MHI Performing Front-End Engineering and Design Order for

SCS Energy LLC, a US power development company, is developing the HECA project. The plant will be built near Bakersfield in California's Central Valley and will perform three complementary functions. The IGCC power plant will utilize America's plentiful coal supply and petroleum coke, a by-product from the oil refining process, to produce hydrogen from gasified syngas to generate electricity cleanly and efficiently. A portion of the syngas will be used in the production of fertilizer at the facility. The CO2 recovered from the syngas will be piped to a nearby oil field for use in enhanced oil recovery.

The IGCC power plant, which will employ MHI's proprietary oxygen-blown gasification technology, will have the capacity to generate 400 megawatts (MW) of electricity, while the fertilizer plant will be capable of producing 2,500 tons per day. DOE is providing $408 million in federal funding, or approximately 10% of the total project cost.

During the FEED phase, Mitsubishi Power Systems Americas, Inc., MHI's wholly-owned subsidiary for power systems business in the U.S., is a subcontractor to Fluor. The FEED effort is underway and will be completed by March 2013. SCS Energy is expected to finalize the contract for engineering, procurement and construction in mid-2013. Construction is slated for completion by the end of 2017.

IGCC is a technology that converts pulverized coal to gas in a gasifier vessel and then uses this coal-gasified syngas to produce hydrogen for the production of electricity in a combined-cycle power generation process. Compared with conventional coal-fired power generation, IGCC delivers higher power generation efficiency together with lower emissions of CO2, sulfur oxides (SOx), nitrogen oxides (NOx) and dust.

MHI is one of the few companies in the world that possesses proprietary technology for both air-blown and oxygen-blown gasifiers. Of these two, the company's air-blown technology was adopted for the 250 MW Nakoso IGCC demonstration plant in Iwaki, Fukushima Prefecture in Japan, which is owned by Clean Coal Power R&D Co., Ltd., a venture funded by 10 Japanese electric power companies. The plant has achieved the world's highest level of power generation efficiency. The Nakoso plant has completed more than 16,000 hours of operation, and during last summer's threatened electricity shortage, it generated continuously at full load and demonstrated a high level of reliability and operability. Since the HECA facility will be producing both electricity and fertilizer, the oxygen-blown technology was a more appropriate fit for the project.

CO2 capture is accomplished by first gasifying coal to produce carbon monoxide (CO) and hydrogen and then converting the CO to CO2 and hydrogen in a shift reaction with water vapor. The CO2 is then separated and recovered using a solvent. Part of the resulting CO2 will be combined with ammonia to produce urea as part of the fertilizer production. The rest will be sequestered in deep oil reservoirs, where it will enhance crude oil extraction and extend the life of an existing oil production field.

MHI believes that its outstanding technological expertise was the key factor in convincing SCS Energy to select MHI's IGCC technology for the HECA project. The company will spare no effort to bring the FEED process to a successful conclusion and will work toward winning the EPC contract for the HECA IGCC and fertilizer project as well. At the same time, the company intends to step up its promotion of IGCC and CCS technologies in the world market, thereby enhancing the effective utilization of coal and making a significant contribution toward the reduction of greenhouse gas emissions.