16-02-09 Colombia 1000 Bpd Proposal

8/16/2019 16-02-09 Colombia 1000 Bpd Proposal

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MODULAR REFINERY PROPOSAL

Date: February 9, 2016

Client: MR. HENRY ECHEVERRI

INTRODUCTION

CLIENT is interested in processing crude oil into marketable fuel products. VFuels, LLC (VFuels) fabricates

modular (skid-mounted) crude oil refining and gas processing equipment. VFuels proposed solution for CLIENT

is the design and fabrication of one (1) 1,000 bpd Crude Distillation Unit (CDU). The CDU will be located in

Colombia and will produce naphtha, diesel #2, and Heavy Fuel Oil (HFO or residuum). Multiple CDU trains can

be combined to achieve a higher throughput as necessary.

PRICE, SCHEDULE & PAYMENT TERMS

VFuels’ price for one (1) 1,000 bpd CDU is 4,969,000 US (Four Million Nine Hundred Sixty-nine Thousand US

Dollars). Freight terms are FAS, Houston, Texas, USA (client is responsible for freight beyond Houston, Texas).

Please note that modular process equipment supplied by VFuels is only part of a complete refinery. Storage

tanks, civil work, utilities, buildings and other Outside Battery Limits (OSBL) equipment and services (see“Exclusions” at the end of this proposal) are the responsibility of the client and are not included in this proposal.

The price listed above is valid for ninety (90) days from the proposal date and is subject to the execution of

VFuels’ process unit supply agreement within such ninety (90) day period. The fabricated CDU will be shipped

within ten (10) months of contract signing and receipt by VFuels of the down payment.

Milestone % Amount ( US) Timeframe

quipment

Down Payment 30 $ 1,490,700 At Contract Signing

Schedule A Design Package Completion 20 $ 993,800 2 months

Major Equipment Receipt 40 $ 1,987,600 6 months

Fabrication Complete, Prior to Shipment 10 $ 496,900 10 months


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ESTIMATED Y IELDS

The estimated yields below are based on average D-86 distillation numbers from the supplied assay.

Product

Yield (%) Yield (bpd)

FuelGas 1.0 10

Naphtha 10.0 100

Diesel 30.0 300

HeavyFuelOil 59.0 590

*Yields can be slightly adjusted according to client specifications and fuel requirements. The production of kerosene can

be achieved by reducing the diesel product yield.

BRIEF PROCESS DESCRIPTION

A Crude Distillation Unit (CDU) or modular refinery is a simplified full-scale refinery that allows for distillation

of crude oil into low octane naphtha, diesel, kerosene and residual fuel oil. It does not include the more

complex refinery processes such as hydrotreating (the reduction of the sulfur content in the diesel), reforming

(increasing the octane of the naphtha for conversion into gasoline), or cracking (converting the heavier

products into diesel and gasolines).

Modular refineries require significantly less capital investment than full-scale refinery facilities; however they

are not able to produce the same yields or quality of products as a full-scale refinery. Additional process units

(reformers, hydrotreaters, crackers) would have to be added to a modular refinery to realize the products and

yields mentioned earlier.

Typically, clients that are targeting the production of diesel and kerosene utilize modular refineries. Naphtha

and residual fuel oil are either sold back into the crude stream or sold slightly below the cost of the crude

feedstock.

In operating a modular refinery, crude oil is pumped from storage to the CDU where it first passes throughheat exchangers and then to a direct-fired heater that raises the crude oil temperature.

The crude oil exits the heater and enters the flash zone of the crude tower as a two-phase stream. The

residuum (or heavy fuel oil) is the liquid part of this two-phase stream and drops to the bottom of the tower.


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The vapor part of the stream flows upward through the tower producing the remaining diesel and naphtha

products.

Naphtha exits the top of the tower as a vapor and is cooled in an overhead condenser before flowing into the

reflux accumulator. Uncondensed vapor, also known as off-gas, is routed to the heater and used as fuel.

Naphtha is pumped from the accumulator and splits, with part of the naphtha returning to the tower as reflux

and the remainder flowing to storage. Any water in the crude oil feed accumulates in the water boot at the

bottom of the accumulator and is sent to water treatment.

Diesel is drawn from the side of the tower into the diesel stripper. The diesel is reboiled to remove light ends

and increase its flash point. The light ends are returned to the tower. The remaining diesel is pumped from

the bottom of the stripper, cooled in an exchanger and air cooler and sent to storage.

The residuum from the bottom of the tower is cooled in a heat exchanger and air cooler and sent to storage.

A slipstream of hot residuum is used as a heat source in the diesel reboiler.

VFUELS DELIVERABLES

VFuels will supply the client with one (1) 1,000 bpd CDU and desalter that will include preliminary and final

engineering/design (also called Schedule A and Schedule B design respectively); a modular refinery with a one-

year supply of spare parts and a documentation package. The documentation package may be used to apply

for necessary permits in country.

The preliminary (Schedule A) design will result in the following deliverables for the Inside Battery Limit (ISBL)

area of the CDU only:

• Basis of Design

• Process (Computer) Simulation

• Stream Summary Data and Yields from Simulation

• Equipment Data Sheets

• General Arrangement Plan

• Process Flow Diagram (PFD)

•

Piping & Instrumentation Diagrams (P&IDs)

• Electrical Power Requirements

• Electrical One Line Diagram

• Summary of Required Utilities

• Equipment List


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• Line List

• Instrument List

The detailed (Schedule B) design prepared by VFuels for the ISBL area of the CDU will result in the following

deliverables:

• Updates to Schedule A materials

• 3D Model of Equipment, Skids, Piping, etc.

• Orthographic (2D) drawings cut from 3D model including vessels, structural steel skids and piping

• Concrete foundation design for skids

• Instrumentation drawing package including wiring schematics, wiring plans, PLC layout, junction

boxes, etc.

•

Electrical drawing package including area classification, grounding, power distribution, wiring plans,

motor control center, etc.

VFuels complies with typical United States standards in its design and fabrication deliverables. These include

meeting ASME B31.3 for piping design; using A106 grade piping with ANSI flanges and fittings; meeting ASME

Section 8 for pressure vessels; heaters per API 560; exchangers per TEMA Class R; air coolers ASME code

stamped and per API 661; pumps per API 685 (sealless) or ASME B73.1 (centrifugal), and area classification

and electrical per NFPA 70.

VFuels will provide the client with three (3) copies of the Schedule A and Schedule B deliverables at the time

of their completion. These deliverables will allow the client to submit to the government for their necessary

construction/operation licenses and permits. In addition, at the completion of fabrication VFuels will supply

the client with three (3) copies of the equipment data books; and at the beginning of site installation, with

eight (8) copies of the operations and maintenance manual.

The equipment supplied by VFuels as part of the CDU, and within the ISBL, will be:

• Crude distillation tower with trays

• Electrostatic Desalter

•

Overhead accumulator• Diesel stripper with packing

• Off-gas drum

• Direct-fired crude heater

• Overhead heat exchanger

• Crude/Diesel heat exchanger


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• Diesel reboiler heat exchanger

• Crude/Residual heat exchanger

•

Overhead Condenser

• Diesel Cooler

• Residual Cooler

• Crude feed pumps (2)

• Naphtha product pumps (2)

• Diesel product pumps (2)

• Diesel reboil pumps (2)

• Residual product pumps (2)

• Chemical pumps (2)

• Instrumentation including local gauges (temperature, pressure, level); transmitters (level,

temperature, pressure, flow); control valves; flow meters; etc.

• Spare parts (one year) including vendor-recommended spares for pumps, coolers, exchangers, heater,

instrumentation and electrical.

The equipment listed above will be placed on steel frame skids (modularized) by VFuels in Houston, Texas. The

modularization process involves fabricating skids; installing the equipment (listed above); fabricating and

installing piping; installing instruments; providing insulation and jacketing of high temperature piping and

equipment; installing electrical components such as lighting, wiring, MCC, etc.; and painting all steel

components. All skids and equipment (except the heater) are assembled at the Houston shop prior to shipping

to verify proper fit.

ISBL VERSUS OSBL; EXCLUSIONS

CDUs have two main areas, the inside battery limits (ISBL) and the outside battery limits (OSBL). The ISBL

equipment consists of the CDU or CDU supplied by VFuels.

However, a facility requires significant support facilities to the CDU that are considered the OSBL. These OSBL

features include civil work (clear, backfill and level the site), roads, security fencing, landscaping, concrete

foundations, buildings (office, control, shop, etc.), storage tanks, truck loading rack, facility piping, powergeneration, electrical power distribution, area lighting, fire protection system, compressed air, nitrogen, water

treatment, oily water treatment, and wastewater treatment.


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This VFuels proposal is for the ISBL CDU only. The price and schedule DO NOT include any considerations for

the OSBL features described above. In addition, the following items are not part of VFuels deliverables and

must be provided by the client:

• Permits, licenses and government approvals including fees

• Site security

• Ocean freight of equipment (provided to Port of Houston, Texas only)

• Equipment installation labor or consumables

• Any other item not detailed in this proposal

S ITE WORK, OPERATIONS & MAINTENANCE

VFuels will supply personnel to advise the client with respect to equipment installation, commissioning and

initial startup. VFuels has included 169 man-days for this site advice in this proposal. The client shall provide

all accommodations and local transportation to US standards for VFuels’ advisory personnel. Any additional

man-days required on site for VFuels’ advisory personnel will be the client’s responsibility and paid at a rate of

$US 2,500 per man per day.

Installation work includes placing the CDU equipment skids onto concrete foundations and installing

interconnecting piping and electrical items. Commissioning includes inspecting all process, mechanical,

instrumentation and electrical components to confirm readiness for startup. Startup includes slowly feeding

crude oil into the CDU and heating/ramping up flow until maximum capacity is reached and all adjustmentsfor correct operation are finished. A test run of the CDU is then performed to confirm achievement of the

equipment requirements.

The client will be responsible for all labor, consumables and operations/maintenance costs during startup and

during regular operation. These costs are typically expressed in dollars per barrel ($/bbl) of crude oil processed

and are higher for smaller refineries. VFuels estimates show a range of $5 per barrel for smaller 1,000 bpd

CDUs to $2 per barrel for 20,000 bpd. These costs can be divided generally into labor and materials/utilities.

16-02-09 Colombia 1000 Bpd Proposal

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