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ONICO

ul. Flory 3/4


00-586 Warszawa, Poland

888 Prospect Ave


La Jolla, California 92037

Poland +48 733 210 673


US +1 858 866 4958

www.onico.pl

Please find attached a presentation titled "Stored Diesel Fuel Quality and
Principles of Particle Counting" prepared by a global leading authority in
the field - Southwest Research Institute (SwRI), please find more
information on http://www.swri.org.

EXECUTIVE SUMMARY

Gary Bessee, SwRI Director and Steve Westbrook, Institute Scientist, the
authors of this presentations, have a combined 73 years’ experience in
Fuels and Lubricants Research at SwRI.

ONICO, a Polish importer and distributor of petroleum products has


engaged SwRI to prepare this report and to test the ONICO solution to
the global issues around stored diesel fuel.

The SwRI report first addresses fuel quality and contaminates. Possible
points of contamination are: end users storage tanks, the crude source,
the refining process, the pipeline, the terminal, and delivery trucks.

The SwRI document notes that ASTM D975, the most commonly used
specification for diesel fuel in the U.S. includes requirements for fuel that
is typically expected to be used within about six months. Proper
monitoring of fuel contamination and remediation can potentially extend
the "shelf life" of stored fuel well past the six months. Thus, saving money
and the environment at the same time.

Possible Issues with stored diesel fuel include: accumulation of water and
particulates during storage; growth of microbial contaminants; oxidation
of fuel; and precipitation of wax during cold weather. Plugged
filters/screens/lines are the most common causes of fuel-related
problems and these issues can all contribute to plugging.
Water is the most common fuel system contaminant. It can come from:
transportation, delivery and intermediate storage; tank breathing;
dissolution of dissolved water/ rain through fill pipes and other openings;
ground water through leaks in underground tanks.

Water: increases corrosion and wear; freezes during low temperature


operation; carries dissolved acids. Water is necessary for microbiological
growth.

There are additional discussions of biodiesel production and storage


temperature concerns.

The report states that the US Federal Trade Commission allows diesel
fuel to contain up to 5% (B5) biodiesel in ASTM D975 diesel fuel and
ASTM D396 heating oil without special labeling.

The SwRI presentation also includes illustrations of clouded fuel and


plugged filters. Low temperature operability and summer fuel vs. winter
fuel are discussed.

Additives to improve low temperature operability are illustrated and


discussed.

There are also discussions, along with pictures, of fuel degradation,


microbial growth and contamination, and fungus contamination.

The presentation notes that "the presence of water, microbial growth,


alcohols, and acidic contaminants can all lead to corrosion of metals in
the fuel tank.

The SwRI Report provides recommendations for gen-set operator that


should minimize risks:
• Work with your fuel supplier to obtain fuel that is appropriate to
your application
• Monitor the fuel during storage to detect contaminants before
they become a problem
• Prudent use of additives - many additives provide inadequate or
even no protection
• Provide means to remove contaminants from stored fuel if they
are detected, i.e. fuel filtration or polishing
The SwRI presentation then describes the workings of an Automatic
Particle Counter (APC) and how is detects contaminant particles which
may be in the stored diesel fuel. The APC will detect but no differentiate:
dirt, free water, air, and fuel degradation products. The APC will not detect
dissolved materials such as fuel additives or dissolved water. Therefore,
once a threshold of countable particles are detected, indicating diesel
Fuel possible contamination, further lab testing is required to analyze an
actual fuel sample in order to suggest proper remediation to bring the
stored fuel into industry acceptable specifications.

SwRI tested a Parker Automatic Particle Counter. The Parker APC will
perform daily testing and will report results via IBM's IoT to an operation
center, which will provide "real time" notification to storage tank operators
of potential contaminate particulate levels. The data will also be reported
to IBM Watson for in depth analytics. Excessive levels of particulates may
justify remediation in order to bring the cleanliness level below the
desired level to ensure proper performance. IBM Watson will also
provide insight into trends of contamination levels for each unique
storage tank as well as industry wide analysis of the numerous factors
that might be contributing to diesel fuel contamination.