Producing premium biofuels in Europe eni’s perspective

Giacomo RispoliExecutive Vice President

European Biofuels SeminarGeneva, April 15, 2015

Highlights

• Scenario

• Eni strategy

• Eni/Honeywell UOP EcofiningTM technology

• Eni Green Refinery

• Looking to the future

• Conclusion

Refining Scenario

European refining industry is living a major economic crisis

refining overcapacity and

low operating margins

old and small size refining

system

environmental constraints

high energy cost

decrease of demand and unbalanced

offer

European Legislation Scenario

• EU's Climate Change Package with EU targets by 2020:

20% reduction in greenhouse gas emissions,

20% improvement in energy efficiency,

20% share for renewable in the EU energy mix.

• EU Directives on biofuels :

Renewable Energy Directive

RED 2009/28/CE

Fuel Quality Directive

FQD 2009/30/CE

10% of renewable energy inthe transportation sector.

Second generation biofuelscounted twice.

Biofuels Scenario

BIODIESEL CONVENTIONAL PROCESS FAME (Fatty Acid Methyl Esters)

Poor Heating Value

Blending wallBlending limit of FAME at 7% max

High content of Oxygen

This constraint can be overcome by using new generation renewable Hydrotreated Vegetable Oil (HVO).

Hygroscopic Properties

BiorefineryEU biofuels

scenario

Eni vision

Refining industry crisis

ECOFININGTM

Technology

Reducing refining overcapacity?

Reinventing petroleum refinery!

Eni's strategy for biofuels

• Since the second half of 2005 eni and UOP decided to launch aR&D joint project to identify a new technology to produce highquality biofuels can overcome all the negative characteristics oftraditional biofuels (FAME).

• This project was a success, and in 2007 a new technology, calledEcofiningTM, was invented by eni and UOP.

• In subsequent years the realization of a new plant with Ecofiningtechnology was held back by the high cost of construction.

• At the mean time the crisis of refining industry required toshutdown weaker refineries.

• In 2011 the Venice refinery, due to its simple process scheme andlow capacity, was shut down to be converted in an oil depot.

Eni strategy for biofuels

• Eni was able to turn a critical situation into a greatopportunity by investing in the innovative Green Refineryproject for the conversion of a petroleum refinery into a“Biorefinery”.

• The Green Refinery idea is focused on the application ofEni/Honeywell UOP EcofiningTM technology and results fromthe long term “Eni Green Strategy”.

• That’s the “make option”: eni entered the biofuels market,producing a new generation of very high quality biofuelsstarting from renewable feedstocks.

Eni Green Strategy results

2007Eni/Honeywell UOPEcofiningTM patent

2012

“Refinery conversion to a biorefinery”

Eni patent

2013

First Green Refinery Project starts

May 2014

Green fuels production starts from

Venice Green Refinery

2017-2018

Green fuels production increase in Venice and starts

from new Gela Green Refinery

2nd half 2005 Eni and Honeywell UOP started a joint

R&D project on innovative Biofuels

eni/Honeywell UOP goal on biofuels

Produce real “drop-in” biofuels, totally hydrocarbon, instead of fuel bio-additives.

Focus on path toward new generation feedstocks.

“Other” Oils: Camelina, Jatropha

Lignocellulosic biomass,algae oils

AdvancedGeneration

Conventional Oxygenated Biofuels

BiodieselEthanol

Hydrocarbon Biofuels

JetDiesel Gasoline

FirstGeneration

Natural oils(vegetables,

greases)

Biofuels process: conventional vs new generation

Green Diesel: high quality product obtained by means of hydrotreating (HVO) withparaffinic composition (oxygen free).

Feed Process Product

Biodiesel FAME

(Fatty Acid Methyl Esters)

Glycerine

BiodieselMethanol

Transesterification

Green Diesel (HVO)Green Jet (HEFA-SPK)Green NaphthaGreen GPLBiological

feedstocks

H2

HYDROTREATMENT

CO2/H2O

Biological feedstocks

Feed Process Product

BIODIESEL CONVENTIONAL PROCESS:

ECOFININGTM PROCESS :

LOW QUALITY LOW CAPEX

HIGH QUALITY HIGH CAPEX

ECOFININGTM technology

Jointly developed by Eni and Honeywell’s UOP toproduce excellent biofuels, with high qualityindependent from the renewable feedstocks used,that can be of:

• 1st generation: edible vegetable oils;

• 2nd generation: tallow, used cooking oils;

• 3rd generation: oils from algae and waste.

Hydrogen

Light Fuels

Green Jet

(HEFA SPK )

Green Diesel

CO2

Water

Deoxygenation IsomerizationProduct

Separation

Renewable FeedstocksVegetable OilsUsed cooking oil Animal FatsOils from algae and waste

ECOFININGTM technology

1st stage 2nd stage

ECOFININGTM: typical yields

Feedstock %wt

Renewable oils 100

Hydrogen 1,5 – 3,8

Product %wt %v

Propane 4-5 7-9

Naphtha 1 - 8 1 - 10

Diesel 75 - 85 88 - 98

CO2 and H2O are also produced by the deoxygenation reaction

Green Diesel quality

Properties Fossil Diesel ULSDConventional

Biodiesel (FAME)

ECOFININGTM

Green Diesel

BIO content 0 100 100

Oxygen, % 0 11 0

Specific gravity 0.840 0.880 0.780

Sulphur, ppm <10 <1 <1

Heating Value, MJ/kg 43 38 44

Cloud Point, °C -5 From -5 to +15 Up to-20

Distillation range, °C 200 - 350 340 - 355 200 - 320

Polyaromatics, %w 11 0 0

Nox emissions Standard + 10% -10%

Cetane 51 50-65 70-90

Oxydation stability Standard Pour Excellent

eni and the Italian Navy defined an agreement, within the frame of the Navy GreenFleet Project, to formulate and produce a new military ship fuel, containing at least50% of Green Diesel produced by means of the EcofiningTM Technology.

The new fuel has been successfully tested for the very first time in Europe on theItalian Military Ship Comandante Foscari on January 2014. In the mid of 2015 thetest will be extended to other ships, including an aircraft carrier and a submarine.

The eni-Italian Navy Green Fleet Project

Eni Green Refinery

• The Green Refinery is the result of the first conversion ofa petroleum refinery into a biorefinery by mean of theapplication of EcofiningTM technology.

• This innovative idea has been patent filed by Eni onSeptember 2012 (n° MI2012A001465).

• Revamping the existing units in Venice significantlyreduces the required investment cost, estimated in 1/4to 1/5 of a new EcofiningTM grass root unit of the samecapacity and intensively sped up project timing.

Sept. 2012

Aug. 2013

Sep. 2013

May 2014

Overcapacity: use existing facilities for doing new business

The Eni Green Refinery project in Venice

The use of existing facilities allows a significant

reduction of capital costs

Substitute FAME with in-house produced HVO

Livorno

Porto Marghera

Milazzo

Gela

Taranto

Wholly ownedIn partnership

Sannazzaro

From Refinery to Biorefinery

Green Refinery Project: two steps

•Today, STEP 1: the EcofiningTM is operating in balance with the hydrogen from the refinery hydroskimming section.

•Tomorrow, STEP 2, on 2017: H2 production from a new steam reformer will allow to maximize the EcofiningTM capacity.

ECOFININGTM

H2

FormerHydroskimming

(H2 from catalyticreforming))

Steam Reformer & feedstock

pretreatment

Max throughput400 kt/y

(H2 balance limiting)

Max throughput560 kt/y

(Existing equipmentlimiting)

A technology challenge

• New feedstock material: different handling due to the poor cold flow properties and organic acidity.

• Conversion of two existing diesel HDS units into the two reaction stages of the EcofiningTM process.

• Integrating the EcofiningTM unit into the previous refinery scheme (utilities, ancillaries, etc.).

• Separating for the 1st step of operation, the derived biological material from the fossil material still running in part of the hydroskimming section of the former petroleum refinery (different blow down, sewers, slop tanks, etc).

The start up: a successful experience

• The Eni Green Refinery start up in the new configuration was very smooth without any issues;

• The ECOFININGTM unit successfully started up in May 2014, producing high quality Green Diesel.

• The unit performance, its operation stability and its response to changes are overcoming expectations.

• The integration with the hydroskimming section and with the utilities, facilities and offsite of the previous refinery is successful.

• Eni is looking for feeding the Green Refinery withadditional advanced biofuel feedstocks:

– Tallow;

– Used cooking oils.

in compliance with the Annex 9 of the Proposal for adirective of the European Parliament and Council,amending the Directive 38/70/EC and 2009/28/EC.

• Focus on short supply chain: advanced feedstock fromthe region surroundings for improving the local economy.

Next improvement…

• Conversion of the refineryon the Venice model.

• Consumption of vegetableoils: 710 kton / year

• Expected production: 530kton / year

Next improvement…

Gela Green Refinery

Looking to the future (eni R&D)…

• New biofuels: a new innovative process is under developmentfor producing new 2nd generation biofuels.

• Bio-oils from microalgae: eni has a pilot plant operating since2010 in the Gela refinery, Sicily, constituted by algae farm andoil recovery plant.

The Green Refinery Project is the result of the

LONG TERM ENI R&D GREEN STRATEGYmade by continuous investment on R&D activities closely linked to the business aimed at developing innovative biofuel technology in advance of the regulations

1st conversion in theworld of a conventionalpetroleum refinery intoa Biorefinery, by meansof the EcofiningTM

proprietary technology,which allowed to renewthe obsolete VeniceRefinery into a highinnovative industrialprocess scheme.

PROCESS INNOVATION

By this strategy we canreduce traditionalrefining capacity withoutlosing technical andscientific know-how andlargely keeping thenational refining industrystructure.

INDUSTRY KEEPING

Conclusions

Launch on the market ofnew high qualitybiofuels: Green Diesel,Green jet, Green LPGand Green Naphtha.

Green diesel, inparticular, will bedistinctive of eni Dieselfuel, assuring premiumquality for strongercompetition.

PRODUCT INNOVATION

Thank you