blake gtle overview slides for coaltrans bkk 2012-11-16 final

Blake Williams

Bangkok, Thailand

Coaltrans Emerging Asian Markets

November 15-16, 2012

COAL UPGRADING

COMMERCIALISATION

Copyright: GTL Energy Limited: COALTRANS 15-16 Nov 2012 2

GTLE has developed a proprietary and patented technology to upgrade low rank coals (LRC) by removal of moisture

7 years of R&D and US$45 million have been spent developing the technology

GTLE process is unique relative to competitive technologies

o Safe, robust, reliable and commercially viable

Technology is at advanced stage of commercialisation

o Commercial scale demo plant in North Dakota since July 2010

o 3rd party commercial facility in New Zealand commissioning now

o 1MMtpa Indonesian Plant under development

Attractive economics and significant market opportunities

Strong management team

Coal Drying Technology Being Deployed


Use of high mechanical

pressure before drying:

1. Increases evaporation

efficiency

2. Permanently transforms

physical characteristics of coal

by collapsing pore space

where moisture resides

3. Produces a stable,

transportable, high energy

briquette suitable for power

generation (PC) and coal chemicals (gasification)

The GTLE Process Simple and Robust

GTLEs unique patented process addresses the challenges of coal-drying safely and cost-effectively using tried and tested material handling equipment

Low Rank Coal/Lignite

Crush

Compaction

Drying

Briquetting

Wash (optional)

Dust

Product Storage

Low

Temp

Heat

Water


Compaction Reduces Pore Volume

4


Competitive Advantages for GTLE

Challenge Competitors* GTLE Technology Difference**

Temperature and

Pressure:

Use high temperature, chemical or

high pressure vessels. This has

cost, safety and environmental

challenges.

Uses a mechanical process followed by

low temperature (coal


Sample Results Achieved To-Date (Kcal/Btu)

Source of coal Date Reduction in moisture Increase in thermal energy

(Kcal/kg)

Indonesian Sub-bituminous 2008 33% to 10.0% TM (70%) 4,585 to 6,110 Kcal/Kg (33%)

Indonesian Bulk Trial (500t) 2011 44% to 14.0% TM (68%) 3,578 to 5,494 Kcal/Kg (55%)

New Zealand Lignite 2006 46% to 12.5% TM (73%) 3,055 to 5,280 Kcal/Kg (73%)

New Zealand Bulk Trial (500t) 2010 41.1% to 14.2% TM (65%) 3,525 to 5,090 Kcal/Kg (44%)

Texas Lignite 2006 35% to 12.5% TM (64%) 3,055 to 5,110 Kcal/Kg (67%)

North Dakota Lignite 1 2008 42.5% to 12.5% TM (71%) 3,335 to 5,110 Kcal/Kg (53%)

North Dakota Bulk Trial (200t) 2010 37% to 13% TM (64%) 3,920 to 5,335 Kcal/Kg (36%)

PRB Sub-Bituminous 2009 30% to 10% TM (67%) 4,780 to 6,000 Kcal/Kg (25%)

Australian Brown Coal 2010 61% to 12.5% TM (80%) 2,610 to 5,750 Kcal/Kg (120%)

Bold indicates trials at South Heart, ND Data reported on a Gross As Received (GAR) basis.

Copyright: GTL Energy Limited: COALTRANS 15-16 Nov 2012

7

GTLE Adds Value to Low Rank Coal Assets

$0

$20

$40

$60

$80

$100

$120

2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000 6,500 7,000

US

$/t

Kcal/kg

Argus CoalIndo Benchmark Pricing (FOBIndonesia)

Newcastle Benchmark Pricing (FOBAustralia)

China: 5800kcal (CFR Qinhuangdao)

AUS 60%TM

Value Uplift of between $30-$70/t*

pays for cost of upgrading and

license fees to GTLE

INDO 45%TM

PRB 27%TM

Brown Coal / Lignite Sub-bituminous Bituminous

*Price Arbitrage Concept Chart: Reference to prices as of Mar-2012 on GAR basis. Refer

example economic slides for updated pricing analysis. Degree of upgrade is coal specif ic.


Following a program of lab testing, progressive scale-up, and bulk sample tests, GTLE is rolling out the technology with:

2 plants built

1 in engineering phase

Others in the development phase

Ready for Commercial Roll-out

Projects Underway (Agreements Executed)

Advanced Interest/Negotiations

GTLE Operations (Pilot and Commercial Scale Demonstration)


Commercial Scale Demonstration Facility (ND)

9

Design capacity up to 250,000 tpa of dried coal product (Moisture reduction from 42% to 12%)

Large volume trials on coal from NZ, US and Indonesia

Training facility plus supports test programs for optimizing operational protocols, long term stockpiling

and transportation studies

Modular plant design expansion possible by process

train replication (addressed scale up risks)

Additional production runs support specific coal analysis, engineering FEED studies


Construction commenced September 2011 and completed in September 2012

Design capacity up to 100,000 tpa; single train modular plant upscale by replication

Domestic NZ coal supply plus export test burns to support larger plant commitment

Underpins ability to have a continuous production plant prove technology and market

Commercial Scale Facility (New Zealand)


BOP (including boiler acceptance test) and Dry Commissioning completed October 2012

First coal introduced late October 2012 wet coal (no heat) to test all material handling

equipment

Rigorous process of Hazid/Hazop plus Independent Safety Review October 2012

As at 15 November, completing minor mods on material handling and bag-houses

11

NZ Plant Status


Desktop Economic Review

Pilot Scale Trials

Bulk Sample Trials (500t) in ND

Stockpiling & Handling

Customer Trials

Combustion Tests

Pulverizer Performance

Boiler Performance

o Ignition, Flame Stability and Turndown Capability

o Burnout Efficiency, Ash Deposition and Heat Transfer

FEED Studies support FID

Consenting / Permitting Stakeholder engagement

License Agreement with Technology Warranty / Package

Standard Operating Procedures (Commissioning, Start-up/Shutdown, Ops, Maintenance) &

Training

12

Project Development Path NZ Example

Significant maturing of technology through process of design, build, commissioning

Significant credibility to come from Operations


Address Technical Soundness, Economic & Financial Feasibility, Political & Institutional Predictability (Per Nick Halkas, ANZ Coaltrans Presentation)

Production Capability: Demonstrate continuous, safe long term reliable production

Store and Ship Product: Large volume stockpile, transport demonstration reflecting real world conditions

Customer Acceptance: Large volume PC plant test burns and product sales

Technology Guarantees: Ability to provide performance warranties

Engineering and Commissioning Package: Firm costing and engineering design, construction and commissioning service delivery.

EPC Partnering, modular design and commissioning team.

Operations Package: Service delivery model

Finance: Opportunities to tie project finance with off-take arrangements and more traditional debt arrangements will change with technology maturity

NZ Plant Supports Commercialisation Path


MOU signed for coal supply and site in Kalimantan

Moisture reduced ~70%; Energy increase ~70%

Existing production and transport infrastructure

Value of $ margin ~$25/t product

Pilot coal trials complete

Base Engineering Package complete

Moving to definitive cost estimate and Detailed Feasibility

NZ Ops to support securing finance and off-take arrangements

Target project commitment 2H-2013, production 2014/2015

1MMtpa Plant Development (Indonesia)

GTL Energy is actively pursuing a 1MMtpa commercial scale plant in Indonesia:

Kalimantan Project

Wood Mackenzie Map of East Kalimantan


Economics What makes good Project?

15

Economic viability for coal upgrading is dependent upon market and project specific variables:

o Market prices (for raw and upgraded coal)

o Properties of the raw coal

o Initial total moisture sets the feed:product (F:P) ratio

o Higher the F:P ratio, the lower the required raw coal cost to stay competitive

o A high ash content puts a ceiling on the ultimate calorific value

o Feed Coal Costs alternative market value vs. fully loaded mining cost

o Transportation costs (from mine/GTLE plant to point of sale)

GTLE analysis enables focused project assessment to identify market opportunities

o Focus towards high TM% (+40%TM) with low ash

o Stranded reserves - Can use mining costs instead of market price

o Close to port/market - low cost (or low investment required) for transport to market


16

Indonesian Project Example

PILOT TRIAL COAL RESULTS Raw Coal Raw Coal

GTLE Product

AR Basis Dry Basis AR Basis

Prox Assay

Moisture 45.0% 0% 14.0% Ash 2.9% 5.3% 4.6% VM 29.4% 53.5% 46.0% FC 22.7% 41.2% 35.4%

Sulfur % 0.15% 0.3% 0.2% Kcal/kg HHV 3,500 6,365 5,475

Data reported on a Gross As Received (GAR) basis

LIFE OF MINE AVERAGE Raw Coal Raw Coal

GTLE Product

AR Basis Dry Basis AR Basis

Prox Assay

Moisture 49.0% 0% 14.0% Ash 4.6% 9.1% 7.8% VM 23.9% 46.8% 40.3% FC 22.1% 44.1% 37.2%

Sulfur % 0.4% 0.8% 0.7% Kcal/kg HHV 3,035 5,950 5,120

Typical Indonesian target is upgrading from 3000-3500kcal to 5000-5500kcal

Can do higher/lower TM% - economics drive decision

Using GTLEs 1MMtpa project under development (as example):


Indonesian Example Price Sensitivity

17

INDO COAL (Based on 1MMtpa) COASTAL EXAMPLE USING HPB ICI Formula

RECENT (AVE Mar-Jul)

2012

CURRENT (Oct 2012)

LOW (March 2009)

GTLE Upgrade of a 49%TM Coal to 14%TM Product (approx. 3,035 to 5,120kcal)

FOB Vessel Indonesia $80.00 $68.00 $58.00

Less Indonesian Truck/Barge Transport (est.) 5.00 5.00 5.00

FOB Mine Netback Price $75.00 $63.00 $53.00

Less Cost of Coal (Market $ Raw/t x 1.62 yield) 35.80 29.30 25.30

Less Process Costs (labor, power, steam, maint.) 11.00 11.00 11.00

GTLE Technology Value Add $28.20 $22.70 $16.70

Less GTLE License Fees (Base + ~% of uplift indicative only) 4.70 4.00 3.00

GTLE Plant Margin (EBITDA) 23.50 18.70 13.70

Less Depreciation (20 years) 3.00 3.00 3.00

GTLE Plant Owner Upgrade Margin (EBIT) $20.50 $15.70 $10.70

Unleveraged EBITDA ROI on Investment - % 38% 32% 22%

Leveraged ROI (free-cash) on Investment - % 79% 62% 38%

FOB Raw Coal Cost - Transport = Coal Input Cost or Mining Cost $21.23 $17.36 (Floor) ~$15.00


GTLE Business Strategy

18

Geographic Markets Product Markets

Business Model

Current GTLE Focus

Seaborne thermal export

Indonesia New Zealand

USA

Licensing

Project Development

Resources Equipment

India

Australia

Other Asia

Gasification

Biomass

Other Other

China

Coking

Operations


Summary

Simple and Distinctive Approach: Unique technology, validated by SENZ, that works with a broad range of coals

Global Opportunity for Value Generation: Technology converts uneconomic low rank coal reserves into valuable, marketable assets to meet rapidly growing demand.

Capable Team: Strong board and management team with engineering, technology, mining, finance experience, developed across US, Asian, Australasian and European markets.

Deployment In Progress: Commercialization underway with a demonstration plant in USA, a commercial scale plant nearing completion in NZ, and a commercial scale plant under development in Indonesia.

For more information,

please write: [email protected]

or visit: www.gtlenergy.com.au

Australia: North America:

140 Greenhill Road 1011 East Murray Holladay Rd

UNLEY South Australia Suite 100

5061 SALT LAKE CITY, Utah 84117

Australia USA

Tel: +61 414 257 900 Tel: +1 (801) 871-0300

blake gtle overview slides for coaltrans bkk 2012-11-16 final

Documents

gtl energy limited

low temperature coal

challenges of coal

technology gtle process

low rank coal assets

gtle technology difference

thailand coaltrans

coal chemicals gasification