Stone Bridge Energy Partners               24044 Cinco Village Center Blvd., Suite 100               Katy, TX 77494 July 17, 2015  The Honorable Stephen DonCarlos Mayor of Baytown  2401 Market Street Baytown, TX 77522  RE:  Application for Tax Abatement on behalf of Evonik Corporation and Stone Bridge Energy Partners LLC as joint venture owners of SBE Chemical Partners I LLC, the Project Company (“Raven”)               Dear Mayor DonCarlos:   SBE Chemical Partners I LLC is pleased to submit this formal request to the City of Baytown for consideration of available tax abatements for our project at 9300 Needlepoint Road in Baytown. Consistent with this request we have prepared and completed the attached Application for Tax Abatement in Baytown, Texas as per the City of Baytown Tax Abatement Guidelines Summary.     Stone Bridge Energy Partners, as the lead developer for the project, has been performing development 

work on Raven since the Fall of 2014.  Prior to that, pre‐ development work was being planned and 

evaluated by Evonik, who is also the owner of the site, through its Nilok Chemical subsidiary.  Raven will 

be a 100,000 tonnes per year Olefins production facility to be designed and built by experienced 

engineering and contracting firms, familiar with best practices in the petrochemical industry with 

excellent reputations along the Texas Gulf Coast.  Raven will contract with viable entities, utilizing 

commercialized and proven technology; involving creditworthy stakeholders (feedstock suppliers, 

pipeline operators and off takers), and is projected to complete development, achieve Financial Close 

and start construction in early 2016.  

The Project and Benefits Raven has put together a project to build a new process manufacturing facility in Baytown to convert petrochemical feedstock into a final product requested by neighboring facilities and processors.  We have worked diligently to locate this opportunity in the City of Baytown and the tax abatements requested are essential to securing its presence in Baytown.    For the City of Baytown, the construction of this project would produce an average of 100 construction jobs with a peak of 175 full time jobs and more than 258 man years of construction work.  We believe all of these direct jobs will be new jobs within the City.  Once operations begin on the completed plant, we anticipate a payroll approaching $2MM year for its 30 full time employees. We see these as direct jobs and the resulting payroll producing a healthy multiplier effect throughout the City.  Further, this addition of a process manufacturer and its supporting contractors and vendors will produce a positive direct and 

Exhibit "B"

City of Baytown Tax Abatement Application July 17, 2015 

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indirect benefit to Baytown.  We anticipate positive taxable expenditures on the sales and consumption of local food and beverage, entertainment, housing, as well as supporting travel and hospitality services including lodging.  Further, the capital investment of up to $150 million will provide for future tax basis for the City of Baytown and the addition of the project should provide momentum for other capital businesses to invest in Baytown.  Technology Although Project Raven will incorporate proven technology with significant patent protection, this project is similar to over 30 other projects that have been built worldwide.  The combination of proven technology and best in class construction and operations will insure this project will be a safe addition to Baytown’s industrial infrastructure. The technology that Raven deploys has a small environmental footprint with limited air and other emissions and includes state of the art pollution control technologies.  Further, the process operates at low pressure and low temperatures and is therefore considered a relatively simple petrochemical project.   Project Raven will receive 110,000 tonnes per year of feedstock and process it into approximately 100,000 tonnes of olefin and a residual slip stream of approximately 8,000 tonnes of hydrocarbon liquids.  The plant will receive its feedstock via pipeline and through a relatively low heat conversion process utilizing proprietary catalyst, convert the feedstock to a specified olefin.  Raven will supply the resultant olefin to its customers via pipeline, rail and truck transport.   The Site Selection: Competing Locations Project Raven has gone through an extensive siting process to insure it is competitively located for favorable physical characteristics as well as permitting approval processes and competitive tax structures.  9300 Needlepoint Road in Baytown has been dormant for more than a decade, and this is the first project being proposed for this site in a similar timeframe.  The site is zoned as Heavy Industrial which is appropriate for Raven’s manufacturing process.  Raven has worked hard to maximize the site logistics and properly positioned is various plant components within the site footprint. In addition, Raven would have all heavy construction traffic enter the site utilizing an existing road connection to the I‐10 service road north of the plant site in order to minimize the project’s traffic inconveniences on the City of Baytown and its residents.  Other locations with competitive tax regimes include St. Landry Parish in Louisiana and Mobile County, Alabama.  Evonik is also the potential landlord with the competing location in Mobile County, AL.  Hazelwood Energy Hub has been identified as the potential site at St. Landry in LA.  Projected taxes are shown as more favorable to Raven in both AL and LA, as shown in the attached Tax Comparison contrasting the Alabama and Louisiana taxing regimes with Texas, in reference to the specific site in Baytown.   Raven is currently working with subsidiaries of Quanta Service, Inc., a Fortune 500 company with experienced engineering and construction subsidiaries, familiar with similar projects and with an established local presence.  In fact Quanta’s subsidiary, North Star, was a contractor to disassemble and remove a portion of the legacy project at this site, a carbon black manufacturing facility.     Project Timeline Subject to favorable tax treatment and timely permitting, Raven anticipates construction start as early as January, 2016.  Construction timeline would take approximately 1 ½ years, with average construction 

City of Baytown Tax Abatement Application July 17, 2015 

3  

employment of 100 workers.  The construction will include a 10,000 sf building to house the commercial and operating control room of the project.  After construction, commercial operations are scheduled to begin in the summer of 2017 with 1‐2 exempt employees and the remaining 28‐29 non‐exempt employees resulting in an expected total of 30 employees over the 30‐50 year life of the project.      Estimated Costs Raven anticipates investing $120 million to $150 million in capital expenditures into the project.  Raven will purchase and have installed machines, equipment and supporting infrastructure to have a world class processing plant.  Project investments will include connecting to existing pipeline, utility and communications arteries to complete the build out of the plant.  Additional spare parts and inventory, as personal property will add additional millions of dollars of investment at the site.  This direct capital investment, along with the additional soft costs of interest during construction may top off the invested capital as high as $160 million.    Abatement Request  Further, please find attached a calculation of our anticipated Ad Valorem Tax Savings for the first five years after complete construction, requesting the 5‐year abatement of municipal ad valorem taxes based on the City of Baytown’s Tax Abatement Guidelines Summary:   

Year 1  100% Year 2  100% Year 3  80% Year 4  60% Year 5  50% 

  We look forward to presenting the project for review at the next convening of city council.  Should you, your council or staff have any questions, please don’t hesitate to contact me at via email at tsuffield@stonebridgeenergy.com or vial telephone at (713) 805‐1296. Your consideration is valued and appreciated.  Sincerely,  

 Thomas M. Suffield Executive Vice President  & Partner Stone Bridge Energy Partners LLC  

 

 

 

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APPLICATION FOR TAX ABATEMENT IN BAYTOWN, TEXAS The filing of this document acknowledges familiarity and conformance with Guidelines and Criteria for Reinvestment Zones. This application will become part of the agreement and any knowingly false representations will be grounds to void the agreement. An original copy of this request should be submitted to City Manager, P.O. Box 424, Baytown, Texas 77522-0424, if property is located inside the corporate limits of Baytown. APPLICANT INFORMATION Date: July 17, 2015 Company Name: SBE Chemical Partners I LLC Address: 24044 Cinco Village Center Blvd., Suite 100 City: Katy State: TX Zip Code: 77494 Corporation: X Partnership: Proprietorship: PROJECT INFORMATION Type of Facility See Guidelines X Manufacturing Class “A” Office Space LEED® Certified Office Building Research & Development Service & Distribution Regional Entertainment & Recreation Other Basic Industry Proposed Project Location Address and Legal Description:9300 Needlepoint Road, Baytown, TX 77521 Attach map showing proposed site. Jurisdictions: School District Goose Creek College District Lee College City or Town Baytown Describe Product or Service: This Petroleum Chemical Plant will produce approximately 100,000 tonnes of olefins per year for sale and delivery via pipeline, rail

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and truck offtake. Residual products will include 8,000 tonnes of liquid hydrocarbons for sale on a spot basis to various customers. Project Description: Stone Bridge Energy Partners LLC and Evonik Corporation have established a joint venture company - SBE Chemical Partners I LLC (Raven). Stone Bridge has been performing development work on Raven, which would be a 100,000 tonnes per year olefins production facility to be designed and built by Quanta Corp operating affiliates in Baytown utilizing commercialized and proven technology; involving creditworthy stakeholders (feedstock suppliers, pipeline operators and off takers), and projected to complete development, achieve Financial Close and start construction in early 2016. Attach statement fully explaining project, describe existing site and improvements and provide list of improvements and fixed machinery and equipment for which abatement is requested (Refer to Guidelines, Section 3). X NEW PLANT EXPANSION MODERNIZATION ECONOMIC INFORMATION Construction Estimates: Start Month/Year: 1/1/2016 Construction Man Years: 258 Completion Date: 7/1/2017 Peak Construction Jobs: 175 If Modernization: Estimated Economic Life of Existing Plant:

Years Added Economic Life from Modernization:

Years Permanent Employment Estimates (PEE’S) Current Plant Employment: 0 Number of Plant Jobs: Retained or 30 Created At start/opening: 30 in year: 2017 5 years into operation: 30 in year: 2022 Estimated Appraised Value on Site Personal Improvements Land Value January 1 Preceding 0 0 $.3MM Abatement Agreement:

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Est. Value of Improvements: $5MM $130MM $.6MM Est. Value of Abated Properties $5MM $95MM $.7MM After Abatement Expires: Value upon Completion of Project Personal Property and Project Improvements Not Subject To Abatement: $5MM TBD $.7MM VARIANCE Is the applicant seeking a variance under Section 3 (f) of the guidelines? YES X NO If “YES”, attach required supplementary information. OTHER ABATEMENTS. Has company made application for abatement of this project by another taxing jurisdiction or nearby counties? YES X NO. If “YES” please provide dates of application, hearing dates if held or scheduled, name of jurisdictions and contacts, and letter of intent. COMPANY REPRESENTATIVE TO BE CONTACTED: NAME: Thomas M. Suffield _______________________________ Signature of Company Official TITLE: EVP & Partner Robert Toker, Partner Name & Title of Company Official ADDRESS: 24044 Cinco Village Center Blvd. Suite 100 CITY: Katy STATE: TX ZIP-CODE: 77494 TELEPHONE: 713 805 1296

Preliminary Google Earth Layout For Raven -- Overview

Preliminary Google Earth Layout For Raven – Close Up

Preliminary Google Earth Layout For Raven – Close Up with Approximate Leased Area

Raven – Existing Representative Plant Example

Raven – Existing Representative Plant Example

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