11 april 2014 –fossil fuel foundation beneficiation of … · 2014. 4. 23. · 1. jonkheer michel...

COAL TO LIQUID – A WAY TO MONETIZE ZIMBABWE COAL

11 April 2014 – Fossil Fuel FoundationBeneficiation of Zimbabwean coal.

Is the development of a CTL plant in Zimbabwe a realistic project ?

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JONKHEER MICHEL THUYSBAERT

CHAIRMAN COBRAMAR GROUPSEYCHELLES – SOUTH AFRICA

B. LAW – KUL – BELGIUMMSC. LAW – KUL – BELGIUM

MSC. NOTARY – KUL – BELGIUM

11 April 2014

Fossil Fuel Foundation

The Wanderers

Johannesburg

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Presentation by:

CTL - A WAY TO MONETIZE ZIMBABWE COAL

Agenda

ß Introduction;ß Cobramar;ß Coal mining in Zimbabwe;ß Domestic coal beneficiation;

ß The Coyl Synfuel model;ß Pricing examples;ß Latest update on “Coyl Synfuels” CTL

project for Zimbabwe;ß Conclusion

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ß Initiator: Cobramar Group

ß Cobramar Group: Privately held Group promoting businessdevelopment in O&G sector on the African Continent;

ß Cobramar has entered into a number of Agency Agreements andamongst others with South African Based CTL technologydeveloper “Clean Coal Technologies” for the development of newgeneration CTL-GTL-CBM & LTL plants in Africa & India with animmediate focus on Botswana and Zimbabwe;

ß Cobramar Consortium: works in association with local partners toensure that the local empowerment and the Zimbabwe CITIZENDEVELOPMENT is being adhered to in an open transparent andsharing basis, for the development of the local market and citizenparticipation.

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CTL – A WAY TO MONETIZE ZIMBABWE COAL

• HISTORY OF ZIMBABWE COAL MINING• The history of coal in Zimbabwe dates back to 1895 when the first

coal claims were pegged around Hwange.• Actual mining commenced in 1903 (110 years ago) when the first

shaft was commissioned by Hwange Colliery at No.1 Colliery.• 1982- Zimbabwe Government buys Anglo American 40% stake in

HCCL• The same Company subsequently commissioned a series of other

shafts.• Coal mining peaked at about 6 million tons and present consumption

is about 2 million tons, majority going to the Hwange Power Station;• Government controlled Hwang Colliery produces about 60% of the

present capacity;• Landlocked – lack of logistics / railway for exports;• Good quality coking coal

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CTL – A WAY TO MONETIZE ZIMBABWE COAL6

BLOCK TONNES MINED

MINING HISTORY

NO.1 COLLIERY 60,320,000 1903 – 1961

NO.1 NORTH COLLIERY 1,392,000 1965 – 1970

NO.2 COLLIERY 83,520,000 1927 – 1972

NO.3 COLLIERY 88,160,000 1953 – 1999

NO.4 COLLIERY 4,640,000 1976 – 1980

M BLOCK 6,032,000 1998 – 2004

TOTAL 222,064,000

HISTORY OF UNDERGROUND MINING AT HWANGE

* Courtesy Hwange Coal

CTL – A WAY TO MONETIZE ZIMBABWE COAL7

-

1 000 000

2 000 000

3 000 000

4 000 000

5 000 000

6 000 000

7 000 000

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

AN

NUA

L TO

NN

AG

E(to

nnes

)

YEAR

RAW COAL PRODUCTION 1980 - 2012

Production history at Hwange Colliery:


8CTL – A WAY TO MONETIZE ZIMBABWE COAL

Typical composition of Hwange thermal coal

9CTL – A WAY TO MONETIZE ZIMBABWE COAL

Upper Sengwa Basin

Gwayi Basin

Mlibizi Basin

Lower Sengwa Basin


CTL – A WAY TO MONETIZE ZIMBABWE COAL 10

• Zimbabwe has about 20 billion tons of coal reserves.• If it can not be exported, can it be beneficiated

1. Power generation ?

• Hwange Power Station (ZPC):¸920 mw / 550 mw

• Kariba South Hydro (ZPC):¸750 mw / 600 mw

2. Coal to liquid – CBM to liquid ?


Hwange power station Kariba South dam


Sce: Theglobaleconomy.com

CTL - A WAY TO MONETIZE ZIMBABWE COAL13

Hence the proposed initiative :

the development of a CTL (Coal to liquid plant) inZimbabwe, using Zimbabwe coal for conversion to petroleumproducts, presently imported to Zimbabwe, monetizingZimbabwe Coal.


• The model

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Coal/CBM Feed CCT Gas Clean-up CCT-FT Process

Ammonia - NH3(nitrogen & hydrogen)

Urea - fertiliser(NH2)2CO

Products

Diesel (72 Octane, low sulphur, Euro 5)

and Petrol

Light Naphtha andother chemical

products

Electricity (tail gas plus steam -from gas cooling & reactor heat)

CO2

3rd Party Partnership

Sequestration or Enhanced Oil Recovery

Gasification

CTL - A WAY TO MONETIZE ZIMBABWE COAL15

CCT FT REACTOR MODULAR DESIGN AND REACTOR TRAIN PARALLEL IMPLEMENTATION DIAGRAM.

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• The model will combine the most efficient andmodern technologies for the development of an efficient ‘ newgeneration CTL ‘ plant;

• The general components of the plant such as coal washing plant,gasification, gas clean-up, sulphur removal, refinery components, gasturbine etc…. will be sourced from existing suppliers with proven trackrecords as well as the ones that are the most suitable for Botswana coal;

• One of the smallest components – but most important is the FTreactor . Cooperation with

• CCT are the Owners of world wide marketing rights of the SouthAfrican CCT FT Technology. The technology was developed by theUniversity of the Witwaterstrand (WITS) in Johannesburg (SouthAfrica).


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See below a picture of the reactors – MANN TURBO DIESEL - GERMANY

ß Pilot plant operation sinceJanuary 2008 and the first phaseof piloting completed at the endof November 2009. The plant ispresently not running will befired up again in 2014 for furthercatalyst testing.

ß Plant in operation for 18 monthsß Production about 3 barrels per

dayß Pilot Plant can be visited by

appointment


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Diesel Cut (Produced at CCT – Baoji):

ß Clear liquid – very high quality diesel.

ß Low sulphur (can be less than 10 mg per m³ or 10 ppb).

ß Good cetane number (72).

ß Can be used in a diesel engine as is.


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The newly developed CCT FT Technology which

proposes to use offers following advantages compared to other technologies presently available in the market:

ß Reduction in C02 emissions;ß Easy to scale up;ß Simpler operation; ß Shorter time from design to market;ß Shorter payback period;ß Parallel design and construction;ß Process that is more efficient and flexible ß Reduction in capital cost compared to other similar technologies;ß Using fixed bed reactors in line, allows the flexibility to use different catalysts and use new catalyst developments;


ß The CCT fixed bed technology allows the development of the plant on a MODULAR BASIS, in 1,350 barrel / day or 5,000 barrel/day modules;

ß Hence upfront capital cost can be considerably reduced and further units developed with inherent cash-flows as and when the market demand for the company petroleum products has been proven.

ß Since every coal deposit – every methane deposit has its own dynamics, we will not present a detailed financial case study but will nevertheless present some general indication of cost for a 1,350 / 5,000 / 30,000 barrel day plant :

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General remarks :

ß Capital costs exclude owners costs, costs of feasibilitystudies and finance cost, and are based on US Gulf Coast prices.

ß Capital cost must be regarded as indicative /curve costs.

ß No provision is made for the cost of the infrastructure outside plant boundary.


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1350 bpsd

46.0 %0.97 %27.2 %25.8 %

508,000 tonnes / year

US$ 229 million

9.1 years After Tax6.4 years At Zero Tax


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5000 bpsd

46.0 %0.97 %27.2 %25.8 %

1.88 million tonnes / year

US$ 672 million

6.3 years after tax4.4 years at Zero tax


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30000 bpsd

47.4%4.05%28.3%20.3%

9.21 million tonnes / year

US$ 2.7 billion

4.6 years After Tax3.2 years At Zero Tax


• The present Cobramar models, under various degrees of developmentare indicating a +- 5-7 year payback depending on the location – capitalcost – product mix - domestic taxation – possible Governmentincentives and tax schemes including 0% duty on imports of capitalgoods;

• It is generally accepted by all Economists that the price of fuel willincrease in the next decades and developing nations, third worldcountries will require more and more fuel;

• Revenue to the plant is derived from :

• Product sales (Diesel – Naphtha – gasoil – wax etc...) – such decision to be made after interaction with stakeholders;

• Electricity sales;• Sulphur sales;

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Latest update on the CTL project in Zimbabwe:

1. The proposal has received unofficial endorsement from the Ministry ofMines;

2. Terms of reference for PFS are being prepared;

3. The project can only succeed on a PPP basis and discussions are underway with number parties to enter the Coyl synfuel equity, in line withthe Zimbabwe indigenisation policies;

4. Zimbabwe has sufficient existing mining capacity to facilitate a rapiddevelopment of the project – specially if the stakeholders decide tocommence the development with a small capacity plant (1350 barrel /day) and expand it on a modular basis over a number of phases;

5. One can not ignore the fact that the F-T reaction produces C02, evenif the new CCT FIXED BED technology has managed to considerablereduce the C02 emissions compared to existing technologies.Proactive solutions being discussed;

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6. Water – depends on gasification technology, plant design and torecycle water – 5,000 barrel day plant – between 690,000 –1,150,000 cbm per annum – 25,000 barrel day plant – between3,450,000 – 5,750,000 cbm per annum. - 1350 barrel / dayplant – 250,000 cbm per annum.

5. Location of plant : if the plant were to be located at Hwange – 45kmto Zambezi river………..

6. Funding for the project is – strangely enough – readily available andproposals are under discussion;

7. We want a transparent – collegial process where all are welcome tojoin and run on a PPP basis + also create a new regulatory frameworkwith the Zimbabwe Government for the new “synfuel”;

8. Main challenge – have the necessary guarantees in place for the salesof the product;


ß CONCLUSION:

ß The project is proceeding within the guidelinesand regulations established by the Government and Ministries of theGovernment of Zimbabwe;

ß Thanks to the modular technology of the FT reactor, we can embark ona phase I 1350 barrel / day, reducing the initial capital outlay. Furtherphases will be constructed with a targeted 30,000 barrel / day capacityor a probable FDI of us$ 3 – 3.5 billion;

ß With average ash content of about 23% for Zimbabwe coal, the firstphase will require about 600,000 tons of coal;

ß Provided PFS is completed positively in 2014, Bankable study couldcommence in 2015 – commissioning of phase 1 in 2018-2019;

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ß A tremendous way to ease the Zimbabwe balance of payment, drasticallycut the foreign currency export phase 1 1350 barrels / day = about

ß Job creation;

ß 12 MW power sold into the grid (phase I) – plant self-sufficient;

ß Creation of a new Industry for Zimbabwe;

ß Export potential !

ß Zimbabwean participation from day 1 and increasing as we move forward;

ß Technology transfer;

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We thank you for your attention & interest.

• For further information contact:

&

• SINGAPORE: Monie & Associates • Mr. Yves de Monie• Tel: 00 32 477 664948• @ [email protected]

• South Africa:• Michel Thuysbaert:• Mobile SA: +27 83 6580179• Mobile Botswana +267 71680167• @: [email protected]• Fax: +27 86 553 9979

Turning Positivism into action

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SIYABONGA !!!!!
mailto:[email protected]:[email protected]

11 april 2014 –fossil fuel foundation beneficiation of … · 2014. 4. 23. · 1. jonkheer michel...

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