Indonesia Sumatera SNG Project Feasibility Study of … Sumatera SNG Project Feasibility Study of Low rank coal to SNG New Energy and Industrial Technology Development Organization

Feasibility Studies with the Aim of Developing a Bilateral Offset Credit

Mechanism FY2011

Studies for Project Development and Organization

Indonesia Sumatera SNG Project

Feasibility Study of Low rank coal to SNG

New Energy and Industrial Technology Development Organization (NEDO)

Mitsubishi Heavy Industries, Ltd.

Indonesia Sumatera SNG Project

Feasibility Study of Low rank coal to SNG

2012/5

Low rank coal

SNG

CO２

SNG Plant

EOR/CCS

To existing pipeline

4.55 Mton/yr

11.4M ton/yr

150MMSCFD

石炭

石炭

コンバスタ

リダクタ

SGCSGCガス化炉ガス化炉

Coal Gasifier (Oxygen blown)

Gas purification

Pre- Drying

SNG Compression

CO2

Synthesis gas

CO2 Compression

Project Outline (1/1)

SNG Synthesis

Coal Supplier

1. Outline of Sumatera SNG Project

SNG Plant

JAKARTA

CO2 Oil CO2

EOR

Concept

SNG Plant

Low Rank Coal Mine

Oil Plant

CO2 Injection

Singapore

JAKARTA

NG

Pipeline

South Sumatera is promising plant location.

● SNG plant is constructed beside Low Rank Coal mine. SNG product is transported to West Java with exiting pipeline.

● Byproduct CO2 is injected existing oil fields for EOR and CCS.

Project Outline (2/2) 1. Outline of Sumatera SNG Project

● Design of coal gasification and SNG synthesis process with Low Rank Coal

● Estimation of Plant Capital and Operating Cost

● Oxygen-blown gasification test with “Indonesian Low Rank Coal” at Gasification Pilot Plant in Nagasaki Japan

● Study of EOR and CCS opportunity of CO2, byproduct SNG Plant

● Study of application for “Bilateral Offset Credit Mechanism (BOCM)”

2. Outline of Feasibility Study

Gasifier

Control Room

Coal Feeder

● Oxygen-blown Gasification test using “Indonesian Low Rank Coal” was conducted at 50ton per day class Pilot Plant in MHI’s Nagasaki R&D center.

● Test results such as main syngas components and gasification efficiency, will be reflected to the design of Commercial class gasifier.

Appearance of 50 t/d class Coal Gasification Pilot Plant

Coal Gasification Pilot Plant Test(1/2)

3. Feasibility Study Result

Slag

Slag

Water

Bathe

Slag hole camera

Gasifier

Vessel

Combustor

Water bathe

camera

Slag is discharged very stably. No unburned carbon falls down from slag hole. Discharged Slag is grassy. (Good appearance)

Discharged slag

slag hole camera

water bathe camera

Coal gasification test was completed successfully.

Coal Gasification Pilot Plant Test(2/2)

3. Feasibility Study Result

Initial Screening Study of CO2/EOR

- Initial CO2 EOR/CCS Screening Study was completed. The study was

screening of oil fields in South Sumatera Basin of 100km radius of SNG

plant.

- The study collected data of half of oil fields in the radius. 2/3 of

reservoirs show CO2/EOR miscible flooding.

- Detail study for CO2/EOR for one representative reservoir was

conducted. The study of core sampling, slim tube test and geological

simulation was carried out. Increment oil recovery is estimated to be

28.8%.

3. Feasibility Study Result

BOCM / CO2 Emission Reduction Calculation (1/1)

＜Coal Gasification＞

＜CCS-EOR＞

ERy: 3,316,404 tCO2/yr GHG emissions reductions in year y by CCS-EOR

BEy: 4,560,270 tCO2/yr Baseline emissions reductions in year y

PEy: 1,243,866 tCO2/yr Project emissions reductions in year y

LEy: 0 tCO2/yr Leakage in year y

ERy: 2,975,874 tCO2/yr GHG emissions reductions at the Coal Gasification Plant in year y

BEy: 10,582,242 tCO2/yr Baseline emissions reductions in year y

PEy: 7,606,368 tCO2/yr Project emissions reductions in year y

LEy: 0 tCO2/yr Leakage in year y

＜Combined Result＞

ERy: 6,292,278 tCO2/yr GHG emissions reductions by coal gasification and CCS-EOR in year y

BEy: 10,582,242 tCO2/yr Baseline emissions reductions in year y

PEy: 4,289,964 tCO2/yr Project emissions reductions in year y

LEy: 0 tCO2/yr Leakage in year y

3. Feasibility Study Result

Base Condition for Sensitive Analysis of SNG Price

Item Unit Price

① EPC Plant Cost MM USD 2,920 ～ 3,650 (100% ～125%)

② Coal Price $/ton 13 ～ 16

③ Target SNG Price $/MMBtu < 10

④ CO2 Off Take Price $/ton 30 ～ 50

(25 years)

⑤ BOCM Credit Price $/ton 0 – 10

(10 years)

⑥ Finance Repayment %p.a./ Year 5% / 18

⑦ Return on Equity (ROE) % 12.5

⑧ Project Period Year 30

⑨ Availability % 90

Sensitive Analysis (1/2)

3. Feasibility Study Result

Coal Price CAPEX CO2 Price ( US$/ ton) SNG Price

(US$ / MMBtu) Off-Take BOCM Credit

Project Target @ 13 US$ / ton 3,302 MM US$

(EPC 2,920 + O/C 208 +

IDC 174)

30 10 10.0

EPC Cost High @ 13 US$ / ton 4,073 MM US$

(EPC 3,650 + O/C 208 +

IDC 215)

30 10 12.1

Coal Price High @ 16 US$ / ton 3,302 MM US$

(EPC 2,920 + O/C 208 +

IDC 174)

30 10 10.8

CO2 Credit Price

Zero

@ 13 US$ / ton 3,302 MM US$

(EPC 2,920 + O/C 208 +

IDC 174)

30 0 10.8

CO2 Off Take

Price High ①

@ 13 US$ / ton 3,302 MM US$

(EPC 2,920 + O/C 208 +

IDC 174)

50 10 7.9

CO2 Off Take

Price High ②

@ 13 US$ / ton 4,073 MM US$

(EPC 3,650 + O/C 208 +

IDC 215)

50 10 10.0

Sensitive Analysis (2/2)

O/C : Owner’s Cost, IDC : Interest during Construction

3. Feasibility Study Result

4. Feasibility Study Summary

The product price of SNG is 10 $/MMBtu calculated by sensitive analysis. This price is equivalent to import LNG CIF price.

Coal gasification test was completed successfully. Slag was discharged very stable. No unburned carbon fell down from slag hole.

Initial CO2 EOR/CCS Screening Study around the potential low rank coal mine was completed. The study was screening of oil fields in South Sumatra Basin of 100km radius of SNG Plant. The study collected data of half of oil fields in the radius. 2/3 of reservoirs show CO2 /EOR miscible flooding.

The reduction potential volume of CO2 was calculated and the methodology of CO2 reduction for Indonesia SNG/EOR plant was summarized. Possible CO2 Reduction volume in this plant will be about 6.29 M t/y.