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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

1. Outline of Sumatera SNG Project


Project Outline (1/1)
SNG Plant

11.4M ton/yr

Low rank
coal

PreDrying

SGC

Coal Gasifier
(Oxygen blown)

Coal Supplier

4.55 Mton/yr

Gas purification

CO2

CO2 Compression

CO
EOR/CCS

Synthesis
gas

150MMSCFD

SNG
Synthesis

SNG
Compression

SNG
To existing
pipeline

1. Outline of Sumatera SNG Project


Project Outline (2/2)
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.
Singapore
Oil Plant

SNG Plant

SNG Plant
JAKARTA

CO2 Injection

Low Rank Coal Mine

NG
Pipeline

Oil

CO2

CO2

JAKARTA
EOR
Concept

2. Outline of Feasibility Study

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)

3. Feasibility Study Result


Coal Gasification Pilot Plant Test(1/2)

Oxygen-blown Gasification test using Indonesian Low Rank Coal was


conducted at 50ton per day class Pilot Plant in MHIs Nagasaki R&D center.
Test results such as main syngas components and gasification efficiency, will be
reflected to the design of Commercial class gasifier.
Gasifier
Coal Feeder

Control Room

Appearance of 50 t/d class Coal Gasification Pilot Plant

3. Feasibility Study Result


Coal Gasification Pilot Plant Test(2/2)
Coal gasification test was completed successfully.

Slag is discharged very stably.


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

Discharged slag

Combustor

Slag hole
camera

Slag

Water
bathe
camera

slag hole camera

Slag
Water
Bathe
Gasifier
Vessel

water bathe camera

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
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:

tCO2/yr

Leakage in year y

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:

tCO2/yr

Leakage in year y

Combined Result
ERy:

6,292,278 tCO2/yr

BEy:

10,582,242 tCO2/yr

PEy:

4,289,964 tCO2/yr

LEy:

0 tCO2/yr

GHG emissions reductions by coal gasification and CCS-EOR in year y


Baseline emissions reductions in year y
Project emissions reductions in year y
Leakage in year y

3. Feasibility Study Result


Sensitive Analysis (1/2)
Base Condition for Sensitive Analysis of SNG Price
Item

Unit

Price

MM USD

2,920 3,650 (100% 125%)

$/ton

13 16

$/MMBtu

< 10

EPC Plant Cost

Coal Price

Target SNG Price

CO2 Off Take Price

$/ton

30 50
(25 years)

BOCM Credit Price

$/ton

0 10
(10 years)

Finance Repayment

%p.a./ Year

5% / 18

Return on Equity (ROE)

12.5

Project Period

Year

30

Availability

90

3. Feasibility Study Result


Sensitive Analysis (2/2)
Coal Price

CAPEX

CO2 Price ( US$/ ton)

Off-Take

BOCM Credit

SNG Price
(US$ / MMBtu)

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

10.8

CO2 Off Take


Price High

@ 13 US$ / ton

3,302 MM US$
(EPC 2,920 + O/C 208 +
IDC 174)

50

10

7.9

CO2 Off Take


Price High

@ 13 US$ / ton

4,073 MM US$
(EPC 3,650 + O/C 208 +
IDC 215)

50

10

10.0

O/C : Owners Cost, IDC : Interest during Construction

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.