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Lube Oil - PowerPoint Presentation

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Lube Oil - PPT Presentation

Recycling and Rerefining Gulf Basin Petroleum Recycling Company 2 Company Overview Focus Mgmt Team Provide petroleum based environmental services to Gulf Basin industries Recover used oils and rerefine to generate valuable base lube oil and other refined products ID: 383842

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Slide1

Lube Oil

Recycling and Re-refining

Gulf Basin Petroleum

Recycling CompanySlide2

2Company Overview

FocusMgmt.

Team

Provide petroleum based environmental services to Gulf Basin industries

Recover used oils and re-refine to generate valuable base lube oil and other refined products

Extensive experience in used oil re-refining operations, used oil collection, commercial, civil and industrial construction

Exceptional

track record in building and growing business

across a wide range of industries

Near-Term

Plan

To develop the capability to

recycle used oils having a high level of contaminantsConstruct a new, state of the art, 30 MM GPY used oil recycling /re-re-refining plant in Bienville, MSUtilize the rail and barge capabilities of Port BienvilleSlide3

3Vision & Mission

Our Vision

Our

Mission

To become the leading used oil re-refiner in the Gulf Basin and partner of choice to existing used oil collectors

and generators of used oils.

To make a significant and lasting contribution to the environment and to sustainable development. To aid in the economic recovery of the Gulf RegionSlide4

More than a billion gallons of used oil is available for re-refining

Improper Disposal (400 MM GPY)

Asphalt, Cement Kilns

Re-refineries

Fuel Blending

4Slide5

US market is in the early stages of development5

USA

 

 

 

1.2 billion gallons collected

 

290 million re-refined

 

8 Plants operating

 

3 Plants announced

 

 

 

Europe

 

 

620 million gallons collected

 

500 million re-refined

 

28 Plants operating

 

No new plants announced

 

 

 

1200 MM GPY

620 MM GPY

Used oil volume – Million Gallons/yearSlide6

There is ample room for new re-refineries in each regional market

6Slide7

The collection market in the US is highly fragmented and estimated to include ~400 companies nationwide providing collection & recycling servicesThere is only one national company (Safety-Kleen)

& approximately 30 significant regional Companies; the balance of the industry participants are small “Mom & Pop collectors

These

small companies

typically sell their used oil to Industry as an alternative to virgin fuels

Burning used lubricants is a poor use of the material from both an environmental and economic perspective

Used oil generators would prefer to have their used oil recycled

USED OIL COLLECTION

Company

Annual Volumes

Primary Service Area

Safety-Kleen

180 ~ 200

National

FCC

75 ~ 80

Mid Atlantic / Gulf Coast

United Solutions

30 ~ 40

North Central

Thermo Fluids

70 ~ 80

Intermountain West

DeMenno / Kerdoon

40 ~ 50

California

Universal Lubricants

20 ~ 30

Midwest

Inter Gulf Corporation

25 ~ 30

Southwest

Universal Environmental Svcs

30 ~ 35

Southeast

Lorco Petroleum

15 ~ 25

Northeast

Aaron Oil

20 ~ 25

Gulf Coast

TOP 10 US

COLLECTORS (MM GPY)

The feedstock supplier (collector) market is extremely fragmented

7Slide8

Supplying re-refineries is the best option for collectorsMajority of collectors are now selling into lower margin burner markets as an alternative to virgin fuelsCollectors are experiencing erosion of margins

Lower cost of natural gas“Warm mix” asphalt reducing demand for fuelGeneral economic malaise

Due to margin squeeze, small collectors are losing market share to collectors with re-refining capability or access to higher paying markets such as fuel blending, exporting.

More re-refining capacity is needed to support used oil collectors

Most collectors desire to get into higher margin re-refining but don’t have the resources or expertise to go it alone

Capital cost of re-refining equipment

Lack of technical expertise to operate a re-refinery

8Slide9

StrengthsConstructed, commissioned &

operated a re-refinery

Have the team

& execution

c

apabilities

to grow

Have significant

Business

experience over a

wide rang ofindustries

Have constructed, commissioned and operated a re-refinery in Chester, SC

Team has significant expertise in building and operating oil collection and fuel processing facilities. Established customers for all re-refinery productsUnderstand the challenges and opportunities in the businessWe have a very strong and experienced management and operations team to grow the business across multiple locationsLessons learned from prior operations and commissioning experience give us a strategic advantage for technology selection and commissioning of plants

9

Expertise in government, military and government bid contracts

Managed and Directed operation of construction firms operating

across the globe

Managed and directed used oil collection company

Managed and directed fuel recovery company

Slide10

The time is right to build re-refineries in the US

Propelling Growth

Increased public awareness of the harmful effects of unregulated disposal of waste on the environment and on the health of

its citizens

Increasing

consciousness on recycling and people’s willingness to pay

the same or more

for recycled products

CONSCIOUSNESS

Increase in crude oil prices and tight supply of virgin lube oil

Payback period for re-refining is now less than 4

years. Re-refined base lube sells at a discount of around ~10% to virgin base lube

ATTRACTIVE ECONOMICS

Through continuous

development,

the technology has improved and is cost effective. Several players are successfully using the

company’s planned equipment set

Used oil collection systems have improved, partly through government initiatives

TECHNOLOGY IMPROVEMENTS

Several national, international regulations are in place for collection and processing of used oil

US DOE

targets by

2015,

1.0-1.2 B GPY to

be re-refined. This will require a tripling of current capacity in the U.S. Thus, re-refining in the US is a phenomenal growth opportunity

GOVERNMENT INITIATIVES

10Slide11

Lubricating oils are largely (75-95%) made of base oils, a mineral oil produced at an oil refinery; The balance would be additives, which are used to improve the lubricant’s performance

It takes approximately 2 barrels (84 gallons) of crude oil to produce 1 gallon of virgin base oil

The

US

Market represents 25% of global Lube Oil consumption, which total global consumption of approximately 10.3 billion per annum

Annual US sales of Lubricants between 2004-2010 have been relatively flat at ~ 2.5 Billion Gallons, due to the link between economic growth – net new vehicle sales and manufacturing equipment sales, offset by extended intervals in oil changes.

There are vast differences in per capita consumption – United States 8.40 Gallons; Asia 0.80 Gallons; Western Europe 3.47 gallons

Region

Demand, Billion (Gallons /Year)

Per Capita Demand (Gallons / Year)*

United States

2.5

8.4

Latin America

0.8

1.8

Europe

2.8

6.9

Middle East

0.5

3.1

Africa

0.5

0.7

APAC

3.2

09-5.3**

Total

10.3

1.7

Lubricant Market Overview

11