Blake Williams
Bangkok, Thailand
Coaltrans Emerging Asian Markets
November 15-16, 2012
COAL UPGRADING
COMMERCIALISATION
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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
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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
GTLEs 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
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Compaction Reduces Pore Volume
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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
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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.
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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 (FOBIndonesia)
Newcastle Benchmark Pricing (FOBAustralia)
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 specif ic.
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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)
Copyright: GTL Energy Limited: COALTRANS 15-16 Nov 2012
Commercial Scale Demonstration Facility (ND)
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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
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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)
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
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NZ Plant Status
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
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Project Development Path NZ Example
Significant maturing of technology through process of design, build, commissioning
Significant credibility to come from Operations
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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
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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
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Economics What makes good Project?
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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
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Indonesian Project Example
PILOT TRIAL COAL RESULTS Raw Coal Raw 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 Coal Raw 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 GTLEs 1MMtpa project under development (as example):
Copyright: GTL Energy Limited: COALTRANS 15-16 Nov 2012
Indonesian Example Price Sensitivity
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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
Copyright: GTL Energy Limited: COALTRANS 15-16 Nov 2012
GTLE Business Strategy
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Geographic Markets Product 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
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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.
For more information,
please write: [email protected]
or visit: www.gtlenergy.com.au
Australia: North America:
140 Greenhill Road 1011 East Murray Holladay Rd
UNLEY South Australia Suite 100
5061 SALT LAKE CITY, Utah 84117
Australia USA
Tel: +61 414 257 900 Tel: +1 (801) 871-0300