Realizing Natural Gas Opportunity:

Markets, Products & Technological Challenges

Dave T. Montgomery : Gas Engine Technology Specialist

Scott B. Fiveland : GAS NTI manager
Spark Plug

Prechamber

June 5th, 2013

Orifice

Main
Chamber
Fresh Mixture

Burned Gases

Caterpillar Gas Engine Footprint

IPSD

MWM
MAK
EMD
PDGT

Integrated Team, Right Platforms

LPSD Gas Engines

World Energy Demand

15.000

27%

Million tons oil equivalent

Oil
26%

10.000

38%

Natural Gas
5.000

23%

Coal

28%

25%
0

2000

2005

Renewables

2010

Biofuels

2015

2020

2025

Nuclear Energy

2030

Hydroelectricity

Source: 2030 BP Energy Forecast (Million tons oil equivalent)

Natural GAS will have LARGE DEMAND.Moving Forward

3

Natural Gas

Natural
bybyRegion
NaturalGas
Gas Prices
Region
$18

Abundant Supply

$16
$14

Japan (LNG)

$12
$/mmbtu

Shale Gas
Energy Independence Opportunity

$10
$8

EU

$6
$4

Regional Pricing

$2

USA

$0
2006

Emissions

2009

2010

USA (Henry Hub)

2011

2012

Japan

USA Gas vs Oil Price (Energy Equivalence)

$140

Barrels of Oil Equivalence

Growth to Continue
USA Export?

2008

Europe (Zeebrugge)

Cleanest Fossil Fuel

Flaring Reduction

LNG Expansion

2007

$120
$100
$80
$60

Price Spread

$40
$20
$2006

2007

2008

USA (Henry Hub)

2009

2010

2011

2012

Oil (WTI)

A Growth Opportunity
Driven by Customer Value
Pricing Differential: Diesel to Natural Gas
2011 Actual

$/DGE

$/mmBTU

$28

$4

Economic Advantage of Gas

Estimated Annual Fuel Savings**
400 EMD Locomotives

$ 182 million
$21

$3
25 Cat 797 Trucks

$ 17 million
$14

$2

Long-term Fixed Gas

Gas Contracts Pricing

50MW Power Plant

$ 36 million
$7

$1
Typical Fracturing Crew

$ 6 million
$0

$0
US

Germany China

* Large EPG and Industrial Customers

India

Brazil
** Price spread of $2 per DGE and gas substitution of 65%

A Growth Opportunity
Supply and Demand

Demand for
Natural Gas

Supply of Natural Gas

Strategy Summary Continuous Speed Product for EP Market

Key Driver: Owning & Operating Cost / Electrical Efficiency

Technology Strategy
Spark Ignited Engines

Technology priorities
Burns 100% Gas
Efficiency > 50%
Power density

Enriched Prechamber System

Spark Plug

Qualitative Example
Jet
Ignition

Prechamber

Conventional
Ignition

Orifice

10 BTDC
Main
Chamber

4.3 BTDC

Burned Gases

Fresh Mixture

Pressure (kPa)

3.6 BTDC
16000
14000
12000
10000
8000
6000
4000
2000
0
200

Prechamber

2.9 BTDC

Main Chamber

2.2 BTDC
1.5 BTDC
300

400
Crank Angle (deg)

500

600

Caterpillar Approach to Modeling GAS Engines

Combustion Physics
-Chemical Kinetics
- Flames

Thermo-mechanical
-Piston Rings
- Thermal Loading

Cycle Simulation
-Zonal combustion
- Stochastic models end-gas knock

Combustion CFD
- Full cycle

Laminar Flame Speed Measurements

Engine Combustion conditions

- Lean Combustion : Lambda = 1.7
- Pressures > 100 bar
- GAS : variable methane number

6/5/2013
13

Misfire / NOx limit

DYNAMIC GAS BLENDING

Oil & Gas

Rail

Marine

Mining

SYSTEMS AND KITS

PROFIT FROM FLEXIBILITY
Lower fuel costs - up to 70% replacement of diesel with gas
Use gas when it is available and diesel when it is not
Continuous adjustment to fuel quality and pressures
Wide variety of fuels from associated gas to gasified LNG
Maintain diesel power and transient response
Maintain service intervals and component life
Improved display performance and troubleshooting
Reduce gas flaring by consuming dry field gas
Maintain original emissions certification with retrofit kit

Dual Fuel Engines

and Retrofit Kits

3512 Land Electric Drilling Module

17

Flame Propagation in Premixed Dual-Fuel

At <= 1.7 a flame can propagate easily
Leaner than = 2.0 flame propagation is a challenge
If the overall chamber is at = 1.8, then at a 60% gas substitution, the
gas is at = 3.0; this gas cannot propagate a flame and only the gas
in close proximity to the diesel will burn
3 Energy Release Mechanisms
1) Natural Gas entrainment diesel jet
2) Natural Gas Turbulent Flame
Propagation
3) Diesel Ignition

HIGH PRESSURE DIRECT INJECTION (HPDI)

THE FUTURE OF MOBILE GAS
Much lower fuel costs - over 95% replacement of diesel with gas
Maintain diesel power, transient response, and reliability
Capable of meeting Tier 4 off-highway and rail standards without SCR or DPF
Engine retrofit is fuel systems only uses robust diesel components
Engine controls work like diesel, no additional complexity
Same or better fuel efficiency compared to Tier 3 base engine
Dual Fuel Engines
5 - 7% better fuel efficiency than micro-pilot engines at Tier 4 emissions
and Retrofit Kits
Tanks and tender cars will be adapted to machines to deliver LNG

MAXIMIZING FUEL SAVINGS ANNUALLY*

400 EMD Locomotives

$ 266 million

HPDI Dual Fuel

injector
replaces
existing diesel
injector

Accelerating
Through
Partnership

25 Cat 797 Trucks

$ 25 million
* Estimated based on price spread of $2 per DGE and gas substitution of 95%

19

Challenges Modeling HPDI

Diesel Modeling
Challenges
Ignition
Soot Modeling

HP Natural Gas Modeling

Challenges
Injector modelingexit
Jet penetration /
spreadartificial diffusion (grid)

Conclusions
Natural Gas Abundant in Supply
Lean-Burn Spark Ignited Engines
Focused on Electric Power
Flames are lean / high-pressure

Dynamic Gas Blended Engine

Require integrated modeling approaches

High Pressure Direct Injection

Need data to validate HP gas jet models