is brought
into the reactor at the internal quench points in order to cool the reactants and thus control the
reaction rate.

Most of the cooling of the reactor effluent is accomplished in the feed/effluent exchanger. Final
cooling of the reactor effluent is obtained in an air cooler and a water-cooled trim cooler. Water is
injected into the stream before it enters the coolers in order to prevent the deposition of salts that
can corrode and foul the coolers.

The function of the stripper section is to separate light ends that contain hydrogen sulfide from the
diesel resulting in a diesel that meets the sulfur content and flash point requirements of the diesel
specification. The stripper is reboiled using steam.

3.4 Naptha Hydrodesulfurization Unit

The naphtha hydrodesulphurization reaction takes place in a fixed-bed reactor at elevated
temperatures ranging from 300 to 400° C and elevated pressures [ranging from 20 to 30
atmospheres of absolute pressure], typically in the presence of a catalyst consisting of an alumina
base impregnated with cobalt and molybdenum.

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3.4.1 Process Flow Diagram ‐ NHDS

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The liquid feed is pumped up to the required elevated pressure and is joined by a stream of
hydrogen-rich recycle gas and make-up hydrogen from the CRU. The resulting liquid-gas mixture is
preheated by flowing through the feed/effluent heat exchanger. The preheated feed then flows
through the fired heater where the feed mixture is totally vaporized and heated to the required
elevated temperature before entering the reactor and flowing through a fixed-bed of catalyst where
the hydrodesulphurization reaction takes place.

The hot reactor effluent is cooled by flowing through the feed/effluent heat exchanger, the effluent
air cooler, and the water-cooled trim cooler before entering the products separator vessel at about
35° C. The liquid from the products separator vessel is routed to the steam-reboiled stripper. The
bottoms product from the stripper is the final desulfurized liquid product from the
hydrodesulphurization unit and is fed to the splitter.

Excess hydrogen-rich gas from the products separator vessel that is not required for recycle gas is
combined with the sour gas from the stripper overhead and routed to a fuel gas treater for removal
of the reaction product hydrogen sulfide gas (H2S). The H2S-free hydrogen-rich gas is then
recycled back for reuse in the reactor section. Any excess treated gas is used for fuel.

4. CODES & STANDARDS

The following prevailing standards of United States engineering design and codes are adhered to
in the processing, layout and selection of the various component parts used in the fabrication and
assembly of this plant:

 ASME Code Section VIII, Division 1, Pressure Vessels and Heat Exchangers;
 ANSI B31.3 Petroleum Refinery Piping;
 FM Requirements for Burner Control;
 API-RP520, Parts I and II, Design and Installation of Pressure Relieving Systems in
Refineries; and
 API-500A Classification of Areas for Electrical Equipment in Petroleum Refineries (Class 1,
Group D, Division 2) on the process end of the skid. The heater is located at least 50 feet
from the other process equipment and control room.

All process vessels are designed and fabricated in accordance with the ASME Code, Section VIII,
Division 1. The tower and strippers are carbon steel, with associated trays being 316 stainless
steel as required. Fabrication shops for the vessels are tested and certified by ASME, insurance
companies and other regulatory agencies to perform fabrication in accordance with the ASME
Code, Section VIII, Division 1. These shops are provided with a certificate having a certificate
number and they are audited and re-certified every three years. Copies of the shop’s certificate
are available after a purchase order has been issued for the coded vessels.

Certified mill test reports on materials used on ASME Code vessels are provided and
shipped with each vessel for the buyer’s and customs use.

Sufficient surge capacity is provided in all vessels to assure stable control and allow
corrective action to be taken in the event of a process upset or equipment failure.

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Sufficient elevation is provided for all vessels to assure adequate suction head at low liquid
level for pumps.

The heater is a horizontal cabin-type with a convection section. Certified mill test reports
on materials used to build the heater are provided and shipped with the heater for the
buyer’s and customs use. Burners can be designed to meet the needs of multiple fuel
sources. The heater is built in accordance with the following codes:

 Coil: ASME Section I;

 Tubes: ASTM A-106 Grade B;
 Fittings: ANSI B16.9;
 Flanges: ANSI B16.5; and
 Burner: FM Requirements.

All piping and valves required within the process battery limits are provided, fabricated and
installed to the maximum practical extent. Piping design is according to ANSI B31.3. All process
piping is A-106, Grade B seamless unless otherwise specified.

5. EXCEPTIONS & EXCLUSIONS

The following Items are not included in the pricing of this proposal:

 All interconnecting piping between skids and ship-loose items (can be supplied
loose for field weld after EPC Engineering and Site Plan);
 Initial Consumables & Fluids Charges
 Applicable local, state or federal taxes, duties or fees
 Control Room & MCC
 Design of Foundation for supporting Plant
 Field installation labor or materials necessary to install the equipment at the job site
 Flare and drain systems, Header only
 Fuel gas supply, Header only
 Instrument air supply, Header only
 Interconnecting wiring
 Nitrogen supply
 Off-loading, hauling or rigging
 Personnel protection
 Spare parts for start-up or operation
 Supervision of installation or startup
 VFDs, Power equipment/wiring

The following Systems are not included in the pricing of this proposal:

 Produced Liquids pumps and storage

 Power Generation

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
6. ENVIRONMENTAL IMPACT
The ADU will not make a significant contribution of air contamination to the atmosphere. Fugitive
emissions are minimal due to the small number of flanged connections and pumps. Since these
plants use air cooling, the only other effects on the local environment are the products of
combustion exhausted into the air by the plant heater and the water that is brought in with the
crude oil.

For each 1/10th of 1% of water in the crude feed, one barrel of distilled water will be produced for
each 1,000 barrels of crude processed (1 kg per metric ton). Since the water is in equilibrium with
the distillate, the water may contain up to 500 mg per liter of total organic carbon (TOC).

If a desalter is determined to be required during the FEED study, (depending on the amount of salt
in the crude), from 30 to 130 gallons per hour of brine water would be discharged per 1,000 barrels
of crude processed (from 0.9 to 4 liters per hour for each metric ton per day).

7. YIELDS
Preliminary Yields are (vol%):

 Gasoline : 40%
 Diesel : 18-22%
 Fuel Oil : 38%

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 Commercial Proposal 3130806 Rev. A

1. BASIS OF PROPOSAL:
a. End User : customer

2. BUDGETARY PRICE (+/‐20%):

Budgetary Price for Facilities (+/-20%) negotiated

3. DELIVERY:
a. The current (Ex-Works) delivery is 48 weeks After Receipt of Approved Drawings.

b. Delivery is subject to shop availability at time of PO.

c. EXW (Ex-Works)

d. The schedule allows for a maximum of 14 days from receipt of any Approval Drawings by
Client for Approval; delayed approval thereafter may necessitate a Change Order to allow for
increase in material cost.

4. VALIDITY:
Thirty (30) Days

5. NOTES/EXCEPTIONS:
a. Any changes to the Scope of Work may generate a Change Order as per Article 12 of
Standard Conditions of Sale and may result in schedule delays.

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 b. This proposal does not include any allowance for:

i. Any taxes, VAT or GST or other levies;

ii. Any import Charges, Costs and Fees;

iii. Any Duties.

c. These costs will be the responsibility of the customer as an additional cost over and
above the quoted price.

d. We will provide one (1) electronic copy of the Data Book per unit. Hard copies can be
quoted upon request after completion of the project.

6. PAYMENT:
i. Milestones

By Wire Transfer:
1) 10% : For FEED (Front End Engineering Design), with Purchase Order

By LOC per 5.b and 6.ii below:

2) 30% : With Approval Drawings
3) 20% : Upon Documented Placement of Purchase Order for Major Materials
4) 20% : Upon a Milestone to be advised
5) 25% : Upon Readiness for Shipment
6) 5% : Upon Completion of Commissioning

7. TERMS & CONDITIONS:

This Proposal is offered subject to Our International Company’s Standard Terms &
Conditions attached at Appendix I.

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 8. ADDITIONAL SCOPE:
Where additional engineering or fabrication scope is requested by the Client, this
will be performed at Our International Company’s published Rates attached at Appendix II.

Field service (installation and commissioning) if applicable will be performed under a

separate
Contract.

9. COMPANY CERTIFICATION:
Energy Services, LLC certification documents are in attached at Appendix III.

10. CONFIDENTIALITY:
All confidential information obtained by Client or their representatives in the
presentation or subsequent discussions or negotiations will be held in complete
confidence by them (except as disclosure may be required by law or requested by
governmental authorities or with respect to information which becomes non-confidential
through no act or omission of Client or any of their representatives). All confidential materials
obtained by Client, or any of their representatives or any party related thereto, in connection
with this proposal, shall be destroyed or returned to Client, or any of their representatives,
respectively, within ten (10) days before termination hereof.

Our International Company appreciates the opportunity to provide this proposal and we
look forward to working with you on this project.

Feel free to contact us at your convenience with any questions and please
keep info@synfuel.ru in copy on all correspondence.