CBF Project

PETROCOM ENERGY LIMITED

Catalogue

I． Introduction
II． CBF
III．Coal Blending Technology
IV． Character of Technology
V． EMO Rotterdam
VI． Research and Development Center
VII． Site Selection for CBF
VIII．Potential Customers
IX． Logistic System
X． CBF Development Plan

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I． Introduction

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’s core strategy is to construct state of the art Coal
Blending Facilities (CBFs) to serve the growing need for environmentally
compliant coal in China’s electrical generation market.
The CBF projects of Petrocom will bring in the Dutch advanced
technology. At present, this technology is being successfully used in EMO
Rotterdam while PEL’s CBF in China will be based on this and set up the
close cooperation with Iv-Bouw and KEMA.
The company will leverage its considerable management experience,
strong Chinese government support, an extensive network of supply chain
partners and exclusive license to proven pollution reducing CBF technology
to become one of China’s premier coal suppliers.
II． CBF

PEL is the exclusive Asia licensee for proprietary European coal

beneficiation technology used 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. The first 4 CBFs are all planned to be in operation by Q1
2008. PEL projects pro-forma 2008 revenue of US$1.1B from 40+mm tons
of CBF coal.

III. Coal Blending Technology

PEL and IV-Bouw entered into a license agreement in 2003 to exclusively

market the CBF technology in China (the same technology in the EMO
Rotterdam facility). IV-Bouw provides engineering and construction support

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 for the CBFs, as well as technical support during the operation phase. PEL
has signed a MOU agreement with Sinocoal International Engineering
Design & Research Institute (SCIEG) appointing them as the design
institute of CBF facilities. Hubei Cheng Tao Tendering Company Limited is
the contractor coordination organization appointed 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.

IV. Character of Technology

Technology of coal blending is a coal producing method with high

technology and economic benefit. The coal with different specification will be
blended in the silo with 50 meters high and 25 meters in diameter by the
computer automatically, and then the coal which can match the
requirements of different boilers for different customers will be produced.
The blended coal is produced with low cost and high quality.
The basic principal of CBF is producing the coal with low cost and high
quality which is good for environmental protection. By blending the coal with
low sulphur, low ash, low CV and the coal with high sulphur, high ash and
high CV, the uncleaned coal with low value will be blended to cleaned coal
with high value. The blended coal can improve the burning efficiency of the
boilers, and it can match the economic profit of the power plants and some
other end users. Also the blended coal can match the requirement of
environmental protection.
CBF technology can reduce SO2 emissions from coal-fired power plants
by over 50% by scientifically blending coal to meet PRC, US and European
environmental standards. It can improve combustion efficiencies of coal-fired
power plants increasing electric generation by 3%-5% by custom blending
coal to meet plant design specifications.

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 V. EMO Rotterdam

PEL’s Coal Blending Facilities (CBFs) are based on the proven design of
Europe’s largest coal terminal, EMO Rotterdam, 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.
The CBF of EMO can match the requirement of reducing SO2 emission
in Europe, American and China; also it can match some other requirements
in environmental protection.

EMO supplies 20 million tons of blended coal to Germany (60%),

Holland (23%), Belgium (9%), France (7%) and some other countries (1%)
each year.

VI. 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.
Demonstration center of technology and equipments: including all the data
and technical specification of the projects.
Research and Development Center: operation and researching of new
technology, and the research of the new technology which is suitable for China
Market.

Burning Lab: the test of burning efficiency of the blended coal;

Wuhan Huazhong Technology University has signed the cooperation

contract with PETROCOM in researching and testing coal. With the rich
experience in coal blending and cooperation with local power plants of KEMA,
the lab will do the test of blended coal, and then they can make sure whether

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the blended coal can match the requirement of different power plants.

VII. Site Selection for CBF

（P14 in PEL PPT: CBF, Designated Site Selection）

VIII. Potential Customers

（In PEL PPT:：Potential Customers）

IX. Logistic System

Ocean Freight

PEL has identified a number of transportation requirements for the raw

blendstock coal and the blended CBF coal.
PEL is currently discussing a cooperation alliance with NYK Bulkship (NYK),
which is one of the global largest Ship owning/operating companies in the
world. NYK was established in 1885 and it started Japan's first long-distance
liner service begins on Bombay route in 1893. In 2002 NYK became the first
shipping company to obtain ISO14001 certification. PE 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.
PEL will use a combination of Time Charter, Voyage charter and COA options to
kick start coal supply into China.

Inland

Domestic Rail Transport

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PEL has signed a strategic cooperation framework agreement with China
Railway United 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 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. CBF Development plan

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.

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Site selection completed and reserved by Port Authority for PEL.

Tianjin

Primary port facility serves Beijing and the surrounding region.

A cooperation agreement has been signed with a local company for joint
development.
Site selection and initial engineering have been completed.

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.

Projections 2008 — 2010 Preliminary (P30-P31)

PEL plans to have the first 4 of its CBFs in operation by the end of 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
Comparison to the world’s largest coal producers/traders: (The chart is on Page
20 of PEL PPT)