kbr global and south african overview clean carbon

KBR Global and South African Overview

CLEAN CARBON INDUSTRIES Lda 65 000 bbls per day

liquid fuels from Low Grade Coal Tete Mozambique

Hugh Brown - Chief Executive CCI Lda

VIII Conselho Coordenador Nampula 15-17 August 2012

Project Objectives • To manufacture liquid fuels from own and waste coal from Tete. • To produce 65 000 bbls per day (3.5bn litres per year), 20 000 bbls

petrol and diesel and 45 000 bbls A1 Jet fuel. • To export 40 000bbls per day of the jet fuel • To use existing road rail and sea distribution methods with an

export pipeline to Savane from Tete along Sena rail servitude • To serve Mozambique markets first and then export markets • To consider production of chemical feedstock as well as fuels • Export of liquids can be through road network and sea ports of

Mozambique • To save $800m per annum in foreign exchange • To create 2500 direct jobs and appropriate housing and social

services

MOZAMBIQUE COAL TO LIQUIDS 2

Importance to Mozambique

• Enables Mozambique’s fuel supply to be secured inside of Mozambique at a known future feedstock price as opposed to using gas as a feedstock which is linked to oil price.

• Reduces current foreign exchange outflows used for fuel purchases. (+-800m USD per year)

• Uses low quality coals which cannot be exported as feedstock for fuel production and leaves gas to be converted to LNG for export earning foreign currency, power generation and minerals beneficiation.

• Reduces low grade unusable coal pile in Tete as export grades are produced, thus reducing environmental risk in the Tete basin.


CCI CTL Potential Regional Fuel Markets


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Malawi

Tanzania

Zimbabwe

Total

Million litres per annum

Mozambique Fuel Imports

2008 2009 2010 2011 2012 2013 2014 2015 2016

587000000 612000000

657000000 705000000

775000000 804000000

867000000

922000000

1040000000

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Mozambique White Product Imports

Datenreihen1 Datenreihen2


Project Configuration


Coal Feedstock 2012

COAL MINING SCENARIOS PER ANNUM (assumed)

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5,0

10,0

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45,0

ROM Thermal Coking Middlings Waste

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VALE

Rio Tinto

Ncondezi

28m tons per annum of low grade coal is run of mine waste from these 3 producers in order for the coking and thermal coal to be mined and exported, and needs to be sequestrated. Becomes our feedstock for gasification.

“Waste” Coal Type Specifications


Ncondezi /Warrior Middlings Characteristic

Moisture, wt % 8%

Volatile Matter, wt %

10%

Fixed Carbon, wt %

90

Sulfur, wt % 0.2 – 1.2

Free Swelling Index 0 – 8

Ash Content, wt %

40 -50%

Ash Softening Temp – T1, deg C 1,500

Heating Value, Kcal/kg 17Mj/Kg

Advanced Gasification Technology The Key to adding value from Low Value High Ash Coals

CO2 Capture Capable

Low Value Feedstock High Value End Products

•Diesel - Petrol •Aviation A1 Jet

•SNG • Fuel Gas

•Methanol •Hydrogen •Olefins •Acetic Acid •Glycol

Low cost low quality coal

Downstream Fischer Tropsch And treatment

Processes

By-Products

Synthesis Gas (CO+ H2)

Sulfur

Ash

Chemicals

High Quality Fuels

Fertilizers Gas

•Ammonia •Urea

GASIFIER (REACTOR)

Conversion Processes RECTISOL, FISCHER

TROPSH AND TREATMENT

10

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PROCESS

International Prefeasibility Study Best Engineers from USA, Germany and top ex SASOL/Mossgas specialists on

team

Expert team review USA/Europe

Worlds technologies investigated against Tete coal characteristics


101,0

67,5

86,0 89,5

111,0

159,5

35,0

128,0

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40,0

60,0

80,0

100,0

120,0

140,0

160,0

180,0

200,0

-1 0 1 2 3 4 5 6 7 8 9 10

HIG

H R

ISK

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80

GASIFIER RANKINGS - FEEDSTOCK, EXPERIENCE AT COMMERCIAL SCALE AND EPC RISK

GE ENTRAINED FLOW

SES BUBBLING FLUID BED

SIEMENS ENTRAINED FLOW

UHDE PRENFLO SLAGGING ENTRAINED FLOW

UHDE HIGH TEMP WINKLER (BFB)

LURGI DRY ASH DRY BOTTOM

SHELL ENTRAINED FLOW SLAGGING

KELLOGG BROWN AND ROOT KBR TRIG (CFB)


Lurgi (Germany) • Due to their experience base at SASOL

gasifying low grade Karoo type coals at large commercial scale, Lurgi scored a high 54.0 points out of 60.0 for feedstock suitability.

• In terms of experience at scale, the SASOL plant is the largest coal gasification plant worldwide by far. They scored a total of 58.0 out of 60.0 for confidence at scale.

• Finally they have a long track record of engineering and shut down support at SASOL and were extremely capable in supporting Fluor Daniel when SASOL was constructed. However they do not undertake EPC contracts themselves. So the EPC capability score was 47.5 out of 60.0. Overall Lurgi scored an impressive 159.5 out of 180.0 points.


• KBR ranked second in the competent persons rankings, and has the best EPC capability of all candidates.

• Their very robust technology is also easily operated, a good feature for Mozambique. (isolated) KBR scored 44.0 out of 60.0 for feedstock compatibility as they have tested some high ash coals including one from South Africa.

• Experience at scale is considered both positive and negative. Because the pilot plant is the only operating reference they have, they were penalized for not being at commercial scale as such. However due to their major experience in pioneering oil cracking technology which has certain similarity in vessel characteristics their scale up implications were considered simpler than other designs.

• Their massive EPC financing and engineering capability will be a major positive to a potential project in Mozambique. They scored 50.5 out of 60 for this item. Overall KBR scored 128 points out of a possible 180 points.


KBR USA

Results of CCI technology review with world wide coal gasification suppliers regarding use of Tete Coal

• Lurgi technology suitable

• KBR technology suitable

• CCI has secured both of their commitment to supply technology under license with a guarantee to our consortium

• Kick off meeting with both companies in USA held and Europe held in June/July 2012

• Both companies are engaged in concept engineering

• We are funded and ready to go to end prefeasibility study now… due Oct 31st 2012


Pipeline Route along Sena railway: 520km to Savanna for product - Servitude granted for export of liquid fuels


Loading buoy and FTZ at Savanna


Production and Export Facility

Gasification Plant, syngas reforming to fuels, plus methanol and export viatruck, rail and pipeline

Fuel Storage, Pipeline and mooring buoy and approach channel all owned by CCI, up to 80 00 ton ships handled 19

Tanker mooring and floating buoy for fuel export to all Mozambique ports and abroad from own channel and harbour facility

OIL PRICE PREDICTIONS

1 2 3 4

LOW 92 118 127 136

LIKELY 100 120 138 147

HIGH 110 136 147 160

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US$

PER

BA

RR

EL

DOE OIL PRICE PREDICTIONS

1 = 2012 2 = 2020 3 = 2035 4 = 2050

1 2 3 4

LOW 92 118 127 136

LIKELY 102 127 138 146

HIGH 110 140 150 180

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CCI OIL PRICE PREDICTIONS

1 = 2012 2 = 2020 3 = 2035 4 = 2050


Capital Costs

• Plant Capital

• US$6 450m

• Off-sites and Utilities

• US$950m

• Pipeline

• US$600m

• Port

• US$200m


Competitiveness – Costs of Production


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Texas Tight Oil Arctic Offshore Presalt Deep Water (Brazil)

Oil Shale Colorado

Oil Sands Canada

CCI CTL

Cost of Production US$ Per Barrel* Texas Tight Oil

Arctic Offshore

Presalt Deep Water (Brazil)

Oil Shale Colorado

Oil Sands Canada

CCI CTL

*2012 USD

Security of Feedstock Costs (own supply)

2012 2020 2030 2040 2050

Gas Costs 2,00 2,54 2,76 3,04 3,44

Coal costs 1,00 1,30 1,69 2,20 2,86

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Gas vs Waste Coal costs per Gj


Status • Project Prefeasibility study stage 1 completed. • Technology review and coal tests complete • Meetings with technology vendors in USA and Europe

complete • Team and consortium appointed, finalized • Savanna Port site prefeasibility study done in 1999

confirms suitability of site. Requires some updating • Conceptual Engineering has commenced • Project overall requires prefeasibility study (50%

complete) followed by bankable feasibility study. (2 years starting March 2013)

• MOA with Ministry of Energy signed • All assumptions are in tact to date


Conceptual Engineering USA and Germany

Prefeas Phase 2 in progress Phase ends 31 10 2012

• LKBR and Lurgi competing for gasifier plant

• Lurgi to supply liquids reforming and Fischer Tropsch Plant (Cobalt Catalyst technology)

• Basic plant engineering layout, costs and full project proposal ready end October 2012.


Binding Rights Agreement signed 8 Feb 2012 – Min of Energy Government of Mozambique ( Gasification, Land

Rights, Servitudes, Pipeline).

MOA signing Maputo

CCI /Min of Energy legal teams


Advantages of this Project

• Feedstock is reactive, rich in carbon, physically hard, with very low phosphorous and sulphur makes very clean quality fuel through gasification and Latest Fischer Tropsch downstream processing

• Security of supply from this project is un-paralleled due to integrated ownership of feedstock, availability of waste coal, plant, pipeline port terminal etc.

• De linked from the oil price.

• Security of asset and export chain guaranteed.

• Has good carbon credits in stable political country of Mozambique


We are already in the second stage of the prefeasibility stage of the project now.

Phase 1 prefeasibility study has been delivered to MINEN (March 2012).

We Look forward to an exciting and efficient

development programme with the Ministry of Energy as our champion and partner

Hugh Brown CCI

[email protected]


kbr global and south african overview clean carbon

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