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COPYRIGHT RESERVED PROPERTY OF AFRICAN CARBON ENERGY Dr Johan van Dyk, Technology Manager African Carbon Energy [email protected] Mr. Johan Brand, CEO, African Carbon Energy [email protected] August 2015 Theunissen UCG Project Update Africary is proud to be a founding member of the SA UCG Association!
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Africary - SAUCGA August2015 (Brand+vanDyk)

Feb 09, 2017

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Page 1: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

Dr Johan van Dyk, Technology Manager

African Carbon Energy

[email protected]

Mr. Johan Brand, CEO, African Carbon Energy

[email protected]

August 2015

Theunissen UCG Project

Update

Africary is proud to be a founding

member of the SA UCG Association!

Page 2: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

Thank you to all our sponsors!

We appreciate your support!

And to Raquel Richardson from Ap22ude (Pty) Ltd

Money BoxInvestment 156 ( Pty.)

Page 3: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

History of the Theunissen project

3

By 2008 he has successfully developed

the first UCG proposal at Sasol; proving

the value of this exciting technology.

Mr Brand became the UCG Business

Manager for Sasol, Director of the UCG

Association in London + the Technical

Director of Wildhorse Energy

Mr Monkoe left Sasol Mining in 2006 to

become COO at Ingwe Collieries and later

non-executive Director at Optimum Coal.

He was part of the Optimum buy-out

where he retained a substantial

shareholding and became financially

independent at the listing of Optimum.

In 2001 Johan Brand (Mining Engineer) and

Eliphus Monkoe (Operations Manager) met

at Sasol Mining as part of the Brandspruit

Mining team.

Eliphus told Johan about his experience in

the Former Soviet Union where UCG has

been implemented since the 1940’s.

Together they initiated the implementation of

UCG at Sasol.

Page 4: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

African Carbon Energy (“Africary”)

• African Carbon Energy was established as a South African coal mining company in 2007 as a 50:50 Partnership between Johan and Eliphus.

• The company was founded on our expertise in mining, exploration, gasification and specifically Underground Coal Gasification (UCG) and our business philosophy then is to support equity investments with operational involvement

• From 2011 to 2012 Africary finalized the deal for a massive 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.

• Our business philosophy grew to invest and develop our own UCG to Power project on the Theunissen resource for implementation in the DoE process.

Page 5: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

AFRICARY’s vision

“To build own and operate a

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

Low cost and abundant resource “COAL”

Growing market demand “ELECTRICITY”

rising price and 30 year off-take agreement

Clean, Green and efficient technologies “UCG”

Use learning and experience from other projects to

fast-track and focus

Page 6: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

Sasol above ground gasification process

Steam,

oxygen or air Ash

Syngas for

electricity

generation

Coal

Coal Mining

Coal exploration

& drilling

surface

Coal seam

Ash dump

Page 7: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

With UCG, the same coal gets

mined and gasified in one step

Syngas for CTL or

electricity generation

Coal exploration

& drilling

surface

Coal seam

Oxygen

or air

Ash

Page 8: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

Coal gasification is an old concept

UCG has a long history… • Coal gasification was used more than 150 years ago to produce “town-gas”

for lighting streets in the UK and the US • Sasol (South Africa) has been gasifying coal for over 50 years and currently

produces about 40% of the nation's current liquid fuel requirements (160,000 bbl/day)

• Commercial UCG has been successfully operated in 15 mines for more than 50 years in Russia – supplying UCG syngas for power generation

8

First

UCG

test

1930

Page 9: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

More than 30 countries in the World are currently undertaking UCG activities

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Source: UCG Association

Page 10: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

TUCG Setup – trident system

Injection well

Production well

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Page 11: Africary - SAUCGA August2015 (Brand+vanDyk)

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Page 12: Africary - SAUCGA August2015 (Brand+vanDyk)

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Bloodwood panel 2 Dry Gas Composition – Air Blownaverage of 12 months production

Primary Constituents – Dry Gas Basis Average – Mol %

Hydrogen (H2) 20.94

Methane (CH4) 8.60

Carbon Monoxide (CO) 2.56

Ethane (C2H6) 0.54

Carbon Dioxide (CO2) 21.63

Nitrogen (N2) 44.67

Average Calorific Value – LHV (MJ/Sm3)

(MJ/Sm3)

5.71

Average Calorific Value – HHV (MJ/Sm3)

(MJ/Sm3)

6.46

Page 13: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

Carbon Energy Syngas HHV for 1 year

average

+ 1 standard deviation

- 1 standard deviation

Page 14: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

Over a 6 month period with the injection flow rate kept constant 1500 nm3/hr, the

graphs indicate changes in volume of syngas produced and the energy content of the

syngas.

There is clear correlation between these two parameters, when there is more gas

being generated, the gas is of higher energy content.

Page 15: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

15

UCG Gas Engines in commercial operation

Page 16: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

Project basic mass and energy balance

Coal to Gas:

Energy conversion is

75% to 85% efficient

Gas to Electricity:

Energy conversion is

38% efficient

Page 17: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

17

Why UCG in SA?

With Eskom’s 7 years production experience at Majuba – UCG is a proven SA

technology

With increase in tariffs electricity generation by gas engines is cost competitive!

The graph below shows the increase in the average annual selling price of Eskom

electricity from 17.91c/kWh in 2006 to 79,73c/kWh in 2015 and is set to continue this

upwards trend (www.NERSA.co.za, 2015)

17

Page 18: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

Where is Theunissen?

The Africary Rights include all coal exploration licences previously

owned by BHP Billiton. The Rights comprise an area of 322km2 and

consist of:

A northern (34km2) coal resource area

A southern (173 km2) coal resource area

A western (122 km2) coal resource area 18

Page 19: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

Coal Target Blocks

The coal tonnage (gross-in-situ)

in the target farms are:

• Inferred as 20.5 million tons

• Measured as 3.7 million tons

The coal tonnage in the

rest of the resource is

Inferred at 976 million

tons

Page 20: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

Coal Geology: Proven coal supply!

Page 21: Africary - SAUCGA August2015 (Brand+vanDyk)

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Exploration &Electro-seismic grid

Exploration Drillingo ±4Mt of measured resource from the #3 seam

o Proximate Analysis

o Ultimate Analysis

o Fischer Analysis

o Hydrogeology – porosity and conductivity

o Rock strength

3D Electro-Seismico Confirm Aquifers

o Confirm coal seam continuity

o Identify dykes, sills and displacements

Page 22: Africary - SAUCGA August2015 (Brand+vanDyk)

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ANALYSES PURPOSEProximate analysis: Moisture, Volatile matter, Ash, Fixed Carbon* Mass balance, ash content, waterTotal Sulphur* Environmental, gas cleaning designGross Calorific Value* Efficiency of processTrue relative density Mass balance on coal, measured resource classification

Ultimate: C, H, N & O (by difference) Mass balance, oxygen consumption, gas quality

Forms of sulphur: Pyritic, Sulphate & Organic Speciation, environmental, gas cleaning

AFT (oxidizing conditions) Gasifier operating window

Ash composition: SiO2, Al2O3, Fe2O3, TiO2, MgO, CaO, Na2O,

K2O, P2O5, SO3 Influence acid/base ratio of ash, slagging, trace element capturing

Fischer Assay: Char, Liquid hydrocarbons, Water, Gas (by

difference) Liquid hydro carbon yields, tar and oil

Petrographics: Maserals and rank (COAL DEFINITION) Reactivity, coal classification, tar yields, and much more

Mineral composition

Type of minerals and not composition, i.e. clay, sulfates,

carbonates

Trace elements analyses Environmental, gas cleaning design

Chlorine, Cl Environmental, gas cleaning design, corrosion

Fluorine, F Environmental, gas cleaning design, corrosion

Crucible swelling number If coal is caking coal / plasticity

Gieseler fluidity If coal is caking coal / plasticity

Self-heating and Spontaneous Combustion Rate of combustion, start-up

Pore size and surface area Reactivity, cavity formation, gas velocity expected

MEASURED RESOURCE

ENVIRONMENTAL + *

MASS AND ENERGY BALANCES + *

GASIFIABILITY AND RATE OF GASIFICATION

Coal Geology: Properties of the coal

Page 23: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

“Coalology” Geophysical study

ADVANCE

100m 100-300m >300m

Cavity Width

0-100mOnly local collapse

Only local collapse

Only local collapse

100-300mOnly local collapse

30-100m collapse

30-100m collapse

>300mOnly local collapse

30-100m collapse

Full collapse

3m 3

0m

300m

Surface

Coal seam

Water table 50m

Not to Scale!

(Otherwise you will not be able to see what is

happening…)

Page 24: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

Supporting & Access Infrastructure

Aqua Alpha – Directional Drilling• Specialists in cavity design

• Specialist drilling management

• International and local track record• Sasol

• Anglo American

• China

• Hungary

SASOL ALPHA DRILLING RIG

Ssr/coreldraw/kaths01.cdr

Page 25: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

Underground technology and getting

into the coal seam

Page 26: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

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Power Generation Gas Engines can operate on Syngas

produced directly from UCG

Page 27: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

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Power GenerationGas Engines can operate on Syngas

produced directly from UCG

Page 28: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

Possible 132kV Power Line Route

Page 29: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

Project Lifecycle Roadmap and Timeline

Plan

Init

iate

Tim

e Li

ne

Exec

ute

Clo

se

Implementation PhasePhase Concept Phase (FEL1) Pre-Feasibility Phase (FEL2) Feasibility Phase (FEL 3)

Mobilize Team

Kick-Off Charter Devel.

07 Jan. 2013

Nov. 2013 Jan. 201415 Feb.

2013

Group/Individual Plan & Align

Develop Business Case &

Investment Plan

Decision Gate 1

Mobilize Team

Kick-Off Charter Update

Group/Individual Plan & Align

Develop Eng. & Bus. Options

Mobilize Team

Kick-Off

Group/Individual Plan & Align

Develop Basic Design

Mobilize Team

Kick-Off

Group/Individual Plan & Align

Final DesignFabricate/Procure

ConstructCommission

Decision Gate 2

Decision Gate 3

HandOver

Jun. 2015Apr. 2014

IPP AwardJul. 2014

Jan 2012

Coal from BHP

2 Farms

Aug 2013

June 2014

EIA appr

IPP FCQ2/ 16

Exploration Drilling

BANKABLE

BOQ3/ 18

Project Roadmap - 45,000 hrs

- R250m

Grid conn

EIA start

WUL

ChoseTechnology

CDE appoint

Jan 2015

DoE BidSep 15

Page 30: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

The UCG Commercialization flow for

South Africa…

Step 1: Find a suitable energy Market and do competitor analysis

Step 2: Obtain a suitable UCG coal Resource

Step 3: Explore the resource and find and obtain rights to a suitable site - AA

Step 4: Concept Design finalize Technology choices of the planned facility - CDE

Step 5: Risk Assessment and financial suitability assessment – CDE + McRoberts

Step 6: Environmental Applications and permit approvals – Golder Associates

Step 7: Bankable Feasibility Study with Engineering Designs and Cost Estimate

Step 8: Bank approval – Signed Nedbank as MLA!

Step 9: EPC Negotiations and O&M service level agreements

Step 10: Offtake Agreement and financial close

Page 31: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

Key Milestones

Gas RFP

Bid Opening;

Sept 2015

to Dec 2015

PPA Finalisation

Project

Financial Close

Q2 2016

Project

syndication and

BEE Partners

H1 2015

DoE Gas RFI

Registration

May 2015

Completion of

Bankable Feasibility

Study in Q4 2014

PROJECT READY

for

IMPLEMENTATION

Africary value

proposition for

International

Investor

17 Dec 2014

Construction and

Commissioning

and first

electricity

production by

H2/2018

24 moths

Page 32: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

>40 years coal conversion experience within Africary Dr JC van Dyk

Mr JF Brand

Mr D du Preez and team (decades of engineering and gas processing

experience)

Mr Conrad Katz, Aqua Alpha (decades of engineering and directional drilling

experience)

NWU – Proff Waanders, Proff Neomagus, Proff Strydom and Proff Dennis

Gasification science - Experience

Page 33: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

Africary’s international involvement and local support towards UCG implementation

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Standardization of UCG measurements, control and operation through

South-African Bureau of Standard (SABS) and ISO Technical Committee

Members

Groundwater Monitoring During Mining of Coal In-situ by Means of an

Underground Coal Gasification Process - PWI23691 (1 Oct 2014)

ISO/TC 263, Standard for integrated pillar less co- extraction of coal and gas

(amendment of standard)(2 Feb 2015)

ISO/TC 263, Coalbed methane exploration and development (19 Apr 2015)

Collaboration with NWU, WITS, UFS

Advisory Member to the Minister of Energy in South-Africa

Collaboration with Freiberg University and Virthucon - Germany and

Advisory Board Member

Pittsburgh Coal Conference to be hosted by Africary and NWU in Cape

town South Africa in 2016!

Page 34: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

Advantages of Africary's commercial 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 58%

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 90% less water

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

process

Gas Engines offer higher fuel efficiency (up to 40%), than any boiler

operated in SA today (±35%)

Page 35: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

Advantages of Africary's commercial UCG

technology – positive social impact

UCG can monetize economically unmineable coal that would be otherwise lostto the economy (<26% of coal reserves recoverable with conventionalmining…Source: U.S. Energy Information Administration, “International EnergyStatistics: Coal,” 2011)

New high value jobs created in the drilling, gas processing and gas engine /CCGT maintenance industries

UCG projects can be located in economically depressed areas away fromcurrent mined areas

There are no chemicals used in the UCG process as only air and water are usedfor gasification

No fracking required and there are no drilling chemicals injected when drillingthe boreholes

Clean Coal Technologies provide a much needed injection of R&D capital with anew industry being developed and creating high value jobs

Page 36: Africary - SAUCGA August2015 (Brand+vanDyk)

COPYRIGHT RESERVED – PROPERTY OF AFRICAN CARBON ENERGY

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