press release

Texaco Press Release - Texaco Led Team Selected By U.S. Department of Energy

Texaco Hydrocarbons-To-Liquids Initiative Takes Positive Step Toward Commercialization

FOR RELEASE: TUESDAY, OCTOBER 12, 1999.

HOUSTON, Oct. 12 - Texaco Energy Systems Inc. has been selected by the U.S. Department of Energy (DOE) to lead a team that will design an Early Entrance Co-Production Plant (EECP) for the production of electricity and high-quality diesel fuel using a combination of Texaco's proprietary gasification and Rentechs Fischer-Tropsch technologies.

The team will carry out a four-year, $14.6 million research, development and testing program, which will culminate with the creation of the preliminary engineering design for commercial implementation of a multi-product plant. The DOE is providing $9 million in funds, or 62 percent of the total, under its Vision 21 initiative. The Texaco-led team consists of Brown & Root Services, a division of Kellogg Brown & Root, Inc., General Electric (GE) Power Systems, Praxair, Inc. and Rentech.

Commenting on the announcement, Graham H. Batcheler, President of Texaco Energy Systems Inc. (TESI), said, Texaco is pleased to participate in this collaborative effort with companies that are leaders in their respective fields. The expertise of this team coupled with the DOEs initiative to advance the commercialization of co-production facilities will pave the way toward clean energy solutions.

The DOEs Vision 21 initiative is primarily executed by the Federal Energy Technology Center (FETC). FETC is one of DOEs field offices for fossil energy research with sites in Morgantown, W. Va. and Pittsburgh, Pa. Texaco's initial focus will be to commercialize the EECP concept using low-value hydrocarbons, such as refinery by-products, as the feedstock. As the technology matures, other feedstocks will be used to produce electric power, diesel fuel and other products.

Once commercialized, this process will produce products that can assist the refining industry in meeting future fuel specifications. For example, the resulting diesel fuel can be blended with traditional refinery-cracked diesel to create a product that generates fewer emissions. Additionally, more hydrogen is produced and greater processing efficiencies are achieved.

The Texaco proprietary gasification technology, a process that converts solid, liquid or gaseous hydrocarbon feedstocks into synthesis gas, will then be used as a feedstock for the Rentech Fischer-Tropsch technology. The integration of these technologies with Praxairs air separation process and GEs combined cycle technology will facilitate the use of a broad range of original feedstocks, such as petroleum coke, heavy oils and other by-products generated in refineries and heavy oil production upgrading facilities, as well as coal.

Texaco Energy Systems Inc. (TESI), formed in April 1999, was created to explore opportunities to broaden Texaco's energy portfolio. Leveraging the strength of a global corporation, TESI will explore business opportunities in fuel cells, hydrocarbons-to-liquids and alternative fuels. As a technology-based company, Texaco plans to apply energy expertise and proprietary technologies to make these emerging energy opportunities a reality.

Updated: October 1999