Theunissen UCG Project - Underground coal gasification · PDF fileLube Oil Based Stock ... • Group Five agreed to be the EPC contractor for the Theunissen UCG Project ... be based

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

Mr. Johan Brand, Director,

African Carbon Energy

[email protected]

SA UCG Association Workshop

8 August 2016

Update on Africary’s

Theunissen UCG Project

Africary is proud to be a founding

member of the SA UCG Association

mailto:[email protected]


AFRICARY’s vision

“To build own and operate a

Modern Commercial UCG plant”and then grow to large scale Poly-generation

African Carbon Energy was established as a South African coal mining

company in 2009 as a 50:50 Partnership between Johan Brand and Eliphus

Monkoe

The company was founded on our expertise in mining, exploration,

gasification and specifically Underground Coal Gasification (UCG)

To utilize clean, green and efficient technologies based on UCG syngas in

Gas Engines or IGCC power systems

Future CtL Diesel opportunities


African Carbon Energy (“Africary”)

• 50% BEE Junior Coal Mining Company

• Focused on the growing market demand for electricity with a 20 year DoE - IPP base load off-take agreement

• From 2010 to 2012 Africary finalized the deal for a 1 billion ton coal resource from BHP Billiton SA that is ideally suited for UCG in the Free State

• We also bought 2 farms ideally placed for our first project


Where is the Theunissen UCG Project?


IPPProcurement Programme

Department of

Energy

(DoE)

National

Treasury

(NT)

Development

Bank of

Southern Africa

(DBSA)

IPP Procurement Programme

In 2012, the Minister of Energy directed thatnew IPP generation capacity should beprocured from hydro, coal and gas sources tosupport the South Africa’s base load energymix and added generation from gas as part ofthe medium-term risk mitigation strategy

The Determinations require that 3,126 MW ofbaseload and/or mid-merit from gas-firedpower generationThe gas will be from both imported anddomestic gas resources.

Government guaranteed 20 yearsovereign offtake by Eskom

http://www.dbsa.org/EN/Pages/default.aspx

http://www.energy.gov.za/

http://www.treasury.gov.za/


18 Months ago (2 Feb 2015) the IPP Office declared:

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY 7

IPP Office Communication - Update

• IPP Procurement Program Office are coordinating the development of the Gas Utilization Master Plan (GUMP)

• Minister of Energy Tina Joemat-Pettersson at World Energy Forum states on 22 Jan 2016 said that Gas-IPP will be launched by Fiscal Q2 (July-September 2016)

• 3,126 MW allocated for gas with special allocation for UCG as domestic gas supply• Africary UCG Project expecting bid opening in H2/2016

http://www.gov.za/speeches/minister-tina-joemat-pettersson-visit-world-energy-forum-wef-davos-switzerland-january-2016


Flow Scheme Options

8

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


Coal to 50 MWe

Coal to Gas:

Energy conversion is

75% to 85% efficient

Gas to Electricity:

Energy conversion is

38% efficient


Carbon Energy Australia

Injection well

Production well

10


11

UCG Gas Engines in commercial operation


15

Power Generation Gas Engines can operate on Syngas

produced directly from UCG


EPC supported by Group Five

9

• Group Five agreed to be the EPC contractor for the Theunissen UCG Project

• Past projects includes:• Saldana Steel 35MWe gas to power• Shell VRU’s – Installation of Vapour Recovery Units• Cabinda Gas Plant (Angola)• PetroSA, • Over 10,000 employees

http://www.g5.co.za/au_achievements.php


Project Finance supported by Nedbank

8

• Nedbank is the 4th largest bank in South Africa

• Financed $2,6 billion of Renewable Energy IPP projects since 2013

• Nedbank agreed to project finance 70% of the Africary 50MW project


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 by Q3/2016

PPA Offtake Agreement and Financial Close by Q3/2017

Operations planned from Q2/2019


Africary Project Progress

Gas RFP

Bid Opening;

Q3* 2016

(Nov 2016*)

PPA Finalisation

Project

Financial Close

Q3 2017

DoE Gas RFI

Registration

May 2015

to June 2015

EIA Approval +

Air emission

licence

Nov 2015

Completion of

Bankable Feasibility

Study in Q4 2014

PROJECT READY

for

IMPLEMENTATION

Engage Nedbank

& Group 5 as

Financier + EPC

2015

Construction and

Commissioning

and first

electricity

production by

H2/2019

24 moths


20

The Future of UCG

for South Africa


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

21

60 years of production in the East Farm


Resource Classification

AreaSAMREC *

Classification

Gross CoalVolumes

(million tons)

Gross Syngas

Volumes (PJ)SPE Category**

Gross GasVolumes (tcf)

UCG Project

Measured 3.7 721P Reserve

(Proven)72 bcf

PalmietkuilFarms

Indicated+

Inferred

5.0+

21447

2P Reserve (Proven + Probable)

0.5 tcf

TheunissenResource

Inferred 1,000 16,560

3P Reserve (Proven +

Probable + Possible)

16.6 tcf

22

* SAMREC classification as signed off by a Competent person.

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


Advantages of UCG technology – positive

environmental impact

UCG power generation produces 25% less CO2 per MWe and in large scale

Combined Cycle mode can reach energy efficiencies of up to 55%

compared to current 35%.

UCG has no dust particulate emissions or ash handling AND little or no

leaching of trace elements from ash when operated correctly / optimally

UCG mining and power generation uses much less water

Less sulphur and heavy metals are released or emitted by the UCG

process


Conventional Boilers produce smog

With UCG

no

SMOG!!

UCG Electricity does not release

particulates into the atmosphere!


What is the future of UCG in SA?

• Coal is to South Africa what oil has been to the industrialised world

• It provides 70% of the country’s energy needs and 93% of its electricity + CTL

• However, several concerns confront coal mining and usage in SA and the major issues include: – increasing costs,

– lowering coal quality,

– water scarcity,

– carbon taxes

– discard stockpiles and ash dumps causing dust storms and AMD.

• BUT: SA have no viable short to medium term domestic baseload alternative to coal!

25


What is the future of UCG in SA?

IGCC = Integrated Gasification Combined Cycle

• IGCC allows for +55% efficiencies and paired with UCG’sdiminutive water requirements & mitigation of discard and ash, provides the most cost-effective clean power solution

• Coal is going to remain a part of SA’s future. But its future must be based on cleaner coal and efficient technology

• The reality is that cleaner coal technologies like UCG power generation are urgently required because syngas remains South Africa’s only large scale domestic clean coal energy supply option!

26

Documents

Theunissen UCG Project - Underground coal gasification · PDF fileLube Oil Based Stock ... • Group Five agreed to be the EPC contractor for the Theunissen UCG Project ... be based