Transcript Mini-Methanol Plant Tata MESSIRI Senior Special Assistant (DTSG/OPTS Initiative) to Governor of Delta State, Nigeria.

Mini-Methanol Plant
Tata MESSIRI
Senior Special Assistant (DTSG/OPTS Initiative)
to Governor of Delta State, Nigeria
Presentation format
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What is DTSG/OPTS Initiative?
Why methanol?
Why small scale methanol?
Sustainability and sustainable development
Economics of methanol production
Methanol production process
Small scale methanol plant parameters
Multiplier effects associated with methanol
Project Partners
Next Steps
DTSG/OPTS Initiative
• DTSG-Delta State
Government
• OPTS-Oil Producers Trade
Section of the Lagos
Chambers of Commerce
• INITIATIVE=To bring about
sustained and sustainable
livelihoods for the people in
the Delta State
Why Methanol?
ESTIMATED CAPITAL COST, GAS INPUT AND REVENUE GENERATION FOR PROPOSED PRODUCTION UNITS IN
INDUSTRIAL ESTATE CLOSE TO OIL FIELDS
ANNUAL GAS INPUT
S/
N
1
PLANT
LPG Plant
ESTIMATED
PLANT
COST ($
MILLION
25
QTY
(BILLI
ON
SCF)
bscf
20.00
COST
OF
GAS($/
SCF)
0.25
COST
($
MILLIO
N)
5.000
ANNUAL OUTPUTS
PRODUCTS
LPG
(12.17%)
Dry gas
(85.10%)
Condensate
(1.61%)
UNIT
PRODUCT
UNIT
COSTS ($)
142,930
tonnes
150
21.440
17,000,000
000scf
0.5
8.500
bbls
20
6.008
QTY
300,400
PRODUCT
VALUE ($
MILLION)
RATIO
PRODUCT
VALUE TO
GAS INPUT
7
2
Methanol
20
1.13
0.50
0.565
Methanol
32,000
tonnes
180
5.760
10
3
Ammonia
25
1.05
0.50
0.525
Ammonia
32,000
tonnes
200
6.400
12
4
Ammonia/
Urea
Complex
45
1.05
0.50
0.525
Urea
55,680
tonnes
200
11.136
21
Carbon black
40,000
tonnes
1,000
40.000
80
2.40
0.50
5
Carbon
Black
1.200
Hydrogen
5
33
bscf
Energy
6
7
8
9
Direct
Reduced
Iron (DRI)
Bio
proteins
225
45
6.73
0.90
Cassava
Starch,
ethanol,
methanol
Power
generation
(50 MW)
0.50
0.50
3.365
0.450
DRI
600,000
tonnes
120
72.000
10,000
tonnes
1,000
10.000
22
MWh
50
21.900
12
21
Off gases
Bio proteins
Cassava
0.50
25
3.74
0.50
-
1.870
Starch
Electrical
Power
438,000
Why small scale methanol?
• It takes about 8years for permitting and construction of
a large world scale methanol plant. A small scale
methanol plant can be up and running in about 2 years.
• The agitation and unrest in the Niger Delta will not wait
to be resolved in 8years time.
• Moreover, several small scale plants will employ more
people than one large scale plant.
• Small methanol plants are less sophisticated and
therefore more appropriate for developing countries
• However, there is a problem today for small oil fields in
Delta (250 or more), some of which have to install
gathering lines for associated natural gas at prohibitive
cost. These fields with small natural gas (only
4mmSCFD) can support a 100tonne/day methanol
production plant.
• If a small plant were to have favorable financing and
low-cost gas, it could in fact be competitive with the
large plants in a local fuel market.
Sustainability and Sustainable development
• Sustainable Development
– Helping mitigate CO2 emissions (global
environment)
– Improving health & standards of living, reducing
poverty (social pillar)
– Increasing local employment and productive use
(economic pillar)
– Reducing deforestation and improving indoor air
quality (local environment)
– Energy interacts with people’s lives in many
different ways, from the basic survival activities
to increasing productivity.
– Productivity can be increased by extending the
working day with lighting and by mechanization.
– It can free up their time, improve their health
and well-being, and open up opportunities.
– Energy services can contribute in a number of
ways to the efficient performance of healthcare
delivery system, for example, through ensuring
reliable heating, lighting, sterilization and
refrigeration, as well as safe disposal of medical
waste.
– Use of biomass fuels for cooking and space
heating creates indoor air pollution, which has
been linked with increased rates of acute
respiratory tract infection (ARI) in children
• Why can methanol be the bridge to
sustainability?
– Methanol can be made at low cost from natural gas
– There is enough flared gas in Nigeria to supply
every family in Sub-Saharan Africa with methanol
for cooking fuel.
– Methanol is a splendid cooking fuel, and there has
been in use for decades a very efficient stove in
which to burn it.
– Methanol can eventually be made from biomass by
known technology when we learn to produce
enough biomass sustainably at low cost.
– Methanol is a nearly ideal fuel in internal
combustion engines or for fuel cells, and an equally
ideal fuel to replace the still enormous consumption
of wood as a cooking fuel in developing countries.
– Its use will eliminate the smoke and soot produced
in the household when wood is burned, and will
reduce household CO2 and greenhouse gas (GHG)
production by about 5/6 when compared to using
non-replaced forests for fuel.
– It is also very attractive as a replacement for the
more expensive and valuable kerosene, which has
enormous liabilities as a household fuel.
– It is handled as a liquid but burns as a gas
– It does not require expensive cylinders and
regulators to be deployed.
Biomass vs. Commercial Energy in Nigerian and Sub Saharan Africa
Biomass(mtoe)
Oil Products(mtoe)
Electricity(mtoe) Biomass(%) O ilProducts(%) Electricity(%)
Nigeria
60,212
866
834
Sub Saharan Africa (12)
114,043
2,016
1,710
Source: IEA: Energy Statistics and Balances of Non-OECD Countries, 1997 (1999 Edition)
97.3
96.8
1.4
1.7
1.3
1.5
Economics of Methanol production
Projected Plant Price for Current 5000 tpd Plants Under
Construction
Capital
Battery limits
($233/annual ton)
$384,000,000
Off Sites
(58/annual ton)
96,000,000
Total
($291/annual ton)
$480,000,000
Plant Price $/ton
Capital charge
Feed and Fuel
Plant operating and maint.
Selling & Admin
Total Plant Price
¢/gal
50.6
8.3
16.7
1.7
77.3
¢/liter
15.2
2.5
5.0
0.5
23.2
4.0
0.66
1.32
.13
6.11
This plant price assumes 330 days per year operation at full capacity.
Capital charges are based on 30% equity, 70% loan at 10% interest per
annum payable over 10 years (usual commercial rates).
A more likely scenario would be 80% of the above assumed capacity This
raises the plant price to $94 per ton (28 cents/gal, or 7.4 cents/liter). This
is at the plant gate. If cognizance is taken for transportation from far from
small users and repackaging into small lots, we arrive at cost closer to
twice this amount say 56¢ and over per liter. This costs we already have
where refined petroleum products are costing 2 – 3 times in the riverine
areas what it costs in the urban centers.
Projected cost for methanol from modular plants
¢/gallon
¢/liter
Salaries
2.0
0.5
Feed and Fuel
3.1
0.8
Purchased Power
0.1
0.0
Catalyst and Chemicals
0.9
0.2
Maintenance on Plant
4.9
1.3
Raw Water
0.1
0.0
Insurance and Taxes
1.7
0.5
Capital Charges
23.8
6.3
Total
36.6
$/ton
6.7
10.3
0.3
3.0
16.3
0.3
5.7
79.3
122.0
Small scale plant is built on a modular skid mounted basis and so does not
obey the 0.67 capacity factor rule but is in fact about 67% of what using
the 0.67 factor rule would have cost.
Capital charges assume 30% equity, 70% loan at 8% interest per annum
payable over 15 years. This is a leveraged loan through multilateral aid
organizations, GGFR or other mechanism. Even at this capital charges are
still about 150% that for a large scale plant.
When transportation fees and lower than100% capacity utilization is taken
into consideration, price to consumer would be between 40¢ and 70¢ per
gallon or 10¢ to 18¢ per liter.
Methanol Production Process
• 25-100 TPD
Hydrocarbon Feed
Feed
Pretreatment
Steam Reforming
and Heat
Recovery
Methanol Product
Methanol
Distillation
Methanol
Synthesis
Cooling and
Compression
Small scale methanol plant parameters
• Process
– Desulfurization of natural gas
– Catalytic Steam/Hydrocarbon
Reforming
– Heat Recovery from Process
Gas
– Synthesis Gas Compression
– Synthesis Gas Loop
– Methanol Distillation
• Units
– Reforming System and Heat
Recovery
– Methanol Synthesis Loop
– Methanol Distillation
– Offsites
• Feed – Natural gas composition
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Methane
Sulfur
LHV
HHV
79.62%(v) approx.
10ppm(v) max
9,104kcal/ncm
10,054kcal/ncm
• Product – methanol composition
– Methanol 99.85%(wt) min.
– Water content
0.5%(wt) max.
– Specific gravity 0.7885 max
• Utilities requirements
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Natural gas
1,008 ncm/mt
Raw water
2,069 kg/mt
Nitrogen(startup)75ncm/hr for 8hrs
Electrical power
552 kwh/mt
Methanol fuelled
absorption cooling
Methanol fuelled lantern
Methanol fuelled cookstove
Methanol fuelled microturbine
Deforestation can be arrested by the use of
methanol cookstoves
Flaring reduced from conversion of associated
gas to methanol
Power generation can be fuelled with readily
available methanol
Agro-processing can be increased from
availability of commercial energy
Methanol in our lives
Desirability of small scale methanol
processing for oil producing areas in Nigeria
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Methanol can be in made in small scale
modular plants from stranded flared gas
that would be difficult or uneconomical
to transport for processing to LNG or
other facilities by pipeline thereby
achieving faster flare down
Methanol burns as efficiently as a
liquefied petroleum gas
Methanol would be cheaper to produce
and is more available than kerosene
Methanol is soluble in water and
therefore easy to extinguish in
households
Methanol is easier to transport and
market than liquefied petroleum gas; and
does not require pipeline infrastructure
like natural gas
Methanol will therefore act as a
replacement for both wood and liquefied
petroleum gas
Methanol can be mixed with ethanol to
achieve the ongoing Federal Government
initiative to link rural development to the
energy sector
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100t/d methanol plant will provide
cooking energy for 125,000 families
Each 100t/d methanol plant will mop up
4mmcfd of flared gas
100t/d methanol plant will prevent the
cutting of 500t/day of wood, replace
about 100t/day of kerosene or liquefied
petroleum gas.
Methanol availability and use will
improve productivity in the rural areas
where over 70% of our population live.
Methanol use as a household fuel will
improve indoor air quality, reduce
deforestation and reduce flaring.
Nigeria with a population in excess of
120 million can accommodate 200 nos
100t/d plants. There are over 250 small
oilfields in the Niger Delta and this is an
opportunity to generate economic
activity and employment in these
communities.
The fuel methanol industry will improve
power availability through micro and
mini power generation
Methanol availability will jumpstart the
chemical industry based on methanolformaldehyde, synthetic glues, acetic
acid, vinyl acetate, etc.
Project Partners
• Delta State Government,
through its Ministry of Power
and Energy
• Bayelsa State Government
• Centre for Household Energy
and Environment (CEHEEN), a
Delta region NGO specializing
in stoves and household
energy
• Local business interests
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Methanol production
Stove production
Lantern production
Refrigerator production
Internal combustion engine
modification
• Dometic AB, a Swedish
company, alcohol stove and
appliance manufacturer
• HydroChem, a Division of
Linde AG and producer of
small-scale gas synthesis
equipment
• SASOL Chemicals, a producer
of synthetic ethanol and
methanol in South Africa
• The United States
Environmental Protection
Agency (USEPA) "Partners for
Clean Indoor Air" (PCIA)
• United Statas Agency for
International Development
(US AID)
Preliminary indications from pilot study
• LOW-/MEDIUM-INCOME
SECTORS
– Kerosene will be displaced
because it is more expensive,
less efficient, indoor air quality
is impaired when used, etc.
– Fuel wood will also be
displaced because of its
convenience, better indoor air
quality.
– Price of the stove and fuel will
be a deterrent.
– Use of micro-credit could offset
this deterrent.
– CERs can play a decisive role
and it would be innovative with
consumers being the actual
beneficiaries of their savings to
the climate
• HIGH INCOME SECTOR
– LPG will be displaced because
of unavailability of product and
disadvantages associated with
packaging in heavy pressurized
cylinders.
– Electric cookers will also be
displaced because of regular
and unpredictable power
outages.
– Cost is not an issue.
– If a CDM methodology can be
developed CERs due from the
project can be applied for the
purchase of stoves for low
income users.
Next Steps:
• The GGFR Initiative should support
WIN-WIN scenarios related to the 3
pillars of sustainable development –
economic, social, environment.
• Developing small-scale use of
methanol at local / regional level will
take advantage from use of flared
gas,
– helping mitigate CO2 emissions (global
environment)
while
– improving health & standards of living,
reducing poverty (social pillar)
– increasing local employment and productive
use (economic pillar)
– reducing deforestation and indoor air
pollution (local environment)
• Economic empowerment of the oil
producing communities will reduce
the unrest and restiveness thereby
improving operating profits and
image of IOCs and government
• Sign MOU with all Methanol Alliance
parties
• Carry out detailed feasibility studies
and business plan
• Identify stranded associated gas fields
• Put in place political and other
necessary risk guarantees
• Match local and international
investors and partners
• Develop a CDM Methodology for the
project
• Develop a micro-credit scheme for the
financing of purchase of the stoves
• Need support from GGFR partners
active in Nigeria
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Federal Government of Nigeria
Shell Petroleum Development Co.
ChevronTexaco
World Bank/IFC