Developing the Feasibility of Bioprocessing Projects through Multiple Revenue Streams. John Lockhart BPA Stephen Cutting Aurecon 22 November 2017

Transcription

1 Developing the Feasibility of Bioprocessing Projects through Multiple Revenue Streams John Lockhart BPA Stephen Cutting Aurecon 22 November 2017

2 Project Overview Creating an agribusiness future The development of Bioprocessing Australia s Mackay Bioprocessing Facility will deliver new integrated agribusinesses and processing precinct into Mackay, that offers economic, export and community benefits. 2

3 Products and Export The objective of Bioprocessing Australia s Central QLD Bioprocessing Plant project is to commission a nominal 2, tonnes per annum yeast production facility in Central Queensland. 3

4 Multiple Revenue Streams The project scope includes developing oilseed processing facilities to produce vegetable oils and oilseed meals for animal feed revenue streams. Vegetable oils and tallow will feed a biodiesel plant to generate revenue from QLD s mandated fuel market, plus producing glycerine. Glycerine provides the feedstock for Torsel yeast production, currently sold into export animal nutrition markets. Sugar feedstocks will produce high nucleotide yeast products for additional revenues. Competitive advantage is that established products are to be sold into existing markets, with supply and off-take agreements able to be established in long term integrated supply with local farmers. 4

5 Value Add This project includes value adding local agribusinesses to produce oilseed meal for the animal feed industry, a biodiesel to improve transport emissions, and processing glycerine and sugar feedstocks to process high quality non-gmo yeast products for animal feeds to replace hormones, stimulate growth and add protein. 5

6 Step Change for Agribusinesses Canegrowers are looking to venture into multi-cropping, achieve improved ground cover to reduce runoff to the GBR, and develop new food and feed markets that are integrated into the agri-business operations in the Mackay region. 6

7 Energy Park Synergies Existing Cogeneration plants offer considerable capital savings to establish the integrated processing modules. Site lease, steam, power, water and effluent treatment costs will be deferred to OPEX costs, and be charged proportionally to production ramp up 7

8 Market Led Project This project is driven by a need to increase non-gmo yeast production to capitalise on expanding domestic and export animal feed markets for: TorSel Yeast TorSel contains 33% more organic selenium than competitor products Sold in levels of 4000ppm (actual level is much higher) Proven performer in livestock Selenium is added to all feed globally High nucleotide yeast (HNY) Used as a natural flavour and flavour enhancer across the food industry. Used in feed as a flavour, source of nucleotides, protein and prebiotic. Autolysed yeast (AY) Used as high protein and palatant similar to fishmeal 8

9 Research and Development Assistance This project will develop the previous demonstration plant technologies into full scale production of yeast The project also integrates four separate value chains into a single operating entity, on an existing energy park, using technologies that have not been combined together before in this configuration. The project will qualify for elements of the Federal Government s R&D Tax Incentive Scheme and other direct contributions to commercialise developing technologies 9

10 Project Development BPA MBPF Integrated Site Layout Weighbridge Biodiesel/ Glycerine Processing Plant Oil Seed Processing Plant Oil Seed Meal Animal Feed Ingredients Glycerine, Tallow Import Facilities Yeast Processing Plant Utilities 10

11 Oil Seed Supply Chain Central QLD Agriculture Areas 11

12 Integrated Logistics with existing agriculture, mining and existing road, rail and port facilities 12

13 Import/ Export/ Logistics Requirements Imports Glycerine Methanol Selenium Process equipment Export Torsel Yeast HNY Yeast QLD Distribution Biodiesel Animal feeds 13

14 Project Development - Staged Capital Plan In order to increase the capital efficiency of this project, it is proposed to stage the STAGE 1 Yeast production from imported glycerine and sugar solutions project to match the availability of oil seeds in the Mackay districts, as local cane farmers grow soybean and sunflower plants as sugar cane fallow crops. There is also opportunity to increase yeast production progressively if feedstocks can be supplemented from adjacent oilseed production areas in Clermont, Capella, Emerald and Proserpine. Stage 1: It is envisaged that Stage 1 of the project will focus on establishing the yeast production equipment, that can produce animal feed products from existing sugar solutions from Racecourse Sugar Mill. STAGE 2 Yeast production from Integrated local supply STAGE 3 Incremental expansion to match yeast, biodiesel and soy meal markets uptake Stage 2: will be to establish oil seed processing capacity to make vegetable oils, oil seed meals and biodiesel and glycerine feedstocks. Stage 3: The next stage is to ramp up the Bioprocessing facility capacity to match the agronomy, harvesting and year round supply potential of Central QLD oil seeds, feedlot meal markets, biodiesel sales and yeast market opportunities. An initial injection of seed capital from the Federal Developing Northern Australia programs or Queensland State Advance QLD or Biofuels programs, would assist Bioprocessing Australia to bring forward investment in this project. This would enable quick gains to kick-off the initial R&D trials and engineering studies to establish the optimum processing configurations, plant and equipment designs and logistics systems for a district wide integrated industry. It would also enable site construction to commence once planning and approvals, lease arrangements, capital funding and detailed designs are completed. 14

15 Planning, Statutory, Legal, Compliance Requirements and Approvals The FS has investigated the statutory environmental and planning constraints of the proposed site and the statutory approvals required for the proposed Bioprocessing Plant. The proposed plant will require local and State environmental and planning approvals under the Planning Act 2016 (Qld), Environmental Protection Act 1994 (Qld) and the Workplace Health and Safety Act 2011 (Qld). Pre-lodgement advice was undertaken with Mackay Regional Council and the relevant State Government agencies. The key matters raised by the agencies were: Potential impact on the amenity (visual, noise and odour) of the local area Demand on existing utilities (water and power) Stormwater drainage design Details of air and wastewater emissions Access arrangements in particular with the future Mackay Ring Road design All pre-lodgement meetings were positive and no major areas of non-compliance were identified by the project team or the approval agencies. Approvals are achievable within a 3-5 month timeframe. Mackay Regional Council Department of Local Government, Infrastructure and Planning Department of Transport and Main Roads Ergon Energy 15 Workplace Health and Safety Queensland Department of Environment and Heritage Protection

16 Feasibility Study Key Stakeholder Discussions Positive discussions have been held with the following project stakeholders: QLD Department of State Development Regional Developments Australia GW3 Mackay Isaac Whitsunday economic development group Mackay Regional Council Mackay Sugar Limited Canegrowers Association and leading cane farmers Department of Infrastructure, Local Government and Planning Queensland Transport and Main Roads Wilmar Logistics Biofuels Association Australia North Queensland Bulk Ports Leichardt Holdings Feedlot Department Agriculture and Fisheries Mackay Area Productivity Services (MAPS) Agritechnology Thomas Borthwick & Sons Meatworks Farmicist HPDezign Suncoast Renewables The resounding feedback is that the project is COMPLEMENTARY for all stakeholders and adds value at all levels 16

17 Key opportunities for Bioprocessing Facility Economies of scale with labour and logistics with larger plant capacity Land tenure savings with site lease State significant project support First in Queensland opportunities for funding Agri-business crop cycles could be blended across Mackay, western districts and other regions Plant unit size selected to process in campaign runs for various products. All process units are able to increase production by operating for more days in a year Potential to co-locate with other food/ feed technologies that use same utilities and balance of plant 17

18 Tasks to be undertaken in Detailed Design Detailed Design, Tendering, Procurement and Evaluation Detailed design for construction Classification of capital cost estimate to AACE Class 2 level, P&ID (piping and instrumentation drawing) detailed development, including full instruments and control loop links, PFD (detailed process flow diagram) with nominal and maximum process flow balances. Intelligent 3D design and 4th dimensional database development of all facility assets Asset identification and database of key attributes to handover to CMMS Engineering Information system for operational readiness handover Tendering Procurement Assistance Conduct tender evaluation Award contracts Project Execution Site project management of construction contract Contract and Procurement administration Interface to local stakeholders Operational readiness and Training Commissioning 18

19 Feasibility Study Conclusions Export markets have been firmly established for Torsel yeast products from the Borenore plant, but opportunities exist to develop further yeast products with sugar solutions Revenue streams from yeast, soymeal, sunflower meal and biodiesel are all entering growth cycles in market over the next 5 years, so potential exists for increasing sale prices Ongoing stakeholder discussions may provide further opportunities to grow additional products, for increased volume or value-add to boost revenue Multiple scope options have been analysed, considering multiple production schedules Reductions in the Capital and Operating cost base can be made if lower capacities and less flexibility and risk management features are employed Staging of Capex spend aimed to fast-track yeast revenues for early Cash Flow. Major long lead Capex items selected with latent capacity for future production flexibility Positive NPV/ Cashflow possible in 7 to 12 year period from start of construction on conservative base case model Further improvements in NPV/ IRR are achievable for different assumptions and parameters Opportunities to grow additional revenue streams by increasing feedstock processing and blending of feedstock products Preliminary risk assessments undertaken, with technology and market risks the major areas Timing of project development is good, with considerable government promotion for Develop Northern Australia and Bio futures programs Strong community support with integration of existing businesses FS financial results show long term returns, even for increased CAPEX. There are risks across all revenue streams, but potential upside if markets develop as anticipated 19

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