Introduction to Africary’s Theunissen 50 MW IPP Project ...

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

Mr. Johan Brand,

Director,

African Carbon Energy

[email protected]

10 October 2017

Introduction to Africary’s Theunissen

50 MW – IPP Project

600 MW – PPP Project

1,950 bbl/day – CtL Project


Location of Theunissen UCG 16 tcf exploration and production (E&P) Facility


Resource Classification

AreaSAMREC *

Classification

Gross CoalVolumes

(million tons)

Gross SyngasVolumes (PJ)

SPE Category**Gross GasVolumes

(tcf)

UCG Project Measured 3.7 721P Reserve

(Proven) 15 years72 bcf

PalmietkuilFarms

Indicated+

Inferred

5.0+

21447

2P Reserve (Proven + Probable)

120 years0.5 tcf

TheunissenResource

Inferred 1,000 16,5603P Reserve

(Proven + Probable + Possible)

16.6 tcf

3

* SAMREC classification as signed off by a Competent person.

**SPE = Society of Petroleum Engineers category, but the values in the table are indicative only


The TUCG Project Status

Step 1: Domestic Gas-IPP program a suitable electricity Market - from DOE

Step 2: Purchased UCG coal 2012: 1 billion ton Resource - from BHP

Step 3: Explored the resource and obtain surface rights (600 ha)

Step 4: Designed and finalized engineering for the mine & 50MW power station

Step 5: Bankable Feasibility Study + Financial assessment – PWC

Step 6: Received Environmental Approval & Emission permits in 2015

Step 7: Received Mining Right Application Approval in 2016

Step 8: Bank project support approval – Signed Nedbank

Step 9: EPC and O&M service level agreements – Signed Group5

Step 10: IPP Office indicated domestic Gas RFP in 2018

PPA Offtake Agreement and Financial Close by Q4/2018

Operations planned from Q4/2020 [24 month construction period]


PPP – 600 MW

5


UCG Cost breakdown for 600MW

7


Africary’s future:120 year’s of coal under our farms

8

60 years of production in the East Farm


OWNERS CAPACITY (bbls/ day)

NATREF (Total + Sasol) 108 5000

SASOL >160 000

SAPREF (Shell + BP) 180 000

PETROSA 45 000

CHEFREF (Chevron + Caltex) 110 000

Liquid fuels production


Flow Scheme Options

10

Combined Heat and Power Generation

Methanol& Higher Alcohols

Substitute Natural Gas (SNG)

FT Syncrude

Hydrogen

GasificationSyngas

To Oxo Chemicals & Derivatives

MTBEFormaldehideDMEAcetic AcidAcetaldehydeAcetic AnhydrideChloromethanesDMTMMAMethyl Amine

Ethylene & Propylene

Gasoline &Diesel Fuel

Gasoline & Diesel FuelEthylene & Propylene

Urea (fertiliser)

To Refining Upgradingto Naphtha Steam CrackerAlpha OlifinsLube Oil Based StockSpecial Waxes

To Hydrogenation (Pet refining & Others)To HydrocrackingTo Ammonia SynthesisPossible Fuel-Cell Fuel

Possible Fuel-Cell Fuel

IGCC (Integrated

Gasification Combined

Cycle) or Gas-Engine


World Bank mini-GTL evaluation

Overall Risk and Time to Commercialization

TIME TO COMMERCIALIZATION

OV

ER

ALL R

ISK

LONGSHORT

HIGH

LOW

METHION

OBERON

Africary has signed agreement with CGTL to perform a CTL study for 2,000 bbl/day


12

CompactGTL’s Demonstration Plant Aracaju, Brazil


Case 1a: Dual stage FT unit with H2:CO ~1.92 and cooler on FT tail gas

Syngas from

Battery limits

PSA /

membrane

(TBC)

P2P1

P5

Make-up H2

FT reaction

water

FT tail gas

to fuel

Syngas

to FT

Battery limits of FT unit

P4 Synthetic crude

FT stage 1 FT stage 2

FT cooling system

To fuel gas

P3

Tag Description Mass flow [kg/h]

Vol flow Properties Remarks

P1 Syngas from battery limits 30000 57650Nm3/h See Table 1 Assumed feed gas composition as per Africary Process Design Basis document

P2 Syngas to FT unit 30000 57650Nm3/h See Table 1 Feed gas rate to FT reactors to be finalised when H2generation scheme defined

P4 Synthetic crude (from FT) 6220 1210bpd

Reference (for Case 1a&

Case1b)

Routed to Upgrader for naphthta & diesel production Note: Syncrude for this case (Case 1a) used as reference to evaluate impact of TG chiller

P3 FT tail gas (to fuel) 13030 18150Nm3/h See Table 2 Indicative composition of fuel gas assuming no FT tail gas recycle

P5 FT reactionwater 10440 - See Table 3 Typical composition of combined FT reaction water from product separators in FT unit.


http://www.sapia.org.za/

Positive Economic Impact

UCG-Polygeneration cost benefits are:

Modular design reduce complexity

Quick (24 months) implementation

Production can be scaled between electricity and liquid fuels

The SA economy has huge demand for LPG, LNG and Hydrogen as alternative fuels

Naphtha production is discouraged with almost no market / demand

The South African Basic Fuel Price

(BFP) is ~ R6.00 per litre or about

$60-70 / bbl and provides a hedge

against the USD oil price


The economics – Max Fuels

Product Own Use UnitSellable

Production UnitPrice

(ZAR)/unitTurnover

(Rm/year)Annual

Turnover

Oxygenlocal

productionkg/hr kg/hr 0.00 R -0

R 1 642

Nitrogen 5 000 kg/hr kg/hr 0.10 R -4CO2 / (Credits) 10 000 kg/hr kg/hr (0.10) R 8Coal 67 074 kg/hr kg/hr 0.14 R -75Water 62 m3/hr kg/hr 0.01 R -4Electricity 27 MWh 27 MWh 1 030 R 2Diesel 11 294 litre/hr 6.00 R 564Naphtha 200 kg/hr 1 484 litre/hr 6.00 R 64LPG 35 kg/hr 72 kg/hr 17.00 R 5LNG/CNG 8 150 kg/hr 8.00 R 543

Hydrogen 90 580 kg/hr 132.00 R 538Sulphur 206 kg/hr 1.00 R 2

UCG-Polygeneration with several products:

Oxygen requires 8 MWe and is incorporated in the Own Use.

The main sellable product is Ultra Low Sulphur Diesel

LNG/CNG production has a price premium, due to lower fuel taxes

Production can be scaled between electricity and liquid fuels, but in this case Electricity is minimized and is operated on tail and waste gas streams

Hydrogen is priced at $10/kg

Naphtha production to be sold as Illuminating Paraffin.


The Economics – Max Fuels

Opex includes a 10 year payment at 10% interest of R 4,658 billion

Preliminary financials supports a UCG polygeneration detail study and cost modeling

CAPEX Cost Unit Quantity Unit Exchange rate

Gross annual profit

ASU 13 $/bbl 1 950 bbl/day 13.20 R/Euro R 341

R 651

UCG 15 $/bbl 1 950 bbl/day 13.20 R 379Shift + AGR 31 $/bbl 1 950 bbl/day 13.20 R/Euro R 791FT + Refining 53 $/bbl 1 950 bbl/day 13.20 R/Euro R 1 364LNG 680 $/tpa 70 416 t/a 13.20 R/$ R 632H2 PSA + Compression 5 Euro 580 kg/hr 15.50 R/$ R 78Power Gen 650 Euro/kW 27 000 kW 13.20 R/Euro R 373OBL 12 $/bbl 1 950 bbl/day R 300Indirect and EPCM 19 $/bbl 1 950 bbl/day R 500

Total R 4 658

OPEX Cost Unit Quantity Unit Exchange rateGas Processing + FT 15 $/bbl 1 950 bbl/day 13.20 R/$ R 141Powergen excluding fuel 15 $/MW 27 kW 13.20 R/$ R 45Overheads 5 $/bbl 1 950 bbl/day 13.20 R/$ R 47Capital and Interest R 758

R 991


Step 1: Purchased UCG coal 2012: 1 billion ton Resource

Step 2: Approved Mining Right Application in 2016

Step 3: Measured 3.7 mT and obtain surface rights (600 ha)

Step 4: Market: Domestic Gas-IPP program + ULSD + LNG

Step 5: Environmental Approval – Half way if power is approved

Step 6: Designed and finalize PFS and BFS engineering for UCG & 30MW & 1,950 bbl/day

Step 7: Financial assessment and then Bankable Feasibility Study

Step 8: IDC project support

Step 9: EPC and O&M service level agreements

Step 10: Offtake Agreements

The CTL Project Status

Introduction to Africary’s Theunissen 50 MW IPP Project ...

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