Falcon Gas Storage Company and CO2-Global Sign LOI to Support ZENG Power Plant Development in Texas

Business Wire, May 10, 2006

HOUSTON -- Falcon Gas Storage Company, Inc. and CO2-Global, LLC have entered into a letter of intent (LOI) for Falcon to support CO2-Global's development of a 70-140 megawatt Zero Emission Natural Gas (ZENG) fired power plant in north central Texas adjacent to Falcon's Worsham-Steed Gas Storage Facility.

"The LOI envisions that Falcon will supply natural gas from Worsham-Steed for the ZENG power plant, which will be designed for zero emissions after CO2 capture," said Falcon President and CEO John M. Hopper. "Falcon also would use the captured CO2 for its enhanced oil recovery (EOR) operations at Worsham-Steed, which in addition to being used as a gas storage facility, is estimated to contain approximately 50,000,000 barrels of crude oil, a significant percentage of which could be extracted through a miscible CO2 flood."

Negotiations have been initiated by CO2-Global to sell the "green" power from the ZENG facility, to be located in ERCOT's North Zone, which has both a shrinking generation reserve margin and tighter restrictions on air emissions under the Clean Air Interstate Rule that goes into effect in 2010. The ZENG Power Module(TM) is emission free after CO2 is captured for EOR, providing clean power generation by eliminating greenhouse gas emissions and regulated emissions such as SO2, NOx and Mercury.

The ZENG Power Module is based upon use of the oxy-fuel Gas Generator that has been developed by Clean Energy Systems (www.cleanenergysystems.com). This permits combustion of gaseous hydrocarbon fuels with oxygen, resulting in production of a high-temperature and high-pressure steam gas mixture. The steam (and CO2) is expanded in a reconfigured steam turbine, then the CO2 is separated in the steam condensation process. The cycle has net positive production of water, enables 100% capture of CO2 and has zero emissions of NOx.

The 70-140 MW ZENG Power Module is based upon reconfiguring near-term commercially available components and early commercialization in niche industrial markets. This will also advance subsequent implementation of a larger and higher efficiency 200 MW ZENG Power Block(TM).

About CO2-Global, LLC

CO2-Global, LLC is a wholly owned subsidiary of CO2-Global AS, a Norwegian based firm specializing in the development of zero emission power generation and CO2 capture for the use in EOR.

About Falcon Gas Storage Company, Inc.

Houston-based Falcon Gas Storage Company is one of the largest independently owned developers and operators of high-deliverability, multi-cycle (HDMC) natural gas storage capacity in the United States. The largest privately owned gas storage provider in Texas, Falcon has more than 22 Bcf of working gas storage capacity at its Hill-Lake and Worsham-Steed gas storage facilities. Falcon is developing the MoBay Storage Hub, an HDMC gas storage project in southwest Alabama, which ultimately will have up to 50 Bcf of working gas capacity available to serve markets in Florida and the southeast. Falcon also is involved in crude oil production, including enhanced oil recovery, ancillary to its gas storage operations. Visit Falcon at www.falcongasstorage.com.