The Brief Introduction of Petrocom Energy Ltd.

(PEL)
I. Introduction: (P2-P3)
There is a growing need for environmentally compliant coal in China’s
electrical generation market. PEL’s core strategy is to bring in the foreign
advanced coal blending technology, combining with its domestic
experience to establish a complete platform of the art Coal Blending
Facilities (CBFs).
The company will leverage its considerable coal management experience,
an extensive network of coal supply chain partners, exclusive proven
pollution reducing CBF technology and the support from the national
policy to make efforts to become one of China’s premier clean coal
suppliers.
PEL’s management team, led by Chairman and CEO Howard Au, has an
average of over 30 years of successful experience in the Asian energy
market which made PEL gain the strong support of several Chinese
governmental authorities involved in the coal industry and electrical
generation market.
The company has extensive supply contracts with Indonesian, Vietnam
and Russian coal suppliers and is in deep cooperation discussions with
Chinese coal producers and electrical generating entities.
The first 4 CBFs are scheduled to be started to construct in July, 2006
with a constructing period of 10 months. At that time, the processing
capacity of coal will be over 40 million tons and the annual revenues will
be $ 2.5 billion. When second and third 16 CBFs in total are operational,
revenues in 2010 are projected to be $6-7billion.
II. Brief introduction to PEL (P4-P5)
Petrocom Energy Ltd. (PEL) is registered in the Cayman Islands and
headquartered in Hong Kong on September 8th, 2005, which is a
multinational corporation focusing on investment and management in
related energy projects. PEL has representative offices in Jakarta
(Indonesia), Shanghai, Beijing, Shenzhen, Yinchuan (Ningxia) and Taipei
(Taiwan).
PEL’s management team has rich experience in the development and
management of international business, international energy, commodity
trade and energy infrastructure. In addition PEL has its own sales agency
and engineering advisors. PEL has established cooperation relationship
with many partners in Europe, Japan, China and Indonesia, etc.
Closely cooperating with Iv-Bouw and KEMA, PEL brings in the advanced
foreign CBF technology to China. At present, this technology is being
successfully used in EMO Rotterdam which is the basis for the CBF
technology to be used in China by Petrocom.
In addition to the CBF projects, PEL is engaged in the business in coal
safety. Presently PEL has established a JV with TKI—Taiheiyo Global
Holdings Ltd. (TGH).
III. Management Team（ P6-P9）

Howard Au, Chairman and CEO

Mr. Howard Au is a Hong Kong based entrepreneur who has specialized in

investing in coal and energy related projects in the Asia Pacific Region. Mr. Au
has over thirty years of experience in all areas of the international coal
industry including shipping, trading and electricity generation. He won a
professional status in the energy sector in various parts of the world including
Asia, South America, Australia, and Europe and has worked in large
international corporations and set up his own successful businesses.

Mr. Au worked as a manager of the World Wide Shipping Agency Ltd. from
1973-1982 when he was admitted a member and fellow of the Institute of
Hong Kong Shipping Management, the Institute of British Royal Logistics &
Transport and the British Institute of Management. From 1982 - 1990 Mr. Au
was the Fuel Supply Manager of China Light and Power Ltd., the major power
utility company in Hong Kong. He worked for this company in resourceful fuel
purchase for which he set up a large network of international fuel purchase. In
1990, Mr. Au participated in establishing Glencore in Switzerland. Glencore
grew to become the world's biggest international coal-trading firm led by its
sales in Asia, amongst other commodities, in the world with major equity
interest in a large number of coalmines. Mr. Au personally oversaw the
acquisition of a number of coalmines for Glencore and the massive growth of
Glencore in Australia and the Asia Pacific Region.

Mr. Au is highly respected figure in international energy sector, particularly in

the Asia and Pacific region, due to his business acumen that has typically
introduced coal trading and projects with high growth prospects to a variety of
countries.

Colin S. Tam, Non-Executive Director

Mr. Colin Tam is an USA well-known industrial energy management expert
and Chinese American entrepreneur. In 1993, Mr. Tam started up CEA Asia
Inc. in Hong Kong, which became current Meiya Power Company Limited
(MPC). MPC successfully built 12 hydro and thermal power plants in mainland
China, in which 10 are fully completed and currently in operation and 2 are
going to be completed an in operation.

Alfred K W Wong, Director and Interim CFO

Mr. Wong has been serving as Executive Director of AIF Capital Limited,
advisor top the US$780 million Asian Infrastructure Fund, a private equity fund
established in 1994 which invests in high-growth private utility companies
throughout Asia, and the Russell AIF II Fund sponsored by Frank Russell Co.

Mr. Tom Young, Chief Operating Officer

In Hong Kong he has previously worked as the marketing manager for ARKO
Energy Ltd. developing and marketing the Internet based online coal trading
for the ARKO Group. Mr. Young was the Project Manager on ARKO's Project
Implementation Team, which dealt with ARKO's coal related investments,
including coalmines and coal preparation facilities in China, and coal ports in
Indonesia.

Keith Stott, Project Director

Mr. Stott was the Chief Operating Officer for CLP. He was responsible for the
day to day operation of the total 7500 MW power system including all power
stations, transmission & distribution networks and interconnections to the
Chinese Grid System. In addition to the above the COO for CLP, he was
responsible for construction of new transmission network & power stations
including the 2500 Mw Gas Turbine station at "Black Point".

Li Sze Wing, Technical Advisor

Mr. Li was ever at CLP and Mirant Asia Pacific, where he was responsible for
performance engineering for several power plants and for technical and
environmental due diligence for its various projects, including Hirma (India),
Balagrah (India), Hinkrut (Thailand), Shandong International Power
Development Company (SIPD), China Power International Company (CPI),
Inner Mongolia, Nanjing and Caojing (all in China).

Advisory Board

James R. Sexton:
Jim Sexton is a 1965 graduate of the U.S. Naval Academy and Harvard’s
2000 Program for Global Leadership. He is a former US Navy Pilot. Mr.
Sexton established 2 international logistics & transport companies and in this
field he has rich experience.

Mr. Henry Houng

Mr. Houng is a famous enterpriser in Taiwan, and he has been working in
importing high quality coal from America, South Africa, Australia, Indonesia
and the mainland of China to Taiwan market these years. Also he engaged in
the investment of power plants equipment and the related energy projects. He
ever worked for Glencore from 1991-1999 and was responsible for marketing
coals from all over the world into the Taiwanese Power market.

Mr. Hsi shih chi:

Mr.Hsi Joined Taipower in 1959 and became president in 1994 and Chairman
in 1997. He has experience of over 45 years in Taiwan energy market.

Rob van de Waal:

Owner of Iv-Bouw Groep with extensive experience of a wide range of
engineering projects around the world. Van de Waal is the pioneer of
international coal blending technology and owns the technology of multi-silos
coal blending design. He inherited his family properties and by business
development and purchase, he developed his company into an international
engineering enterprise whose costumers are most the multinationals.

IV. Company size (P10-P11)

(In P.10 of PEL PPT: Organization, Key Partners)
V. PEL Mission
PEL Mission: Deliver value to the coal industry in China by becoming a
market leader in the effective integration of three key segments of the coal
supply chain.
Coal Marketing
• Explore the coal mine and manage the purchasing of coal in China,
Indonesia, and Alaska
• Develop and manage the CBF end-user markets
• Organize the supply of blended coal to end-users in China and North
Asia
Coal Blending
• Blend “off-spec” coals scientifically to produce “compliance” grade coal
• Supply tailor-made environmentally friendly and efficient coal to power
plants in China and Asia
Coal Mine Safety
• Monitor the coal mine operation with advanced coal mine safety
production system;
• Sales of safety equipment and services used as leverage to secure
long term and steady coal allocations.
VI. The introduction to the project (P14-P19)
CBF—Coal Blending Facilities
PEL is the exclusive Asia licensee for using European coal beneficiation
technology to blend coal to meet US, European and new PRC
environmental standards and improve combustion efficiencies in coal-fired
power plants.
PEL has identified 20 prospective locations for CBFs throughout China. It
is planned that the first 4 CBFs will be contructed from July, 2006. After
the successful operation of the first four CBFs by PEL in 2008 more than
40 million tons of coal will be blended with a projected sales income of 2.5
billion US dollars.

CBF Technology
PEL coal blending is a method using leading technology to produce the
high quality coal with automated silos.
Different variety’s of coal have different specifications. Even the coal from
same coal mine has different specifications. The quality of the coal will
affect the efficiency of the boilers, including the mills, burning efficiency,
ash cleaning, the emission of SO2, Nitric Oxide and CO2. And all these will
affect the profit of the power plants and steel plants.

Since 2003 PEL has held the exclusive technology license in China from
Iv-Bouw in Holland for the CBF. Iv-Bouw will be the lead engineer and
support the project and assist in its construction, and they will offer
technical support during operation. In 2006 the exclusive cooperation
between PEL and Iv-Bouw for the CBF has been extended to cover the
whole of Asia.

PEL signed a MOU with Sinocoal International Engineering Design &

Research Institute (SCIEG) appointing them as the official design institute
for the CBF facilities. Hubei Cheng Tao Tendering Company Limited has
been appointed as the contractor coordination organization for the PEL
CBF construction project. It acts as the technical and contractual
consultant to assure project compliance and development by PRC
engineering & civil construction firms.

PEL’s Coal Blending Facilities (CBFs) are based on the proven design of
Europe’s largest coal terminal, EMO Rotterdam, which has been in
operation since 1994.
The EMO CBF was designed and built by Dutch engineering firm Iv-Bouw,
with which PEL has negotiated exclusive technology licenses for Asia.

EMO’s CBF scientifically blends coal which satisfies European, US and

PRC environmental requirements for SO2 and other combustion
byproducts. KEMA is a world reknowned coal combustion and sampling
and analysis consultancy firm from Holland who tested and designed the
coal blends for the power plants in Holland. PEL has signed an exclusive
agreement with KEMA for the CBF in China.

Steam Coal Imports & Marketing

Beijing Petrocom Logistics Technology Co., Ltd has signed a coal
purchasing agreement to supply coal to the 4 coastal power plants in the
south of China, which are affiliated to Datang International Power
Generation Co., Ltd. with an annual importing amount of 6 million tons.

Taiheiyo Global Holdings (TGH)

TGH is a joint venture between PEL and Taiheiyo Kohatsu of Japan. The
JV has licensed world class coal mine safety and in-mine methane gas
collection technologies for use in China. PEL has cooperated with
Taiheiyo Kouhatsu ， and Sino-coal International Engineering Group
making use of the advanced coal mine safety technology owned by TKI as
the research platform to get further improvement according to the actual
China situation. Dalian Coal Technology (DCT) is a joint venture between
TGH and the China Coal Research Institute (CCRI) – Fushun, formed to
manufacture, assemble and distribute mine safety and methane gas
collection systems in China.

The technologies include:-

• Double-Pipe Gas Drainage Drilling Machine (able to drill twice as
far as existing equipment)
• Miner Location System (location monitoring device for each
individual miner)
• PHS Communication System (Underground telecommunications
system)
• THY 2000 Monitoring System (Mine management and monitoring
system)
• Optical Gas Sensor (Used to detect methane gas in the mines)

Other Safety Equipments — New-style KL3LM (A) Miners’ Lamp

An overall agency agreement in China for selling KL3 LM(A) Miners’ Lamp
has been signed between Beijing Petrocom Logistics Technology Co., ltd
and Beijing Huading Sifang Science and Technology Development Co.,
ltd. This miner’s lamp adopts new techniques such as LED new-style
lamp-house and lithium ion storage battery and single-chip microcomputer
intelligent power supply management, etc. Thus it is small, light and safe
with high illumination and a long-life span and so on. It is the new-style
lighting equipments for removing hidden risks for coal accidents and for
ensuring miners’ safety. Currently it has already been sold in major coal
production provinces such as Shandong, Henan, Shanxi, Inner Mongolia
 and three provinces of Northeast etc. It is anticipated that the annual sale
quantity will reach 400,000.

Research and Development Center

PEL will establish a R&D centre in China. The R&D centre will incorporate
R&D for the TGH and CBF projects and will be comprised of 3 core
sections. TGH and CBF partners such as TKI, Iv-Bouw and KEMA will
consult for the centre.

VII. Site Selection of CBF（ P20-P21）

（P14 in PEL PPT: CBF, Designated Site Selection）
VIII.Potential Customers Distribution（ P22-P23）
（In PEL PPT:：Potential Customers）

IX. Logistics System（ P24-25）

Ocean Freight
PEL is currently drafting a cooperation alliance with NYK Bulkship (NYK),
which is one of the global largest Ship owning/operating companies in the
world. PEL will work with NYK to ensure a reliable chartering operation that
allows PE the security of a highly experienced shipping company with the
flexibility to adapt to new challenges and opportunities.

Inland
Domestic Rail Transport
PEL has signed a strategic cooperation framework agreement with China
Railway United Logistic Limited (CRUL) to establish a joint coal logistics
centre to coordinate transportation, distribution and warehouse interface and
operations.
PEL is to transport raw coal to the CBFs from Mines/Ports and to transport
blended coal to domestic customers. PEL will also work with existing suppliers
and miners who will utilize their current rail transport allocations in diverting
coal from the current supply chain through the CBF network.

Inland River Barge Transport

PEL will work closely with existing barge freight companies to transport coal to
and from the inland CBFs. It is to transport coal to and from the CBFs on the
inland river systems, particularly the Yangtze River and its branches. PEL will
work on a long term basis with these companies and will, in the future, work to
bring more up to date design barges with greater capacity into the Chinese
market.

X. Development Planning (P26-P31)

CBF Development plan (P26-P27)
In coordination with PRC State, Provincial and local government agencies,
PEL has identified 20 prospective locations at which to build (CBFs). Coal will
be sourced primarily from China and Indonesia.
Following are the first 4 CBFs at strategic locations:
Lianyungang
 Coastal facility serves power generators in eastern China including the
area around Shanghai.
 A cooperation agreement has been signed with the port authority for joint
development.
 Environmental evaluation report of the project has finished and obtained
the approval.
 Site selection completed and reserved by Port Authority for PEL.
Tianjin
 Major port CBF supplies to the East of China, including the power plants
around Shanghai.
 A cooperation agreement has been signed with the local corporation for
joint development.
 The preparation of site selection and initial work has been finished
Xiangfan
 Inland rail to barge coal facility on the Han River, a tributary of the
Yangtze, and at the junction of the country’s major north-south and east-
west rail corridors serving much of central and eastern China.
 A cooperation agreement has been signed with the port authority for joint
development.
 In principal agreement to lease entire port to CBF business
Yichang
 Inland rail to barge port facility on the Yangtze River served by the
county’s major north-south rail route and just downstream from
ChongQing.
 A cooperation agreement has been signed with the port authority for joint
development.

Recent Key Development results（ P28-P29）

Hubei Development & Reform Commission
 Hubei Development & Reform Commission
MOU has been signed on 8/June in Hong Kong. The provincial
government will lead a research on strategic energy storage jointly with
PEL and Huazhong Science & Technology University. The blended coal is
planned to supply as the strategic energy reserve of Hubei.
 JOVO Group
An MOU has been signed by PEL and JOVO for project development.
JOVO supplies LPG and LNG to customers in Guangdong and plans to
set up DME operations to blend with the LPG to reduce its LPG supply
costs. PEL will supply blended coal to a coal gasification facility which will
 provide coal gas to the DME plant.
 Zhanjiang Port Group
PEL has signed MOU with Zhanjiang Port Group. Located in West
Guangdong this is one of the largest ports in Southern China.
 Jiujiang Metallurgy Coal Group (JMCG)
CBF project has been treated as the main development project within
Jiangxi Province. Province government has shown their full support for
PEL with the issue of signed document. Blended coal supplied by PEL will
be stored as the strategic reserve for Jiangxi Province.
 Guangxi Development & Reform Commission
PEL has reached agreement with Guangxi PDRC for the building of CBF
facilities in Beihai, Fangcheng and Qinzhou with full governmental support.

Projections 2008 — 2010 Preliminary (P30-P31)

PEL plans to have the first 4 of its CBFs in operation before the first quarter
2008, each with an operating capacity of 10mm metric tons per year.
By year-end 2010 PEL plans a total of 20 CBFs with an annual production
capacity of 200 million metric tons.