Kelley GTM Manufacturing, L.L.C.

2100 Spruce • Amarillo, TX 79103

(806) 576-4600 Phone • (806) 373-9473 Fax

www.gogtm.com

Manufactured Under License from NCF Industries, Inc.

Kelley GTM L.L.C.

KGTM is a company designing, manufacturing and

retesting Gas Transportation Modules, based in

Amarillo, Texas. It is 60% owned by the Kelley Family

of Companies and 40% owned by Pressure

Technologies plc owners of Chesterfield Special

Cylinders.

The Kelley Family has led the specialty gas

transportation industry with the most progressive

transportation developments for over half a century.

Chesterfield Special Cylinders has been a leader in

high pressure cylinder technology for over a century.

Kelley Compressed Gas History

• 1946 – Jack B. Kelley starts selling helium

• 1959 – JBK buys first tube trailer (3AA)

• 1960 – JBK designs and builds world’s first Jumbo

helium tube trailer (3AAX)

• 1969 – JBK builds first optimum helium trailer (3T)

• 1990’s – Kelley explores Type 3 and Type 4

technologies for compressed gases

• 2004 – Kelley begins relationship with NCF

KGTM History

• 2005 – Joint R & D with NCF Industries

• 2006 - GTMM Formed, testing continues

• 2008 – GTMM achieves US DOT Manufacturing

approvals

• February, 2009 – GTMM receives approval of the

KGTM, SP 14266

• Summer 2009 – First shipments

• April 2014 – US DOT Retest authorization received

• May 2014 – Unit 200 produced

GTM Organizational Chart

GTM Specifications

• 9 Steel Vessels hoop-wrapped with resin infused fiberglass. Low cost, readily available welded pipe.

• Built & tested to US DOT SP 14867.

• Each vessel delivers 13,734 ft³ (389 M³) of CNG at 3,250 psig.

• Each GTM delivers 123,606 ft³ (3,500 M³) of CNG at 3,250 psig.

GTM Module for CNG Storage of

123,606 SCF (3,500 m3) of CNG at

3,250 PSIG (224 bar)

Single GTM Solution for delivery of

123,606 SCF (3,500 m3) of CNG at 3,250

PSIG (224 bar)

Dual GTM Solution for delivery of 247,212 SCF (7,000 m3) of CNG at 3,250 PSIG (224 bar)

GTM Mother-Daughter CNG Transport Industry Model

Mother station Daughter station

Takes gas from existing gas

supply line, flare gas or LNG

plant

GTM vehicle delivers gas to daughter station

Receives gas and dispenses it to

the end user (e.g. oil rigs using

gas power generators)

In some cases vehicle takes flare gas from oil rigs

Max. 150 miles

Case Studies • Stranded or Flare Gas

– Clients have used GTMs in order to move stranded gas or

capture gas that was being flared and delivering it to market.

– By 2014, the U.S. EPA will discontinue flaring gas and the

number of clients capturing previously-flared gas will sky rocket.

• Examples of Clients – Bakken Express in the Bakken Shale grounds.

– FlareSolve

– CPSL

– Montana Dakota Services

Case Studies • Gas to supply stranded Commercial/Industrial end

users – Many of our clients use GTMs to transport CNG from a

pipeline/fueling station to a stranded manufacturing facility for

energy and fuel purposes.

• Examples of Clients – NG Advantage

– Powerserve

– Martin Machinery

– Compressed Energy Systems

– SLF TechSys

Case Studies • Supply CNG as a fuel for drilling and fracking rigs

– Many clients are studying converting their drilling, fracking rigs

from diesel fuel to CNG in order to save costs on fuel.

– These clients utilize GTMs to bring CNG from a pipeline/fueling

station to their on-site locations.

• Examples of Clients – Chesapeake

– Apache

– Cabot Oil & Gas

– Bison Fuels

– Anadarko Petroleum

– CLEANCOR Pressure Vessels

– CanGas Solutions

Case Studies • Mother/Daughter CNG Application for vehicle

refueling – Clients in the CNG vehicle market or clients who are studying

converting their fleets from diesel to CNG vehicles use GTMs to

transport CNG from the Mother station and to act as the storage

unit for CNG being dispensed from the Daughter station

• Examples of Clients – Compressed Energy Systems

– Pinnacle – AT&T

– Cumberland Natural Gas

Case Studies • Helium, Hydrogen & Other Gases

– Some of our clients use GTMs to store and transport helium,

hydrogen and many other gases with industrial and technical

uses.

– Examples of Clients:

• U.S. Government – Department of Defense - Helium

• Ventech Refineries – Nitrogen, Hydrogen

• Tertiary Oil Recovery – OilSteam

• Gas Utility Applications – Questar

– PG&E (Pacific Gas & Electric)

Case Studies • Energy Storage Solutions

– Clients will also use GTMs to store compressed gases for

energy purposes.

• Examples of Clients – Clean Energy Systems

– Sustain X

– Emerald H2

Case Studies • Rail Locomotive Tender

– Bright Energy Services – C-Zero Engineering

– Cummins Engine Co.

– BNSF Railroad

• Only Rail Certified CNG transport and storage

system available – Weight not an issue on rail

– Stackable so 4 KGTMs can ride on one flatcar

– Our existing FRA acceptance is critical to our customer

– Market size: EIA expects rail to use 1 trillion Btu in 2017 and

148 trillion (35% of usage) by 2040 reference case

– Trials scheduled for June 2014 with KGTMs

International Clients • Total Support Energy – Nigeria

• SGN – Dominican Republic

• EGP – Peru

• ARCTAS – Colombia

• AccesGas – Mexico

Competitive landscape KGTM Luxfer IGX Lincoln

Technology Type II steel Type III aluminum Type IV composite

Capacity 123,000 scf 358,000 scf 356,000 scf

Cost per scf $1.00 $1.50 $1.60

Approvals DoT for cylinders and the

module

DoT and ISO for

cylinders only

DoT and ISO for

cylinders and the module

Fire test Survives 1,400 F for 45

minutes

Rated to 230 F only Rated to 230 F only

Passed rail crash test Yes No No

Integrated Manufacturing Yes No Yes

Experience 68 years 5 years 20 years

Fatal accidents No No Yes

KGTM Planned Development • 20’ lighter wall/helical wrapped cylinder

– Will weigh less – 3,000 pounds savings

– Be higher pressure – 3,600 psig working pressure

– Carry more gas – pipe ID, pressure add 10,000 scf

– Will fit into the existing, tested and approved packaging

– FEA complete, POC vessel in process

– Expect DOT approval by December 2014

• 40’ LW/HW – 85% of the Titan in volume, 60% of the cost

– Production cost not linear so margins are higher

– Will require new packaging testing

– Expect DOT approval by July, 2015

KGTM Standards Development

• ISO 11515 – ultra large composite cylinders – Appendix to the standard being prepared by CSC

– Covers existing cylinders and development program

– ISO agreement for work program expected December 2014

– Appendix approval expected July 2016

– Allows access to all ISO signatory markets

• Individual market approvals by special permit – Israel

– UK

Partnership Marketing Initiatives

• Aluminum Type 3 – Negotiating with Worthington Industries and CNG Cylinder Int’l

– ISO authorization in place – good for international market

– Directly compete with Luxfer/IGX offering

• All composite Type 4 – Exploring offering from S. Korea

Questions?

Appendix

Components Weight (Lbs/Kgs):

• Empty GTM = 36,760 / 16,674 each

• CNG @ 3,250 psig = 5,000/2,268 per GTM

DESIGN QUALIFICATION TESTS

• (a) Pressure cycling tests: All cycling tests shall be performed by

hydrostatically pressurizing the tube between zero and the

designated pressure at a rate not to exceed 4 cycles per minute.

Adequate recording instrumentation must be provided if the

equipment is to be left unattended for periods of time. All tubes

used in the cycle test must be destroyed. Note: 24” diameter, 60”

length test specimens for Hot/Cold/Environmental vs 24” diameter,

20 feet length due to constraint of testing facilities is authorized.

– (1) Ambient Temperature: A representative tube shall be tested at ambient

temperature without showing visible evidence of distortion, deterioration or failure

as follows: Each tube tested at a minimum must withstand 10,000 pressurizations

between approximately zero and service pressure, followed by at least 30

pressurizations between zero and test pressure. After completion of the test, the

tube shall be pressurized to burst in accordance with the following paragraph (b),

and the burst pressure recorded.

– (2) Environmental test: A representative tube shall be tested without showing visible evidence of distortion, deterioration or failure as follows: (i) The tube shall be conditioned for 48 hours at zero pressure, a minimum 140F, and a minimum 95% relative humidity. (ii) Pressurize from zero to service pressure for 5,000 cycles a minimum 140F, and a minimum 95% relative humidity. (iii) Stabilize at zero pressure and ambient conditions. (iv) Pressurize from zero to service pressure for 5,000 cycles at minus 60F or lower. (v) Stabilize at zero pressure and ambient conditions. (vi) Pressurize form zero to test pressure for 30 cycles at ambient temperature.

– (3) Thermal cycling test: A representative tube shall be tested without showing visible evidence of distortion, deterioration or failure as follows: (i) At ambient temperature from zero to service pressure, cycle 10,000 times followed by 30 cycles from zero to test pressure. (ii) Hydrostatically pressurize to service pressure and submerge and hold tube for 10 minutes in 200F fluid; transfer the tube and submerge for 10 minutes into minus 60ºF fluid. Transfer time shall be between one and three minutes, with the pressure in the tube controlled within the range of service to test pressure. Repeat 20 times.

– (4) After passing this test, the tube must be burst-tested and the pressure recorded.

• (b) Hydraulic burst test. One representative tube shall be hydrostatically pressurized to

failure as follows: (1) Pressure shall be applied at a uniform rate not to exceed 200 psi

per second, up to the designated burst pressure, and held for a minimum of 60

seconds; the pressure shall be increased to failure and the burst pressure recorded. (2)

The burst pressure of the tube must be at least 2.4 times the marked service pressure.

Failure must initiate in the sidewall and the tube must remain in one piece. The burst

pressure and failure must be recorded.

• (c) Gunfire test. One representative tube charged with air or nitrogen to service

pressure shall be impacted by a 0.50 caliber armor piercing projectile and a 0.50 caliber

“tumbled” armor piercing projectile. The composite tube shall be positioned so that the

projectile impact point is in the tube sidewall having hoop winding. The distance from

the firing location to test tube must not exceed 50 yards. Tested tubes shall reveal no

evidence of a fragmentation failure. Results of the tests must be recorded.

• (d) Fire Engulfment test. The composite tubes tested must be fitted with pressure relief devices in accordance with § 178.BB-10 and charged with the intended lading to the prescribed filling pressure or density. Charging with nitrogen or air is authorized only if the subject tubes will be in non-liquefied gas service. A single tube and the completed assembly shall pass a “pan fire test” using a pan at least 8” deep and extending beyond the GTM on all sides 12 to 24 inches. 150 gallons minimum of diesel fuel or JP-4 shall be ignited and allowed to burn out. The pressure in any tube shall be monitored and shall at no time exceed the test pressure of the finished composite reinforced tube. Results are acceptable if the contents do not vent or vent through the PRD. After successfully passing the fire test, the single tube must be pressurized to burst as required in § 178.BB-18(g) above, and the pressure recorded.

• (e) Rollover test. The complete assembly, charged to service

pressure shall be rolled or dropped from a height representing the

actual configuration during transportation. The assembly shall be

robust enough to withstand a minimum 8g load as evidenced by

typical shock load indicators. Results are acceptable if there is no

apparent damage to the piping, valves, or fittings resulting in loss of

contents.

CONTAINER IMPACT TEST After the 6.7-mph impact test, inspection of the ISO container revealed that the structure had not sustained any visible

damage. The corner-to-corner (A1 to A2, B1 to B2, C1 to C2, and D1 to D2) measurements on each side face of the frame

showed no measurable changes in distance as a result of the impact test. The container being tested did meet the

requirements related to the SRS specification described in Section 41 of the UN Manual of Tests and Criteria and as a

result has satisfied all of the requirements outlined in Section 41at a gross operating weight of 44,000 pounds.

• (f) Forklift Puncture test. The complete assembly shall be puncture

tested as described in the application. As a minimum any tube

within the assembly shall be capable of withstanding level 2

damage as defined in paragraph 7.B above.

• (g) Qualification test results. A report of all tests for each design

qualification, describing test setup, procedure and results must be

submitted to the OHMSPA prior to production of the design.

GTM Manufacturing, LLC

2100 Spruce St. • Amarillo, TX 79103

P.O. Box 31598 • Amarillo, TX 79120-1598

(806) 576-4598 Office • (806) 373-9473 Fax

www.gogtm.com • sales@gogtm.com