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GTL Energy - coal upgrading - Commercial plant proves technology

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GTL Energy coal upgrading - Commercial plant proves technology

• Working through the scale-up stages to reach commercial deployment of the Solid Energy plant in New Zealand
• Addressing all key risks to guarantee success
• Creating a platform for technology deployment in Asia through large scale project development

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GTL Energy - coal upgrading - Commercial plant proves technology

  1. 1. Blake Williams Bangkok, Thailand Coaltrans Emerging Asian Markets COAL UPGRADING COMMERCIALISATION
  2. 2. 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
  3. 3. Copyright: GTL Energy Limited: COALTRANS 15-16 Nov 2012 3 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 GTLE’s 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
  4. 4. Copyright: GTL Energy Limited: COALTRANS 15-16 Nov 2012 4 Compaction Reduces Pore Volume 4
  5. 5. Copyright: GTL Energy Limited: COALTRANS 15-16 Nov 2012 5 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 <150F, 65C), ambient pressure. Only water removed, no post-treatment required. Stability of Product: Had problems with coal moisture stability (staying dry) and propensity for spontaneous combustion. Mechanical processing collapses pore space: limits moisture reabsorption. Stockpile trials demonstrate stable product. Economics High CAPEX and OPEX – partly linked to complexity of process, high temp/energy, pressure process design or binders. Feasibility review indicates attractive economics for target coals and markets. Scale-Up Not proven at scale, or experienced problems in scale-up Demonstration at relevant commercial scale in North Dakota / New Zealand. Modular development approach mitigates risk. *Anecdotal, discussions with customers and publicly available information. ** Based on test programs to date, to be proven in the field by large volume production (residual risk)
  6. 6. Copyright: GTL Energy Limited: COALTRANS 15-16 Nov 2012 6 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.
  7. 7. 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 (FOB Indonesia) Newcastle Benchmark Pricing (FOB Australia) 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 specific.
  8. 8. Copyright: GTL Energy Limited: COALTRANS 15-16 Nov 2012 8 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)
  9. 9. Copyright: GTL Energy Limited: COALTRANS 15-16 Nov 2012 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
  10. 10. Copyright: GTL Energy Limited: COALTRANS 15-16 Nov 2012 10 • 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)
  11. 11. Copyright: GTL Energy Limited: COALTRANS 15-16 Nov 2012 • 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
  12. 12. Copyright: GTL Energy Limited: COALTRANS 15-16 Nov 2012 • 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
  13. 13. Copyright: GTL Energy Limited: COALTRANS 15-16 Nov 2012 13 • 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
  14. 14. Copyright: GTL Energy Limited: COALTRANS 15-16 Nov 2012 14 • 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
  15. 15. Copyright: GTL Energy Limited: COALTRANS 15-16 Nov 2012 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. 16. Copyright: GTL Energy Limited: COALTRANS 15-16 Nov 2012 16 Indonesian Project Example PILOT TRIAL COAL RESULTS Raw CoalRaw 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 CoalRaw 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 GTLE’s 1MMtpa project under development (as example):
  17. 17. Copyright: GTL Energy Limited: COALTRANS 15-16 Nov 2012 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
  18. 18. Copyright: GTL Energy Limited: COALTRANS 15-16 Nov 2012 GTLE Business Strategy 18 Geographic MarketsProduct 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
  19. 19. Copyright: GTL Energy Limited: COALTRANS 15-16 Nov 2012 19 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.
  20. 20. Copyright: GTL Energy Limited: COALTRANS 15-16 Nov 2012 20 Find out more at the 2nd Coaltrans Emerging Asian Coal Markets Download the event brochure here >>>

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