PRESENTATION

1. Introduction of CTL Plant Project
(for Coal Mongolia 2014)
Baganuur Energy Corporation LLC
February, 2014

2. Project introduction
2
Project owners
• “Baganuur Energy Corporation” LLC
• 50:50 joint venture company between MCS (Mongolia) and POSCO (South
Korea)
Purpose of the
Project
• To produce liquid fuels from Mongolian coal
• To produce clean gas fuel to solve UB air pollution
Project site
• 3rd khoroo, Industrial zone B, Baganuur district, Ulaanbaatar
CAPEX • USD 2 billion
Capacity
• Diesel 456 ktpa
• Gasoline 90 ktpa
• DME 100 ktpa
Feedstock
• Baganuur 4.2 mt
• Ukhaa Khudag 3.0 mt
Annual tax duties • USD 100 million

3. MCS and POSCO signed Joint Venture agreement to implement CTL Plant
Project
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4. About MCS Group
4
Mining
Property
Development
& Investment
Engineering &
Infrastructure
Other
FMCG
ICT
MMC/0975.HK (UHG
ooking coal mine)
• MCS Property
• MCS Estate
• Shangri-La
Hotel
• Green catering
• MCS International
(Power & Infrastructure)
• Unitel Group (mobile
phone operator)
• MCS Coca Cola
• MCS APB
• Mongolian Beverage
company
• Anungoo
• Sky Resort
• Goyo Cashmere
• IMC Hospital
 MCS Group was founded in 1993
 2nd largest taxpayer in Mongolia for last decade
 Over 8.600 employees

5. About POSCO
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6. POSCO-SNG plant
6
• POSCO is currently implementing SNG Plant project:
– Location: Gwangyang, South Korea
– Capacity: 500 ktpa SNG
– Feedstock: Imported Coal (Indonesia)
– Startup: first half of 2014

7. Economic growth and petroleum products consumption of Mongolia
• Real growth of Mongolian economy averaged
9%, in 2002-2013.
– Diesel average annual growth was 12%.
– Gasoline average annual growth was 5%.
7
• Estimated petroleum consumption in
2020:
- Diesel: 2~3 mtpa
- Gasoline: 0.6~1.4 mtpa
162 174 191 208 258 271 306
388 429 416
502
647 717 773
2 500
-
500
1 000
1 500
2 000
2 500
3 000
3 500
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2020
Diesel Import Volume (in kt)
3,000
234224244250270255275
346
367
323286
325
389380
600
-
200
400
600
800
1 000
1 200
1 400
1 600
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2020
Gasoline Import Volume (in kt)
1,400

8. Economic burden of petroleum import
8
0,00
1,00
2,00
3,00
4,00
5,00
6,00
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
FuelImport,bil.USD
1.05
CHP-5
1.31 1.59
1.93
2.32
2.85
3.5
4.37
5.57
CTL Plant
1.26
1. Оyu Tolgoi
2. Sainshand industrial park
3. Railway
4. Paved road
5. CHP
6. Cement plant …

9. 9
The level of air pollution in Ulaanbaatar had reached disaster level
Source: World bank
Ulaanbaatar 2008-2009
WHO Interim
WHO AQG

10. 10
Project objectives and resources
Coal
22
Gas fuels
Peak load
demand
Diesel
Gasoline
Steel products
Chemical
products
Exploitation proven
(billion tonnes)
Coal
gasification
?
Natural gas
Crude oil
Oil shale
0.043
Fischer-
Tropsch
DME
Power
Plant
DRI
Chemic
al plant
Domestic resource Industry
?
Decrease
import
dependency
Decrease
air pollution
Export
products
Steel
production
Decrease
import
dependency

11. 11
Coal Industry FS Studies’ History
• All coal processing technologies were studied.
• Coal gasification + FT plant was selected due to its economic performance and
strategical importance.
Thermal
coal
Coking
Coal
Combustion • Power generation
Gasification
Semi-coke
Coking
• Diesel
• Gas fuels
• Semi-coke
• Diesel oil
• Others
• Cokes
• Gas fuels
• Chemicals
F/S completed
F/S completed
F/S completed
F/S completed
FT
MTG
• Gasoline
• Gas fuels
F/S completed

12. 12
CTL Project of Baganuur Energy Corporation
• Feasibility study: - (Canada)
- HQCEC (China)
• EPC: - POSCO E&C and MCS international LLC
DME synthesis
100 ktpa
Coal
Baganuur 4.5 mtpa
UHG 3.0 mtpa
Coal
Gasification
FT reactor
• Diesel fuel
• Gasoline
• Gas fuel
90 ktpa
456 ktpa
Air
Separation
Syngas
purification

13. CTL Plant Layout
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Air separation
Unit
Power
Plant
Fischer-Tropsch Unit Water
Treatment
Unit
Storage and
Tanks
Methanol and
DME Unit
Sulfur
Recovery Unit
Syngas Processing
Unit
Administration
Building
Gasification
Unit
Coal Preparation
Unit
Security Check
Point
Parking Lot
Gas Cooling

14. Location of CTL plant
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15. CTL – fuel quality
15
 CTL fuel is very clean.
 Compared to convention diesel fuel, CTL diesel fuel can reduce:
 NOx emission by 45%
 Particulate matter by 40%
 Hydrocarbons by 60%
 CO by 45%.

16. CTL project development
• Joint Project Team (20 persons from MCS and 15 persons from POSCO) is working on
the CTL project implementation.
• Below is main timeline of the project.
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17. Conclusion
To reduce import dependency
• Mongolian petroleum consumption is
estimated to reach 3.5 mtpa in 2020.
• It will reduce petroleum import
dependency, if CTL and other coal
gasification projects will be successfully
completed in Mongolia.
To reduce air pollution
• First step to completely solve air pollution
in Ulaanbaatar.
• 100,000 tpa of DME will cover 50% of ger
districts in Ulaanbaatar. Also, the
production capacity can be expanded if
necessary.
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18. Thank you for your attention
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