Presentation on theme: "Mini-Methanol Plant Tata MESSIRI"— Presentation transcript:
1 Mini-Methanol Plant Tata MESSIRI Senior Special Assistant (DTSG/OPTS Initiative)to Governor of Delta State, Nigeria
2 What is DTSG/OPTS Initiative? Why methanol? Why small scale methanol? Presentation formatWhat is DTSG/OPTS Initiative?Why methanol?Why small scale methanol?Sustainability and sustainable developmentEconomics of methanol productionMethanol production processSmall scale methanol plant parametersMultiplier effects associated with methanolProject PartnersNext Steps
3 DTSG-Delta State Government DTSG/OPTS InitiativeDTSG-Delta State GovernmentOPTS-Oil Producers Trade Section of the Lagos Chambers of CommerceINITIATIVE=To bring about sustained and sustainable livelihoods for the people in the Delta State
4 Why Methanol?ESTIMATED CAPITAL COST, GAS INPUT AND REVENUE GENERATION FOR PROPOSED PRODUCTION UNITS IN INDUSTRIAL ESTATE CLOSE TO OIL FIELDSS/NPLANTESTIMATED PLANT COST ($ MILLIONANNUAL GAS INPUTPRODUCTSANNUAL OUTPUTSRATIO PRODUCT VALUE TO GAS INPUTQTY (BILLION SCF) bscfCOST OF GAS($/SCF)COST ($ MILLION)QTYUNITPRODUCT UNIT COSTS ($)PRODUCT VALUE ($ MILLION)1LPG Plant2520.000.255.000LPG (12.17%)142,930tonnes15021.4407Dry gas (85.10%)17,000,000000scf0.58.500Condensate (1.61%)300,400bbls206.0082Methanol1.130.500.56532,0001805.760103Ammonia1.050.5252006.400124Ammonia/Urea Complex45Urea55,68011.136215Carbon Black802.401.200Carbon black40,0001,00040.00033HydrogenbscfEnergy6Direct Reduced Iron (DRI)2256.733.365DRI600,00012072.000Off gasesBio proteins0.900.45010,00010.000228Cassava Starch, ethanol, methanol-CassavaStarch9Power generation (50 MW)3.741.870Electrical Power438,000MWh5021.900
5 Why small scale methanol? It takes about 8years for permitting and construction of a large world scale methanol plant. A small scale methanol plant can be up and running in about 2 years.The agitation and unrest in the Niger Delta will not wait to be resolved in 8years time.Moreover, several small scale plants will employ more people than one large scale plant.Small methanol plants are less sophisticated and therefore more appropriate for developing countriesHowever, there is a problem today for small oil fields in Delta (250 or more), some of which have to install gathering lines for associated natural gas at prohibitive cost. These fields with small natural gas (only 4mmSCFD) can support a 100tonne/day methanol production plant.If a small plant were to have favorable financing and low-cost gas, it could in fact be competitive with the large plants in a local fuel market.
6 Sustainability and Sustainable development Helping mitigate CO2 emissions (global environment)Improving health & standards of living, reducing poverty (social pillar)Increasing local employment and productive use (economic pillar)Reducing deforestation and improving indoor air quality (local environment)Energy interacts with people’s lives in many different ways, from the basic survival activities to increasing productivity.Productivity can be increased by extending the working day with lighting and by mechanization.It can free up their time, improve their health and well-being, and open up opportunities.Energy services can contribute in a number of ways to the efficient performance of healthcare delivery system, for example, through ensuring reliable heating, lighting, sterilization and refrigeration, as well as safe disposal of medical waste.Use of biomass fuels for cooking and space heating creates indoor air pollution, which has been linked with increased rates of acute respiratory tract infection (ARI) in childrenWhy can methanol be the bridge to sustainability?Methanol can be made at low cost from natural gasThere is enough flared gas in Nigeria to supply every family in Sub-Saharan Africa with methanol for cooking fuel.Methanol is a splendid cooking fuel, and there has been in use for decades a very efficient stove in which to burn it.Methanol can eventually be made from biomass by known technology when we learn to produce enough biomass sustainably at low cost.Methanol is a nearly ideal fuel in internal combustion engines or for fuel cells, and an equally ideal fuel to replace the still enormous consumption of wood as a cooking fuel in developing countries.Its use will eliminate the smoke and soot produced in the household when wood is burned, and will reduce household CO2 and greenhouse gas (GHG) production by about 5/6 when compared to using non-replaced forests for fuel.It is also very attractive as a replacement for the more expensive and valuable kerosene, which has enormous liabilities as a household fuel.It is handled as a liquid but burns as a gasIt does not require expensive cylinders and regulators to be deployed.Biomass vs. Commercial Energy in Nigerian and Sub Saharan AfricaBiomass(mtoe) Oil Products(mtoe) Electricity(mtoe) Biomass(%) O ilProducts(%) Electricity(%)Nigeria ,Sub Saharan Africa (12) ,043 2,016 1,Source: IEA: Energy Statistics and Balances of Non-OECD Countries, 1997 (1999 Edition)
7 Economics of Methanol production Projected Plant Price for Current 5000 tpd Plants Under ConstructionCapitalBattery limits ($233/annual ton) $384,000,000Off Sites (58/annual ton) ,000,000Total ($291/annual ton) $480,000,000Plant Price $/ton ¢/gal ¢/literCapital chargeFeed and FuelPlant operating and maintSelling & AdminTotal Plant PriceThis plant price assumes 330 days per year operation at full capacity. Capital charges are based on 30% equity, 70% loan at 10% interest per annum payable over 10 years (usual commercial rates).A more likely scenario would be 80% of the above assumed capacity This raises the plant price to $94 per ton (28 cents/gal, or 7.4 cents/liter). This is at the plant gate. If cognizance is taken for transportation from far from small users and repackaging into small lots, we arrive at cost closer to twice this amount say 56¢ and over per liter. This costs we already have where refined petroleum products are costing 2 – 3 times in the riverine areas what it costs in the urban centers.Projected cost for methanol from modular plants¢/gallon ¢/liter $/tonSalariesFeed and FuelPurchased PowerCatalyst and ChemicalsMaintenance on PlantRaw WaterInsurance and TaxesCapital ChargesTotalSmall scale plant is built on a modular skid mounted basis and so does not obey the 0.67 capacity factor rule but is in fact about 67% of what using the factor rule would have cost.Capital charges assume 30% equity, 70% loan at 8% interest per annum payable over 15 years. This is a leveraged loan through multilateral aid organizations, GGFR or other mechanism. Even at this capital charges are still about 150% that for a large scale plant.When transportation fees and lower than100% capacity utilization is taken into consideration, price to consumer would be between 40¢ and 70¢ per gallon or 10¢ to 18¢ per liter.
8 Methanol Production Process TPDHydrocarbon FeedFeed PretreatmentSteam Reforming and Heat RecoveryCooling and CompressionMethanol ProductMethanol DistillationMethanol Synthesis
9 Small scale methanol plant parameters ProcessDesulfurization of natural gasCatalytic Steam/Hydrocarbon ReformingHeat Recovery from Process GasSynthesis Gas CompressionSynthesis Gas LoopMethanol DistillationUnitsReforming System and Heat RecoveryMethanol Synthesis LoopOffsitesFeed – Natural gas compositionMethane 79.62%(v) approx.Sulfur 10ppm(v) maxLHV 9,104kcal/ncmHHV 10,054kcal/ncmProduct – methanol compositionMethanol 99.85%(wt) min.Water content %(wt) max.Specific gravity maxUtilities requirementsNatural gas 1,008 ncm/mtRaw water 2,069 kg/mtNitrogen(startup)75ncm/hr for 8hrsElectrical power kwh/mt
11 Deforestation can be arrested by the use of methanol cookstoves Flaring reduced from conversion of associated gas to methanolPower generation can be fuelled with readily available methanolAgro-processing can be increased from availability of commercial energy
13 Desirability of small scale methanol processing for oil producing areas in Nigeria Methanol can be in made in small scale modular plants from stranded flared gas that would be difficult or uneconomical to transport for processing to LNG or other facilities by pipeline thereby achieving faster flare downMethanol burns as efficiently as a liquefied petroleum gasMethanol would be cheaper to produce and is more available than keroseneMethanol is soluble in water and therefore easy to extinguish in householdsMethanol is easier to transport and market than liquefied petroleum gas; and does not require pipeline infrastructure like natural gasMethanol will therefore act as a replacement for both wood and liquefied petroleum gasMethanol can be mixed with ethanol to achieve the ongoing Federal Government initiative to link rural development to the energy sector100t/d methanol plant will provide cooking energy for 125,000 familiesEach 100t/d methanol plant will mop up 4mmcfd of flared gas100t/d methanol plant will prevent the cutting of 500t/day of wood, replace about 100t/day of kerosene or liquefied petroleum gas.Methanol availability and use will improve productivity in the rural areas where over 70% of our population live.Methanol use as a household fuel will improve indoor air quality, reduce deforestation and reduce flaring.Nigeria with a population in excess of 120 million can accommodate 200 nos 100t/d plants. There are over 250 small oilfields in the Niger Delta and this is an opportunity to generate economic activity and employment in these communities.The fuel methanol industry will improve power availability through micro and mini power generationMethanol availability will jumpstart the chemical industry based on methanol-formaldehyde, synthetic glues, acetic acid, vinyl acetate, etc.
14 Delta State Government, through its Ministry of Power and Energy Project PartnersDelta State Government, through its Ministry of Power and EnergyBayelsa State GovernmentCentre for Household Energy and Environment (CEHEEN), a Delta region NGO specializing in stoves and household energyLocal business interestsMethanol productionStove productionLantern productionRefrigerator productionInternal combustion engine modificationDometic AB, a Swedish company, alcohol stove and appliance manufacturerHydroChem, a Division of Linde AG and producer of small-scale gas synthesis equipmentSASOL Chemicals, a producer of synthetic ethanol and methanol in South AfricaThe United States Environmental Protection Agency (USEPA) "Partners for Clean Indoor Air" (PCIA)United Statas Agency for International Development (US AID)
15 Preliminary indications from pilot study LOW-/MEDIUM-INCOME SECTORSKerosene will be displaced because it is more expensive, less efficient, indoor air quality is impaired when used, etc.Fuel wood will also be displaced because of its convenience, better indoor air quality.Price of the stove and fuel will be a deterrent.Use of micro-credit could offset this deterrent.CERs can play a decisive role and it would be innovative with consumers being the actual beneficiaries of their savings to the climateHIGH INCOME SECTORLPG will be displaced because of unavailability of product and disadvantages associated with packaging in heavy pressurized cylinders.Electric cookers will also be displaced because of regular and unpredictable power outages.Cost is not an issue.If a CDM methodology can be developed CERs due from the project can be applied for the purchase of stoves for low income users.
16 Next Steps:The GGFR Initiative should support WIN-WIN scenarios related to the 3 pillars of sustainable development – economic, social, environment.Developing small-scale use of methanol at local / regional level will take advantage from use of flared gas,helping mitigate CO2 emissions (global environment)whileimproving health & standards of living, reducing poverty (social pillar)increasing local employment and productive use (economic pillar)reducing deforestation and indoor air pollution (local environment)Economic empowerment of the oil producing communities will reduce the unrest and restiveness thereby improving operating profits and image of IOCs and governmentSign MOU with all Methanol Alliance partiesCarry out detailed feasibility studies and business planIdentify stranded associated gas fieldsPut in place political and other necessary risk guaranteesMatch local and international investors and partnersDevelop a CDM Methodology for the projectDevelop a micro-credit scheme for the financing of purchase of the stovesNeed support from GGFR partners active in NigeriaFederal Government of NigeriaShell Petroleum Development Co.ChevronTexacoWorld Bank/IFC