Coal to Liq Westinghouse Flint ApegAnl Presentn09
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FOX CREEK COAL TO LIQUIDS PROJECT:GREEN FUELS FOR THE FUTURE
Presented by:
en n , . ng., . . - ro ec anager
APEGGA Professional Development DaysTELUS Convention Centre
Cal ar Alberta
Friday April 24, 2009
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Inexpert use of data in this presentation
could be harmful to your companys bottom line,and may shorten an otherwise promising career !
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Agenda
Alter NRG Cor orate Overview &
how the Fox Creek Coal-to-Liquids Projectgot started
Fox Creek Project Overview
Focus on Key Environmental Challenges- Carbon and Water Management
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Who is Alter NRG?
Alter NRG is a publicly traded (TSX: NRG; OTCQX: ANRGF) Canadian companyrovidin clean ener throu h asification
Right Assets Industry-leading Westinghouse plasma gasification technologyLarge coal resource (40,000 bbls/d for 50 years)
Right People
Experienced management and technical team
Track record of on-time, on-budget delivery
Staged growth
Right Plan
Strategic partnerships with industry leadersNumerous growth opportunities technology and energy revenues
Environmental concerns
Right Time
Our vision is to be a senior energy producer by becoming the worlds leading supplier
ncreas ng ong- erm g o a eman or energySpecial financing and tax incentives for clean energy projects
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of plasma gasification technology and developing environmentally sustainable and
economically viable gasification projects
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Target Markets
Large size Strong economic returns
Competitive advantage
Waste-To-Energy (WTE)
nv ronmen a a van age
onvert ng waste nto c ean energy power an steam an or transportat on ue w e re uc ngharmful air emissions and the need for landfills.
Power Plant Retrofi t
Converting coal and biomass into clean syngas prior to combustion, to meet all environmental
em ss ons s an ar s, an prov e eca es o a ona annu y ncome.Petroleum Coke
Converting the energy rich by-product of upgrading (petroleum coke) to useable energy such aspower, or liquid fuels.
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Coal-To-Liquids (CTL)
Converting our large coal asset into high-value liquid fuels like diesel, and naphtha.
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Gasification 101 continued
2 2
Carbon Monoxide & Hydrogen
. building blocks to many-
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Gasification 101
Liquids (e.g. diesel, naphtha)
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What is Plasma?
Plasma is a highly ionized gas
By controlling gas through the plasma torch and with the aid of a magneticfield, energy from the electric arc is transferred to the process gas
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What is Plasma Gasification?
What are the advantages of plasma gasification?
control provides:
- Ability to gasi fy blended feedstocks includingwaste
- High-quality syngas-- Better environmental performance
Energy efficient Plasma Torches use 2% to 5% of the energy input Facili ty Exports 80% of the energy input to clean
syngas
Alter NRG owns Westinghouse Plasma Corp. -
30 years and over $100 million of R&D throughWestinghouse
Proprietary IP with 22 active patents worldwide Performed hundreds of pilot tests on numerous feedstocks
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s tp p ot ac ty ocate n a son,PA
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Plasma Technology Milestones
Industry-leading Technology Worlds 1st Commercial-Scale Plasma Gasifier
Mihama Mikata operational in 2002Plasma technology used since 1989 by GM, Alcan, etc.- over 500,000 hours of industrial use
Worlds Largest Plasma Gasifier for WTEAdding Commercial Facilities
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Utashinai operational in 2003Pune being commissioned in 2008-09
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Our Competitive Advantage
Our Value: Provide clean energy at low cost ($2 to $4 per MMBtu) from cheap andabundant feedstocks includin waste biomass coal and etroleum coke.
Environmentally Responsible Plasma gasification can
reduce CO , NOx, SOx & PM
Commercially Proven
Two facilities in commercialoperation for more thanfive years
and other harmful emissions
Somerset power plant retrofitwill be the largest renewableenergy project in Mass.
Commercially operatingplasma torches for ~ 20 years
Independent third-party tech
reviews RW Beck, Hatch,AECOM, Juniper, Golder, etc.
Project size $50 - $300 million
reduced financingrequirements and quicker
time to com letion
Worlds only commercialplasma gasification WTEfacilities processing MSW
Worlds lar est hazardous
Multitude of feedstock inputs
Variety of outputs: syngas,steam, baseload power &liquid fuels
waste plasma gasificationfacility being commissioned
World-class plasmagasification pilot facility
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A Scalable & Flexible TechnologyIndustry-leading Technology
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Fox Creek Coal to Liquids Project
Location
Other Western Canada Gasification-based Projects
The Fox Creek Project Highlights and Economics
The Environmental Challenges- Carbon Capture & Storage- Managing Water Demand
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CTL Value PropositionHow Fox Creek Got Started
Capitalizing on the SpreadBetween Coal and Oil
High Value Diesel & Naphtha
Market Opportunity
CTL via gasification commercial for more than 30 years
addingvalue
Value per tonne
700
800
900
1000
Crude Oil (WTI)
Natural Gas (Nymex)
Coal Bi Sand Bar e
AddingValue
Netback over $70/ barrel ( US$80WTI) Enough low cost coal for40,000 bbls/d for 50 years
Coal Resource Specifically Suited For Gasification 200300
400
500
Close to major light oilfields forCO2 sequestration andto infrastructure, refineries and end markets
Execution PlanSource: World Coal Institute
0
2000 2001 2002 2003 2004 2005 2006 2007 2008
since 2008
Target operation by 2015 2016
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1 tonne coal = 1.5 bbls diesel
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Polygeneration Options
Low value added / No local marketSyngas as Clean Fuelm e 2 cap ure po en a
Synthetic Natural Gas Low value addedVery high CO2 yield vs. market
owerCO2 capture more costly
Hydrogen Good value on paper/ merchant market
Good CO2 capture economics
Liquid HC Fuels Highest value added outside of pet chemGood CO2 capture economics/EOR area
Ethanol Under investigation
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Fox Creek Coal to Liquids Project
Location of Coal Reserves
Fox Creek
Coal Resource
Grande
Prairie
Fox Creek
Coal Resource
Grande
Prairie
Edmonton
Calgary
Edmonton
Calgary
56,000 acres
850 mega-tonnes in place
468 mega-tonnes resources
close to existing road, rail &pipeline infrastructure
close to future EOR sites forconventional oil & gas
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Other Projects in Western CanadaUsing Gasification
ar ous o san s p an s heavy bitumen residues to hydrogen, CO2/CCS
- Coal to hydrogen, CO2 / CCS
(Belle Plaine, Sask.) Alberta / Sask Pet Coke to power, CO2 / CCS
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Fox Creek CTL Project Highlights
Extract coal using established surface mining technology
Produce diesel fuel and naphtha through gasification andconversion of synthesis gas ( syngas) to liquids
Capture and store the majority of the CO2 (CCS)
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Addressing ImportantStrategic Goals for Alberta
for Alberta Utilization of low rank coal resources in an environmentall
responsible manner
Conversion to clean, high-value energy, especially diesel fuel -
Carbon capture and storage part of the plan
Extension of conventional oil field life throu h enhanced oil
recovery (EOR)
New approaches to water management
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The Value Chain
Extraction Transportation/Processing F-T Processing
Cost to Mine & Process Coal = $43/tonne
Revenue = $165/tonne
CO2 Capture and Sale Naphtha
Approximate Gross Margin =
Sulphur Free Diesel (>70 cetane)
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Note: Assumptions based on 2015 under the 20,000 bbl case, Cost to process coal include all operating costs and sustaining capital
$122/tonne
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Preliminary Project Economics
Projected Leveraged Rates of Return Using Constant Pricing
Assumptions: IRR is based on a constant pricing with constant expenses. Leverage is based 50%debt, 7% interest rate.
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Main Project Metrics
UltimateInitial Phase
,
Make Up water, t/day*
,
5,000
,
10,000 moredetailslater
Products, b/dayDiesel
Naphtha
16,500
3,500
33,000
7,000
CO2 , t/daymmscfd
11,500220
23,000440
detailslater
owern erna
gen.n erna
gen.
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a preliminary estimate of best in class performance for CTL plants
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Surface Coal Mine
Dragline mininginvolves a series of
parallel open pits
5-35 metre overburden
As mining advances,
overburden excavated
is backfilled into thepreviously mined pit
n ng tec n ques arerelatively conventional
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Coal Properties, Reserves & Cost
FOX CREEK PROJECTASSAY OF RUN OF MINE COAL
Component % Weight
Carbon 41.59
-place
468 mega-tonnesresource at estimated
y rogen .
Oxygen 9.70
Nitrogen 1.05
$10/tonne cost
One tonne will convert to
1.5 barrels of l iquidSulphur 0.32
Ash 25.00
Moisture 20.00
wil l support 40,000 b/dliquids for 50 years
Total 100.00Heating Value,MJ/kg (btu/#)
16.2 (6,950)
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Other Project Elements
Coal Transportation, Preparation and Storage
Coal is trucked to a storage area at the coal-to-liquids plant Coal is conditioned for gasification
operations or land reclamation
Coal-to-Liquids Plant Coal gasified to syngas mixture of hydrogen and carbon monoxide
Syngas is processed to form a mixture of hydrocarbons, then
Steam & Fuel gas by-products used to generate steam/power
Co-product CO2 captured for EOR or other storage
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Coal to Liquids Plant
only main streams shown
AirAir
SeparationUnit
CO2
to EORincl. all H2S
Naphtha
& Diesel
process water
Coal from
Fox Creekmine
Gasifier
CO shift &
Gas cooling
rawsyngas
Gas
cleanup Productupgrading
Hydrogen sepn.
Fischer-Tropschs nthesis
Slag to disposal
fired heater
wastesteam
fuel gasquench water
make upwater
steam turbines
power exportto grid
internaluse
FOX CREEKCOAL PROJECT
LF J an 14,2008
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Where are we now?
Partner Selection & Discussion
Interested in those that bring technology or operating know-how
Other investors are also being sought
Commenced May 2008; one year
2010: Environmental Assessment and Project application
onsu a on
Stakeholder Consultation plan in place and already underway
Pre-Design Basis Work
Short-listing gasification, gas cleanup and FT technologies Enter into appropriate NDA agreements
Also use this period to confirm capital costs
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Confirming CO2 and water plans also key
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Market for Products
Diesel
Transportation fuels are increasingly in short supply across North America
and diesel demand is growing Expected start-up diesel production (13,500 barrels per day) represents
a ou o curren es ern ana a supp y
Diesel product is a very high quality (>70 cetane) blending stock, that can be
used to upgrade lower value stocks (e.g. oil sands products)
Naphtha
Used as a diluent to transport heavy crude oil in pipelines
Diluent is in short su l in Alberta and demand is rowin
Carbon Dioxide
Gasification captures 85% of plant CO2 in form suitable for nearby EOR
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t er storage opt ons or a ance o pro uct on vs. eman
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Project Schedule
2008 2009 2010 2011 2012 2013
Preliminary Disclosure (complete)
2014 2015
Terms Of Reference
Baseline Environmental Work
EIA / Project ApplicationMinesCoal to Liquids Plant
Regulatory Process Review
Approvals issued
Key Technology/Licensor Review
Engineering, Construction & Startup
MinesCoal to Liquids Plant
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Environmental Opportunities
Optimizing Water Supply & Net Use
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Carbon Dioxide Emissions
Comparing various sources - kg CO2 / m3 transportation fuelCO only. Other CO E not included except for LNG
kg/m340 APIcrude 20 APIcrude
Coker based refinery
Bitumen RecoveryUpgrading and Refining
low high
CTL
6,000
5,000 Dilute CO2
Captureready CO2
4,000
LNG
3,000 ProductionRefiningBy-Products
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, End use
Sources: T.J.McCann & Associates, LENEF Consulting, NETL, SAE/Argonne Lab - Figures do not include other GHG gases
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Carbon Capture & Sequestration
capacity, Mega-tonnes CO2
Coal Bed
Methane
gas & oilpools
9,00015,000
10,000
2,000 EOR
aquifers
sto rage @ 100 M-t/year = 360 years top 240 oil pools
capacity, Mega-tonne CO2
2,580
Source: CERI / T.J.McCann & Associates
top 350 gas pools
,
cost to sequester
$
/tonne
100
50
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Source: CERI 0 50 100 M-t/year
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Sequestration Options Considered
EOR market 2012 estimated
at 27,000 t/day for ~20 years
,but need alternatives tocover for EOR demandvariations
eep sa ne aqu ers
depleted gas reservoirs
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C i F C k d
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Comparing Fox Creek andDakota - Weyburn
Make no mistake about i tthe CCS and oil contribution aspects
Compare with the well known Dakota Gas Plant (ND) - Weyburn (Sask)heavy oil field link
Coal mined, t/day 18,000 (lignite) 13,500 (sub-bit)
Dakota - Weyburn Fox Creek - Local Fields
e y startup
Liquids Produced, b/day 28,000 (NG-boe) 20,000
,
EOR potential, mmboil 130 550years 10-15 25-30
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CO2 sequestered, Mega-t/year 1.8 4
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The Water Challenge
Carbon Capture & Sequestration
Optimizing Water Supply & Net Use
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The Water Challenge
recall this map
from a
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Main Factors Driving Water Policy
A Key Environmental Consideration in Alberta .
Reliable source of water for process is required, but river 30 miles
distance/$100 million plus environmental approval headacheswe do not need
s s e us ness an nanc a ncen ve o ge crea ve
Optimize water conservation
maximum recycle & reuse - zero river water critical review of demand vs. acceptable quality maximize air cooling; water for trim control only
For make up: potential sources of groundwater and surface waterarebeing investigated from mine operations; also investigating use ofbrackish/saline sources
In shortriver water is a last resort!
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Water management under investigationbut here is a work-in-progress plan!
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Water Demand Schematic
Boiler Feed Water180BFW make up 910
Water flows tonne/day or cubic metre/day
for 20,000 b/day case
Gasifier-Shift-Rx
CO2 recovery
Amine 320
Steam (240)Quench Twr 380blowdown 410 HRSG
blowdown
deaerator
Shift-FT
ma e up
Quench Twr 380
make up
Trim Water Coolin 200
CW
Compressor 140
scrubber drains
brine
Slag CoolingQuench 3650
1970
Cooler 1080
200
?
issue: keeping it cool
Waterin slag Waste Water
Collection-Treatment
600
ow own
2002080
40
1880treated water return
Mine & Surface Water
Brackish/Saline Watermake up
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Analyzing Water Balance Further
Water flows tonne/day or cubic metre/day
for 20 000 b/da case
Real Net Losses
c ua a e p ows
Rx Section 700Slag Cooling 3650
Gasifer-FT-Rx (net) 350Slag Cooling 2570
BFW Deaerator 180
a e pCW Make Up 200
5460
Brine 80Trim Cooling/W-W 400
3580
Sources
Recycled 1880
Mine & Surface * 2000Brackish/Saline ** 15805460
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* Not yet confirmed ** Supply virtually unlimitedno contingency included!
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Matching Needs to Sources
Water flows tonne/day or cubic metre/day for 20,000 b/day case
Slag Cooling 3650 Brackish/Saline Water (1580)
+ Plant Recycle and/or Mine water (2100)How much treatment needed ?
o ow own s reams nee any rea men
Reactor Section(non steam)
700 Use balance of Recycle stream (850)
Exact source will depend on treatment needed
BFW Make Up 910 Plant Recycle and/or Mine waterExact source will depend on treatment needed
Cooling WaterMake Up 200 Plant Recycle and/or Mine waterExact source will depend on treatment needed
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we need to get creative and no cooling towers!
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do we have a water back up plan?
Id kind of hoped
be further down the
list than Plan B !
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Summary
An important future-oriented coal opportunity for Alberta
Key Minister approvals-in-principle: April, 2008
Consistent with some important Alberta government drivers onAlberta CO2 policy & maximized value added in Alberta
,
Public Disclosure & Proposed Terms of Reference issued:June-October, 2008
Mine & CTL shows sound economics (>20% ROE)
Opportunity for project enhancements/redirection with partners
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S
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Summary
The environmental challenges in CO2 and water are ont e ront urner or ot t e government an s
85% of the project CO2 emissions will be captured andseques ere
We are getting creative to avoid water draw from rivers
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thank you!
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