Transcript Slide 1

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Coal to Liquid a Viable Energy
Alternative
Theo L.K. Lee
Headwaters CTL, LLC.
Headwaters Energy Service, Utah USA
India Energy Conference, New Delhi, Oct 3 & 4 2008
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Scope of Presentation
Why coal-to-liquid (CTL)?
What is Headwaters DCL technology
How to deal with high ash coals
Strategy for implementing CTL project
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Indian Oil Balance
(BP Statistical Review)
Indian oil import projected to be 6 million BPD in 2030
CTL is the pragmatic alternative to imported crude
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India ranks 4th in coal reserves
(mostly high ash coals)
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Oil
Gas
Coal
Coal remains the cheapest energy option
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Recent steep increases in energy prices
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Maximizing the Value of Coal
Electricity Production
A choice to make:
Products
3 MWh electricity
Total
Value
$120
$120
Fuel and Power Production
1 ton
Coal
Indirect Coal
Liquefaction
Products
Value
0.083 MWh electricity
$3
0.28 bbls naphtha
$13
2.13 bbls diesel fuel $166
Total
$182
Fuel, Power & Fertilizer Production
Products
Value
0.31 MWh electricity
$12
0.30 bbls naphtha
$14
1.58 bbls diesel fuel
$123
0.30 t ammonium nitrate $105
Total
$254
Liquid fuel provides greater mobility
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CTL Technology Options
Direct Coal Liquefaction (DCL)
Coal + H2 Catalyst
linear + ring Hydrocarbons (CxH2x)
Coal/resid + H2 Catalyst linear + ring Hydrocarbons (CxH2x)
Indirect Coal Liquefaction (ICL)
1. Gasification: Coal + O2 + Steam
Syngas (H2 + CO)
Catalyst
2. FT Synthesis: H2 + CO
linear Hydrocarbons (CxH2x+2)
Catalyst
MTG Synth. : H2 + CO
ring Hydrocarbons
(CxH2x)
Note: Practiced during WWII by Germany
Hybrid Coal Liquefaction
Integration of Direct and Indirect Coal Liquefaction
Coal Properties and Product Objective
influence choice of technology
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Technology Performance
DCL
ICL
(recycle)
Hybrid
Thermal Efficiency (%)
58.0
44.6
55.1
Liquid Yield, bbl/short
ton
3.04
2.17
2.74
Carbon Utilization
Efficiency, (%)
53
34
45
Plant CO2 Generation,
(lbs/bbl product)
780
1560
1010
6 to 10
8 to 12
7 to 10
1.0
1.15 – 1.30
1.03
Water Consumption,
(ton/ton product)
Relative Capital
Investment
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Direct Coal Liquefaction Process
H2S, NH3, COx
Make-up
Hydrogen
Coal or
coal-resid
+ disposable
Fe catalyst
Recycle H2
C1 – C2
LPG
Gas Recovery
Treatment
HydroCoal
treating
Liquefaction
H-Donor
Slurry
Slurry
Fractionation
De-Ashed Solvent
Oil (DAO) De-ashing
Refining
Gasoline
Diesel Fuel
Heavy Vacuum
Gas Oil (HVGO)
Ash Reject
Can be omitted for low ash coal
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Petroleum Resid Hydrocracking Reactors
Tonen
Japan
Husky, Canada
PKN, Poland
Pemex, Salamanca
Mexico
Pemex, Tula
Mexico
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Shenhua Inner Mongolia 20,000 BPD DCL Plant
2005
Early
Headwaters’ 1st DCL license: End of 2008 Startup
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Refined DCL Liquids
- Shi, Yuhua (RIPP, Oct/04)
Properties
(5%, 90%)
Naphtha
(99,159oC )
Diesel
(195, 277oC)
Density, g/cm3 (20oC)
Viscosity, mm2/s (20oC)
S, ppm
N, ppm
Cetane No.
Acidity mgKOH/100ml
Oxidation Sludge, mg/100ml
Flash Point, oC
Cold Filter Plugging Point, oC
Solidification Point, oC
Compound Class Type Analysis, w%
Paraffin
Naphthlene
Aromatics
0.7641
<0.5
<0.5
0.8648
3.69 (3 ~ 8)
<5
(<2000)
<1
46.7 (>45)
0.4 (<7)
<0.3 (<2.5)
76
(>55)
-9
(<-5)
-26 (<-10)
26.7
68.3
5.0
13.3
81.9
4.8
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Approach in Processing High Ash Indian Coal
High ash coal:
– lower efficiency
– higher maintenance cost
Ash reduction prior to DCL
– Conventional coal washing
– Coal/oil agglomeration
– Solvent refined coal
Blending with low ash or no ash feedstock
– Gasification: petcoke (ash <30%)
– DCL: petroleum resid (ash < 12%)
(coal/oil co-processing)
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Economic Analysis of ICL Project
(US mine mouth location)
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Baler & O’Brien
(Mar/2007)
CAPEX
$85K per barrel/day capacity
OPEX
$15/bbl
Feedstock
$10 short ton
Total Liquid Yield 1.9 bbl/short ton
Distillate Price
122% of WTI
Equity
100%
No CO2 Capture
Breakeven crude oil price (WTI) = $48
To generate 12% after-tax IRR with no government incentive
Economics of CTL project depend on coal type, scale, & location
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Overview of Worldwide CTL Activities
China: to startup first DCL plant; ICL-FT, MTG, MTO
under design/construction; government controlled pace
USA: mostly ICL with emerging interest in DCL
Indonesia: Active partnership with Korean & Japanese
companies
India: Oil India Limited Assam DCL project; government
coal block allocation RFP (both ICL and DCL proposals)
Australia: UCG & ICL-FT activities
Mongolia, Columbia, etc..
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CTL Strategies/Key Points for Success
 Coal reserve secured and accessible
 Proven technology and adequate security package
 Robust and experienced contractor
 Deep pocket sponsors for completion &
performance risk
 Optimal financing structure (low debt/equity ratio)
 Sound risk allocation strategy
 Use derivatives to control commodity risk
 Positive government policy incentives
SNC-Lavalin
April 2008
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Cost Breakdown of ICL – FT Plant
Fischer-Tropsch
Synthesis 12%
Product
Recovery/Refining
5%
Power Block
18%
Coal
handling/Prep
9%
Gas Cleaning
&
Conditioning
20%
Syngas
Total 56%
Air Separation
9%
Gasification 27%
Baler & O’Brien
(Mar/2007)
$80 to 100K per barrel/day capacity (US location)
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