# Report to the

Global CCS Institute



# Final Front

‐ End Engineering and Design Study Report

January 2012DISCLAIMER

This Report and the contents hereof (collectively, this “Report”) are being provided pursuant to and in
accordance with that certai n Funding Agreement by and between the Global Carbon Capture and Storage Institute Ltd. and Tenaska, Inc. (the “Funding Agreement”). Except as otherwise explicitly stated in the Funding Agreement, the provisions of the Funding Agreement are for the sole protection and legal benefit of the parties thereto, and their permitted successors and assigns, and no other person or entity
shall be a direct or indir ect beneficiary of, or have any direct or indirect cause of action or claim against, any party arising from the Funding Agreement or the publication, disclosure or di stribution of this Report.

This Report does not constitute the provision of engineering or design servi ces or advice and should
not be utilized or relied on by any person or entity as engineering or design servic es or advice. For the avoidance of doubt, neither Tenaska, Inc., Tenaska Trailblazer Partners LLC, nor their affiliates shall be liable to any third party for any harm or loss
associated with utilization of or reliance on this Report.

### Abstract

The Trailblazer Energy Center (Trailblazer or Project) is a supercri tical pulverized coal electric generating station under development by Tenaska. Trailblazer is expected to be the first new-build pulverized coal plant in the USA to incorporate a commercial-scale post-combustion carbon dioxide capture plant into the initial design. The Project will be designed to capture 85 to 90 percent of the carbon dioxide that otherwise would be emitted into the atmosphere. The Project will generate nominally 760 MW gross at summer ambient temperature with the CO 2 capture plant operating. The site is in Nolan County, Texas, United States of America (U SA), approximately nine miles east of Sweetwater, Texas.

Tenaska selected Fluor Econamine FG Plus SM technology and contract ed with Fluor to complete a Front-End Engineering and Design (FEED) study for the carbon dioxide capture portion of the Project. This report provides a complete summary of the FEED study effort including: pertinent Project b ackground information, the scope of facilities covered, the scope of the FEED study servic es, identification and treatment of health, safety, and environmental risk issues, high lights and challenges, next steps, lessons learned, and conclusions.

This is the eleventh in a series of know ledge sharing reports on Carbon Capture and Storage (CCS), developed by Tenaska for the Global CCS Institute.

## Final Front-End Engineering and Design Study Report

January 2012



### Table of Contents

1.0 I NTRODUCTION AND B ACKGROUND .................................................................. 1

1.1 Project Over view ........................................................................................................ 1

1.2 Developer B ackground .............................................................................................. 2

1.3 Partner Info rmation .................................................................................................... 3

1.4 Project Development Hi story and Status ................................................................. 4

1.5 Technology and Engine ering Prov iders .................................................................. 7

1.5.1 Owner’s En gineer .............................................................................................................. .. 7

1.5.2 EPC Contra ctor ................................................................................................................ ... 7

1.5.3 CO 2 Capture Technology Pr ovider Sele ction ...................................................................... 8

1.5.4 CO 2 Capture Technol ogy Overview .................................................................................... 9

1.6 FEED Study Requirement and Obj ective ............................................................... 11

2.0 P URPOSE AND G OALS ................................................................................... 12

2.1 Trailblazer Project Pu rpose and Goals .................................................................. 12

2.1.1 Carbon Regulation Early Mo ver .............................................................................. 12

2.1.2 Strategic Access to Existing CO 2 Markets ............................................................. 12

2.1.3 National Energy Security ......................................................................................... 12

2.2 Trailblazer CC Plant FEED Study Purpose and Goals .......................................... 13

2.3 Final FEED Study Report Purpose and Goals ....................................................... 13

3.0 E XECUTIVE S UMMARY ................................................................................... 14

3.1 Background and Overview ...................................................................................... 14

3.2 Results and Conclusions ......................................................................................... 15

3.3 Summary of FEED Stud y Lessons Le arned .......................................................... 15

4.0 CC P LANT P ROJECT F ACILITIES S COPE ......................................................... 18

4.1 Background Info rmation .......................................................................................... 18

4.2 Division of Responsibility, Inte rface and Battery Limits ...................................... 18

4.3 Scope of Facilit ies Included .................................................................................... 19

4.4 Exclusi ons ................................................................................................................. 21

5.0 FEED S TUDY S COPE OF S ERVICES ............................................................... 22

5.1 Progression/Schedule .............................................................................................. 23

5.2 Process Engin eering ................................................................................................ 235.2.1 Design Basis .................................................................................................................. ... 23

5.2.2 Process Simulation and Heat and Material Ba lances ........................................................ 29

5.2.3 Process Equipment Data Shee ts ...................................................................................... 29

5.2.4 P&IDs and Summa ries ...................................................................................................... 30

5.2.5 Design Re views ................................................................................................................ 30

5.3 Equipment Defi nition ............................................................................................... 31

5.4 Equipment Pr icing .................................................................................................... 33

5.5 Plant Design & Model ............................................................................................... 34

5.6 Bulk Material Quantifi cation and Pr icing ............................................................... 35

5.6.1 Types ......................................................................................................................... ....... 35

5.6.2 Quantification Methods ...................................................................................................... 36

5.6.3 Pricing Me thods ............................................................................................................... . 36

5.7 EPC Execution Planning .......................................................................................... 37

5.7.1 Execution Method a nd Schedu le ....................................................................................... 38

5.7.2 Engineering and Supp ort Servic es .................................................................................... 39

5.7.3 Procurem ent ................................................................................................................... ... 39

5.7.4 Construc tion .................................................................................................................. .... 39

5.7.5 Commissioni ng ................................................................................................................. . 40

5.8 Capital Cost Es timation ........................................................................................... 41

5.8.1 Direct Fiel d Costs ............................................................................................................ .. 42

5.8.2 Indirect Fi eld Co sts........................................................................................................... . 42

5.8.3 Home Office Costs ............................................................................................................ 42

5.8.4 Miscellaneous Costs ......................................................................................................... 4 3

5.8.5 Project Company (Owners’) Co sts .................................................................................... 43

5.8.6 Escalation and C ontingenc y .............................................................................................. 44

5.8.7 Project Code of Account s .................................................................................................. 44

5.8.8 Open Book Estima te Appr oach ......................................................................................... 45

5.8.9 Capital Cost .................................................................................................................. ..... 46

5.9 Operating Cost Estimation ...................................................................................... 46

5.10 Performance Summary ............................................................................................ 48

5.11 FEED Study Co mpletion .......................................................................................... 49

5.12 Potential Future Value Engineeri ng and Optimizati on Studies ........................... 50

6.0 H EALTH , S AFETY AND E NVIRONMENTAL I TEMS ............................................... 51

6.1 Process Hazard Analysis ......................................................................................... 51

6.1.1 HAZID ......................................................................................................................... ...... 51

6.1.2 HAZOP ......................................................................................................................... ..... 536.2 Air Emissi ons ............................................................................................................ 54

6.3 Wastes ....................................................................................................................... 55

6.4 Fire Prot ection .......................................................................................................... 56

6.5 Dispersion M odeling ................................................................................................ 56

7.0 H IGHLIGHTS AND C HALLENGES ...................................................................... 58

7.1 Highlights .................................................................................................................. 5 8

7.2 Challenges ................................................................................................................ 62

8.0 N EXT S TEPS ................................................................................................. 64

8.1 Tenaska Responsibilities ......................................................................................... 64

8.2 Fluor Responsi bilities .............................................................................................. 64

9.0 L ESSONS L EARNED ...................................................................................... 66

10.0 R ELEVANCE TO C ARBON C APTURE AND S TORAGE .......................................... 68

11.0 C ONCLUSIONS .............................................................................................. 69

12.0 A CRONYMS AND C ITATIONS ........................................................................... 71-1- 

## 1.0 Introduction and Background

1.1 Project Overview

The Trailblazer Energy Center (Trailblazer or Project) is a supercritical pulverized coal electric generating station (PC Plant) combined with a commercial-scale, postcombustion carbon dioxide (CO 2 ) capture plant (CC Plan t) under development by Tenaska. The Project will generate nominally 760 MW gross at summer ambient temperature with the CC Plant operating. The site is in Nolan County, Texas, United States of America (USA), approximately nine miles east of Sweetwater, Texas. Trailblazer is expected to be the first new- build coal-fueled power plant in the USA to incorporate a post-combustion CC Plant into th e initial design. Th e station is being designed to capture 85 to 90 percent of the CO 2 that otherwise would be emitted into the atmosphere which is nominally 17,100 to 18,100 short tons per day (16,420 metric tons per day). CO 2 from the Project will be sold into the Permian Basin CO 2 market, where it will be used for enhanced oil recovery (EOR) and, ultimately, permanently stored underground.

Figure 1 – Trailblazer Plant Conceptual Illustration

Sub-bituminous coal will be delivered to the Project from the Powder River Basin (PRB) in Wyoming via the Union Pacific (UP) and/ or Burlington Northern Santa Fe (BNSF) railroads. The Project site is bordered on the north by the UP and on the south by the BNSF. The Project will inte rconnect to the Electric Reliability Council of Texas (ERCOT) 345 kV electrical syst em, most likely at a substati on about six miles from the Project site.

The Project is being developed by Tenask a, and is owned by Tenaska Trailblazer Partners, LLC. Tenaska Trailblazer Partners, LLC is owned 65 percent by affiliates of Tenaska and 35 percent by Arch Coal, Inc.

See http://www.tenaskatrailblazer.com for more information about the Project.-2- 

### 1.2 Developer Background

Since its founding in 1987, Tenaska has su ccessfully developed and constructed 15 power generation facilities, totaling more than 9,000 MW. Today, Tenaska operates eight power generation faciliti es totaling 6,700 MW that it owns in partnership with other companies. Tenaska also provides energy risk management services and is involved in asset acquisition and management, power marke ting, fuel supply, natural gas exploration, production and transportation systems, biofue ls marketing and electric transmission development.

Tenaska Capital Management, an affiliate, provides management services for standalone private equity funds, with almost $4.5 billi on USA dollars (USD) in assets, including nine power plants and multiple natural gas midstream assets, including gas storage, gathering and processing facilities. In 2010, Tenaska and its affiliates managed approximately 34,000 MW of assets on behalf of a variety of customers and private equity investors.

An affiliate, Tenaska Marketing Ventures (TMV), is regarded as one of the top 10 natural gas marketers in North America, and provides natural gas commodity, volume management, hedging and asset management products and services. In 2010, TMV was ranked No. 1 in the USA in natural gas pi peline capacity trading according to Bostonbased CapacityCenter.com, which monitors and collects capacity and operational information on all interstate pipelines.

Another affiliate, Tenaska Power Services Co. (TPS), specializes in electric power marketing and asset management for utilities and non-utility generators and is one of the largest marketers of electric pow er in the USA. TPS has de veloped a significant presence in the wind industry and continues to be th e leading third-party provider of scheduling, marketing, and asset management services for wind generation in ERCOT and the
Southwest Power Pool.

In 2010, Tenaska had gross operating revenues of USD$10 billion and assets of approximately USD$3.2 billion. In 2011 , Forbes magazine ranked Tenaska as 25th among the largest privately-held USA companies, based on 2010 revenues.-3- Figure 2 – Tenaska Projects and Office Locations

See http://www.tenaska.com for more information about Tenaska.



### 1.3 Partner Information

In March 2010, Arch Coal acquired a 35 percen t share of Tenaska Trailblazer Partners, LLC (the Project Company) from affiliates of Tenaska. St. Louis-based Arch Coal is the second largest U.S. coal producer, with re venues of USD$3.2 bill ion in 2010. Through its national network of mines, Arch Coal s upplies cleaner-burning, low-sulfur coal to U.S. power producers to fuel roughly 8 percen t of the nation’s electricity. The company also ships coal to domestic and international steel manufacturers as well as international power producers.

In total, Arch Coal contri butes about 16 percent of the domestic coal supply from 23 mining complexes in Wyoming, Utah, Colora do, Illinois, West Virginia, Kentucky, Virginia, and Maryland.

Arch Coal controls a domestic reserve base totaling 5.5 billion tons (4.26 billion metric tons).

In addition to becoming a valued partner, Ar ch Coal also will provide low-sulfur PRB coal to the Project under a 20-ye ar coal supply agreement.

See http://www.archcoal.com for more information about Arch Coal.-4- 

### 1.4 Project Development History and Status

In early 2007 Tenaska developed the opinion th at it was increasingly likely that the USA would take steps to regulate CO 2 emissions. In response, the company formed a multidiscipline task force to inves tigate the development opportunitie s that would be created in
a carbon-constrained environment. The task force believed there could be economic incentives for “first movers” that might not be available on an ongoing basis to those who were slower to react to this change.

The company drew task force members from the Development, Environmental, and Engineering groups within Tenaska. Af ter a six-month review, the task force recommended development of a PC plant with post-combustion CO 2 capture in west Texas. The company’s Executive Board a pproved the recommendation in the fourth quarter of 2007.

Following internal approval, Tenaska has advanced Project development according to the milestone schedule shown in Figure 3 below. Additionally, the report to the Global CCS
Institute titled Development of the Tenaska Trailblazer Energy Center , dated August 2010, provides a history of the Project, the rationale behind the site selection and technology selection, and identifies key challenges the Project faces.

Figure 3 – Historical Trailblazer Project Development

Date Activity / Milestone

2007  Conceptual phase conducted

 Tenaska Board approves development of the Project

February 2008  Site procured

 Air permit application filed with the Texas Commission on Environmental Quality (TCEQ)

 Electric interconnection request filed with ERCOT

 Project announced

July 2008 Local office in Sweetwater, Texas opened

September 2008 ERCOT issues its initial study of the Project’s interconnection request

December 2008 Engaged Burns & McDonnell to serve as the Owner’s Engineer

January 2009 Nolan County tax abatement granted

February 2009 TCEQ issues draft air permit for public comment

March 2009 Hospital district tax abatement granted

May 2009  Texas Legislature passes clean energy legislation that provides grants and tax
incentives for car bon-fueled electric generating projects that capture at least 70 percent of the CO 2 they otherwise would emit and meet stringent air emission standards for nitrogen oxides, sulfur dioxide, particulate matter and mercury

 Texas Legislature passes legislation that establishes a framework for regulation
of CO 2 sequestration and storage-5- Date Activity / Milestone

June 2009 Fluor Enterprises selected as Engineering, Construction and Procurement (EPC)

contractor

July 2009 Tenaska requested direct referral of its ai r permit application to the Texas State Office of Administrative Hearings for a contested case hearing

March 2010  Arch Coal, Inc. purchases 35 percent share of the Project company

 Project signs a 20-year coal su pply agreement with Arch Coal

April 2010  Tenaska commits to use of dry cooling technology

 Tenaska signs settlement agreement with the Environmental Defense Fund

June 2010 Trailblazer signs a funding agreement with the Global Carbon Capture and Storage Institute (Global CCS Institute) to receive a USD$7 million grant

July 2010 Fluor Econamine FG Plus CO 2 capture technology is selected

August 2010 Fluor begins the CC Plant FEED study

December 2010 Trailblazer receives its final air permits from the TCEQ

May 2011 Tenaska open book review of CC Plant cost estimate

June 2011 CC Plant FEED study completed

July 2011 Tenaska signs an agreement with the City of Stamford for a portion of its water supply needs One of the well-known challenges with CCS is th e cost – primarily in terms of the capital cost and energy consumption. Under current market conditions, power plants with CCS cannot compete with those without CCS. The strategic location of the Project provides the ability to sell CO 2 into the mature Permian Basin EOR market. This defrays some of the costs of CCS. However, the current CO 2 market prices are insufficient to cover the
entire costs of CO 2 capture. In addition, the CO 2 prices vary as a function of oil prices, which introduces uncertainty in this revenue stream over the life of the Project.

Thus, the Project requires some recognition of the value associated with capturing CO 2 in
order to be economic. With the status of the USA political climate (which is notably
different than in 2007 when Tenaska launc hed the Project) th e timing for such recognition and, thus, further Project devel opment, is uncertain. As such, on the engineering side, the Project is currently in the documentation stage and will undergo only very slow development until the key Project signals change. Overall project development will continue to advance in the ar eas that are required to maintain an “early mover” position. Some of these areas includ e water supply, maintaining the air permit, lobbying, legislative support, and local community interaction on the Project.

Section 8.0 discusses next steps for the Projec t in general and the CC Plant engineering in particular.

Figure 4 below depicts the current development status of the Trailbl azer project using the project development framework tailored for CCS projects in the ‘Define’ phase by the
Global CCS Institute.-6- Figure 4 – Trailblazer Project Development Status

Activity Trailblazer Status during ‘Define’ Phase Project Context and Opportunity Definition and
Recommendation Completed in 2007 with Tenaska Board approval to proceed.

Site Selection Completed in February 2008 with purchase of the Project site

Stakeholder and External
Relations Public engagement activities ongoing

Environment Environmental studies comp leted; air permits received in 2010 Permit matrix developed
Health and Safety Completed Hazard Identification ( HAZID) and Hazard and Operability (HAZOP) studies. A safety program will be implemented for construction, commissioning, and operations consistent with the programs used at other
Tenaska facilities.

Fuel Supply 20-year fuel agreement with Arch Coal executed in March 2010 Power Plant – Capture Facility  Preliminary PC Plant engineering completed

 CC Plant FEED study completed

 Potential value engineering opportunities identified

 Basic design interfaces defined

CO 2 Product  Conservative preliminary CO 2 specification established for the FEED study based on industry data.

 CO 2 transportation pipeline route will be determined once an agreement is in place with the CO 2 purchaser

Infrastructure  Only minor railroad right-of-way (ROW) required as both BNSF and UP railroads both border the Project s ite. Railroad interconnections will be determined once rail transportation contracts are in place

 Electric transmission interconnection request submitted; Facility study confirmed the ability to interconnect. Recently the studies have been reopened to accommodate a late r commercial operations date.
Project Delivery  Fluor Enterprises was selected as the EPC contractor and the CO 2 capture technology provider

 Relationship established under a memorandum of understanding including an EPC term sheet

 EPC contract not yet completed
Capital / Operating Costs FEED study resulted in a firm, “overnight” EPC price for the CC Plant. PC Plant pricing is indicative and will be finalized prior to EPC contract
signing.
Operations Tenaska will work with its op erations subsidiary to define a plan
Revenue and Trading Power and CO 2 off-take parties have not been selected and agreements will need to be negotiated
Ownership and Legal Project ownership and governance stru cture is in place. Tenaska entities own 65% of the Project company and Ar ch Coal purchased a 35% share of the Project compan y in March 2010.
IP Management Fluor IP protection covered under a license agreement. EPC and technology provider ar e the same company.
Financial Analysis  Market studies for power and CO 2 completed

 Detailed proforma constructed

Risk Owner Risk analysis will take place prio r to financial close. EPC Contractstructure for both the PC and CC Plants envisioned to be fixed price, datecertain type with certain risks allocated to the contractor and technology-7- Activity Trailblazer Status during ‘Define’ Phase provider.
Funding  Project owners have provided development funding

 Funding agreement with Global CCS Institute in place

Future Work Plan  Public engagement efforts continue

 Engineering work suspended pending USA federal government action on carbon capture incentives and market conditions

 Maintain environmental permits

Status of Studies Various technical studies completed as outlined in reports provided to the
Global CCS Institute



### 1.5 Technology and Engineering Providers

1.5.1 

### Owner’s Engineer

In December 2008, prior to solicitation and sel ection of the Project EPC contractor and
CO 2 capture technology provider, Tenaska engaged Burns & McDonnell to be the Owner’s Engineer. Burns & McDonnell is a full-service engineering, architecture, construction, environmental and consulting solu tions firm. Its staff of more than 3,000 represents virtually all desi gn disciplines. Burns & McD onnell plans, designs, permits, constructs and manages facilitie s all over the world. In 2010, the Engineering NewsRecord ranked Burns & McDonnell number 22 in design firms and number 8 in power plant design firms. See http://www.burnsmcd.com for more information.

1.5.2 

### EPC Contractor

In order to develop the Project with guarant ees for plant performance and to obtain a high percentage of the capital cost for the Projec t on a firm price basis (developed during an open book estimate phase), Tenaska conducted a competitive proposal process to select an EPC contractor for the Project.

Immediately following engagement of Bu rns & McDonnell, Tenaska and Burns & McDonnell developed and issued a Request for Pr oposal (RFP) to initiate this process. The RFP went to experienced and reputable engineering firms, CO 2 technology providers, and EPC contractors.

In the RFP, Tenaska asked for proposals to include (1) a PC Plant based on a recent similar- size reference project executed by the contractor and, separately, (2) a CC Plant based on a the contractor’s preferred technol ogy or technologies. By doing so, Tenaska
and Burns & McDonnell were able to evaluate the prospective contractors’ experience with and ability to execute both parts of the Project scope. The RFP also revealed certain alignments and conflicts among the pool of prospective EPC contra ctors and leading CO 2 capture technology providers.

Tenaska received and evaluated multiple pr oposals. The evaluation criteria included indicative pricing, experience, performance, schedule, commercial terms, and ability to perform.

In June 2009, after extensive analysis and proposal conditioning, Tenaska selected Fluor Enterprises, an affiliate of Fluor Corpor ation (collectively, Fluor) to be the EPC-8- contractor for the Project. Fluor and Te naska signed a Memorandum of Understanding (MOU) whereby the parties agreed to work toge ther to define the scope of the Project and to develop and negotiate an EPC contract for the PC plant and, potentially, the CC plant. Although Fluor included its own Econamine FG+ SM (EFG+) technology in the EPC bid, they remained open to engineering and cons tructing a third party technology or allowing the potential for a third party CO 2 capture supplier/constructor to work at the Trailblazer site in parallel with Fluor. Tenaska required this flexibility as a pr ovision of the MOU.

1.5.3 

### CO 2 

### Capture Technology Provider Selection

After establishing the initial MOU with Fluor , Tenaska began a process to identify the preferred CC Plant technology provider and EPC contractor. Burns & McDonnell assumed the lead role to avoid any perception of conflict of interest with Fluor related to
its in-house CO 2 capture technology.

The selected vendor would proceed into an approximately nine month (planned duration) FEED process to engineer th e initial design, quan tify capital cost for the CC plant (including all interface costs with the PC plant), and to establish performance guarantees.
The selected vendor would need the financ ial strength to assume commercial risks associated with new technology should the Proj ect proceed to construction and ultimately operation.

The process included two phases – pre-qualif ication and competitive bidding.

For the pre-qualification phase, conduc ted from June 2009 through September 2009,
Tenaska contacted seven CO 2 capture technology vendors to determine their level of technology development in the industry and thei r interest in entering into a competitive bidding process for award of the CC Plan t FEED study. Six of the seven vendors responded with general information about their process technology, history ofdevelopment, business profile and financial information. At the end of the prequalification phase, Tenaska and Burns & McDonnell analyzed the submissions and
identified a shortlist of four vendors using Kepner-Tregoe Decision Analysis.

For the subsequent competitive bidding pha se, Tenaska, Fluor, and Burns & McDonnell developed a formal bid package containing commercial terms and conditions and technical specifications. Bu rns & McDonnell issued the package in October 2009 to the four shortlisted vendors. The package solici ted indicative bids for either an engineerprocure (EP) approach or an EPC approach – whichever method th e supplier preferred. One bidder submitted a bid under an EP approach and an EPC approach and three bidderssubmitted under an EPC approach only. Those technology providers that did not have inhouse EPC capability formed teams with contractors in order to meet the RFP requirements.

Tenaska received all bids by January 2010. Af ter bid evaluation, Tenaska selected Fluor to license, engineer, procure, and constr uct its EFG+ technology. In June 2010, the parties amended and restated the original MOU with the appropriate provisions to reflect that Fluor would conduct a FEED study for th e CC plant. In the amended agreement, Fluor and Tenaska agreed to establish the Project capital co st through an open book-9- process. This was an important condition of the agreement because Tenaska selected Fluor, in part, based on an indicative capital cost bid. Thus, Tenaska required a higher level of transparency into the final capital cost estimate to rationalize any differences in the final cost against the bid cost. Se ction 5.8.8 discusses the Open Book Estimate Approach.

Further information on the process undertaken by Tenaska to identify and select the preferred vendor to perform the CC Plant F EED study for the Project can be found in a separate report provided to the Global CCS Institute in January 2011 and titled CO 2 Technology Evaluation, Me thodology and Criteria.

1.5.4 

### CO 2 

### Capture Technology Overview

Tenaska selected Fluor as the preferred supplier to perform the CC Plant FEED and proceed with the Project to completion. Fluor’s EFG+ CO 2 capture technology is conceptually shown in Figure 5 below. Fl uor formulated its amine-based solvent to
recover CO 2 from low-pressure, oxygen-containing streams. The EFG+ process is similar in overall concept to amine-base d gas treating processes which have been practiced for many years in the natural ga s, petrochemical, and refining industries.

Figure 5 – EFG+ Simplified Process Flow Diagram (Generic*)

*Note that this is generic drawing for EFG+; for Trailblazer, all cooling water exchangers are replaced with air coolers (DCC) BLOWER (STRIPPER)-10- Below is a typical process description. Refer to Figure 5 above.

The flue gas enters the bottom of the Dir ect Contact Cooler (DCC) where the gas is cooled by a circulating water stream. The ci rculating water stream contacts the flue gas over packing and removes the majority of a ny particulates present. Lowering the gas temperature is beneficial because:

 Much of the water vapor contained in the flue gas is condensed and separated from the feed gas before entering the solvent sy stem. The need to boil off excess water from the solvent loop is significantly reduced;

 The reduction in water vapor flow reduces the overall mass flow to the blower; and

 The lower temperature of the flue gas resu lts in higher density and therefore lower
volumetric flow rate to the blower.

The circulating water enters the top of the DCC and is heated by the cooling and condensing of water vapor in the flue gas. Excess water, produced in the DCC from the condensing of water vapor in the flue gas, is routed to the battery lim its after filtration.

For applications where the flue gas contains higher levels of SO 2 , the top section of the DCC contains a circulating scrubbing solution that is dosed with sodium hydroxide. The purpose of the solution is to further reduce the SO 2 content of the flue gas – to extremely low (single digit ppm) levels – since SO 2 will create degradation of the solvent in the
absorber.

The cooled overhead gas from the DCC flows to the absorber via the blower. The flue gas enters the bottom of the ab sorber and flows upwards counte r current to the circulating solvent. The solvent reacts chemically to remove the CO 2 in the feed gas. Residue gas, consisting mainly of nitrogen and oxygen, is wash ed with a circulating wash water stream before leaving the top of the absorber.

The CO 2 rich solvent from the bottom of the abso rber flows to the solvent regeneration section. The rich solvent is heated against hot lean solven t from the stripper in the solvent cross heat exchanger. The hot rich solvent then enters the stripper and flows down counter-current to stripp ing stream, which removes CO 2 from the rich solvent. Heat for stripping is supplied by low pressure steam via the reboiler. Lean solvent from the stripper is cooled in the solvent cross heat exchanger and lean so lvent cooler prior to be routed back to the absorber. A portion of the cooled lean solvent is diverted through a solvent filtration system to remove solution contaminants.

The overhead vapor from the stripper is cooled and most of the water is condensed out of the low pressure CO 2 product. The majority of the conde nsed water returns to the top of the stripper as reflux, while th e balance returns to the ab sorber. The remaining low pressure CO 2 product is routed to the compre ssion section where the product CO 2 is compressed and treated to meet the final product specifications.

Some contaminants, such as heat stable salts (sulfates, nitrates, and oxalates of monoethanol amine (MEA)) and thermal/oxi dation degradation products, cannot be removed in the solvent filtration package and must be removed through a reclaiming-11- operation. In order to minimize solvent degr adation, Fluor has recently developed a lowpressure, low residence time reclaiming system.

Refer to Attachment 1, Page 3 for a full process description of the Fluor EFG+ technology.



### 1.6 FEED Study Requirement and Objective

Post-combustion CO 2 capture has not yet been deployed at the scale needed to process the entire flue gas stream produced by a worl d-scale coal-fueled power plant. Doing so
creates business and t echnical challenges.

One of these challenges with such a firs t-of-a-kind deploymen t is that technology providers, original equipmen t manufacturers (OEMs), and EPC contractors do not yet possess the information or experience to firm-bid the elements of the plant at the scale required. Therefore, project developers have to fund a costly FEED study to define the costs and performance with enough certainty to establish commercial guarantees and to attract equity and debt financing.

In defining how to achieve this objective, it is useful to refe rence industry standards. For example, the FEED study would generally meet the requirements of a Front End Loading 3 study, as set out by Independent Project Anal ysis, Inc. Also the cost estimate would need to qualify as a Class 2 or Class 3 es timate according to the Association for the Advancement of Cost Engineering (AACE). Some times, this type of estimate is referred to as an “appropriations” or “authoriza tion” grade estimate. AACE documented the requirements of its classification levels in International Recomme nded Practice No. 18R97 titled “Cost Estimate Classification Syst em – As Applied in the Engineering, Procurement, and Construction for the Process Industries.” The document is available at www.aacei.org and is included as Attachment 6.

Tenaska and Fluor developed a FEED study scope to meet these standards. The scope required Fluor to complete a nominally nine-m onth (planned duration) effort. The effort consisted of a progression of engineering activities to produce formal technical
“deliverable” documents. These deliverable s ultimately enabled Fluor to use highly accurate deterministic cost estimation techniques sufficient to support a firm-price commercial offering with a relatively low con tingency allowance. Through conditions to its agreement with Fluor, Tenaska gained insight to the final CC Plant capital cost through an open book estimating process.

Section 5.0 provides a detailed description of the FEED study scope of services.-12- 

## 2.0 Purpose and Goals

This section describes the purpose and goals of:

 the Trailblazer Project,

 the Trailblazer CC Plant FEED Study, and

 this report



### 2.1 Trailblazer Project Purpose and Goals

2.1.1 

### Carbon Regulation Early Mover

In early 2007 Tenaska developed the opinion th at it was increasingly likely that the USA would take steps to regulate CO 2 emissions. In response, the company formed a multidiscipline task force to inves tigate the development opportunitie s that would be created in
a carbon-constrained environment. The co mpany drew task force members from the Development, Environmental, and E ngineering groups within Tenaska.

The task force believed there could be economic incentives for “first movers” that might not be available on an ongoing basi s or to those who were slower to react to this change. After a six-month review, the task force r ecommended development of a pulverized coal plant with CO 2 capture in West Texas. The co mpany’s Executive Board approved the recommendation in the fourth quarter of 2007.

2.1.2 

### Strategic Access to Existing CO 2 

### Markets

The task force also recommended the Project be strategically located in West Texas to provide access to the Permian Ba sin oilfields. The Permian Basin is the location of the world’s largest and most robust CO 2 market which provides supply for Enhanced Oil Recovery (EOR). Oil producers have used EOR in the Permian Basin since the early 1970s. As such, in Texas, rules and regulati ons are already in place with regard to CO 2 handling and disposal. The addition of CO 2 capture equipment will increase the cost of the Project and, in Trailblazer’s case, consum e a significant amount of the electricity that
otherwise would be available for sale. As a result, Tenaska viewed a robust CO 2 market as being essential to the Project’s success.

2.1.3 

### National Energy Security Tenaska conceived the Project during a period of energy turm oil in the USA. Events contributing this turmoil included: Ven ezuela’s reduced oil production in 2003, China’s increasing demand for oil throughout the mid 2000s , and the huge price spikes caused by
Hurricanes Katrina and Rita in 2005.

Trailblazer is envisioned to enhance the USA’ s national energy security interests in three

ways:

 Providing a path forward for the use of coal – the nation’s most abundant and affordable fossil fuel – as an electric ge nerating fuel in a carb on-constrained world;

 Boosting domestic oil produc tion using anthropogenic CO 2 ; and-13-  Providing affordable, reliable base load el ectric energy to help meet the nation’s growing electricity demand.

The USA government recognized all of these goals as being importa nt to the continued energy security of the USA.



### 2.2 Trailblazer CC Pl ant FEED Study Purpose and Goals

The technical and commercial objectives of the FEED study were:

Completion of pre-financi ng portion of the engineering which included process, mechanical, civil, structural, and electrical engineering fo r the CC Plant scope and which
results in:

 Confirmation of the expected performa nce backed by commercial guarantees;

 Technical and execution planning in suffici ent detail to support a highly-accurate EPC cost estimate and a firm price co mmercial offer for Project execution;

 Affirmation that the EPC price is consiste nt with the indicative bid used in the
evaluation and selection of Fluor with confirmation through an open-book review

process;

 A design meeting the Owner’s and industr y standards for integrity, operability, availability, safety, a nd environmental profile;

 An annual O&M cost estimate for the CC Plant;

 Confirmation that scale up to a la rge commercial size is achievable;

 Confirmation that major equipment can be procured for the configuration and sizes planned; and

 Confirmation of constructability.



### 2.3 Final FEED Study Report Purpose and Goals

The overall goal of this report is to provide information and insights that can be used by others embarking on a post-combustion CO 2 capture project FEED study.

The key purposes of this report are to:

 Describe the scope of the CC Plan t and the FEED study performed;

 Provide FEED study results incl uding cost and performance;

 Describe challenges and hi ghlights of the FEED study;

 Confirm that construction and operation of a large scale CC plant integrated with a PC plant is feasible;

 Confirm that the health, safety and envi ronmental impacts associated with a CO 2 capture plant are acceptable;

 Provide the “next steps” required to adva nce the development of the Project; and

 Provide lessons learned from the FEED study-14- 

## 3.0 Executive Summary

3.1 Background and Overview

Trailblazer is a supercritical PC electric generating station under development in Nolan County, Texas, USA, approximately nine miles east of Sweetwater, Texas. Trailblazer is expected to be the first new-build coal pl ant in the USA to incorporate a commercialscale post-combustion CC Plant in to the initial design. The Pr oject will be designed to capture 85 to 90 percent of the CO 2 that otherwise would be em itted into the atmosphere. The plant will generate nominally 760 MW gross (at the summer ambient temperature with the CC Plant operating).

The aims of the Project are to capitalize on potential early-mover credits associated with potential carbon legislation, provide fo r beneficial reuse of the capture CO 2 through EOR in the Permian Basin, and contribute to USA energy security through the use of coal and production of domestic oil.

In advancing Project development, Te naska conducted separate competitive and sequential processes to select the Project EP C contractor and the CC technology provider. Through these processes, Tenaska selected Fluor Enterprises for both roles including supply of the EFG + CO 2 capture technology.

Tenaska contracted with Fluor to complete a FEED study for the CC Plant. A FEED study is necessary because s uppliers in this developing industry do not yet have experience at commercial scale for a large CC plant. The main purpose of the FEED is to complete enough technical definition (requiring nominally 15 – 20 percent of the overall engineering and planning effort) of the Pr oject to support firm price offering and commercial performance guarantees.

Key activities in the FEED study included: clear definition of the CC Plant scope of facilities, division of responsibility, and interface with the PC Plant; process engineering (to establish the design basis, simulate the process, produce heat a nd material balances, etc); equipment definition and competitively-bid pricing; plant layout development and 3D modeling; design reviews and the HAZOP study; bulk material s quantification and pricing; EPC execution planning and schedu le development; and cost estimation. In defining the CC Plant scope, certain items have been excluded and assumed to be part of the PC Plant scope – for which the engine ering and cost estimation has not been completed.

This report provides a complete summary of the FEED study effort including: pertinent Project background information, the scope of facilities covered, the scope of the FEED study services, identific ation and treatment of health, safety, and environmental risk issues, highlights and challe nges, next steps, lessons learned, and conclusions.-15- 

### 3.2 Results and Conclusions

Tenaska and Fluor achieved the goals of the CC Plant FEED study, resulting in:

 A design which meets Tenaska and industry st andards and notably so in the areas of safety (through incorporation of the findings from the hazard and operability study and air dispersion modeling) and environmental profile (through specification of the
CO 2 capture rate at and permitted air emissions in the design basis);

 Confirmation that the technology can be s caled up to a constructable design at commercial size through (1) process a nd discipline engineering design and computational fluid dynamics (CFD) analys is, (2) 3D model development, and (3) receipt of firm price quot es for large equipment;

 Production of engineering design and planning deliverables which supported deterministic cost estimation;

 Confirmation of the cost estimate basis through an open-book process (described later);

 A firm second-quarter overnight EPC price offer of USD$667,100,000 for the CC
Plant that is consistent with the original indicative bid fo r the CC Plant. This supports the overall project (PC and CC Plants) cost ba sis consisting of (1) an EPC cost (with contingency and escalation) of USD$2,800,000,000 to USD$3,300,000,000 plus (2) Owner’s costs, interconnects, financing fees , and interest during construction at an additional USD$1,000,000,000 to USD$1,250,000,000;

 An O&M cost estimate totaling nom inally USD$10,400,000 per year (excluding power and steam consumption which repres ent net power generation losses for the overall project which includes bot h the PC and CC Plants); and

 Establishment of performance guarantees whic h, after the addition of an appropriate margin, were consistent with the expected performance in Fluor’s indicative bid.



### 3.3 Summary of FEED Study Lessons Learned

Following is a list of the less ons learned in preparing for, conducting, and managing the CC Plant FEED study:

 Interface Definition and Optimization . Defining and optimizing the interface between the PC and CC Plants was important dur ing the CC Plant FEED study (e.g. heat integration). These two pieces of the overall Project scope are different technically and generally belong to two different industr ies (power and chemical process). As a result, it is natural that experience in th e respective scope areas comes from different organizations and these organizations can ha ve different codes, design criteria, and standard practices. It is necessary to ha ve both organizations (w hether they are the same company or different companies) direct ly involved. Furthermore, it is ideal if both pieces of the scope ar e developed simultaneously to realize synergies between the two scopes.-16-  Single Point of Contact . Tenaska realized strong c oordination from the direct
involvement of both the PC and CC teams and reaffirmed the value of having both scopes awarded to one organization. By doing so, Fluor was able to apply common methods in areas such as project manageme nt, document control, and technical design procedures. This also reduced concerns with proper handling of confidential information and allowed greater transparency in seeking optimized heat integration.

 Value Engineering

. Tenaska experienced success with a continuous focus on value engineering through the FEED st udy as the capital cost estimate came in very near the indicative bid. Through this approach, th e team reduced the capital cost by approximately USD$23,400,000. Some of th e design ideas contributing to this
reduction include th e application of:

o A single CO 2 compressor soft starter for both machines;

o Plate and Frame-type heat exchangers for stripper reboilers;

o Optimized the absorber and DCC construction materials;

o Eliminated large-bore alloy block and bypass valves; and

o An “in-line” (instead of “right angle”) plot plan arrangement.

 Vendor Support . Tenaska and Fluor experienced so me minor difficulty in attracting vendor interest and, therefore, obtaining mu ltiple compliant and competitive bids for all equipment.

 Firm Project Economics . It is not yet known how CO 2 regulations and prices will affect power prices locally and nationally. CO 2 price support from regulations or legislation is necessary because CO 2 prices available from EOR off-takers (a commonly used rule of thumb algorithm is CO 2 price per million cubic feet = 2% of the posted project equivalent oil price pe r barrel) are insuffi cient to support CO 2 capture – especially with the inherent vola tility in the crude oil commodity market. Thus, during the FEED it was difficult to evaluate design alternatives.

 Operations Support . Although Tenaska had substantial support in terms of project management and discipline engineering bot h internally and via Burns & McDonnell, the FEED team recommends a greater level of involvement from experienced operations personnel to ensure alignment w ith the operational capabilities determined in the design phase.

 Capital Cost Estimate Accuracy . Tenaska selected Fluor as the CC Plant technology provider on the basis of multiple criteria, with one being the nonbinding indicative capital cost of the plant based on Econa mine FG+ technology – perhaps an AACE Class 4 or 5 estimate with nominally +/- 30% accuracy. As such, a key objective of the FEED study was to complete engineer ing design definition to increase the accuracy of the estimate sufficiently to allow Fluor to offer a firm price for the CC Plant scope of the Project w ith a contingency allowance that was determined prior to the study.-17-  Addressing Key Scale-Up Issues . With the large equipment required for the CC Plant and the scale-up it represents from prev ious experience, a fe w key areas required special engineering study. These included th e mechanical design of the large flue gas ducts, CFD modeling of the flue gas flow in these ducts, CFD modeling of the gas and liquid distribution in the DCC and ab sorber, and detailed evaluation of the CO 2 compressor vendor bids and experience.-18- 

## 4.0 CC Plant Project Facilities Scope

4.1 Background Information

Tenaska selected Fluor to initiate front-end engineering and procurement services for the PC Plant portion of the Project under an open book estimate phase in June 2009. Tenaska placed this work on hold in May 2010 at approximately 30 percent engineering completion. During that period, Tenaska al so selected the Fluor EFG+ as the CO 2 capture technology under a competitive bidding process. In making this selection, Tenaska valued the potential execution s ynergies between the PC and CC project components (among other eval uation criteria).

Further information on the process undertaken by Tenaska to identify and select the preferred vendor to perform the carbon capture FEED for the Project can be found in a separate report provided to the Global CCS Institute in January 2011 and titled CO 2 Technology Evaluation, Me thodology and Criteria.



### 4.2 Division of Responsibility, Interface and Battery Limits

Fluor executed the CC Plant FEED study begi nning in August 2010 and finishing in June 2011. The effort was approximately 10 mont hs in duration (including a nominal onemonth schedule extension caused by Tenaska).

Fluor performed this work under a multi-o ffice execution plan to ensure alignment
between the PC Plant and CC Plant offices. Although the FEED study is a standalone estimate for the CC Plant, it considered synergies due to a combined execution between the PC and the CC Plants. As such, during the CC Plant FEED study, it was necessary to develop a detailed Division of Responsibility (DOR) matrix – Refer to Attachment 2.

Compared to the DOR matrix, the CC Plant scope can be more simply described in terms of the geographic “battery lim its” (boundary). This boundary is depicted by a red line shown on the simplified plot plan in Attachme nt 1 Page 9. The battery limits are also shown on the block flow diagram (Attachment 1, Page 10) and the process flow diagrams (Attachment 1, beginning Page 11).

In general, Project scope inside this b oundary is “inside battery limits” (ISBL) and, therefore, included. Project scope outside this boundary is “outside battery limits” (OSBL) and, therefore, excluded. With Resp ect to the CC Plant, OSBL scope items are either the responsibility of th e Fluor PC Plant team or of Tenaska per the DOR matrix.

There are two notable exceptions to this si mple geographical description of the scope division. The scope excludes the following ISBL items:

 Site preparation, fencing, grading and drainage, paving and surfacing

 Digital Control System (DCS) equipm ent; control and instrument cables-19- Also, note the scope split for flue gas ductwork. The CC Plant only includes the ductwork between the DCCs and the absorber. Ductwork from the flue gas desulfurization (FGD) to the DCC and from the absorber to the stack is part of the PC Plant scope.

These various exclusions are not included in the CC Plant cost and have not been
estimated.

In addition to the DOR and geographical depic tion of the battery limits, as part of the FEED study, Fluor developed a table to define all the interfaces be tween the PC and CC Plants. Figure 6, below, is a copy of the in terface table.

Figure 6 – PC / CC Battery Limit Interface Table

Interface Area From To Comment

Absorber/Stack CLM-1002 Stack Absorber Vent Duct

DCC/PC Power Plant CLM-1001 Flue Gas Feed
CC/PC Pipeway FLT-1001A/B Battery Limit Excess DCC Water
CC/PC Pipeway P-1007A/B Battery Limit Scrubbing Solution Blowdown
CC/PC Pipeway HX-1003 Battery Limit PC Condensate Return
CC/PC Pipeway Battery Limit HX-1003 PC Condensate Supply
CC/PC Pipeway P-1008A/B Battery Limit Condensate Return
CC/PC Pipeway V-1004 Battery Limit Condensate to PC Plant
CC/PC Pipeway CMP-1002 Battery Limit Compressed CO 2 Product
CC/PC Pipeway Battery Limit DSH-1001 Low Pressure Steam Supply
CC/PC Pipeway Battery Limit Utility Pipeway Demineralized Water
CC/PC Pipeway Power Plant Utility Pipeway Instrument Take-Off
CC/PC Pipeway Power Plant Utility Pipeway Plant Air
CC/PC Pipeway Power Plant U tility Pipeway Service Water

Common Area Power Plant Utility Pipeway Potable Water

Following are more detailed descriptions of the scope inclusions (Section 4.3) and exclusions (Section 4.4) that may assi st in understandi ng the DOR matrix.



### 4.3 Scope of Facilities Included

Following is a descriptive summary-level li st of the scope included in the CC Plant portion of the Project. This list is consistent with the more detailed DOR matrix in
Attachment 2.

 CO 2 Capture Process Equipment.

o All equipment wetted by th e flue gas polishing and CO 2 capture process fluids. (The large equipment includes the DCC’s, CO 2 absorbers, CO 2 strippers, reboilers, CO 2 stripper condenser, and solvent reclaimer.);

o Equipment required for process heating and cooling (air coolers etc.);

o Wetted instruments;

o Control valves;-20- o Access platforms, ladders, stairs and lifting equipment; and

o First fill of solvents and reagents.

 Flue Gas Handling Fans. Include flue gas booster fans for overcoming the differential pressure associated with the CO 2 capture process equipment. The scope
excludes the PC Plant induced draft fan.

 CO 2 Compression Equipment. This includes the large compressor machines, inter and after coolers, driers, and catalytic oxidation equipment.

 Field Fabricated and Shop Fabricated Tanks.

 Miscellaneous Equipment. This includes equipment not related to the CO 2 capture or compression processes such as sump pumps, safety showers, building fire protection, vapor and gas detection equipment, and th e continuous emissions monitoring system.

 Flue Gas Ductwork. The scope of supply for ductwork begins with the inlet flange of the DCC and ends with the discharge flange of the treated flue gas from the absorber. (The CC Plant scope does not include the ductwork from the FGD to the DCC or the
ductwork from the absorber overhead back to the stack.) The scope also includes support steel, thermal insulation, dampers, and expansion joints.

 Piping. All piping between CO 2 capture process and CO 2 compression equipment within battery limits. This also includes piping not related to the carbon capture or compression processes such as utilities s upply (i.e. potable water, building fire protection, air conditioning, etc.).

 Auxiliary Power Distribution. 345kV/13.6kV

 Motors for CO 2 Capture Process and Compression Equipment.

 Electric Power Cable(s).

o Electric power cable(s) from motor control centers for the carbon capture and
CO 2 compression facility

o Power distribution for the CC Plant begi nning with the secondary connections to the auxiliary transformers.

 Buildings for CO 2 capture and compression facilities

 Foundations for CO 2 capture and compression facilities

 Structural Steel for support of all structures, vessel s, flues and ducts, pipe systems, and all provisions for access and egress incl uding stair towers. Include all hoists, cranes, monorails for facility.

 First Fills of Chemicals and Lubricants

.

 Start-Up and Co mmissioning Spares

.-21- 

### 4.4 Exclusions

Following is a descriptive list of the scope excluded from the CC Plant portion of the Project. Excluded items may either be the re sponsibility of the PC Plant scope or of
Tenaska. This list is consistent with th e more detailed DOR matrix in Attachment 2.

 Site Preparation , fencing, grading, drainage, pa ving, and surfacing both ISBL and OSBL of the CC Plant. By combining a ll site preparation for both the PC and CC Plants, there is expected to be cost and execution synergy in the civil scope contract;

 PC Plant including coal delivery and handling, PC boiler, steam turbine generator and steam cycle equipment, switchyard, induced draft fan, selective catalytic reduction (SCR) of NOx, baghouse, activated carbon in jection (ACI), FGD, and the stack;

 Flue Gas Ductwork System upstream of the DCC inlet flange and downstream of the absorber outlet flange. Also not included is the bypa ss of carbon capture process equipment between by-pass dampers and the stack. Ductwork downstream of carbon capture process equipment (from outlet flange of last process column to stack) is not included;

 DCS Equipment ; control and instrumentation cables;

 OSBL Utility Piping Systems including instrument air, pl ant air, nitr ogen, potable water, fire water, cooling water, steam, c ondensate, process sewer, sanitary sewer and

storm water sewer;

 Emergency Power Generation ;

 Onsite CO 2 Pipeline from CC Plant battery limits to the Trailblazer property fenceline;

 Product CO 2 Pipeline from fenceline to point of interconnection;

 Plant Roads ;

 Supply of Liquids required by the CO 2 Capture and Compression Facility (demineralized water, co oling water supply and retu rn, steam, and condensate);

 345 kV Power Distribution line and connection to auxili ary transformers located at the CC Plant;

 Operational Spares ; and

 Noise Attenuation has been applied on a minima l basis pending project wide evaluation to be performed for the overall project by Fluor Power. Equipment has been specified to meet the 85dba threshold at a distance of thr ee feet (1 meter).-22- 

## 5.0 FEED Study Scope of Services

This section describes the FEED study scope for the CC Plant portion of the Project, which will utilize Fluor EFG+ technology.

The FEED study is a critical phase in the deve lopment of large projects – particularly those that are unique in terms of scale, t echnology, or configuration, where reference plant cost and performance information is una vailable. As describe d in Sections 1.6 and 2.2, the main objective of the FEED study phase is to establish and define the technical scope of work and project execution in sufficien t detail to determine the project cost and commercial terms that form the basis of a firm EPC price and proposal for the Project. Doing so requires completion of approximately 15 – 20 percent of the total CC Plant engineering and planning effo rt, which reduces the Project risk before moving into detailed engineering and construction.

The FEED project team was a multi-discipline task force, comprised of members experienced in EFG+ technology and power pl ant design. The team included all the elements of a full project execu tion team with specialists in the engineering fields and functions identified in the positions below:

 Project Management;

 Process Engineering;

 Mechanical Engineering;

 Civil and Structural Engineering;

 Piping Engineering;

 Electrical Engineering;

 Instrument and Controls Systems Engineering;

 Health, Safety, and Environmental;

 Scheduling and Planning;

 Procurement;

 Contracts;

 Construction;

 Commissioning & St art-up; and

 Cost Estimating .

Each of these departments worked together as an integrated team. The team performed the work in the project development sequen ce discussed in Section 5.1. Accordingly, the team composition changed as the CC Plant design evolved. Fluor ensured a seamless interface between project t eam members through routine communication and multiple design reviews that emphasized teamwork betw een specialists. Interface with the PC design team was also critical , and successfully performed with specific focus on how the PC Plant operates with respect to the CC Plant and the battery limit interfaces.

The services contract executed between Te naska and Fluor for the FEED development included progress payment terms based on a mile stone deliverables plan that reflected the design development process for a typical FEED phase of large projects.-23- 

### 5.1 Progression/Schedule

Originally, the planned FEED study schedul e duration was nine months. During the FEED study, the team encountered a few issu es that would either require a schedule extension (due to the sequential nature of th e activities) or increased cost to maintain
schedule. Tenaska elected to extend the schedule. As a resu lt the actual FEED study duration was approximately 10 months.

The FEED study followed a typical developm ent sequence. The sequence includes the eight phases listed below, with key deliverab les associated with each phase listed in parentheses.

 Phase 1: Process Engineering (Design Basis, Process Fl ow Diagrams (PFDs), Heat and Material Balances (HMBs);

 Phase 2: Equipment Definition (equipment data sheets, specifications);

 Phase 3: Equipment Pricing (bid lists, bid packages, bid tabs);

 Phase 4: Plant Layout & Model (Plot Plan);

 Phase 5: Material Quantificati on (MTOs, Physical Drawings);

 Phase 6: EPC Execution Planning (E PC Schedule, Contract Plan);

 Phase 7: Cost Estimating (Capital, Operating Costs); and

 Phase 8: Commercial Proposal (Cost, Schedule, Performance Guarantees).

Attachment 3 contains a simplified schedul e of the FEED study ac tivities showing the completion dates for key deliverables comi ng out of the phases listed above. The following sections discuss each of these FEED study phases in more detail.



### 5.2 Process Engineering

5.2.1 

### Design Basis

Process engineering starts with the preparation and establishment of the formal Project design basis. However, prior to doing s o, Tenaska provided its high-level input, which
included:

 Selection of PRB coal supplied by Arch Coal;

 Selection of assumed PC boiler technology;

 Determination of coal heat input and resu lting flue gas flow rate and composition;

 Selection of Fluor EFG+ technology;

 Project life of 30 years;

 Design for air cooling to minimize water cons umption rate (Refer to separate Global CCS Institute study report titled “Cooling Alternatives Evaluation for a New Pulverized Coal Power Plant with Carbon Capture”);

 Ensure design meets permitted air emission limits – see Section 6.2;

 CO 2 product to meet or exceed current Permian Basin quality specifications (see Figure 9);

 The CO 2 removal system shall have a CO 2 recovery of 90 percent or greater;

 Design the CC Plant for 25 percent turndown in total flue gas mass flow rate. The turndown for each train operated individually or jointly is 50 percent. For joint operation, turndown may vary between trains;-24-  PC Plant capacity fa ctor is 90 percent;

 Desired on stream factor is 346.75 days per year; and

 All rotating equipment drivers shall be electric.

In addition, prior to the FEED study, Te naska and Burns & Mc Donnell established economic evaluation factors for the Project. The purpose of these fact ors is to allow the combined FEED study team to evaluate vari ous potential design options and determine the best economic decision for the Project. Figure 7 below is a table of these five factors.

Figure 7 –Project Economic Evaluation Factors

Parameter Value

Value of Electric Power USD$3,550 per kW

Value of Steam USD$284 per lb/hr (per 0.454 kg/hr)

Value of Flue Gas Pressure Drop USD$1,325,800 per inch of water (per 0.249 kPa)

Value of Solvent USD$75,820 per lb/hr (per 0.454 kg/hr)

Value of CO 2 Captured USD$4,476,842 per 0.1percent below 90 percent

The value of electric power is based on the su m of (1) the estimated specific capital cost for the PC Plant, and (2) the 30-year net pres ent value of coal conversion efficiency using an assumed fuel cost at the commercial opera tions date (COD) and a discount rate of 10 percent. This value was, then, converted to USD$/kW using assumed PC plant heat rate and net output.

The value of steam is based on value of electric power (USD$3,550/kW) multiplied by the low pressure steam turbine power genera tion efficiency of 80 kW per 1,000 lb/hr (per 454 kg/hr). Note: Through the FEED study it was determined that the rate of power generation losses associated with low pressu re steam extraction were lower than this
value.

The value of flue gas pressure drop is based on the value of electric power (USD$3,550/kW) multiplied by the calculated kW power demand per inch of water pressure drop for a fan handling 2,800,000 actual cubic feet per minute (79,287 actual cubic meters per minute) with an assumed effi ciency of 88 percent. It should be noted that the pressure drop evaluation factor and electric power evaluation factor were applied separately to the applicable de sign attributes of the project so as to ensure that that the analysis did not “double count” for the incremental electric ne cessary to overcome higher pressure drop.

The value of solvent is based on the 30-year net present value of one lb/hr of solvent consumption using an assumed 2009 MEA price of USD$1,550/ton (escalated by 3 percent per year) and a disc ount rate of 10 percent.

The CO 2 value is the 30-year net present value, using a 10 pe rcent discount rate, of 0.1 percent CO 2 emitted based on a CO 2 value of USD$60/ton, and 3 percent escalation rate-25- (with 0.1 percent CO 2 converted to tons of CO 2 using the design coal input rate and carbon content).

Tenaska anticipated encountering a number of design decisions requiring economic analysis using these factors. However, most of the design decisions were straightforward and clear such that detailed analysis was not warranted. Some of these items include: reducing/limiting the number of control valve bypasses, isol ation valves, instrumentation, and ductwork runs, evaluation of the absorber material of construc tion, and evaluation of the reboiler heat exchanger type.

In addition, since this Project is in the development stage, the actual economic factors are not known. (Power and CO 2 off-take agreements, which will establish the pricing basis, have not been negotiated.) As such, this uncerta inty gave a lack of c onfidence in utilizing these factors when a particular design issue was applicable (e.g. further optimizing the air cooler design temperature).

Fluor used input from Tenaska to develop the detailed CC Plant project design basis. The final process design basis establishes the parameters necessary to complete process simulation modeling. Fluor uses process simula tions to establish the heat and material balance and to define the technical parameters of the plant equipment and systems. The following sections describe the item s included in the resulting design.

CC Plant feedstock (flue gas) quant ity, composition, and conditions

The flue gas feedstock flow rate and compos ition are key elements in the design. During the development of the PC Pl ant component, Tenaska provide d the Fluor PC team with various design coal compositions. The PC team used the design coal data to simulate the performance of the boiler and determine th e combustion flue gas composition and flow rates. Tenaska also provided the assu med PC boiler technolo gy for the Project. Therefore, when the CC Plant FEED st udy began, Fluor generated the flue gas combustion compositions to include the assu med boiler design. Also included in the
combustion simulations was a conservative amount of air to account for air leakage into
the boiler.

For the various coals, the calculations produced different flue gas compositions and flow
rates. The Fluor FEED team selected the fl ue gas with the harshest conditions (highest flow rate, lowest CO 2 concentration, and highest oxygen conc entration) to be the basis of the design and basis of performance guarantees for the CC Plant. The final design flue gas consisted of the properties and composition shown in Figure 8 :-26- Figure 8 – Flue Gas Properties and Composition

Parameter ValueComposition N 2 66.060 vol%

O 2 4.676 vol%

CO 2 11.640 vol%

H 2 O 16.830 vol%

Ar 0.795 vol%

SO 2 10 ppmv

NO X 26.3 ppmv

Flow Rate 327,196 lbmol/hr (148,414 kgmol/hr)
Temperature 131.3°F (55.2°C)

Pressure 13.67 psia (94.25 kPa)

Product specifications (quality and conditions)
Tenaska defined the CO 2 product recovery rate and quali ty specification as shown in Figure 9. Across all parameters, the specifi cation meets or exceeds the typical Permian
Basin CO 2 specification. Unfortunately, because the CO 2 off-take agreements have not been established, the final specification is not known. Nor is it known whether the Project will need to meet the specification continuous ly or if there may be some flexibility regarding certain parameters.

Figure 9 – CO 2 Product Specifications

Parameter Value

End Use Enhanced Oil Recovery

Recovery Rate 18,103 STPD (16,163 Metric ton/d) 90% at ambient design temperature
Temperature < 100

Pressure 2,500 psig (~17,338 kPa absolute)
Purity >98 vol%

Maximum O 2 concentration < 10 ppmw

Maximum N 2 + Ar concentration < 4 mol%

Maximum H 2 O concentration <30 lb/million ft 3 (481 kg/m 3 )

Maximum H 2 S concentration < 20 ppmw

Maximum concentration of: SO 2 , CH 4 , NH 3 , and solvent Not detectable

Among these parameters, the most challenging are the O 2 concentration, which requires reaction with hydrogen across an oxidation catalyst, and the water concentration, which is met through drying on molecular sieve beds.

Regarding purity, the typical Permian Basin spec ification is 95 vol%. Tenaska raised the project specification to 98 vol% because it is easily achieved with Fluor EFG+ technology. However, in doing so, Tenaska di d not lower the levels of contaminants present (such as inerts).-27- Utility/support systems and heat integration

The development of the process design basis required significant interface between the CC and the PC Plant teams. Figure 6 in Sect ion 4.4 provides a table of these interfaces. Among them are utility and support systems provided by the PC Plant. The PC and CC project FEED teams jointly developed the battery limit conditions for these systems. Key items affecting the process design include:

 The PC Plant will provide saturated 50 psig (approximately 446 kPa absolute) low pressure steam to the CC Plant which returns to the PC Plant as condensate.

 PC Plant condensate at 114oF ( 45.6oC) is heated against hot overhead vapor from the
CO 2 stripper

The latter item represents heat integration betwee n the PC and CC Plants and is a method to optimize the thermal efficiency of the overall Project. Prior to the CC Plant FEED study, Fluor, Tenaska, and Burns & McDonnell also considered heat integration with the
CO 2 compressor intercoolers. However, Tenask a elected not to pursue this integration due to: (1) potential contamina tion of the condensate with CO 2 (from potential leaks) that
could result in accelerated corrosi on of boiler tubes, (2) the fact that the integrated design would be dependent on the CO 2 compressor, which has not been selected, and (3) the intercoolers are another source of low-grade heat and there is a limited ability to utilize it in the PC Plant steam cycle – there is onl y minimal temperature difference between the intercooler temperatures and prospective PC water streams that appears to outweigh the potential cost of integration.

Site-specific design criteria

There are a number of site-related items in the design basis. They include ambient temperature ranges, elevation, atmospheric pres sure, rainfall, etc. Figure 10 contains these values for the Project.

Figure 10 – Site-Specific Design Basis Parameters

Parameter Value

Maximum Dry Bulb Temperature Recorded 110.0oF (43.3°C )

Minimum Dry Bulb Temperature -9.0°F ( -22.8oC)

Dry Bulb Design Temperature fo r CC Plant 82.0oF (27.8°C )

Design Relative Humidity 56 %

Site Elevation 2000 ft (610 m)

Atmospheric Pressure 13.66 psia (90.1 MPa)

Annual Mean Rainfall 25.0 inches (63.5cm)

Daily Maximum Rainfall 9.0 inches (22.9cm)

Mean Wind Velocity 11.7 miles per hour (18.8 km/hr)

Design Wind Velocity 90.0 miles per hour (144.8 km/hr)

Prevailing Wind Direction (See Figure 11)

Seismic Zone Site Class C-28- Figure 11 – Wind Rose Annual Average Wind Data for Abilene, TX 1961-1992

The most important of these site-related parameters is the design temperature. Determination of the design temperature is inte rrelated with the availability of water and the cooling method select ed for the Project.

The Project is located in a semi-arid area, wi th annual rainfall averaging about 22 inches (56 centimeters). As such, prior to the CC Plant FEED study, Tenaska and Fluor explored several cooling options for both the PC and CC Plants. Fluor completed the study in February 2010, which included:

1. air cooling,
2. full wet cooling, and
3. partial wet cooling ( hybrid cooling).

Subsequent to this analysis Tenaska decided that Trailblazer will employ air (dry) cooling in order to reduce the Project’s water usag e due to both the economic results of the analysis and the limited water resources in the area.

With regard to the air cooling, Tenaska esta blished separate and distinct ambient design temperatures for the PC and CC Plants, resp ectively. Tenaska set the PC Plant design temperature at 99.6°F (37.6°C) which is n ear the maximum ambient temperature (99 th percentile) for the site. However, Tenask a set the CC Plant design temperature at 82°F-29- (27.8°C), where only approximate ly 15 percent of the annual hours are higher than this temperature. When the ambient temperatur e exceeds the design temperature, Tenaska and Fluor expect the CO 2 capture rate of the CC Plant to decrease slightly from the 90 percent capture design point (falling to approximately 88 percent at 99.6°F).

Tenaska preferred the slight capture rate de gradation at high ambient temperatures over the alternative of a 99.6°F (37.6°C) design temperature which would have vastly
increased the number of air co olers (to maintain the proce ss operating conditions) and the associated capital cost. Tenaska deemed the small CO 2 capture degradation to be acceptable because it meets the stated goal to achieve between 85 and 90 percent CO 2 capture.

If regulations require conti nuous 90 percent capture in th e future, Tenaska could add
more air coolers. PC Plant thermal efficien cy is much more sensitive to high ambient temperatures and, thus, Tenaska retained a high ambient design temperature for the PC Plant. For additional information, refer to separate Global CCS Institute report titled

“ Cooling Alternatives Evaluation for a New Pulverized Coal Power Plant with Carbon Capture .”

Operational objectives (such as plant turndown and reliability)

Among the main areas where Tenaska provide d input to the design basis were the operational and reliability criteria. Tenaska and Fluor agreed that the turndown of the CC plant would be 50 percent for each train ope rated individually or jointly. For joint operation, the turndown percen t could vary between trains. With the 2x50% train arrangement, this turndown requirement is inherently met by the Fluor process configuration (as limited by the absorber tu rndown limit) and has no other impact on the design of the facility. This equates to opera ting anywhere in the ra nge of 25 percent to 100 percent total flue gas flow . Tenaska also requested th e CC Plant be designed for a PC Plant capacity factor of 90 percent and an on stream factor of 346.75 days per year.

5.2.2 

### Process Simulation and Heat and Material Balances

Based on the design basis criteria, Fluor prepared process simulations. Process simulation, when validated with measured data and when programmed properly, is an efficient way to rigorously perform process engineering calculati ons and to produce the heat and material balance (HMB) – See Attach ment 1, Page 12. Fluor uses a proprietary rate-based simulation model calibrated agains t historical operating plant data and from recent pilot plant test results.

The HMB formed the basis for developing th e preliminary process equipment list, the PFDs (See Attachment 1, Page 11), and proce ss data sheets. PFDs depict the major equipment and major process systems for the plant.

5.2.3 

### Process Equipment Data Sheets

The PFDs form the basis for developing both ma terial selection diagrams (MSDs) as well as the start of the piping and instrumentat ion diagrams (P&IDs). The MSDs are a collaborative effort between process e ngineers, who define the conditions and-30- compositions of the various process and utility streams, and metallurgical engineers, who determine optimum materials of construc tion for the various plant equipment and systems. The MSDs form the basis for mechanical equipment, piping, and instrumentation material specifications.

Process engineers then develop process equipment data sheets from HMB and MSD results. The process equipment data sheet s include primary results from the HMB, including pressure, temperature, and equipment size criteria. Later, mechanical engineers
will add further details to the data sheets.

5.2.4 

### P&IDs and Summaries

The P&IDs are the next step in the process en gineering phase. P&IDs are a collaborative effort between all the engin eering disciplines. P&IDs in clude all the major equipment and systems depicted in the PFD, as well as all the utility and process support systems required to complete the design. P&IDs repr esent a primary engineering deliverable, and establish the technical definition for virtually all the engineering di sciplines. The P&IDs evolve during the project as new details emerge, including vendor-specific equipment parameters. Following completion of revi ews and the HAZOP study, and prior to bulk material quantity estimation, the P&IDs are frozen and issued for design.

The final activity in the process engineering phase is the preparation of flow stream summaries, including utility system and envi ronmental summaries, and pipeline flow summaries. Other engineering disciplines use this data for further development in the areas of system sizing, instrumentation and control systems design, environmental permits and hydraulic sizing of piping systems.

5.2.5 

### Design Reviews

Fluor and Tenaska conducted four major de sign reviews during the FEED study. Below is a description of each in chronological order:

1. PFD Review. Fluor engineers described the PFDs including the major streams and the functionality of each piece of equipm ent in the EFG+ design. The PFDs also show the control philosophy fo r the plant operation. The diagrams were reviewed and discussed with the Tenaska project team throughout the course of half a day. Fluor addressed the list of questions a nd recommendations that came up during the meeting in the final revision of the PFDs.

2. HAZID. A HAZID is the high-level safety assessment done very early in design development. Fluor and Tenaska engi neers carried out a HAZID study led by a moderator experienced in the HAZID techni que. Dividing the EFG+ into sections based on the preliminary plot plan, the HAZID team considered each area of the plant against a checklist of general hazards. As a result, the team identified potential hazards. For each identified hazard, the team considered the risk presented by the hazard and all possible means of either eliminating the hazard or mitigating the risk. The moderator assigned actions to either disc ipline groups or individuals to ensure the mitigating control. The HAZID review la sted for one day. See Section 6.1.1 for
additional information.-31- 3. P&ID Review. Fluor engineers reviewed the P&ID s with Tenaska’s project team. In the review, Fluor described each process and ut ility line. These descriptions included defining the valve types, equipment connec tions, line sizes, piping connectivity, and various operating scenarios. The review lasted four days. The Fluor team
documented Tenaska’s recommendations and ad dressed them in the final revision of
the P&IDs.

4. HAZOP. A HAZOP is a structured and syst ematic technique for process hazard analysis and risk management. The US A government has mandated Process Hazard Analysis (PHA) for certain types of fac ilities through the Occupational Health and Safety Administration (OSHA) Code of Federal Regulations (CFR) number 1910.119. This regulation is also called Pr ocess Safety Management. Although the regulation may not strictly a pply to the Project or to CO 2 capture facilities in general, the method has become widely accepted in the process industry as a productive way to identify and manage process safety. As such, with these positive benefits and
without an official determination as to its applicability, Tenaska elected to conduct a HAZOP for the Project.

The scope of a HAZOP includes the identificat ion of (1) potential hazards in a system and (2) operability problems likely to l ead to nonconforming products. The HAZOP method assumes that deviations from the intended design or operating conditions
cause the occurrence of risk events. The HAZOP moderator facilitates identification of such deviations by using sets of “guide words” as a systema tic list of deviation perspectives. For the Project, the HAZO P team of Fluor, Tenaska, and Burns & McDonnell engineers used P&ID s as a starting point. Fl uor pre-divided each system into nodes. The team individually discu ssed the nodes following the guide words. The three-day review resulted in a list of recommended modifications to the P&IDs or items that required further study. S ee Section 6.1.2 for additional information.



### 5.3 Equipment Definition

The process engineering deliverables descri bed above provide the fundamental data necessary to start discipline -specific engineering in the mechanical, structural, piping, control systems, and electrical areas. Fluor ca tegorizes this work into two primary areas: (1) engineering of equipment and systems and (2) physical layout of interconnecting systems (plot plan). This sect ion describes the former category.

As described in Section 5.2.3, process engi neers prepare and provide the equipment process data sheets to the ot her engineering disciplines for further development and definition. Mechanical engineers use the pr ocess data sheets to further develop the equipment designs. After doing so, the engine ers add mechanical details to the data
sheets.

After sizing the equipment and creating the a ssociated data sheets for each, mechanical engineers provided a sized equipment list to the other engineering disciplines. The other discipline engineers used this equipment list to complete their designs. For example, piping engineers used the equipment list to cr eate the plot plan and electrical engineers used it to design the elec trical systems.-32- Complete technical definition of each piece of major mechanical equipment includes the data sheets discussed above, narrative procur ement specifications, and engineering notes. Fluor prepared the narrative sp ecifications using internal standard documents, modified to reflect project-specific crit eria. Similarly, in developi ng the engineering notes, Fluor identified any unique requirements. When combined, these documents formed the basis for the equipment technical definition nece ssary to support equipm ent pricing through competitive bidding by qualified vendors.

Mechanical equipment includes:

 Pressure Vessels . Mechanical engineers develop outline drawings based on process criteria. After doing so, they add code requirements, metallurgy, wall thickness calculations, nozzle/shell attachment crit eria, ladder and platform layouts, and internal support requirements to the vessel data sheet.

 Rotating Equipment (including pumps, blowers and compressors) . Mechanical engineers develop the gene ral rotating equipment desi gn configuration based on process flow criteria. The effort include s selection of equipment type. There are many types of compressors, blowers, and pumps, but at a high level the options
would include:

o Compressors: centrifugal ve rsus reciprocating;

o Pumps: in-line or centrifugal or positive displacement; and

o Blowers: axial fan configurations.

Fluor developed preliminary horsepower rati ngs as part of se lecting the rotating equipment type for each application. In a ddition to selection of the equipment type for each service, mechanical engineers spec ified the associated auxiliary systems, such as lube oil criteria, minimum flow bypa ss systems, and seal specifications. After adding this information, the completed m echanical data sheet provides sufficient detail to support competitive bidding.

 Heat Exchangers . There are three roles for heat exchangers: those which cool the process against a utility (like cooling wate r or air), those which heat the process against a utility (like stea m), and those which interchange thermal energy between process streams for efficiency. Regardi ng the first role, the majority of heat exchangers in cooling service for the Proj ect are air-cooled ty pe design (also called fin-fans) due both to the limited water availabi lity in semi-arid west Texas and to the cooling study determination of dry cooling. For the other heat exchanger roles, the Project will utilize “plate and frame” t ype as well as limited “shell and tube” exchanger designs. Mechanical engineers selected among these types based on the experience and application. Th e engineers then performed heat transfer calculations
to establish heat transfer surface area requirements. The engineers used this information to establish the general footpr int and physical outline of the exchangers. Following these activities, the engineers added the results (e.g. heat transfer duties and dimensional characteristics) to the mechanical data sheets.-33-  Packaged Equipment . Packaged equipment includes chemical injection packages and product gas dehydration systems. This e quipment category includes items comprised of multiple smaller equipment components th at are shop fabricated and skid mounted. Like the other equipment areas, mechan ical engineering expands upon the process data to establish overall performance cr iteria and specific design requirements for each of the smaller equipment components.

 Electrical Equipment and Instruments . Electrical equipment includes transformers, switchgear, etc.



### 5.4 Equipment Pricing

Major equipment and systems pricing was a key element in the development of the Project cost estimate. Major equipment repr esented a substantial portion of the overall Project cost. Fluor established pricing through a competitive bidding process during the course of the FEED study. This effort in cluded development of a qualified vendor bid list, development of commercial purchase or der terms, the assembly and issue of bid packages to approved bidders, and receipt, ev aluation and selection of the recommended vendors. The following discussion includes more details about the st eps in this pricing

process.

The pricing effort starts with the identifica tion of high-value equipment and systems that comprise the majority of capital cost for the Pr oject. The threshold value for this list was set at those items expected to be grea ter than USD$250,000, but was reduced for highvalue equipment where good in-house pricing hi story was available, or supplemented for lower-value equipment that was unique to Fluor experience. This list included the major mechanical equipment items, major electr ical equipment, and instrumentation.

Fluor developed a vendor bid li st for the identified equipmen t based on qualified vendors from previous EFG+ project experience and compared/supplemented it with the bid list prepared previously by the PC Plant team. Th is resulted in a bid list that would allow realization of potential volume discount purchases for combined like equipment procurement between the PC and CC Plant co mponents. Tenaska reviewed and provided input to the final bid list.

Fluor developed purchase order commerci al terms based on standard practices supplemented with applicable terms from th e Tenaska-Fluor EPC contract term sheet (part of the MOU). Fluor combined the resulting commercial term document with the technical attachments to produce complete Re quest for Quotation (R FQ) bid packages for each identified purchase order.

Fluor issued the RFQ packages to each iden tified bidder from the approved bid list and set bid submission deadlines ranging from 4 to 6 weeks, depending on complexity of the equipment and systems. During this pe riod, the FEED team supported the bidding process by providing clarificati ons to vendor questions. In select cases, Fluor invited vendors to bid conditioning meetings to discuss both technical and commercial terms and ensure common understanding of project objectives.-34- Once received, Fluor evaluated the bids on bot h a commercial and technical basis. The evaluations resulted in the pr eparation of formal bid tabulations. These tabulations were
a contract deliverable for Tenaska and identi fied the bid pricing as well as conformance to, or departure from, the vari ous commercial and technical elem ents of the bid package. This tabulation provided the basis for th e selection of the recommended vendor and
associated cost. Fluor and Tenaska reviewed the bid tabulations to ensure agreement on the recommended vendors.

Fluor summarized the resulting li st of recommended bidders and associated cost into priced equipment lists for inclusion into the Project cost estimate.

After agreement on the preferred vendor with Tenaska, the FEED engineering team incorporated vendor-specific equipmen t information into the design.



### 5.5 Plant Design & Model

Fluor started the plot plan using the PFDs and preliminary equipment sizes. As equipment sizing and requirements became availa ble, Fluor modified and refined the plot plan. The plot plan, along with the P&IDs, represents a key element in project definition and is the composite effort of all the engineering disc iplines. Fluor and Tenaska completed extensive reviews of the plot pl an to ensure achievement of the Project constructability, operability, and maintainability objectives.

The approved plot plan sets the basis for the development of a three-dimensional (3D) model of the Project. This model is a comm on approach for large-sc ale, multi-discipline projects, and provides a common design platform for all engineering disciplines to ensure integrity of final interfaces and minimizati on of interferences and errors.

The previous generation engine ering world used manual drawi ngs to provide directions
to construction and as a medium for devel oping material quantitie s. In that design environment, the various engineering discip lines involved in a project (structural, architectural, mechanical, piping, electrical , and instrumentation) all developed their respective designs independently. Other en gineering disciplines then checked these independent designs for conflicts and c ontinuity in design. This manual method introduced human error, and resulted in errors in both construction dr awings and material quantities. The industry averaged three to five percent rework due to construction drawing errors.

The introduction of the computer age brought in the next phase of engineering design – two-dimensional Computer Aided Design (C AD) software. Similar to the manual drawing approach, each engine ering discipline prepared draw ings in a CAD format, and checked each other’s design for conflict and continuity of design. The mathematical processing capabilities of CAD software significantly reduced dimensional errors. However, design interferences and associated rework remained a significant issue for
construction.

The next development was use of 3D modeling that allowed all engineering disciplines to work on a common design platform. This approach not only resulted in reduced
dimensional error with the automated math ematical dimensional checks, but also-35- automatically identified clashes or interfer ences between engineering designs. The 3D approach significantly reduced cons truction interference problems.

At that point, the 3D model was a drafting t ool that provided the benefits cited above. The next development was the ability to link databases to the model, allowing “intelligence” to be included in the design. Material specifications, structural steel catalogue data, electrical system connectivity, and overall plant process flow criteria
database information have all been linked to the model electronically to provide access to technical data and specificatio ns within the model.

Another area in which computer advances have brought benefit is transparency – the ability to present the design in a 3D environm ent to facilitate design reviews. Reviewers can readily visualize the finished product a nd are much better positioned to provide input into design reviews. The 3D design medi um clearly conveys construction sequencing, operator accessibility, an d safety features.

In addition, the bulk material take-off (MTO) ef fort is transparent a nd automated. It is tough to question the accuracy of piping quanti ties, for example, when they are readily accessible in the model. With ready downloads by various criteria, the 3D model eliminates the need for “over-buy” of excess material for contingency. All together, the development of the 3D model is a large stri de toward improving the quality and accuracy of engineering.

Although project engineering a nd construction are the primar y areas benefitting from the 3D model, there also are benefits for the owner once the project is completed and the facility is in operation. The 3D model provides an excellent training tool for operators and maintenance personnel, allowing th em to become familiar with the plant configuration. The owner can maintain the m odel in as-built conditions to provide ready documentation of the plant configuration and subsequent design changes.

Fluor used a state-of-the-art 3D software system for the Project. The model included foundations, structural steel, mechanical equipment, buildings, pipe, and cable corridors. Due to the scope of the FEED study phase, Fluor did not perform detailed 3D modeling of instrumentation and electrical systems. However, Fluor would complete this modeling during the detailed engineer ing phase of the Project.

Attachment 5 contains a screenshot from the 3D model construc ted for the Project.



### 5.6 Bulk Material Quantification and Pricing

In addition to the engineered equipment and systems costs discussed above, quantification and pricin g for bulk materials also are majo r considerations in defining the project scope and cost.

5.6.1 

### Types

Bulk materials typically include:

 non-engineered items, such as conc rete (including rebar, embeds);

 structural steel (pipe racks, supports, and platforms);-36-  piping systems (pipe, elbows, tees, valves);

 electrical (cable trays, cable, conduit, junction boxes); and

 control systems items.

Bulk materials also include pre-fabricated buildings, such as the electrical equipment power distribution centers or th e analyzer shelters, and equipment shelters for the product compressor buildings.

5.6.2 

### Quantification Methods

Fluor quantified the majority of bulk material s for foundations, struct ural steel and piping systems through the 3D model. In addition to physical layouts, the model database also includes component specificati ons. Accordingly, downloads from the finished model provided bulk materials by cat egory and specification.

Fluor based the electrical and control system s bulk material quantities on plan drawings, supplemented with cable tray/cable layouts, de velopment of cable schedules and standard details for multiple, common applications (again, not through the 3D model). Fluor then summarized these bulk materials according to material categories and specifications.

5.6.3 

### Pricing Methods

Bulk materials are readily available “off-the- shelf” commodities. As commodities, they are subject to pricing volati lity associated with the raw materials of construction. However, the amount of pricing volatility vari es among the different bulk materials. An example is copper, which greatly influences el ectrical cable and wire costs. Another area of potential price volatility is for materials th at are more labor intensive to fabricate and subject to labor escalation costs. These in clude bulk materials that are shop fabricated prior to delivery to jobsite, including structural steel and pipe, as well as the prefabricated buildings discussed above.

The construction industry commonly uses bulk materials and, thus, these materials are readily available with standard pricing. For the CC Plant, Fluor derived the majority of material pricing from recent project histor y for like commodities and volume purchases. Fluor supplemented with informal budgetary pricing from preferred suppliers for commodities where recent project history was lacking or where labor was a significant cost component of the delivered product. Fluor used informal budgetary vendor quotes to validate in-house pricing on items such as pr e-fabricated buildings and shop fabricated steel and piping.

One area of exception to this bulk material pr icing approach was the large diameter alloy valves. Although a bulk item in the general sens e, these valves are not routine items and, therefore, Fluor considers them specialty bulk items. Fluor based the pricing for these large diameter alloy valves on a formal, competitive bidding process among approved suppliers.-37- In summary, Fluor priced bulk materi al using three methods, as follows:

 For items that have relatively low pri ce volatility, Fluor applied in-house/recent project purchase order values for similar commodities and volume purchases. Items in this category include concre te, rebar, embeds, small bore valves, flanges, fittings, bolts, gaskets, conduit, cable tray and, miscellaneous supports;

 Budgetary, informal pricing from preferred suppliers for shop-fabricated steel, shop fabricated pipe, pre-engine ered buildings and cable; and

 Formal competitive bidding for large diameter alloy valves.

Figure 12 below summarizes th e bulk pricing approach:

Figure 12 – Bulk Material Pricing Methodology

Account Bulk Item Description Pricing Methodology

In-house/
recent project
history Informal quote
from preferred
supplier Formal Competitive

quote

Concrete Concrete, rebar, embeds X

Anchor bolts X

Steel Shop fabricated steel X

Misc Steel X
Buildings Pre-Engineered X

Piping Small bore valves, flanges, bolts, gaskets X

Shop fabricated piping X
Large bore alloy valves X

Electrical Cable and wire X
Cable tray, junction boxes,
switches, panels X

Instrumentation Tubing, valves, instrument

stands X

Fluor included the final bulk material quantities and associated pricing data in the project capital cost estimate.



### 5.7 EPC Execution Planning

Project execution planning must consider a wi de variety of issues to develop the most efficient and cost-effective approach. Some of the major considerations that must be addressed in the formulation of Engi neering, Procurement Construction, and Commissioning (EPCC) execu tion planning include:

 Contract terms;

 Labor availability;

 Site logistics;-38-  Technical complexity;

 Major equipment and material sources; and

 Extent of field fabrication.

Much of the execution planning is dependent on the FEED study design. For example, the FEED study defines the amount of specialty field-fabricated e quipment, the extent and metallurgy of piping systems, and the plot layout, all of which are considerations that influence the optimum project execution appr oach. Accordingly, th e execution planning effort cannot begin in earnest until much of the early projec t FEED engineering has been accomplished.

5.7.1 

### Execution Method and Schedule

Fluor will execute the Projec t as a single project, with both PC and CC components under a common timeline. This approach will allo w the Project to realize efficiencies and volume discount cost savings for combined contr acts. It also will a llow for the effective optimization of craft labor pool resources.

Fluor documented the details of its approach in the EPCC schedule. As an integrated schedule, it identifies execution interfaces a nd interdependencies between the PC and CC Plants. Examples of these interfaces include completion of the overall site civil activities (assigned to the PC Plant execution scope ) to support CC above-ground construction mobilization and on-line dates of major interconnecting common systems required for CC start-up.

The overall Project (including both PC and CC plants) schedule is 57 months. This duration starts at full notice-to-proceed (NTP ) and ends at substantial completion (which includes CC Plant commissioning and successful performance testing). The schedule begins with detailed engineer ing and procurement efforts wi th a focus on long lead time delivery items. This 23-month phase of the effort includes two ke y review points set up to occur at 30% and 60% of engineeri ng completion. Construction follows the engineering effort with a s light overlap. Including co mmissioning (and performance testing), this phase is 36 months in duration.

Attachment 4 is a simplified ve rsion of the EPCC Schedule.

Construction scheduling considers many factor s, including equipment deliveries, extent of field fabrication activities, subcontracting plans, craft la bor availability, and PC plant interfaces. Schedule development also consid ers work sequences, concentration of craft personnel, inspection, and testing procedures.

In addition to identifying these critical sche dule interfaces, the schedule also defines the engineering durations. Timing of equipment vendor data availabil ity and completion of the primary design reviews drive these durations.

Critical path runs through equipment procur ement (including receip t of supplier data), design reviews, piling/foundations, stack erecti on (PC scope), field fabricated equipment (DCCs, Absorbers, strippers, and lean flash drums), CO 2 compressor and buildings,-39- instrumentation, and commissioning. To maintain the critical path, Fluor will put initial emphasis in the detailed engineering phase on validating the design and supplier of long lead equipment (field fabricated items and CO 2 compressors) so that vendor data can be received as soon as possible.

The following subsections describe each of the EPCC components of the Project
execution.

5.7.2 

### Engineering and Support Services

Engineering execution variables include dete rmining design mediums/deliverables (such as 3D model discussed above), schedule, specialty third party subcontracting, multioffice execution, procurement plans, and construction support. The FEED team
establishes each of these ite ms as the basis for developing detailed home office costs.

Fluor developed organization charts to establish projec t organization structure and identify key positions including staff levels a nd associated wage rates. The organization includes both engineering and pr oject support services (project management and controls, administration, quality, procurement, cont racts and construction and commissioning planning). The amount of time allocated to the Project for ea ch organizational position is a function of the activities and sequence of the EPCC schedule. As needed, Fluor identified and solicited proposals for third-part y specialty engineering subcontracts. The home office plan also includes computer systems and in-house system costs.

Using this information, Fluor prepared th e internal home office cost estimates.

5.7.3 

### Procurement

Procurement and contract execution is anothe r support service like those described above. Execution planning for procurement requires es tablishing how the project material and equipment will be provided and what portion of the work will be subcontracted. The plan leverages the FEED study procurement work a nd vendor bid list. Fluor supplemented the FEED study information with th e identification of bulk materi al orders and associated vendor bid list and bid packages. Similarly, Fluor will develop a s ubcontract plan based on the construction execution approach.

5.7.4 

### Construction

The FEED study team interfaced with construc tion planning to identify material types, equipment, and design features required for the Project. Fluor held design and constructability reviews. The purpose of these reviews is to align the Project team on the best method to design the facility with cons ideration for the construction methods. This
interface resulted in a constr uctable design, but also provi ded the necessary background to develop the construction execution pla n. In considering constructability, no modularization (other than standard pre- dress vessels or skid mounted equipment assemblies) was considered. For the scale of this plant, primarily stick-built field erection is the only realistic option.

Construction planning includes determination of the split between work performed by directly hired labor (“direct hire”) and the work performed by a subcontractor. This split-40- is dependent on labor availability, regional labor posture (i.e. uni on or open shop / nonunion), and the type of work. Determination of this split influences the construction management organization, temporary facilities, work sequences, etc. To determine this split, Fluor performed a labor survey to determine regional craft availability and wage rates during the FEED study. Based on this surv ey, Fluor identified the work that will be performed on a direct hire versus a subcont ract basis.

The determination of construction work allocation then formed the basis for development of the overall project EPCC schedule. In addition, Fluor considered the following items in developing the construction schedule:

 Procurement Plan – The procurement plan affects the EPCC schedule in several ways as it (1) determines the timi ng of when vendor data will be available to support the engineering effort, (2) documents the quoted material and equipment deliveries, (3) defines inspection hold points, and (4) includes shipping and logistics. The plan also

needed to be consistent with construc tion “need date” base d on the construction execution sequence that meets the ove rall schedule duration target;

 Availability of detailed e ngineering drawings (both in ternal and vendor) – Fluor defined the engineering work sequences a nd durations based on th e receipt of vendor data (from the procurement pl an), and completion of the 30 percent, 60 percent, and 90 percent completion-level 3D model reviews;

 Site mobilization timing (considered with re spect to the engineering and procurement plans);

 Interface with the PC Plant – most importa ntly, completion of site preparation/civil works and utility tie-in dates;

 Craft levels;

 Work sequences; and

 Subcontract award dates a nd quoted work durations.

Using this input information, Fluor devel oped the schedule using software programmed to reflect sequence and interf ace logic between activities.

5.7.5 

### Commissioning

This final execution planning activities ar e commissioning, start-up, and performance testing. These activities are included because the Tenaska – Fluor MOU defines contract completion as “substantial completion” which in cludes successful performance testing.

Fluor divides commissioning into two types – cold commissioning and hot commissioning. Completion of cold commissi oning is the basis for achieving mechanical completion. Hot commissioning energizes util ity systems in preparation for feedstock
introduction.

Mechanical completion occurs when the facil ity has been substantially installed, but not yet put into operation. At mechanical completion, all the me chanical integrity, continuity, and safety checks have been completed to the extent possible without-41- energization or operation of any plant com ponent or system. Reaching mechanical completion requires cold commissioning activit ies, including system cleaning and motor rotation checks. The commissioning team is responsible for cold commissioning and, in the period prior to reaching mechanical co mpletion, the commissioning team works under
the direction of the construction team. The commissioning team is typically mobilized 6- 9 months prior to construction r eaching mechanical completion.

Once the team achieves mechanical completi on, the facility care, custody, and control
transfer from the construction team to the commissioning team. The commissioning team then begins hot commissioning. During hot commissioning, the commissioning team brings all utilities on-line, starting w ith electrical power. Steam, condensate, water, air systems, etc. all are brought on-line, follo wed by chemical or packaged systems, suchas dehydration or chemical injection systems. Once all utilities and subsystems are online, the plant is ready to introduce feed stock and begin start- up of the facility.

Fluor will then perform start-up and operate the plant for “calibrat ion” – a period during which each of the systems and major equipm ent components are fine tuned for site conditions. This operation mode continues until the facility achieves steady-state operation, at which time it is ready for perfor mance testing. Fluor will perform formal testing to ensure the facility meets th e throughput and performance guarantees.

During the commissioning period, Fluor will al so provide operations and maintenance training.

After successful performance testing and comp letion of the training activities, Fluor will turn over care, custody and contro l to Tenaska and the Project is essentially completed.

Fluor incorporated each of these steps into the EPCC schedule. The final phase of the EPCC schedule development was to verify that th e facility on-line dates were achievable.



### 5.8 Capital Cost Estimation

Fluor prepared the Project capital cost es timate based on the FEED study deliverables and project execution plans discussed in the prev ious sections. Project capital costs have several elements in the formulation, broke n down into general categories as follows:

 Direct Field Costs;

 Indirect Field Costs;

 Home Office Costs;

 Miscellaneous Costs;

 Project Company (i.e. Owner) Costs; and

 Contingency and Escalation

This section describes each of these categorie s. In addition, this section also describes the way in which Fluor breaks down the capital cost estimate. Fluor calls this break down the “Code of Accounts.” Lastly, this section discusses the “Open Book” estimate approach and the final CC Plant capital cost established by Fluor during the FEED study.-42- 5.8.1 

### Direct Field Costs

Direct field costs include the material a nd equipment costs, construction labor and
subcontracts – i.e. all the cost to provide the permanent facility.

Sections 5.4 and 5.6 describe the method for establishing equipment pricing and material quantities/pricing.

The Project includes major subcontracts for the field- erected vessels (DCCs and absorbers). Similar to major equipmen t, these major subcontracts also were competitively bid during the FEED study.

Fluor developed the craft labor hours base d on material quantities and equipment quantities. To do this, Fluor applied histor ical installation produc tivity rates to these quantities to develop base labor hours. Fluor then adjusted these historical rates with site-specific factors to corre ct for conditions (e.g. weather, operating plant environment, etc.) that may influence worker productivity.

Fluor compiled the resulting costs from materi al, equipment, subcontracts, and labor, all of which combine to determine the Project direct field cost.

5.8.2 

### Indirect Field Costs

Indirect field costs are those costs that support the construc tion field effort, but are not part of the permanent plant facilities. Indirect costs are br oken down into further categories, such as temporary facilities, construction service contracts, construction management, construction equipment, and in surance, permits, and performance bonds (as applicable). Most of the indi rect field costs are time-driven. Accordingly, Fluor used the execution plan and the EPCC schedule to develop these costs.

Temporary facilities include onsite construc tion offices, temporary utilities, material warehouse, lunchrooms, restrooms, and first aid facilities.

Construction service contracts include medical personnel, janitorial services, inspection, and testing subcontracts and welder training.

Construction management provides overall site management, including administration, subcontract management, project controls (cost and schedule reporting), turnover management, safety, and onsite engineering support.

Construction equipment costs include costs for small tools, site vehicles, welding machines, heavy lift equipment, and cranes.

Finally, construction insurance, performan ce bonds (if required), and construction permit
costs are included.

Collectively the costs for these items result in the indirect field co st for the project.

5.8.3 

### Home Office Costs

The bulk of the home office costs are associat ed with the engineering design – i.e. the-43- labor costs for the design team of engin eers and designers. The balance of the home office cost is for support functions including project management, procurement, contract management, project controls (planning and scheduling), information technology support, project accounting, quality assurance/contro l, and other miscellaneous support.

5.8.4 

### Miscellaneous Costs

Miscellaneous costs include a variety of rema ining items, including freight and logistics, commissioning and start-up costs, and impor t duties/fees. Many times miscellaneous costs include sales taxes, a lthough these taxes are the Project Company’s responsibility in the case of Trailblazer. Because the Proj ect materials and equipment have worldwide supply sources, both international and do mestic freight costs required detailed quantification. Fluor compar ed ocean freight quotes (a nd compared them against historical costs) for overseas equipment and materials suppliers. Fluor also identified and quantified import duties and taxes. Similarl y with inland freight, Fluor evaluated and optimized various alternate logistics plans (rail, truck, air) to establish th e delivery costs.

In addition to manpower costs for these teams, other cost s include specialty cleaning processes, temporary test facilities (platforms , ports, etc.), sampling and lab testing costs, and first fill of catalys ts and chemicals. After start-up, costs for plant ope ration to stable condition for performance testi ng also are included.

5.8.5 

### Project Company (Owners’) Costs

Project Company costs are items to the Project Company’s account and are separate from the EPC capital cost. Figure 13 is a list of these potential items.

Figure 13 – Project Company Cost Line Items

Accounting Business Interruption Insurance Business management systems Capital Spares Client staff and expenses Coal Pile / Fuel Inventory Construction Backup Power

Consultants Contaminated & hazardous material disposal Demolition / Site Clearing

Electric Interconnection Environmental and Operating Permits

Gas Interconnection Geotechnical Report Interest During Construction Interest Rate Hedging Instruments Lab Equipment

Land cost Legal

Lender Commitment Fees Lender Reimbursement of Expenses Letters of Credit Fees and Charges Market Consultant Mortgage Recording Fee Office Equipment and Supplies Chemicals and catalysts (ex. first fills) Owner’s auditing/inspection/witness testing Owner’s Engineer Permanent office and laboratory equipment

Permanent office furniture Permanent warehouse and equipment Pipelines Plant operations/maintenance vehicles Plant security Project Management Property Insurance Property Taxes
Rail Interconnection Roadway Improvements

Site Access

Site Labor Sponsor Development Costs

Title Insurance Topographical Mapping-44- Lubricants (initial inventory and operating) Machine shop equipment Maintenance equipment and tools Up Front Finance Fees Warehouse spares (2yr spares) Water Interconnection (Plant and potable) Working Capital

Tenaska has estimated Owners’ costs in the context of the combined overall project (PC+CC Plants). As compared to the combined total EPC cost, Tenaska estimates that Owners’ costs will comprise approximately an incremental 45% cost (or around 31% of the all-in capital cost). Th is increment is primarily comprised of water interconnection, land, Owners’ contingency, development cost reimbursement, project management, precommercial operation date operating costs, init ial fuel (coal) inve ntory, builder’s/marine cargo/liability insurances, financing/commitmen t/letter of credit fees, property tax during construction, interest during c onstruction, and working capital.

5.8.6 

### Escalation and Contingency

Project cost estimates normally include allo cated costs for escalation and contingency.

In most cases, Fluor would assess and apply cost escalation for (1) any delay between the timing of the project cost estimate until th e NTP date and (2) the period between NTP and the actual purchase dates of equipment and materials. However, not knowing the Project NTP date, Tenaska requested that Fl uor provide the EPC price in terms of an “overnight” price dated second quarter of 2011. Thus, the cost estimate does not include escalation, interest during construc tion, or any other Owners’ costs.

Contingency is an amount of cost added to a cost estimate to account for potential risk items that could increase the cost of a proj ect. Depending on the contract structure and method of financing, contingency may be carri ed by the contractor, the owner, or both. In addition, the entity or enti ties carrying the contingency may consider it to be “spent” (an unrecoverable portion of the project cost) or “reserved” (a pool of funds held back and used only if necessary.

Fluor generally determines the contingency amount by identifying potential cost risk issues and apportioning added cost according to the probability that those risks will

occur.

In Trailblazer’s case, Fluor carries the con tingency and assumes that it will be spent. Also, the Project MOU caps the contingenc y at the amount proposed by Fluor in its
indicative bid. Fluor assessed th e cost risk items using its ty pical process and deemed the MOU contingency amount to be acceptable.

5.8.7 

### Project Code of Accounts

The table below provides the code of accounts adopted for the Project. This code of accounts is typical to most la rge construction projects around th e world. As indicated in a previous section of this report, a portion of the Tenaska CC Plant scope will be under the PC Plant portion of the project. Figure 14 identifies cost items outside the CC Plant
cost that are included in the PC Plant portion of the Project.-45- Figure 14 – Fluor Code of Accounts

Account Description

Civil Site preparation, drainage & underground gravity systems, finish grading, roadways

Concrete Foundations, elevated structures, rebar, anchor bolts, embeds

Architectural Buildings, HVAC, plumbing

Mechanical Vessels, pumps, heat exchangers, compressors, packaged equipment

Piping Underground pressure systems, above ground systems, valves, pipe supports

Electrical Transformers, switchgear, cable, fixtures

Instrumentation Analyzers, field instruments, DCS, control valves, relief valves Scaffolding/ Firewatch Safety Personnel

Temporary Facilities Trailers, temporary utilities, warehousing, laydown areas, fencing,

Construction Services Survey, inspection and testing, janitorial, security

Construction Management Site management, QA, Supervision, Logistics, Field Procurement, Contract Management, site engineering

Construction Equipment Heavy lift cranes, backhoes, forklifts, transport vehicles, welding
machines, etc.

Home Office Engineering, Home Office Procurement Freight Ocean and land freight to jobsite

Commissioning & Start-up Cold commissioning, hot commissioning, start-up, performance guarantees, operator training

Miscellaneous Costs Insurance, permits, escalation, contingency

5.8.8 

### Open Book Estimate Approach

In the open book estimate process, Fluor made all costs in the EPC estimate available for review and comment by Tenaska. As part of the process, Fluor:

 Evaluated and recommended all the majo r equipment and subcontract bids to Tenaska. However, Tenaska made the final selection of the appropriate bid ultimately used in the EPC estimate.

 Used the FEED study design deliverables to quantify the bulk materials and, then, based the unit pricing (for example the cost per unit length of pipe) upon prices actually paid on other recent projects.

 Determined installation labor rates by surv eying labor costs in the Project location and adjusting for any anticipated other proj ects in the area. Fluor based the labor hours to install equipment upon historical datafrom actual hours us ed to install the same or similar equipment. Fluor, then, ma de adjustments are for differences, such as size and complexity.

Fluor, Tenaska, and Burns & McDonnell part icipated in a week-long open book meeting in which the parties reviewed the above me thods and results and jointly agree on the capital cost of the Project.-46- 5.8.9 

### Capital Cost

The CC Plant EPC price, for the scope descri bed, including contingency and fees, on an overnight second quarter 2011 basis is nominally USD$667,100,000. Again, this price excludes escalation, interest during cons truction, and any Owner’s costs.

This supports the overall project (PC and CC Pl ants) cost basis consisting of (1) an EPC cost (with contingency and es calation) of USD$2,800,000,000 to USD$3,300,000,000 plus (2) Owner’s costs, interconnects, financ ing fees, and interest during construction at an additional USD$1,000,000,000 to USD$1,250,000,000;



### 5.9 Operating Cost Estimation

Operating cost items for the CC Plant include chemicals, utilities, operating labor, and maintenance. Following is a more detailed discussion of each. Figure 16 summarizes the costs of these items except utilities.

 Chemicals. Chemicals required for th e EFG+ process include:

o Solvent – make-up for losses in the reclaimer effluent and volatilization

o Caustic soda (sodium hydroxide or NaOH) – used in the top section of the DCC to provide the right chem ical conditions to absorb SO 2

o Activated carbon – used to f ilter a slipstream of solvent

o Hydrogen – injected to react with oxygen in the CO 2 product stream (forming water which is removed) in orde r to meet pipeline specifications

o Catalytic oxidation (CATOX) catalys t – catalyst over which the hydrogen
reaction occurs

o Nitrogen – intermittent use to in ert tanks and process equipment

Fluor established the consumption rates through process simulation and development
of the HMB. Fluor solicited and recei ved current budgetary pricing for these chemicals supplied in Texas. The pricing would need to be refreshed at the time when the Project proceeds and may cha nge throughout the operating life. The projected cost of thes e items totals to nomi nally USD$7,500,000 per year.

More detailed information on these consump tion rates is available in Attachment 1, Page 7.

 Operation Labor. Tenaska envisions combined management of both the PC and CC Plants. Fluor expects that the CC plant will require one control room operator and two field operators per shift. Assuming a f our-shift schedule, a total of four control room operators and eight field operators w ill be required. In addition, the EFG+ plant will require a two laboratory technicians. Overall Plant Management is separately covered under the PC Plant staffing.

The labor cost will depend on the locally competitive wages plus benefits. These values have not been determined for the Project.

However, for example, for a fully-bur dened average cost of USD$100,000 per employee per year, the total cost of operating labor for the CC plant would be USD$ 1,400,000 (14 x USD$ 100,000) per year.-47-  Maintenance . For convenience, Tenaska and Fluor have divided maintenance costs into two categories -- la bor and materials.

Fluor expects that a maintenance labor sta ff of five will be required, including a maintenance supervisor, an electrical a nd instrumentation supervisor, and three technicians (mechanical, electrical, and in strumentation). Using the same example cost basis as for operating labor, thes e employees would add cost of USD$500,000

per year.

Regarding maintenance materials, Fluor re commends establishment of a preventative and scheduled maintenance program for the CC Plant facilities. In the unlikely event that a maintenance activity requires a lift, th e Project Company would rent cranes. To encompass the materials and rental cost s, Fluor suggests an annual maintenance allowance of USD$400,000 to US D$500,000 per train per year.

 Utilities. The PC Plant will suppl y utilities for the CC Plant, which include 50 psig (approximately 446 kPa absolute) low pressu re (LP) steam (to drive the stripper reboiler and solvent reclaimer), power (var ious loads including flue gas blowers, solvent circulation pumps, lean vapor compressors, and CO 2 product compressors), and demineralized water (make-up for the so lvent wash section at the top of the absorber).

Tenaska currently considers both the PC and CC Plants to be part of a single Project. As a result, the CC Plant power and steam demands are simply parasitic loads of the overall Project (like the other air quality control systems). Thus, the CC Plant does not have to buy these items. However, in th e future, it would be possible to separate the ownership of the CC Plant from the PC Plant depending on business and regulatory drivers at the time. Figure 15 lis ts the utility consumption rates of the CC
Plant.

Figure 15 – CC Plant Utility Consumption Rates

Utility Consumption Rate

50 psig (~446 kPa absolute) Steam 2,011,800 lb/hr (912,537 kg/hr)

1.33 lb steam / lb CO 2 (1.33 kg steam / kg CO 2 )

Power 119,770 kW

Demineralized Water 47.5 gpm (1.7 m 3 /min)-48- Figure 16 – CC Plant Operating Costs Summary

Area Annual Cost (2011 Basis)

Chemicals USD$ 7,500,000

Operating Labor USD$ 1,400,000

Maintenance labor and Materials USD$ 1,500,000

Total* USD$ 10,400,000

*Excludes utilities and wa ste disposal costs



### 5.10 Performance Summary

Three parameters are important in describing the CC Plant pe rformance. They include:

 CO 2 Capture Rate . In establishing the design basis, Tenaska set the design requirement for 90% capture rate of CO 2 contained in the fl ue gas at the design ambient temperature of 82°F. However, as described previously, this capture rate can vary slightly with ambient temperature. The capture rate requirement expectation ultimately affects a large number of the process design parameters such as solvent flow rates, operating, temperat ures, pressures, and equipment sizes. These effects, in turn, affect the other performance parameters.

 Steam Consumption . The EFG+ technology is a thermal swing process. This means that the solvent heats up as CO 2 dissolves in and reacts with the solvent (absorption) and that heating is required to release the CO 2 from the solvent (regeneration). LP steam provides the heat for regeneration in the stripper reboiler s. The amount of steam required for this heat input is depende nt on a great number of parameters that are technology specific, including CO 2 solvent loading, lean/rich cross-exchanger approach temperature, solvent species, so lvent concentration, etc. Fluor has optimized among these parameters to provide the lowest steam consumption rate for the EFG+ solvent. The solvent reclaiming syst ems also use a small amount of steam.

 Electrical Power Consumption . The process requires elec trical power primarily to drive turbomachinery including the flue gas blower, solvent circ ulation pumps, and
the CO 2 product compressors. Fluor atte mpted to minimize the power demand through the specification and se lection of the most efficient machines, by minimizing pressure drop through the DCC and absorber (which affect the blower power), and by maximizing the stripper overheard pressure. For example, CO 2 compressors dominate the power demand, so Fluor and Tenaska specified and selected highly efficient integrally-geared machines. However, in purely accounting for the power consumption of the CC Plant, this analysis neglects the power generation savings due to the heat integration by preheating PC Plant steam cycle condensate against CC Plant stripper overhead.

Together, the steam and electrical power c onsumption of the CC Pl ant represent a power loss range of nominally 28 to 30% of th e PC Plant net output without the CC Plant-49- operating (depending on the ambient condition). Note that the output of the of PC plant, being dry cooled, varies with ambient temperature.

Figure 17 summarizes the expected performance of the CC Plant. The data in the figure do not account for the value of preheating PC plant boiler feed water against the stripper
overhead. Figure 17 – Expected Performance of the CC Plant

Performance Parameter Units Value

CO 2 Capture Rate Tons/d

Lb/hr

Metric ton/d

% 18,103
1,508,583
16,423

90

Steam Consumption lb/hr kg/hr 2,011,800
912,537

Heat Input MMBtu/hr

GJ/hr

Btu/lb CO 2 (captured) GJ/kg CO 2 (captured) 1,850
1,952
1,226
2,853

Power Demand* kW

kWh/Ton CO 2 (captured) 119,770

159

* Includes CO 2 product compression

Attachment 1, pages 7 and 8 contain th e performance values for the project

.



### 5.11 FEED Study Completion

Upon completion of the FEED deliverables a nd capital cost estimate, members of the Tenaska and Fluor project team met to conduct an open book estimate review. This
review allowed the Tenaska team to review a ll aspects of the cost estimate. During the meetings, the group identified a lis t of recommendations, such as:

 Confirmation of the constructi on labor wage rate build-up;

 Reduction in the quantity of platform and gra ting associated with the air coolers; and

 Revisit and confirm cost of catalytic oxi dizer catalyst and equipment due to a difference between the open book cost estimate and the priced equipment list.

Afterwards, Fluor made the associated adjustments to the capital cost estimate.

After finalizing the capital cost estimate, Fluor issued the FEED books to the Tenaska team. The books included all the project deliverables from each engineering discipline including the cost estimate. Then to complete the FEED project, the Fluor FEED study team presented the results of the FEED and EPC proposal to Tenask a. The presentation topics including highlights of the FEED st udy, a discussion of the EFG+ technology, and
an overview of the EPC schedul e and overall cost estimate.-50- 

### 5.12 Potential Future Value Engineering and Optimization Studies

Prior to and during the FEED study, Tenaska, Fluor, and Burns & McDonnell identified a number of design options with the potentia l to affect capital cost, operating cost, efficiency, and operability. However, the te am did not carry out many of these studies
due to time and cost considerations.

In the future, it may make sense to complete some or all of these studies. These studies
include:

 Cooling Water Optimization Study . This study would evaluate the optimum distribution of the limited water supply av ailable between the PC and CC plants.

 Cooling Water Storage Tank Study . This study would evaluate whether it is economical to add a cooling water storage ta nk(s) for additional cooling water during peak cooling loads.

 Flow Measurement and Ductwork Reduction Study . The current ducting configuration between the D CC outlet and the blower inlet includes a 6X diameter straight run – a design crite rion established by flow m easurement vendors. This results in an overhead vertical loop with the associated support system and stairwell access structure. This study would revisit th e straight run criter ia with the objective of reducing the overhead load and associat ed ducting and steel. The focus of the study is to identify alternate instrumentat ion or configurations that will achieve desired flow measurement accuracy and reduce the extent of ducting.

 Air Cooler Heat Exchanger Optimization Study . Fluor used standard design practices
to set the air cooler fin spacing. In this proposed st udy, Fluor would revisit these standard practices to evaluate the impact of relaxing the stringen t design criteria to achieve cost savings. This study woul d include a technical evaluation and
discussions with air cooler vendors. Th e study would quantify the potential capital cost changes against operating and maintenance impacts.

 Metallurgical Optimization Study . This study would evaluate different materials of construction for potential cost sa ving versus the current design.

 CO 2 Product Optimization Study . Tenaska provided the CO 2 product quality specification for the current EFG+ design ba sis. The quality is consistent with prevailing quality specifications for EOR in the Permian Basin. This study would revisit those assumptions w ith the objective of deleti ng or minimizing equipment including the CATOX and dehydration systems.

 Vessel Pressure Drop Study . This study would evaluate the optimum design of vessel internal systems to identify potential enhanced process improvements and minimization of system pressure drop.

 Ambient Air Design Temperature Study . This study would optimize the temperature design conditions for the most ec onomical results (i.e. optimized CO 2 capture rate versus capital and operating costs).-51- 

## 6.0 Health, Safety and Environmental Items

6.1 Process Hazard Analysis

As discussed previously, the USA governme nt mandated PHA for certain types of facilities through OSHA CFR 1910.119. Although the regulation may not strictly apply to the Project or to CO 2 capture facilities in general, PHA has become widely accepted in the process industry as a producti ve way to identify and manage process safety. As such, with these positive benefits and without an o fficial determination as to its applicability, Tenaska elected to conduct PHA for the Project.

There are several PHA methodologies. So me examples are “What-If,” Checklist, HAZOP, and Fault-Tree analysis. Selecti on among these methods depends on the degree of design information available and the comple xity of the process. Tenaska and Fluor elected to utilize the HAZOP method which has the added benefit off identifying potential operability issues as well as process safety and environmental risks. Since the Project team cannot do the HAZOP until the P&ID s are available, Fluor and Tenaska also conducted a much higher-level HAZID earlier in the FEED study. The HAZID provided a way to identify and address potential safety issues at a very early stage in the design.

6.1.1 

### HAZID

Tenaska and Fluor conducted a HAZID for th e CC Plant at Fluor’s Aliso Viejo office on November 3, 2010. The Fluor attendees include d persons representing control systems, piping, mechanical equipment, project manage ment, process engineer ing, and safety. Tenaska representatives included internal project management and operations, Burns & McDonnell project management, and a process engineering consultant.

Fluor documented the review using Primatech ’s PHAWorks, Version 5 software. In doing so, Fluor used a laptop PC with a proj ection device to allow all team members to
review the recorded discussion.

The HAZID method is a brainstorming proce ss conducted in a team setting to identify process hazards in the early de sign stage. It focuses primar ily on the non-process related
hazards and hazards associated with unwanted process releases. The basis of the HAZID study is a set of hazard keywords used to examine each area/system on the PFDs.

The HAZID addresses:

a. Hazards inherent to plant operati ons, considering factors such as:

 Each type of plant activity including receipt of feedstoc ks, interface with utilities, and disposition of products during normal operations as well as deviation from the normal;

 The physical condition of the materials being handled, the materials’ physical and chemical properties, and the ma terial inventories under both normal operations as well as their de viation from the normal; and

 The possible physical, chemical, and toxic hazards.-52- b. Hazards inherent to other site activities, considering all types of planned activity by the workforce associated with co nstructing, modifying, maintaining, and operating the site as well as th eir deviation from the normal.

c. Hazards potentially impacting the site due to its location, the environment, and other external factors considering factors such as:

 The nature and stability of the site terrain and ways in which it could interact adversely with the installa tion structures, plant, and other site activities; and

 Possible effects of the environment, including extremes of climatic conditions on the site and the ways in which they could interact adversely with the structures, plant, and other site activities.

Figure 18 depicts the HAZID methodology in flowchart form.

Figure 18 – HAZID Methodology

Where appropriate, the HAZID team made r ecommendations for risk reduction and/or further study. Fluor either implemented the recommendations or studied them further to determine whether any design changes were ne cessary. Some of the key items identified
in the HAZID included:

 Addressing issues related to CO 2 venting such as: design of the vent heater system, plume modeling to address ic ing (from freezing of air humidity due to cooling from
the Joule-Thomsen effect associ ated with depressurizing the CO 2 ), and air dispersion modeling (see Section 6.5);-53-  Completion of a noise study, in cluding start-up operations, to determine the need for any noise attenuation; and

 Addressing the potential for coal dust accumulation in various areas.

6.1.2 

### HAZOP

Fluor and Tenaska conducted the HAZOP study for the CC Plant in the Fluor Aliso Viejo Offices on January 24 th through 27 th 2011. Like the HAZID, Fluor documented the review using Primatech’s PHAWorks, Versi on 5 software. In doing so, Fluor used a laptop PC with a projection de vice to allow all team member s to review the recorded
discussion.

In leading the study, Fluor used a classical gui deword technique to identify operator error or equipment failure scenarios that may cause a safety, environmental or business impact. The team evaluated the risk of each scenario. For scenarios demonstrating an unacceptable risk level, the te am recommended the addition of administrative controls or modification of equipment/controls.

Fluor divided the P&IDs into 34 nodes. The team reviewed them in sequential order according to the flow path. The team sy stematically reviewed the nodes looking for inadequacies in the design, potential equipm ent failures, potential deviations to the normal operating conditions, and human errors which could present safety hazards or operability concerns. The team’s discussion of the each node’s operation/function
included:

 Pressure (operating & maximum/minimum): The incoming pressure of the process fluid, pump/compressor pressure, the maximum node pressure that can be achieved, the corresponding ratings of the process vessels/lines, and the impact of a loss of
upstream pressure;

 Flow rate: Consider alternate des tinations (if possible);

 Temperature: Incoming process fluid, heat exchanger maximum/minimum, as well as flashing minimum temperature and corre sponding equipment design ratings; and

 Process material properties including single/multi-phase, flammable and/or toxic characteristics, corrosion potential, mixture concentration variations, viscosity or density changes, contamina tion potential, and correspondi ng equipment materials of
construction.

In doing so, the team identified 57 items for further review.

For each of the identified items, the team de termined the potential consequences without regard for the mitigation systems. Based on the extent of the business interruption, magnitude of the injury/fatality, or envi ronmental impact of each hazard, the team assigned a consequence severity.

Then, for each identified item, the team dete rmined the likelihood of occurrence. During this step the team considered the number of initiating events, their frequency of-54- occurrence, as well as the reliability of th e mitigation system. In doing so, the team examined the full protective system, includi ng relief/shutdown/control devices and DCS alarms (provided that the operator has sufficient time to respond to the upset condition).

Using the consequence severity and likelihood values, the HAZOP team determined total risk as consequence x likelihood. For hazard s with an unacceptable level of risk, the
team identified and recommended methods to reduce the risk level. Figure 19 below describes the risk assessment methodology.

Figure 19 -- Risk Assessment Methodology

1. Select Deviation
2. Determine Causes (Likelihood) a. Equipment Failure b. Operator Error 3. Assess Consequences (Severity)

a. Nuisance b. Process Upset c. Product Quality d. Equipment Damage

e. Lost Production

f. Environmental g. Personnel Exposure

h. Toxic Release

i. Flammable Release j. Explosion 4. Assess Mitigation Capability (Reliability) a. Mechanical Design

b. Mechanical Protection i) Pressure Relief Valve, Vent

c. Control and Interlock i) Active Control ii) Passive Interlock d. Operator Response i) Reaction Time ii) Diagnostic Information 5. Judge Risk Qualitative

a. Likelihood b. Severity

After the HAZOP study, Fluor issued a repor t containing a table of all the items, the existing mitigations, and potential recommenda tions to reduce the risk. Fluor organized the table by nodes. Fluor studied and impl emented the recommendations in the Project design (reflected on the P&IDs).



### 6.2 Air Emissions

For the FEED study design basis, Fluor and Tenaska established the requirement that the
CC Plant amine air emissions be within the volatile organic compounds (VOCs) emission-55- rates established under the TCEQ air pe rmits (#s 8417, PSDTX1123, and HAP13) for the Project for all cases. Tenaska’s confidence in and satisfaction with this assumption was based on Fluor’s experience and performance gua rantee. Figure 20 below is a table of the permitted emission rates. The air permit is publicly available.

Figure 20 – Permitted Air Emissions

Pollutant Performance Standard Compliance Averaging Period

NOx 0.070 lb/MMBtu (0.033 kg/GJ)
0.060 lb/MMBtu (0.028 kg/GJ)
0.050 lb/MMBtu (0.023 kg/GJ) 24-hour average
30-day rolling
12-month rolling

SO 2 0.06 lb/MMBtu (0.028 kg/GJ) 30-day and 12-month rolling

CO 0.10 lb/MMBtu (0.047 kg/GJ) 30-day and 12-month rolling

Hg 1.7x10 -6 lb/MMBtu (8.0x10 -6 kg/GJ) 12-month rolling

NH 3 10 ppm 3-hour average

Filterable PM/PM10 0.012 lb/MMBtu (0.006 kg/GJ) Annual

PM/PM10 Total 0.025 lb/MMBtu (0.012 kg/GJ) Annual

VOC 0.0036 lb/MMBtu (0.0017 kg/GJ) Annual

H 2 SO 4 0.0037 lb/MMBtu (0.0017 kg/GJ) Annual

HCl 0.00063 lb/MMBtu (0.00030 kg/GJ) Annual

HF 0.00050 lb/MMBtu (0.00023 kg/GJ) Annual

Pb 0.00003 lb/MMBtu (0.00002 kg/GJ) Annual



### 6.3 Wastes

In the USA, the Resource Conservation and R ecovery Act sets forth both solid and liquid wastes regulations. The Tr ailblazer CC Plant does not produce any solid wastes. However, four liquid products exit the system. Of these, one – the reclaimer effluent – is
a waste. The other three are water streams utilized or treated in the PC Plant.

As described in Section 1.5.4 and in the EFG+ Process Description (See Attachment 1, Pages 3-6), the EFG+ process is sensitive to incoming SO 2 in the flue gas. As such, the design includes a scrubbing section in the top of the DCCs. However, any residual SO 2 not removed in the DCCs will react with the EFG+ solvent and form heat stable salts (HSS). These salts accumulate in the circ ulating solvent which can lead to further solvent degradation and reduced process pe rformance. To prevent these negative impacts, the EFG+ process includes a se mi-continuous solvent reclaimer. In the reclaimer, a slipstream of hot lean solvent is treated with a sodi um hydroxide solution. The sodium hydroxide reacts with the HSS to free up the solvent and form non-volatile
sodium salts. Most of the so lvent is recovered and returned to the EFG+ process. A small amount of solvent containing the sodium salts – the reclaimer effluent waste – exits the process and is stored in temporary cont ainers. Tenaska will characterize the waste against RCRA test criteria and dispose of the waste offsite through a permitted third party waste disposal contractor. The character of the waste has a large effect on the cost of disposal. Since the characterization for Tra ilblazer has not been done, these costs have-56- not been quantified.

The other three liquid streams exiting the process include:

 Excess quench water (i.e. net flue gas conde nsate) from the bottom section of the DCC;

 Scrubbing solution blowdown from the top SO 2 – removal section of the DCC; and

 Compression condensate – water condensed out of the CO 2 product in the CO 2 compressor intercoolers.

All three streams are routed back to the PC Pl ant for treatment (if any) and, ultimately, to
off-set Plant water demand.



### 6.4 Fire Protection

In general, CO 2 capture plants do not represent a ma jor potential fire hazard due to the
non-flammable characteristics of CO 2 . The biggest fire risks for these plants are the
location of concentrated flammable fluids . These locations include major rotating equipment lube oil systems and electrical transformer liquids. For each of these locations, Fluor designated automated wet sprinkler del uge systems.

In addition, the Project design includes a standard fire pr otection system comprised of firewater piping loop around the perimeter of the facility with fire hydrants and monitors spaced according to spray radius criteria. Tenaska will also locate hand-held fire extinguishers at utility stati ons throughout the plant.



### 6.5 Dispersion Modeling

During the course of both the HAZID and HAZOP reviews discussed in Section 6.1,
Tenaska and Fluor determined that CO 2 releases posed a concern in two areas;

 release of the pressure c ontaining system (piping, compressor, knock-out drums) within the confined produc t compressor building; and

 atmospheric release occurri ng due to upset conditions

In addition to potential CO 2 releases, Tenaska and Fluor also identified the solvent storage facility as a potential hazard to workers due to poten tial spills occurring during solvent truck offloading operations.

As a result, Tenaska and Fluor ag reed that both the potential CO 2 -venting and the solvent spill scenarios should be subjected to furthe r analysis with use of dispersion modeling computer simulations to determine potential resulting concentrations to plant operators and workers, as well as the nearby public.

In completing the dispersion analysis, Fluor used the PHAST (Process Hazards Analysis Software Tool) dispersion m odeling software to determin e both on-site and off-site impacts. PHAST is a program that allows one to examine the progress of a potential incident from release onset, through the formation of a cloud and/or pool, to its dispersion. User-supplied parameters provide the necessary initial values and boundary conditions for modeling. The program applies appropriate entrainment and dispersion-57- models as changing conditions warrant, accomplished through continuity algorithms PHAST employs to integrate these models to ensure a smooth transition between behavior patterns.

The dispersion analysis effort examined two CO 2 release conditions and one solvent release. The Immediately Dangerous to Life and Health (IDLH) concentration values were used as a basis for determining on-site and off-site impacts. The IDLH value for
CO 2 is 40,000 ppm and for solvent is 30 ppm.

The analysis results demonstrated that:

 A CO 2 release inside the compressor building would allow CO 2 to exit through the five roof exhaust vents. The 40,000 ppm ID LH concentration leve l occurred at an elevation of approximately 15 feet a bove ground level and only for a downwind
distance between 20 to 30 feet from the re lease point. Beyond this distance, the CO 2 concentration dissipates rapidly. An imp act from the vapor cloud on workers at ground level did not occur and any potential exposure to concen trations above the IDLH at any elevation is cont ained within the Project site

 The CO 2 vent on the piping downstream of the stripper overhead accumulator
extended 10 feet above the roof of the co mpressor building or 70 feet above grade.
The IDLH concentration from a release from this vent extended 35 feet downwind. It did not reach the ground or an operator accessi ble area; and

 If a hot solvent spill occurred at the lean solvent pumps (P-1006 A/B), the liquid accumulated within the curbed area. The resulting evaporation of the solvent mixture created a 30 ppm IDLH dispersion contour that ex tended 60 feet downwind. This represents a small area where opera tors may be working. The solvent odor should quickly alert any exposed operators of the release giving them adequate time to relocate a short distance to safety.-58- 

## 7.0 Highlights and Challenges

In developing the Project, se lecting the technolo gy, and completing the FEED study, the
FEED team encountered a number of issues. These issues have been categorized as “highlights” and “challenges,” and range fr om aspects of how the team managed the FEED study to the technical cont ent. Project issues identified as “hig hlights” are unique aspects that enhanced the Project and diffe rentiated it from other projects. These
included areas of innovation and successes that improved the project objectives. Project issues identified as “challenges” were areas of the Project that are candidate for future improvement and may be addressed should the Project move forward.



### 7.1 Highlights

 Competitive Process for CO 2 Capture Technology. The CO 2 capture industry is still in its infancy. As such, this creates a number of business and technical issues and risks to realize a Project at commercial power plant scale. A FEED study is required in order to establish cost and performa nce guarantees. However, because even a single FEED study is expensive, it is difficu lt to justify the cost of two competitive FEED studies. As a result, the Owner ends up being in a sole-supplier position with a single provider but without full guarantees . To minimize these risks, Tenaska evaluated technology providers and select ed Fluor EFG+ through a competitive process. The process allowed Tenaska to evaluate indicative cost and performance projections, experience-level, ability to execute, and willingness to guarantee the process, and financial wherewithal on a common basis.

 Sale of CO 2 Product for EOR. As the name implies, CCS is comprised of two challenging aspects: capture and storage. Doing both adds substantial costs. Tenaska has strategically addressed the storage and the cost impact issues by locating the Project near the Permian Basin, which has a mature market for CO 2 use in EOR. Through EOR, Tenaska has a commercially proven and clearly permittable method for permanent CO 2 storage. Furthermore, because EOR results in additional oil production, the CO 2 has value which comes back to the Project and offsets the cost of
CCS to some extent. With this outlet for CO 2 , Fluor has designed the EFG+ process to produce CO 2 product meeting the EOR ma rket specifications.

 Largest CO 2 Capture Project. The Project would repres ent the world’s largest CO 2 capture plant. The CC Plant would rec over 18,103 short tons per day (16,423 metric tons per day) of CO 2 using two trains applying Fluor’s EFG + technology to recover 90 percent of the CO 2 in the coal-fueled flue ga s. Most post-combustion CO 2 capture plants that are have been bu ilt to date are in the range or 300 to 500 short tons per day (268 to 446 metric tons per day) CO 2 production capacity. Additionally, other projects that are currently in developm ent stages are in the range of 3,000 to 6,000 short tons per day (2,679 to 4,464 metric tons per day).

Therefore, Trailblazer would not only be the world’s largest CO 2 capture plant, it would be significantly larger than other plan ts studied at this ti me. The dual train approach is another unique design feature of the Trailblazer facility. The risk-59- associated with two operating trains is minimal since they do not share any major equipment. Chemical storage and inject ion systems are the only shared equipment
between the trains.

The largest post combustion carbon capture plant that Fluor has built was the Bellingham, Massachusetts plant which captu res 350 short tons per day (313 metric tons per day). Note, however, that the Bellingham plant treated natural gas-fueled
combustion turbine exhaust which is lower in CO 2 concentration than pulverized coal flue gas and, thus, the equi pment sizes are larger on a pe r ton basis. The Bellingham plant recovered 85% of the CO 2 from the flue gas. Fluor designed Trailblazer to capture 90% of the incoming CO 2 . The increase in recovery is easily done by using more solvent without requiring a significant increase in st eam or power usage. Fluor designed all current EFG+ plants to recover 90% of the incoming CO 2

.

 Application of Air Cooling. Due to limited availability of water at the Project site, Tenaska determined air cooling to be the most economical (but highest capital cost) cooling method. For the CC Plant, Tenaska and Fluor agreed to adesign temperature of 82°F (27.8oC). The Project site am bient temperature exceeds this design temperature for approximately 15 percent of the annual hours. Tenaska and Fluor selected the 82°F (27.8oC) CC Plant design temperature in order to minimize the number of air cooler bays and, thus, the capital cost of the air cool ers. At times where the air temperature exceeds 82°F (27.8oC), the CO 2 capture recovery rate will degrade slightly (down to approximatel y 88% at 99.6°F (37.6oC) – the 99 th percentile ambient condition). Fluor and Tenaska deemed this to be acceptable since the project goal was to recover between 85 and 90 percent of the incoming CO 2 annually.

 Large Equipment Sizes. Due to the large capacity of the plant, many of the equipment sizes are larger than have prev iously been built. The absorbers, DCCs,
and CO 2 product compressors would be the largest in the CO 2 capture industry. Also, the Project will require a larg e number of air coolers. Throughout the course of the FEED, the Fluor and Tenaska project teams have worked with the vendors to ensure that they had the expertise and capabilities to build the equipment at such sizes.

 Power Plant Heat Integration . Given the large size of the PC and CC Plants, any heat integration between the two would increase the efficiency of the overall system and could save on capital or operating costs. Fluor identified one such added heat integration point during the FEED. The PC Plant condensate is heated against overhead vapor from the EFG+ stripping colu mns. This increases the efficiency in
the PC Plant since the condensate will ente r the steam cycle at a higher temperature and require less heating from power plant so urces. This additional heat picked up by the condensate results in a lower operating cost for the PC Plant while maintaining the same power output. In the CC Plant, th e stripper overhead va por requires cooling
to knock out the water in the stream before it enters the overhead accumulator. By including the heat integrati on, a portion of the cooling is completed in PC condensate heater. Therefore, the air cooled stripper overhead condenser can be reduced in size which will result in a lower capital and operating cost for the condenser. The-60- inclusion of the PC condensate heater w ill be an additional cost but the overall
economics favor inclusion of th is heat integration step.

 Similarly, the team evaluated potential heat integration with the CO 2 compressor intercoolers. However, as another source of low-grade heat, there is a limited ability to utilize it in the PC Plant steam cycle. This determination was affected by two aspects of the prospective sy stem. First, the final CO 2 compressor design had eight stages, which was an increase from the origin al basis. Thus, in order to achieve the specified discharge pressure, this large num ber of stages reduces the pressure ratio and temperature rise of the CO 2 flowing through each stage. In addition, due to concerns over potential contam ination from leaks of the CO 2 into the power plant boiler feed water, a “liqui d couple” exchanger design (where thermal energy in the
CO 2 would be transferred to an intermediate closed-loop system and, then, from this system to the boiler feed water) would be required. Th is design reduces the amount
of heat that can be transferred because each of the two heat transfer has its own smaller temperature difference. Together, these aspects reduce the driving force such
that little heat can be tr ansferred for the required amount of equipment.

 CFD Analysis for Large Equipment Vapor Distribution. Due to the large DCC and absorber sizes, it was imperative that th e vapor distribution at the inlet nozzle and inside each column was adequate. To redu ce the risk of maldistribution, the Project
team decided to run a CFD simulation that would model the dist ribution (1) of the DCC inlet duct up to the inlet nozzle and (2 ) inside each column up to the bottom of the first bed of packing.

The duct vendor designer conducted the CFD anal ysis of the inlet duc t. The analysis conducted determined the flow pattern of the flue gas as it flowed through the ducting from the FGD to the DCC and as the vapor entered the DCC. It was necessary to ensure that the vapor velocity was relativ ely smooth at every section of the ducting and the inlet nozzle. Disruptions in fl ow patterns in the ducting would lead to
inaccurate flow measurements of the flue gas entering the carbon capture plant. Additionally, any negative velocity sections at the DCC inlet no zzle would indicate that some of the vapor was circulating in the opposite direction. This phenomenon would hinder the performance of the column and, thus, the overall process. The results of the CFD analysis on the DCC ducting and inlet nozzle showed that by adding small straightening vanes at the elbow s of the ducting, the flow patterns were
sufficient for the flow measurements and for the operation of the DCC.

The packing and internals vendor conduc ted the CFD analysis for the vapor
distribution inside the DCC and absorber. For each vessel, the sc ope of the analysis included the vapor distribution from the in let nozzle up to the bottom of the first packed bed. Adequate vapor distribution is important in each column in order for the packed bed sections to work as designed. From the results of the CFD analysis Fluor deemed the DCC and absorber designs to be adequate.

 Materials Selection. Fluor studied different constr uction materials for various pieces of equipment and piping. For certain equipment, Fluor studied two types of metallurgical designs to identify the most cost effective option. To do so, Fluor-61- solicited and received comparable prici ng information from suppliers for each material under consideration. As such, Fluor was able to recommend and use the
most cost effective materials of cons truction in the final cost estimate.

 Use of “Turret” Ducting vs. Integral Shell Head in Large Process Vessels . The
overhead duct of the absorber routes the flue gas to the power plant stack and then to the atmosphere. The ducting represents a significant cost in terms of material, instrumentation, and structural support. Fl uor suggested implemen ting a turret design
rather than a traditional shell head on the top of the absorber which would extend the height of the duct vertically before turn ing towards the stack. The turret design eliminates the top shell of the absorber and includes a top sec tion which routes the flue gas 90 degrees without any vertical height required. The turret design would save on material costs of the ducting and, since the overall duct length was reduced, on the pressure drop of the flue gas. The lower pressure drop would reduce the load
on the blower in the CC Plant.

Before implementation, Fluor performed a CFD analysis on the turret design to ensure that the vapor flow characteristics we re adequate and that the pressure drop of the design would decrease from the tradit ional shell design. Both aspects were proven through CFD analysis by the ducting ve ndor. Therefore, Fluor included the turret design in the final design.

The DCC and absorber columns are large e nough that they preclude shop fabrication and therefore require field fabrication, whic h significantly raises cost. The previous
CO 2 capture designs utilized a traditional vesse l head integral with the vessel shell.
The outlet of both of these columns is th rough the top nozzle located on the column head, and discharge through connected ducting. During the design of this system, an idea to replace the integral head with a ducting material type outlet was identified. A subsequent analysis concl uded there would be significan t cost savings using this feature. Thus, Fluor and Tenaska elected to include it in the design and associated
cost estimate.

Cost savings of nominally USD$340,000 is es timated for the four applicable vessels.

 Continuous Value Engineering . Prior to the FEED st udy, Tenaska recognized the cost and performance impact of implementing CO 2 capture. In addition, Tenaska selected Fluor based in part on an indicat ive EPC bid. As such, in executing the FEED study, Tenaska was keenly interested in minimizing the capital cost and ensuring the FEED cost estimate came in at or below Fluor’s indicative bid price.

In pursuit of these objectives, Tenaska and Fluor managed the FEED study with a continuous value engineering approach. Ex amples of implementing this approach
included:

o Tenaska encouraged the Fl uor project management and discipline engineers to raise ideas and options to reduce cost as they completed their assigned FEED study tasks;-62- o In the design reviews and HAZOP, th e FEED team brainstormed cost reduction ideas; and

o Following completion of the FEED study, Tenaska and Fluor conducted a dedicated value engineering session to identify additional cost reduction ideas.

Through this approach, the team reduced the capital cost by approximately USD$23,400,000. Some of the design ideas cont ributing to this re duction include the application of:

o A single CO 2 compressor soft starter for both machines;

o Plate and Frame – type heat exchangers for stripper reboilers;

o Optimized the absorber and DCC construction materials;

o Eliminated large-bore alloy block and bypass valves; and

o An “in-line” (instead of “right angle”) plot plan arrangement.

Again, further optimizations, mostly related to the last value e ngineering session, may
need to be considered later in the Project’s development. Section 5.12 provides a list of
these items.



### 7.2 Challenges

 Change in Flue Gas Basis. As discussed in Section 5.2, the flue gas composition required updating before the CO 2 capture FEED study could begin. The reason for this change was to synchronize the CC Plant design with the selected boiler technology and capacity (increased by nomina lly five percent as compared to the CC technology RFQ basis. This necessitated th e running of combustion calculations to generate new flue gas stream information.

In addition to the boiler design change , Fluor and Tenaska agreed to add a
conservative amount of excess air to the co mbustion calculations to account for air leakage into the flue gas path. Re-doing th ese calculations caused a short delay in the
start of the CO 2 capture FEED study. The result of the calculations provided the CC Plant with a range of flue gas flow rates and compositions depending on the type of coal. The FEED team selected a hybrid flue gas composition which combined the most detrimental aspects from the range of coal flue gas compositions.

 Status of PC Plant Design . Tenaska placed the PC Plant FEED study on hold at a stage of partial completion. During the CC FE ED, this created challenges in defining interactions between the two plants. Be fore the next phase of study for the CO 2 capture plant, the PC FEED study will need to be completed.

 Organizational Continuity. Through the previous work to advance the PC Plant design and the more recent completion of the CC Plant FEED study, both Tenaska and Fluor experienced some orga nizational discontinuity due to:

o Fluor reassigned some of the Project personnel when PC effort stopped;-63- o Fluor introduced the EFG+ team to the Project when the CC Plant FEED effort began;

o The EFG+ team evolved as nature of the FEED study activ ities progressed;

o Tenaska moved personnel in and out of the Project over time as company priorities changed; and

o Due to the reduced near-term likelih ood of the Project, both Tenaska and
Fluor reduced focus on effort toward the end of the FEED.

 Economic Uncertainty . The economic assumptions established by Tenaska and Burns & McDonnell are not firm and are subj ect to change. The market value of CO 2 used for EOR will vary based on oil pricing a nd future carbon legislation/regulations. The market value of power will also vary based on future environmental regulations, state regulations/mandates, economic rec overy, and technology advancements. Project schedule uncertainty also affects a ll of the economic assumptions. The values of steam, electrical power, pressure drop, and CO 2 that underpin the economic
evaluation factors listed in Figure 7, all are affected by the aforementioned items.
The value of solvent is based on current ma rket pricing and it is expected to be reduced as demand for the product increases a nd the technology matures. The lack of firm project economic criteria limited de sign optimization efforts and impacted decisions made for the design basis.

 Level of Vendor Support. Vendor support, responsiveness, and competition varied significantly. Some of the major equipmen t suppliers did not respond to RFQs. In addition, some of the vendors were not w illing to provide firm price quotes as requested, but supplied budgetary quotes inst ead. (These issues were largely limited to the very large and unique cutting-edge equipment.) Compar isons and evaluations between budgetary and firm price quotes we re difficult due to nonconformance to the RFQs. Some of the equipment was non-standard or first of a kind or larger than built to date. For this type of equipment, so me vendors were limited in their ability to respond due to lack of previous experience and associated first-time design costs. Evaluation of some major equipment bids reve aled large cost differentials that were not typical of a good competitive bidding.

 Equipment Sizes. Certain pieces of equipment included in the CO 2 capture FEED study were sized to be larger than pr eviously built. For example, the CO 2 product compressors were almost twice as large as the largest commercially operating CO 2 compressor. Also, Tenaska and Fluor elec ted to perform CFD an alysis on the large diameter columns to ensure proper vapor distribution. This CFD analysis was necessary because the size of the column s were larger than any operating in CO 2 capture service.-64- 

## 8.0 Next Steps

One of the well-known challenges with CCS is th e cost – primarily in terms of the capital cost and energy consumption. In the current market structure, power plants that employ CCS cannot compete with those that do not. The strategic loca tion of the Project provides the ability to sell CO 2 into the mature Permian Basin EOR market. This defrays some of the costs of CCS. However, the current CO 2 market prices are insufficient to
cover the entire costs of CO 2 capture. In addition, the CO 2 prices vary as a function of oil prices, which introduces uncertainty in this re venue stream over the life of the Project.

Thus, the Project requires some recognition by the USA Federal govern ment of the value associated with capturing CO 2 . With the status of the US A political climate (which is notably different than in 2007 when Tenaska launched the Project) the timing for such recognition is uncertain. As su ch, on the engineering side, the Project is curre ntly in the documentation stage and will continue slow development until the key Project signals change. Overall Project development will c ontinue to advance in the areas that are required to maintain an “early mover” position. Some of these areas include water supply, air permitting maintenance, lobbying, le gislative support, and local community
interaction.

Despite this status, Tenaska and Fluor have developed plans for the next steps of the Project. Following is a list of these next steps divided into Tenaska responsibilities and Fluor responsibilities:



### 8.1 Tenaska Responsibilities

Upon completion of the FEED study, Tenask a will update Project economics using the FEED study cost and performance results. The economic modeling will formally confirm the current economic challenges facing the Project. As a result, Tenaska will focus on the following to maintain the first-move status, including:

 Monitor federal carbon capture ince ntives/legislation/regulations;

 Maintain / progress environmental perm its – key permits would include storm

and treated wastewater discharge (if required);

 Continue sourcing water supply opportunities; and

 Continue dialogue for off-take agreements. Upon a change in these key areas, Tenaska wi ll revisit the Project economics. When the economics are favorable, Tenaska will engage Fluor to plan for completion of the

activities listed in Section 8.2.



### 8.2 Fluor Responsibilities

The next steps to progress the CC Plant are as follows:

 Apply Technological Improvements . Fluor’s EFG+ technology will be commissioning a demonstration plant in Wilhelmshaven, Germany during 2011on a coal-fueled flue gas. At this plant, Fluor will further validate the technology and-65- verify new design features. Fluor will apply any improvements learned at the Wilhelmshaven plant to Trailblazer (at Tenaska’s option).

 Refine and Implement Value Engineering Ideas . The Fluor and Tenaska project teams met at Fluor’s office in Aliso Viej o, California on June 7-9, 2011 to identify potential value engineering ideas. Ideas we re brainstormed that could potentially lower the capital or operating costs of the pl ant. These ideas were ranked in order of cost savings and feasibility. Th e result of the meeting was a prioritized list of ideas for potential further study.

 Refresh Cost Estimate . At a point in the future, the Trailblazer project will proceed into the EPC phase. Before the EPC phase starts, Fluor would refresh the FEED study to include any technology improvements to the EFG+ process since the process in continually adding improved design f eatures. Additionally, Fluor will requote vendor bids to update the capital cost es timate. Lastly, Fluor will finalize the interfaces and integration between the PC and CC Plants before the EPC phase begins.-66- 

## 9.0 Lessons Learned

Following is a list of the less ons learned in preparing for, conducting, and managing the CC Plant FEED study:

 Interface Definition and Optimization . Defining and optimizing the interface between the PC and CC Plants (e.g. heat integration) was important during the CC Plant FEED study. These two pieces of the overall Proj ect scope are differe nt technically and generally belong to two different industries (power and process). As a result, it is natural that experience in the respective scope areas comes from different organizations and these organizations can ha ve different codes, design criteria, and standard practices. It is necessary to ha ve both organizations (w hether they are the same company or different companies) direct ly involved. Furthermore, it is ideal if the engineering of both pieces of the sc ope proceeds simultaneously to realize synergies between th e two scopes.

 Single Point of Contact . Tenaska realized strong c oordination from the direct
involvement of both the PC and CC teams and reaffirmed the value of having both scopes awarded to one organization. By doing so, Fluor was able to apply common methods in areas such as project ma nagement, document control, and design procedures. This also reduced concerns with proper handling of confidential information and allowed greater transparency in seeking optimized heat integration.

 Value Engineering . Tenaska experienced success w ith a continuous focus on value engineering through the FEED st udy as the capital cost estimate came in very near the
indicative bid.

Through this approach, the team reduced the capital cost by approximately USD$23,400,000. Some of the design ideas cont ributing to this re duction include the application of:

o A single CO 2 compressor soft starter for both machines;

o Plate and Frame – type heat exchangers for stripper reboilers;

o Optimized the absorber and DCC construction materials;

o Eliminated large-bore alloy block and bypass valves; and

o An “in-line” (instead of “right angle”) plot plan arrangement.

 Vendor Support . Tenaska and Fluor experienced so me minor difficulty in attracting vendor interest and, therefore, obtaining mu ltiple compliant and competitive bids for all equipment.

 Firm Project Economics . It is not yet known how CO 2 regulations and prices will affect power prices locally and nationally. CO 2 price support from regulations or legislation is necessary because CO 2 prices available from EOR off-takers (a commonly used rule of thumb algorithm is CO 2 price per million cubic feet = 2% of the posted project equivalent oil price pe r barrel) are insuffi cient to support CO 2-67- capture – especially with the inherent vola tility in the crude oil commodity market. Thus, during the FEED it was difficult to evaluate design alternatives.

 Operations Support . Although Tenaska had substantial support in terms of project management and discipline engineering bot h internally and via Burns & McDonnell, the FEED team recommends a greater level of involvement from experienced operations personnel to ensure alignment w ith the operational capabilities determined in the design phase.

 Capital Cost Estimate Accuracy . Tenaska selected Fluor a the CC Plant technology provider on the basis of multiple criteri a with one being the nonbinding indicative capital cost of the plant based on Econa mine FG+ technology – perhaps an AACE Class 4 or 5 estimate with nominally +/- 30% accuracy. As such, a key objective of the FEED study was to complete engineer ing design definition to increase the accuracy of the estimate sufficiently to allow Fluor to offer firm price for the CC Plant scope of the Project w ith a contingency allowance that was determined prior to the study.

 Addressing Key Scale-Up Issues . With the large equipment required for the CC Plant and the scale-up it represents from prev ious experience, a fe w key areas required special engineering study. These included th e mechanical design of the large flue gas ducts, CFD modeling of the flue gas flow in these ducts, CFD modeling of the gas and liquid distribution in the DCC and ab sorber, and detailed evaluation of the CO 2 compressor vendor bids and experience.-68- 

## 10.0 Relevance to Carbon Capture and Storage

A FEED study is required to complete enough technical definition to determine the cost and performance of a new CCS project with enough certainty to obtain financing. Completing the FEED study, along with receivi ng the appropriate permits and having the necessary economic drivers, wi ll allow projects to move in to execution and become a reality.

However, a FEED study is a lengthy, costly, a nd detailed effort. This report documents the scope of such an effort , the results, and the lessons learned along the way. This content will help other developers to implem ent the best technical design, achieve cost and performance goals, and manage the effort as a whole.-69- 

## 11.0 Conclusions

Tenaska and Fluor completed a FEED study fo r the CC Plant portion of the Trailblazer Project. The study achieved its objectiv es (see Section 2.2) resulting in:

 A design which meets Tenaska and industry stan dards, notably in the areas of safety (through incorporation of the findings from the HAZOP and air dispersion modeling) and environmental profile (t hrough specification of the CO 2 capture rate at and permitted air emissions in the design basis);

 Confirmation that the technology can be scaled up to constructable design at commercial size though (1) process and di scipline engineering design and CFD analysis, (2) 3D model development, and (3 ) receipt of firm price quotes for large equipment;

 Production of engineering design and planning deliverables which supported deterministic cost estimation;

 Confirmation of the cost estimate basis through an open-book process;

 A firm second-quarter overnight EPC price offer of USD$667,100,000 for the CC Plant that was consistent with the original indicative bid for the CC Plant. This supports the overall project (PC and CC Plants) cost basis consisting of (1) an EPC cost (with contingency and es calation) of USD$2,800,000,000 to USD$3,300,000,000 plus (2) Owner’s costs, interconnects, fina ncing fees, and interest during construction at an additional USD$1,000,000,000 to USD$1,250,000,000;

 An O&M cost estimate totaling nom inally USD $10,400,000 per year (excluding power and steam consumption); and

 Establishment of performance guarantees whic h, after the addition of an appropriate margin, were consistent with the expected performance in Fluor’s indicative bid.

Tenaska and the Project avoided potential di fficulties managing confidential information and benefitted from the single point of contact with Fluor and close coordination between the PC and CC engineering organizations. Additionally, the focus on continuous value engineering efforts (through every meeting/conference call, review of deliverables, design reviews, and a dedicated value engineering session) aided the team in achieving an EPC price which approached the indicative basis.

Figure 21 shows how this report meet s the goals listed in Section 2.3-70- Figure 21 – Achievement of Report Goals

Goals Satisfaction Describe the scope of the CC Plant and the FEED study performed Section 4.0 describes the scope of the CC Plant facilities while Section 5.0 describes the Scope of the FEED study services.

Provide FEED study results including cost and performance  Capital Cost listed in Section 5.8.9

 O&M Cost components listed in Section 5.9

 Performance summarized Section 5.10 Figure 16 and in Attachment 1, Pages 7&8

 Describe challenges and highlights of the FEED study Refer to Section 7.0

Confirm that construction and operation of a large
scale CO 2 capture plant integrated with a coalfueled power plant is feasible  Constructability confirmed through internal Fluor meetings, plot plan development, and production
of the 3D model.

 Operation aspects addressed through completion
of the HAZOP.

 Overall feasibility back by Fluor firm price offer and performance guarantees.

Confirm that the health, safety and environmental impacts associated with a carbon capture plant are acceptable Refer to Section 6.0 – accomplished by incorporating HAZOP findings into design and by air dispersion modeling of identified risk cases.

Provide the “next steps” required to advance the development of the Project Refer to Section 8.0

Provide lessons learned from the FEED study Refer to Section 9.0-71- 

## 12.0 Acronyms and Citations

Acronym Definition

2D Two Dimensional

3D Three Dimensional

AACE Association for the Advan cement of Cost Engineering

ACFM Actual Cubic Feet per Minute

ACI Activated Carbon Injection

Ar Argon

BNSF Burlington Northern Santa Fe Railroad

Btu British Thermal Unit

CAD Computer Automated Design
CATOX Catalytic Oxidation

CC Carbon (Dioxide) Capture

CC Plant Commercial scale carbon cap ture plant portion of the Tenaska Trailblazer Energy Center

CCS Carbon Capture and Sequ estration (or Storage)
CF Capacity Factor

CFD Computational Fluid Dynamics

CFR Code of Federal Regulations

CH 4 Methane

CO 2 Carbon Dioxide

CO Carbon Monoxide

COD Commercial Operations Date

DCC Direct Contact Cooler

DCS Distributed Control System

DOR Division of Responsibility

EDF Environmental Defense Fund

EFG+ Econamine FG Plus

EP Engineer & Procure

EPC Engineer – Procure – Construct
EPCC Engineering, Procurement, Construction, and Commissioning

EOR Enhanced Oil Recovery

ERCOT Electric Reliability Council of Texas-72- Acronym Definition

ESP Electrostatic Precipitator

FEED Front-End Engineering Design

FGD Flue Gas Desulfurization

Fluor Fluor Enterprises and Fl uor Corporation, collectively
Global CCS Institute Global Carbon Capture and Storage Institute

HAZID Hazard Identification Study

HAZOP Hazard and Operability Study

H 2 O Water

H 2 S Hydrogen Sulfide

H 2 SO 4 Dihydrogen Sulfate (Sulfuric Acid)
HCl Hydrogen Chloride
HF Hydrogen Fluoride

Hg Mercury

HMB Heat and Material Balance

HSS Heat Stable Salts
HVAC Heating, Ventilati on, and Air Conditioning

IDLH Immediately Dangerous to Life and Health

IP Intellectual Property

ISBL Inside Battery Limits

kV Kilo (thousand) Volt

kW Kilo (thousand) Watt

kPa Thousands of Pascals (unit of Pressure)

lbmol Pound mole

Lb Pound

LLC Limited Liability Corporation

LP Low Pressure (e.g. steam)

MEA Monoethanol amine

MW MegaWatt

MCC Motor Control Center

MMBtu Million British Thermal Units

MOU Memorandum of Understanding

MSD Material Selection Diagrams
Mph Miles per Hour-73- Acronym Definition

NaOH Sodium Hydroxide or Caustic Soda

N 2 Nitrogen

NH 3 Ammonia
NOx Nitrogen Oxides

NPV Net Present Value

NTP Notice to Proceed

O 2 Oxygen

OEM Original Equipment Manufacturer

OSBL Outside Battery Limits

OSHA Occupational Safety a nd Health Administration

Pb Lead

PC Plant Supercritical pulverized coal electric ge nerating station portion of the Tenaska Trailblazer Energy Center

PFD Process Flow Diagram

P&ID Process and Instrumentation Diagram

PC Pulverized Coal

PHAST Process Hazards Analysis Software Tool

PHA Process Hazard Analysis

PM Particulate Matter

PRB Powder River Basin
Project Tenaska Trailblazer Energy Center

Project Company Tenaska Trailblazer Partners, LLC

QA Quality Assurance

RFP Request for Proposals

RFQ Request for Quotation

SI System International

SCR Selective Catalytic Reduction

SO 2 Sulfur Dioxide

STPD Short Ton per Day

TCEQ Texas Commission on Environmental Quality

TMV Tenaska Marketing Ventures

TPS Tenaska Power Services

Trailblazer Tenaska Trailblazer Energy Center-74- Acronym Definition

UP Union Pacific (Railroad)

USA United States of America

USD United States Dollars

VOC Volatile Organic Chemical

# ATTACHMENT 1

Non-Confidential FEED Study DeliverablesTenaska Trailblazer Partners, LLC Trailblazer Energy Center Date 11 Aug 2011 Carbon Capture Plant Page 1 of 13
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## Funding Agreement Page 38

Non-Confidential FEED Study DeliverablesTenaska Trailblazer Partners, LLC Trailblazer Energy Center Date 11 Aug 2011 Carbon Capture Plant Page 2 of 13
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TABLE OF CONTENTS

1.0 Process Description - Page 38 (b) (ii) (A) ........................................................... 3

1.1 Flue Gas Cooling and Trim SO 2 Removal ....................................................... 3

1.2 Flue Gas Blower and CO 2 Absorption ............................................................ 4

1.3 Solvent Regeneration .................................................................................... 4

1.4 Steam and Condensate System ....................................................................... 5

1.5 Solvent Reclaiming ...................................................................................... 5

1.6 Solvent Make-Up ......................................................................................... 6

1.7 CO 2 Compression and Dehydration ................................................................ 6

2.0 Process Performance – Page 38 (b) (ii) (B) ......................................................... 7

3.0 CO 2 Capture Efficiency and Capa city – Page 38 (b) (ii) (C) ............................... 8

4.0 Simplified Plot Plan – Page 38 (b) (ii) (D) .......................................................... 9

5.0 Block Flow Diagram – Page 38 (b) (iii) (A) ...................................................... 10

6.0 Process Flow Diagrams – Page 38 (b) (iv) (A + B) ............................................ 11

7.0 Overall Heat and Material Balance – Page 38 (b) (v) (A) ................................. 12

8.0 Capital Cost Data – Page 38 (b) (vi) ................................................................ 13Tenaska Trailblazer Partners, LLC Trailblazer Energy Center Date 11 Aug 2011 Carbon Capture Plant Page 3 of 13
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1.0 Process Description - Page 38 (b) (ii) (A)

Equipment associated with Trains 1 and 2 ha ve tag numbers 10XX and 20XX respectively. All common equipment items have tag numbers 00XX. In the following process description, only Train 1 equipment and common equipment are de scribed. Train 2 is identical to Train 1.

The plant is designed to be 100% air cooled.

1.1 Flue Gas Cooling and Trim SO 2 Removal Flue gas to the Econamine FG Plus SM (EFG+) facility comes from the Flue Gas Desulfurization (FGD) tower. The ducting from the FGD to the Po wer Plant stack will have two take off ducts. The two ducts will directly feed the two fifty percent EFG+ trains.

Flue gas from the FGD unit is first routed to the 2-Stage Direct C ontact Cooler (DCC) (CCCCLM-1001) for both cooling and trim SO 2 removal in two separate packed sections.

The flue gas enters the bottom of the DCC and is first cooled in the lowe r section by a circulating water stream. The circulating water contacts the flue gas over pack ing and most of the particulates present in the fl ue gas are removed by scrubbing.

The circulating water enters the quench section of the DCC and is heated by the cooling and condensing of water vapor in the flue gas. Circ ulating water is drawn from the bottom of the DCC to the DCC Water Cooler (CCC-AHX-100 1) by DCC Water Pump (CCC-P-1001A/B) and returned to the top of the column’s quench se ction. 100% air cooling is employed to cool the circulating water.

A slip stream is diverted from the circul ating water downstream of the DCC Water Pump through the DCC Water Filter (CCC-FLT-1001A/B), to continuously remove particulate matter. A portion of the filtered water is returned to th e liquid surge volume in the bottom of the DCC.

The excess water is sent to the battery limits. A sm all slip stream of the filtered excess water is intermittently diverted to dilute a 50 wt% s odium hydroxide (NaOH) so lution to a 20 wt% NaOH solution, to be fed into the scrubbing solution for trim SO 2 removal in the top section of the DCC. In the top section, the cooled flue gas from the DCC lower bed contacts a circulating scrubbing solution. The scrubbing so lution is extracted from a chimney tray located above the quench section of the DCC and is sent back to the top of the column by DCC Scrubbing Solution Pump (CCC-P-1007A/B). A blow down slip is taken from the circ ulating scrubbing solution loop which is sent to the plant battery limits. The scrubbing solution enters the top of the DCC and
absorbs the SO 2 from the flue gas. The cooled, desulfur ized flue gas passes through a mesh mist eliminator and exits the top of the column.Tenaska Trailblazer Partners, LLC Trailblazer Energy Center Date 11 Aug 2011 Carbon Capture Plant Page 4 of 13
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The 20 wt% NaOH solution supplied by the NaOH Injection Package (CCC-SKID-0001) is fed to the suction of the DCC Scrubbing Solution Pump in order to maintain the concentration in the scrubbing loop.

Prior to the NaOH Injection Package, a 50 wt % NaOH solution from the 50 Wt% NaOH Storage Tank (CCC-TK-0002) is pumped by the 50 Wt% NaOH Pump (CCC-P-0004A/B) and diluted to a 20 wt% NaOH solution with the filtered excess quench water in the NaOH Dilution Mixer (CCC-MIX-0002).

1.2 Flue Gas Blower and CO 2 Absorption
The Blower (CCC-BLO-1001), located downstream of the DCC, is used to overcome the pressure drop through the EFG+ plant. The flue gas enters the bottom of the Absorber (CCCCLM-1002) and flows upward through the packed co lumn where it reacts with the lean solvent to remove 90% of the carbon dioxide (contained in the flue gas). A total draw of semi-rich solution is extracted from a chimney tray near the bottom of the second amine bed and sent by the Absorber Intercooler Pump (CCC-P-1003A /B) through the Absorber Intercooler (CCCAHX-1003). The semi-rich solution is cooled against air before being returned to the Absorber.

Treated gas from the absorption section passes through a mesh mist eliminator and enters the wash section at the top of the Absorber where solvent in the vapor phase is captured by a circulating wash water loop. The wash water is removed from a chimney tray and sent by the circulating Absorber Wash Water Pump (CCC-P-1002A/B) through Absorber Wash Water Cooler (CCC-AHX-1002). The wash wa ter is cooled against air and returned to the top of the Absorber. Demineralized (RO) water is also added to the top tray of the column to remove any entrained solvent in the exiting fl ue gas before the gas is routed through a mesh mist eliminator and through a duct to the power plant stack for venting to atmosphere.

Excess solvent/water from the wash water section co mbines with lean solvent entering the top of
the Absorber.

1.3 Solvent Regeneration

The carbon dioxide-rich solvent l eaves the bottom of the Absorb er and is pumped by a Rich Solvent Pump (CCC-P-1004A/B) to th e solvent regenerati on section. The rich solvent from the
Absorber is routed to a Solvent Cross Exch anger (CCC-HX-1001) to heat the rich solution against the lean solution from the Lean Flash Drum (CCC-V-1002) . The hot rich solvent then enters the Stripper (CCC-CLM-1003).

The rich solvent flows down through two packed be ds counter-current to stripping steam, which
removes CO 2 from the rich solvent. The solvent colle cts on the bottom chimney tray and is sentTenaska Trailblazer Partners, LLC Trailblazer Energy Center Date 11 Aug 2011 Carbon Capture Plant Page 5 of 13
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to the Reboiler (CCC-HX-1002). Heat input to the Reboiler is provide d by condensing low pressure (LP) steam.

In the wash section of the Stri pper above the feed nozzle, water from the Overhead Accumulator (CCC-V-1001) is used to wash any entrained so lvent out of the vapor stream. The resulting vapor from the top of the Stripper contains CO 2 saturated with water. The vapor is cooled and condensed against condensate from the PC pl ant in the PC Condensate Heater (CCC-HX-1003) and air by the Condenser (CCC-AHX-1012). The two phase mixture enters the Overhead
Accumulator where the carbon diox ide and condensed water are se parated. The condensed water is pumped out of the Overhead Accumulator by the Reflux Pump (CCC-P-1005A/B). A portion of the condensate is returned to the Stripper as reflux by the Reflux Pump. The remaining liquid
from the Overhead Accumulator is sent to the Ab sorber. The carbon dioxide rich vapor is sent to
the CO 2 compressor (CCC-CMP-1002).

The lean solvent leaving the Stripper is sent to a Lean Flash Drum ( CCC-V-1002) where it is flashed at near atmospheric pressure. The resulting flashed vapor, consisti ng primarily of steam, is returned to the Stripper via the Lean Vapor Compressor (CCC-CMP-1001).

The lean solvent from the Lean Flash Drum is pumped by the Lean Solvent Pump (CCC-P1006A/B) to the Solvent Cross Exch anger to provide heat to the rich solvent. After passing through the Solvent Cross Ex changer, the lean stream is furthe r cooled against air in the Lean Solvent Cooler (CCC-AHX-1004) before bei ng routed back to the Absorber.

A portion of the cooled solvent is sent to th e Lean Solvent Filtration Package. The package consists of a Carbon Bed Inlet Filter ( CCC-FLT-1002), a Carbon Bed Filter (CCC-FLT-1003), and a Carbon Bed Outlet Filter (CCC-FLT-1004). The filtered solvent returns to the main lean solvent line where it is recycl ed back to the Absorber.

1.4 Steam and Condensate System
Low pressure superheated steam at the EFG+ Plan t battery limits is provided by the power plant
to meet all steam demands. The steam is des uperheated in the LP Steam Desuperheater (CCCDSH-1001) with low pressure condensate pum ped by the Reboiler Condensate Pump (CCC-P1008A/B) from the Reboiler Condensate Drum (CCC- V-1003). Steam condensate is returned to the power plant battery limits.

1.5 Solvent Reclaiming
A slip stream of hot lean solvent from the L ean Solvent Pump discharg e is taken out through a semi-continuous reclaiming operation. Also a 20 wt% NaOH solution stream is sent to the reclaimer system package. The recovered solven t is sent back to the Lean Flash Drum. TheTenaska Trailblazer Partners, LLC Trailblazer Energy Center Date 11 Aug 2011 Carbon Capture Plant Page 6 of 13
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reclaimer waste is routed to a waste container and is disposed of via an external disposal

company.

1.6 Solvent Make-Up
The make-up solvent for both trains is stor ed in a common Solvent Storage Tank (CCC-TK0001). Solvent make-up (normally no flow) can be injected into the lean solvent lines when required. The solvent is sent from storage to e ither train’s lean solvent line by a common Solvent Make-up Pump (CCC-P-0001) via Solvent Make -Up Pump Suction Heater (CCC-HTR-0002). Any solvent spills will be collected in the Solvent Su mps (CCC-SUMP-1002) which are periodically emptied to the common Solvent Holding Tank (CCC-TK-0003) via Solvent Sump Pumps (CCC-P-1011). Solvent from the Solvent Ho lding Tank can be routed to the Absorbers by the Solvent Transfer Pump (CCC-P-0003) throu gh the Solvent Sump Filter (CCC-FLT-0001).

1.7 CO 2 Compression and Dehydration Following recovery, the CO 2 product must be compressed and purified to meet the pipeline specifications for oxygen and water. An eight stage, integrally-geared CO 2 Compressor compresses the product carbon dioxide to 2500 ps ig. Upstream of the CATOX Unit (CCC-V1008), the gas is cooled with air cooler s (CCC-AHX-1005/6/7/8) after each stage of compression. Any condensed water is separa ted from the gas in knockout drums (CCC-V1004/5/6/7).

The CATOX Unit is used to reduce the O 2 concentration by catalytic combustion of a hydrogen gas from the power plant with the partially compressed CO 2 product after the fifth stage of compression. The CATOX Unit is a reactor containi ng a highly reactive catalyst that allows the safe and controlled combustion of hydrogen with oxygen, producing water which is knocked out after cooling.

The gas leaving the CATOX Unit is cooled in the fifth stage intercoo ler (CCC-AHX-1009) with any condensed water separated from the gas in CO 2 Compressor Knockout Drum #5 (CCC-V1009). The CO 2 product is then sent to the CO 2 Dehydration Package (CCC-DRY-1001) to
reduce the water content in the stream to belo w the required dew point. Three more stages of compression are needed to achieve the required CO 2 product pressure. The gas between the sixth and seventh stage of compression is cooled by CO 2 Compressor Intercooler #6 (CCC-AHX1010). In the CO 2 Compressor Aftercooler (CCC-AHX-1011) on the final stage of compression, the product carbon dioxide stream is cooled to 99°F and routed to the battery limit for pipeline transportation.Tenaska Trailblazer Partners, LLC Trailblazer Energy Center Date 11 Aug 2011 Carbon Capture Plant Page 7 of 13
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2.0 Process Performance – Page 38 (b) (ii) (B)

EFG+ and Compression Plant Performance (Note 1) Steam Usage (lb/hr) (note 2) 2,011,800 Power Consumption (kW) (note 3) 119,770

Notes:

1. Numbers given are for the sum of the two trains.

2. Steam conditions at battery limits: 50 psig, saturated.

3. The power consumption number excludes the following:

o All heaters (not including the Reboiler Conde nsate Heater or the heater associated with the Dehydration package)

o All fans (not including Air Cooled heat exchangers: CCC-AHX-1001/2001 through CCC-AHX-1012/2012)

o All lighting

o Air conditioning

o Line tracing

o Transformer power loss

o Lube oil pumps and heaters

o Panelboards

o Station battery chargers

o Welding receptacles

o Bridge cranes

o Air conditioning unit MV electrical room

o RIE power supply (normal and alternate)

o Non-continuous services

a. Solvent make-up pump
b. Solvent make-up pump suction heater

c. Solvent Sump pump
d. 50 wt% NaOH pumps

e. Solvent Transfer pump f. CO 2 Depressurization HeaterTenaska Trailblazer Partners, LLC Trailblazer Energy Center Date 11 Aug 2011 Carbon Capture Plant Page 8 of 13
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3.0 CO 2 Capture Efficiency and Capa city – Page 38 (b) (ii) (C)

EFG+ Plant Performance (Note 1)

CO 2 Capture Capacity (STPD) 18,103
CO 2 Capture Efficiency (%) 90Tenaska Trailblazer Partners, LLC Trailblazer Energy Center Date 11 Aug 2011 Carbon Capture Plant Page 9 of 13
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4.0 Simplified Plot Plan – Page 38 (b) (ii) (D)Tenaska Trailblazer Partners, LLC Trailblazer Energy Center Date 11 Aug 2011 Carbon Capture Plant Page 10 of 13
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5.0 Block Flow Diagram – Page 38 (b) (iii) (A)®Non-Confidential Block Flow DiagramTrailblazer Carbon Capture Plant FEEDEconamine FG PlusSMBattery LimitsFlue Gas from FGDAbsorption Train # 1Absorption Train # 2Compressed CO2Productto OSBL18,103 tons CO2/daySteamfrom OSBlCondensateto OSBLStripper Train # 1Compression Train # 1Abbreviations:RO Reverse OsmosisDCC Direct Contact CoolerOSBL Outside CC Plant Battery LimitsFGD Flue Gas DesulfurizationSolventFlue GasCO2ProductSteam/CondensateWaterChemicals/WasteCompression Train # 2ReclaimerReclaimerWasteChemicalsStripperReboilerRich SolventBlowerAbsorberBlowdownto OSBLChemicals2-StageDCCCO2CompressorDehydr.PackageCATOXUnitFlue Gas to PowerPlant StackExcess Waterto OSBLCondensedWater toOSBLHydrogenFlash/VaporCompressorStripperReboilerRich SolventLeanSolventBlowerAbsorberBlowdownto OSBLChemicals2-StageDCCCO2CompressorDehydr.PackageCATOXUnitFlue Gas to PowerPlant StackExcess Waterto OSBLCondensedWater toOSBLHydrogenLeanSolventLeanSolventRecoveredSolventStripper Train # 2LeanSolventFlash/VaporCompressorSteam fromOSBLCondensateto OSBLBattery Limits10,057tonsCO2/day10,057tonsCO2/day1006 tonsCO2/day1006 tonsCO2/day9051 tonsCO2/day9051 tonsCO2/dayDemin (RO)Water fromOSBLDemin (RO)Water fromOSBLCondensateto/from ReclaimerCondensateto/from ReclaimerReclaimerRecoveredSolventChemicalsReclaimerWastePage 38 (b) (iii) (A)Tenaska Trailblazer Partners, LLC Trailblazer Energy Center Date 11 Aug 2011 Carbon Capture Plant Page 11 of 13
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6.0 Process Flow Diagrams – P age 38 (b) (iv) (A + B)Tenaska Trailblazer Partners, LLC Trailblazer Energy Center Date 11 Aug 2011 Carbon Capture Plant Page 12 of 13
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7.0 Overall Heat and Material Balance – Page 38 (b) (v) (A)TenaskaTrailblazer Carbon Capture Plant FEEDEconamine FG PlusSMCC-Plant Heat and Material BalanceAll stream reports shown are for 1 of 2 trains, except for stream 001, which is common to both trains.Stream Numbers 101 106 110Temperature, °F 131.3 129.4 104.8Pressure, psia 13.67 73.66 68.76MWlbmol/hrmol%lbmol/hrmol%lbmol/hrmol%H2O18.02 27,533 16.8% 16,053 100.0% 52.0 96.1%CO244.01 19,042 11.6% 1 88 ppmw 0 36 ppmwN228.02 108,071 66.1% 0 9 ppmw 0 4 ppmwAr 39.95 1,300 0.8% 0 0 ppmw 0 0.0%O232.00 7,649 4.7% 0 1 ppmw 0 0.0%SO264.06 1.64 10 ppmv 0 14 ppmw 0 0.0%NO246.01 0.47 3 ppmv 0 0.0% 0 0.0%NO 30.01 3.83 23 ppmv 0 0.0% 0 0.0%NaNO269.00 0 0.0% 0 0.0% 0.45 0.8%NaHSO4120.06 0 0.0% 0 0.0% 0 0.0%NaOH 40.00 0 0.0% 0 0.0% 0 0.0%NaHSO3104.06 0 0.0% 0 0.0% 0 269 ppmwNa2SO3126.04 0 0.0% 0 0.0% 0.1 0.2%Na2SO4142.04 0 0.0% 0 0.0% 1.5 2.6%NaHCO384.00 0 0.0% 0 0.0% 0.1 0.2%Na2CO3105.98 0 0.0% 0 0.0% 0 328 ppmwTotal Molar Flow, lbmol/hr 163,598 16,054 54Total Mass Flow, lb/hr 4,658,340 289,234 1,180Molecular Weight 28.5 18.0 21.8Density, lb/cuft 0.061 61.6 73.5Liquid Flow, gpm 585.7 1.99Vapor Flow, MMscfd (dry) 1,239Vapor Flow, MMscfd (wet) 1,490Vapor Flow, cuft/hr (actual) 75,789,114pH 3.7 7.6Note 1:Stream Description Flue Gas to DCCComponent FlowsExcess DCC Water(Note 1)Scrubbing SolutionBlowdown from DCCDate: 11 Aug 2011Page 38 (b) (v) (A)Revision: 0Stream flow rate shown is during 20% NaOH storage tank filling in NaOH Injection Package. When 20% NaOH Storage tank is not filling, stream 106 flow rate increases by 54.4 gpm for each train.TenaskaTrailblazer Carbon Capture Plant FEEDEconamine FG PlusSMCC-Plant Heat and Material BalanceAll stream reports shown are for 1 of 2 trains, except for stream 001, which is common to both trains.Stream Number 112 113 129 130 132Temperature, °F 108.7 80.0 94.1 < 100.0 82.0Pressure, psia 13.64 13.73 37.19 2,515.0 409.5MWlbmol/hrmol%lbmol/hrmol%lbmol/hrmol%lbmol/hrmol%lbmol/hrmol%H2O18.02 11,825 9.0% 1,316 100.0% 895 99.4% 0 < 3 ppmv 0 0.0%CO244.01 1,904 1.5% 0 0.0% 5 0.6% 17,133 100.0% 0 0.0%EFG+ Solvent 61.08 0 1 ppmv 0 0.0% 0 0.0% 0 0.0% 0 0.0%N228.02 108,067 82.7% 0 0.0% 0 0.0% 4 217 ppmv 0 0.0%Ar 39.95 1,300 1.0% 0 0.0% 0 0.0% 0 5 ppmv 0 0.0%O232.00 7,649 5.9% 0 0.0% 0 0.0% 0 < 10 ppmw 0 0.0%H22.02 0 0.0% 0 0.0% 0 0.0% 0 6 ppmv 1.0 100.0%NO246.010 0.18 ppmv 0 0.0% 0 0.0% 0 0.0% 0 0.0%NO30.014 29 ppmv 0 0.0% 0 0.0% 0 0.0% 0 0.0%HSS - 0 0.0% 0 0.0% 0 0.0% 0 0.0% 0 0.0%Total Molar Flow, lbmol/hr 130,745 1,316 900 17,137 1.0Total Mass Flow, lb/hr 3,620,980 23,700 16,190 754,130 2.0Molecular Weight 27.7 18.0 18.0 44.0 2.0Density, lb/cuft 0.062 62.2 39.3 27.1 0.144Liquid Flow, gpm 47.5 51.4 3,474Vapor Flow, MMscfd (dry) 1,0830.01Vapor Flow, MMscfd (wet) 1,1910.01Vapor Flow, cuft/hr (actual) 58,418,63915.2pH 7.0 3.7Stream DescriptionCompressionCondensateMake-up Wash Waterto AbsorberTreated Flue Gasto Power Plant StackComponent FlowsCompressed CO2ProductHydrogento CATOX UnitPage 38 (b) (v) (A)Date: 11 Aug 2011Revision: 0TenaskaTrailblazer Carbon Capture Plant FEEDEconamine FG PlusSMCC-Plant Heat and Material BalanceAll stream reports shown are for 1 of 2 trains, except for stream 001, which is common to both trains.Stream Numbers 136 001Temperature, °F 283.7 82.0Pressure, psia 13.66 17.66MWlbmol/hrmol%lbmol/hrmol%H2O18.02 - - 1,100 68.9%CO244.01 -- 0.0 0.0%EFG+ Solvent 61.08 -- 0.0 0.0%HSS - -- 0.0 0.0%Degradation Product - -- 0.0 0.0%NaOH 40.00 -495 31.1%Total Molar Flow, lbmol/hr-1,595Total Mass Flow, lb/hr28035,840Molecular Weight-22.5Density, lb/cuft75.094.7Liquid Flow, gpm0.4647.2Vapor Flow, MMscfd (dry)Vapor Flow, MMscfd (wet)Vapor Flow, cuft/hr (actual)pH8.414.0Note 2: Stream flow rate shown is the maximum flow rate when 50% NaOH pump is filling the 20% NaOH storage tank in NaOH Injection Package. 50% NaOH Pump operates intermittently.Note 3: Reclaimer effluent LHV is approximately 4,700 Btu/lb.Page 38 (b) (v) (A)Date: 11 Aug 2011Revision: 0Reclaimer Effluent(Note 3)Component FlowsStream Description50 wt% NaOH(Note 2)Tenaska Trailblazer Partners, LLC Trailblazer Energy Center Date 11 Aug 2011 Carbon Capture Plant Page 13 of 13
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8.0 Capital Cost Data – Page 38 (b) (vi)

Capital Cost Data Total Project Cost (USD) $667,099,000

# ATTACHMENT 2

Project Division of Responsibility MatrixCarbon Capture PlantContract: A4KCDate: 7 Feb 2011Page 1 of 5Rev 0AReferenceNo.DescriptionSupplyErect /InstallStartup &CommissioningCommentsSCOPE OF FACILITIESOUTSIDE BATTERY LIMITS FACILITIES (OSBL)OSBL1Piping: Underground & above ground systems (see"Interconnecting Piping/Ducting Systems" for list of services)PC PC PC Includes utility systems and waste water treatingOSBL2Ductwork: Ducting & isolation damper upstream of the DCC (toDCC inlet expansion joint). Ducting & isloation damper downstreamof the Absorber outlet flangePCPCPCOSBL2ADuctwork Instrumentation; DCC inlet ducting instrumentation andAbsorber outlet ducing instrumentationCC CC CC Instruments as identified on CC P&IDsOSBL3Electrical: 345 Kv Power Feeder to CC ISBL Electrical equipment(to high side of auxiliary transformer)PC PC PCOSBL4Control Systems: Central Control Room, DCS, interconnectingcabling* from CC ISBL Marshalling Panels (located in PDCs) toPC PC PC * including fiber optic connectionOSBL5 Civil: Grading, drainage, paving PC PC PCINSIDE BATTERY LIMITS FACILITIES (ISBL)A1.0 DEMOLITION, SITEWORK, GRADING AND CIVILA1.1Relocation of existing overhead lines, wellheads and other existingstructures as requiredTENASKA TENASKA n/aA1.1 Site clearing PC PC n/aA1.2 Geotech Report PC n/a n/aA1.3 Topographical Mapping PC n/a n/aA1.4 Rough grade PC PC n/aA1.5 Final Grade PC PC n/aA1.6 Storm water collection and drain to offsite retention PC PC PC See also Interconnecting Piping Systems - UndergroundA1.7 Paving and gravel surfaces PC PC n/a includes spill containment areas for solvent spill collectionA1.8 Fencing and gates PC PC n/aPC Plant is within facility perimeter fence, i.e. does not have a fence between the PCand CC plantsA2.0 STRUCTURALn/aA2.1 Foundation excavation and backfill CC CC n/aA2.2 Foundation Concrete/ Rebar/ Piles CC CC n/aA2.3 Embedments CC CC n/aA2.4 Support structures for CC process equipment and machinery CC CC n/aA2.5 Pipe racks ISBL CC CC n/aA2.6 Ducting supports CC CC n/aA2.7 Access platforms, stairs, ladders CC CC n/aA2.8 Compressor building overhead crane CC CC CC For compressor maintenanceA3.0BUILDINGSA3.1 Product Compressor buildings CC CC CC Pre-engineered building shelters (ventilation, lighting)A3.2 Power Distribution Centers (PDC) CC CC CC Pre-fabricated building to house electrical equipment and DCS marshalling panelsA3.3 Analyzer shelters CC CC CC Pre-fabricated shelters for housing analyzer equipmentA3.4 Caustic Storage Building CC CC CCDuring EPCC phase, this facility will be combined with PC like facility to provide onestorage facility for overall project.A3.5 Truck loading shelter CC CC CCCARBON CAPTURE PLANT PROCESS EQUIPMENTSYSTEMSEquipment inlcudes all auxiliary components, including motors,lube oil, seal systems, etc. as required for equipment functionB1.0ABSORPTION EQUIPMENT SYSTEMCCCCCCB1.1 BlowerCCCCCCB1.2 DCC Circulating Water CoolerCCCCCCDIVISION OF RESPONSIBILITY MATRIXFor the purpose of summarizing what is included in the CC Plant EPCC priceCarbon Capture PlantContract: A4KCDate: 7 Feb 2011Page 2 of 5Rev 0AReferenceNo.DescriptionSupplyErect /InstallStartup &CommissioningCommentsDIVISION OF RESPONSIBILITY MATRIXFor the purpose of summarizing what is included in the CC Plant EPCC priceB1.3 Circulating Wash Water CoolerCCCCCCB1.4 Absorber IntercoolerCCCCCCB1.5 DCC Circulating Water FilterCCCCCCB1.6 Wash Water FilterCCCCCCB1.7 2-Stage Direct Contact Cooler (DCC)CCCCCCB1.8 AbsorberCCCCCCB1.9 DCC Circulation PumpCCCCCCB1.10 Circulating Wash Water PumpCCCCCCB1.11 Absorber Intercooler PumpCCCCCCB1.12 Rich Solvent PumpCCCCCCB1.13 DCC Scrubbing Solution PumpCCCCCCB2.0STRIPPING EQUIPMENT SYSTEMCCCCCCB2.1Lean Vapor CompressorCCCCCCB2.2Solvent Cross ExchangerCCCCCCB2.3Lean Solvent CoolerCCCCCCB2.4CondenserCCCCCCB2.5ReboilerCCCCCCB2.6Carbon Bed Inlet FilterCCCCCCB2.7Carbon BedCCCCCCB2.8Carbon Bed Outlet FilterCCCCCCB2.9StripperCCCCCCB2.10Overhead AccumulatorCCCCCCB2.11Lean Flash DrumCCCCCCB2.12Reboiler Condensate DrumCCCCCCB2.13Reflux PumpCCCCCCB2.14Lean Solvent PumpCCCCCCB2.15Reboiler Condensate PumpCCCCCCB2.16CO2 SilencerCCCCCCB3.0CO2 COMPRESSION EQUIPMENT SYSTEMCCCCCCSee also InterconnectingPipingSystems - Compressed CO2 ProductB3.1Product CO2 CompressorCC CC CCB3.2CO2 Compression IntercoolersCC CC CCB3.3CO2 Compression AftercoolerCC CC CCB3.4CO2 Compressor Knock-out DrumsCC CC CCB3.5CATOX UnitCC CC CCB3.6Dehydration PackageCC CC CCB3.7CATOX CatalystCC CC CCB4.0RECLAIMING EQUIPMENT SYSTEMCC CC CCB5.0SOLVENT STORAGE AND MAKE-UP EQUIPMENT SYSTEMCCCCCCB5.1Solvent Sump FilterCCCCCCB5.2Solvent Make-up PumpCCCCCCB5.3Solvent Sump PumpCCCCCCB5.4Solvent SumpCCCCCCB5.5Solvent Storage TankCCCCCCB5.6Solvent Make-up Pump Suction HeaterCCCCCCB6.0 CO2 DEPRESSURIZATION AND VENTING EQUIPMENT SYSTEMCCCCCCB6.1CO2 Depressurization HeaterCCCCCCB7.0COOLING WATER SYSTEMCCCCCCB7.1Wet Surface Air CoolerCCCCCCCooling for Product Compressor motor cooling. Minimum water usage supplied fromplant water systemINTERCONNECTING PIPING / DUCTING SYSTEMS -ABOVE GROUNDSystems include coatings, insulation, valving, specialty items,supports, etc as required for functional systemC1.0FLUE GAS DUCTINGC1.1 All ductwork between DCC, Blower and CC AbsorberCCCCCCIncluding expansion jointsCarbon Capture PlantContract: A4KCDate: 7 Feb 2011Page 3 of 5Rev 0AReferenceNo.DescriptionSupplyErect /InstallStartup &CommissioningCommentsDIVISION OF RESPONSIBILITY MATRIXFor the purpose of summarizing what is included in the CC Plant EPCC priceC2.0EXCESS DCC WATER SYSTEMC2.1 Excess DCC water systemCCCCCCC3.0HIGH PURITY WATER SYSTEMDemineralized water qualityC3.1 System ISBL CC CC CCC4.0LOW PRESSURE STEAM SUPPLYC4.1 Low pressure steam systemCCCCCCC5.0PC CONDENSATE HEATING SYSTEMC5.1 Supply systemCCCCCCC5.2 Return systemCCCCCCC6.0CARBON CAPTURE CONDENSATE RETURN SYSTEMC6.1 Condensate return systemCCCCCCC7.0PLANT AIRC7.1 Plant air distribution systemCCCCCCAir compressors are located in OSBL and inlcuded in PC scopeC.72 Instrument Air systemCCCCCCAir compressors are located in OSBL and inlcuded in PC scopeC8.0SCRUBBING SOLUTION BLOWDOWNC8.1 Scrubbing solution blowdown systemCCCCCCC9.0COOLING WATER MAKE-UPC9.1 Cooling water make-up systemCCCCCCC10.0 POTABLE WATER SYSTEMC10.1 Potable water distribution systemCCCCCCC10.2 Safety Showers / Eyewash StationsCCCCCCC11.0 SERVICE WATER SYSTEMC11.1 Service water distribution systemCCCCCCC11.2 Hose stations within CC BLCCCCCCC12.0 HYDROGEN SYSTEMC12.1 Hydrogen lines ISBLCCCCCCC13.0COMPRESSED CO2 PRODUCTC13.1 Piping from CO2 Compressor to isolation valve at battery limitCCCCCCC13.2 CO2 pipeline metering systemTENASKATENASKATENASKA Location TBDC13.3 CO2 pipeline systemTENASKATENASKATENASKA Location TBDINTERCONNECTING PIPING / DUCTING SYSTEMS -UNDERGROUNDSystems include coatings, insulation, valving, specialty items,supports, etc as required for functional systemD1.0 FIRE WATERD1.1 Fire Water U/G PipingPCPCPCPerimeter loop + branch lines to IBL deluge systemsD1.2 Hydrants/ Monitors / PIVPCPCPCLocated on perimeter loopD1.3 Deluge Systems (for lube oil skid, oil transformers, etc.)CCCCCCD1.4 Hose Stations and Hose Boxes ISBLCCCCCCD2.0 SOLVENT RECOVERY DRAIN SYSTEMSystem is for solvent only, no other chemicals or rain waterD2.1 Curbing and drain hub, normally closed valve CC CC CCD2.2 U/G piping CC CC CCD2.3 Sump, sump pumping and above ground storage CC CC CCD3.0PROCESS WATER DRAIN SYSTEMD3.1 Curbing and drain hub, normally closed valve CC CC CCD3.2 U/G piping to offsite location PC PC PCD4.0 ACCIDENTALLY OILY CONTAMINATED WATER SYSTEMD4.1 Curbing and drain hub, normally closed valve CC CC CCD4.2 U/G piping to offsite location PC PC PCD5.0 WASTE WATER DRAIN SYSTEMD5.1 Curbing and drain hub, normally closed valveCCCCCCD5.2 U/G piping to offsite locationPCPCPCD6.0 STORM WATER SYSTEMSee also Civil sectionD6.1 Curbing and drain hub, normally closed valve CC CC CCCarbon Capture PlantContract: A4KCDate: 7 Feb 2011Page 4 of 5Rev 0AReferenceNo.DescriptionSupplyErect /InstallStartup &CommissioningCommentsDIVISION OF RESPONSIBILITY MATRIXFor the purpose of summarizing what is included in the CC Plant EPCC priceD6.2 Catch BasinsPCPCPCD6.3Underground Storm water drain system, including analyzer (ifrequired) to offsite locationPC PC PCELECTRICALE1.0 345kV power line to auxiliary transformers located at the CC plantPCPCPCE2.0Power Distribution Centers (PDC), including transformers,switchgearCCCCCCPre-fabricated buildings to house electrical equipmentE3.0 Electrical power distribution system ISBLCCCCCCBL is the high voltage terminals of the CC Aux Transformers.E4.0 Lighting, trays, and racewaysCCCCCCE5.0 Underground Grounding and Lightning ProtectionPCPCPCE6.0 Cathodic ProtectionPCPCPCPending geotechnical reportE7.0 Heat TracingCCCCCCThis will be executed as part of an overall subcontract for the PC/CC. The CCestimate will include a ROM for the heat tracing in the CC area.E8.0 DC/UPS equipmentPCPCPCBattery, battery charger, Inverter, switches, switchboard etc. will be part of the PCE9.0 DC/UPS distributionCCCCCCIn the CC scope, 120 V UPS distribution panels dedicated for the CC will be Suppliedand erected by the CC.COMMUNICATIONSF1.0 IT/Telecommunications EquipmentTENASKATENASKATENASKAF2.0 IT/Telecommunications Infrastructure (wiring/fiber/testing)TENASKATENASKATENASKAF3.0 Site Security SystemPCPCPCF4.0 Fiber Optic, and associated terminationsPCPCPCFO terminations will be a subcontract.CONTROL SYSTEMSG1.0 Rotating equipment Programmable Logic ControllersCCCCCCIncluded with equipment ordersG2.0 Field Instruments and devicesCCCCCCG3.0 Cabling from field instruments to PDC marshalling cabinetsCCCCCCNeed to confirm with Ali (currently in Electrical scope)G4.0 PDC marshalling panels and terminationsPCPCPCG5.0 Analyzer shelter sampling systemCCCCCCG6.0 Fire and Gas Detection SystemCCCCCCField devices + interconnecting cabling to PDC DCS terminationsCOMMISSIONING & STARTUPH1.0 First fill of CC solvents and CC reagents.CCCCCCH2.0 First fill other CC plant ChemicalsCCCCCCH3.0H4.0Construction consumables for CC plant thru successfulperformance test/ acceptanceCCCCCCH5.0 Start-up utilities (fuel, power, water, chemicals)TENASKATENASKATENASKAH6.0 Startup Spare Parts (CC Scope)CCCCCCOWNER COSTSJ1.0 Permanent office and laboratory equipmentTENASKATENASKAn/aIncluded in PC scope and plot areaJ2.0 Permanent warehouse and warehouse equipmentTENASKATENASKAn/aIncluded in PC scope and plot areaJ3.0 Maintenance equipment and toolsTENASKATENASKAn/aIncluded in PC scope and plot areaSCOPE OF SERVICES(DELETED)Carbon Capture PlantContract: A4KCDate: 7 Feb 2011Page 5 of 5Rev 0AReferenceNo.DescriptionSupplyErect /InstallStartup &CommissioningCommentsDIVISION OF RESPONSIBILITY MATRIXFor the purpose of summarizing what is included in the CC Plant EPCC priceINDIRECT COSTSK1.0TEMPORARY FACILITIESK1.1 Temporary BuildingsPCn/an/aIncludes staff and subcontract mobile offices, warehouse, mess, restroomsK1.2 Temporary Man-Campn/an/an/aK1.3 Site trailer office space for Tenaska personnelPCn/an/aK1.4 Material Laydown FacilitiesPCn/an/aK1.5 Temporary PowerPCPCPCK1.6 Temporary WaterTENASKATENASKATENASKAK1.7 Roadways and parkingPCn/an/aK1.8 Weather ProtectionPCn/an/aK1.9 Sanitary facilitiesPCPCPCK1.10 Construction consumablesPCPCPCK2.0CONSTRUCTION SERVICESK2.1 Overall Site SecurityCCn/an/aPortion associated with CC TBDK2.2 Site & office clean-up, rubbish disposalCCn/an/aPortion associated with CC TBDK2.3 Warehousing laborCCn/an/aPortion associated with CC TBDK2.4 Safety TrainingCCn/an/aPortion associated with CC TBDK2.5 Certifications, drug testingCCn/an/aPortion associated with CC TBDK2.6 Computers & serversCCn/an/aPortion associated with CC TBDK2.7 Office furnitureCCn/an/aPortion associated with CC TBDK2.8 Site transportation Service (craft bussing)n/an/an/aK2.9 PhotocopiersPCn/an/aK3.0CONSTRUCTION MANAGEMENT FIELD STAFFK3.1 CM Staffing Costs & PerdiemsCCn/an/aPortion associated with CC; of 56 total site construction management personnel, 17assigned to CC construction. Includes: Construction Mgmt, Craft Superintendents,Quality Control, material management, Contract management, ProcurementK4.0CRAFT BENEFITS & BURDENSK4.1 Craft Benefits, burdens, incentive paymentsSee NoteSee NoteSee Note Included in craft wage rate build-upK5.0CONSTRUCTION EQUIPMENT, SMALL TOOLS & HEAVY HAUL/LIFTK5.1 Small toolsCCCCCCIncluded in craft wage rate build-upK5.2 Rental EquipmentCCCCCCPortion associated with CCE5.3 Heavy Haul/ Lift EuipmentCCn/an/aPortion associated with CCK6.0MISCELLANEOUS COSTSK6.1 Import duties and surchargeTENASKAn/an/aK6.2 Sales TaxTENASKATENASKATENASKAK6.3 Marine cargo insuranceTENASKAn/an/aK6.4 Owner’s auditing/inspection/witness testTENASKATENASKATENASKAK6.5 Permits- environmental, operatingTENASKATENASKATENASKAK6.6 Permits- building, constructionCCn/an/aK6.7 Process Simulatorn/an/an/aRequirement TBDK6.8 All-Risk insuranceTENASKATENASKATENASKAK6.9 General liability, automobile, worker comp insuranceCCCCCCK6.10Contaminated and hazardous material handling and/or disposal,including asbestos, lead, soils, and process fluidsTENASKATENASKATENASKAK6.11 Operating Spare PartsTENASKATENASKATENASKA Based on list provided by FluorK7.0COMMISSIONING & STARTUPAlso see column "Startup & Commissioning"K7.1 Commissioning and Startup ManagementCCCCCCInterface with PC Commissioning and Startup TeamK7.2 Commissioning and Startup CraftCCCCCCK7.3 Commissioning and Startup Operator SupportTENASKATENASKATENASKAK7.4 Operation thru successful Performance TestCCCCCCK7.5 Vendor Field RepresentativesCCCCCC

# ATTACHMENT 3

FEED Study ScheduleTenaska TrailblazerFLUORCO2Capture FEED StudyMilestone Summary ScheduleMonth No. 1 2 3 4 5 6 7 8 9 10Calendar Month Aug Sep Oct Nov Dec Jan Feb MarAprMaySummary MilestonesStart of FEEDKickoff MeetingOwner ExtensionIssue Design BasisIssue P&IDs - IFAIssue Plot Plan - IFAHAZOPIssue P&IDs - IFDMTOs to EstimatingEquip Pricing to Est'gIssue Final ReportPresentation

# ATTACHMENT 4

EPCC ScheduleEPC ScheduleYEAR 1 - 2012YEAR 2 - 2013YEAR 3 - 2014YEAR 4 - 2015YEAR 5 - 2016MilestonesFNTPEngineeringSTART PILINGMODEL REVIEW #1MODEL REVIEW #2CC ABOVEGROUNDMOBILIZATIONSTACK SHELL ERECTIONCOMPLETE (PC)PC MECH COMPLETIONPC UTILITIES ONLINECC MECH COMPLETIONCONTRACTUALCOMPLETIONProcurementMAJOR EQPT POsEQPT VENDOR DATAELECT & INSTR VENDOR DATAMAJOR EQPT DELIVERIESConstructionCommissioning & Start-upCOMPANY CONFIDENTIAL

# ATTACHMENT 5

3D Model Shots

# ATTACHMENT 6

AACE Cost Estimate

Standards

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