Enefit s oil shale projects in Jordan

Transcription

1 Enefit s oil shale projects in Jordan October 2010 Andres Anijalg Project Manager Business Development Department Enefit

2 Contents Enefit Overview Enefit in Jordan Oil and Power Projects Development Plan + Next Steps 2

3 1. Enefit Overview Enefit (Eesti Energia in Estonia) is the largest oil shale mining and processing company in the world Eesti Energia Vertically integrated utility (oil shale mining, shale oil production, generation, distribution, supply) State owned Over 90 years operations with more than 1 billion tonnes of oil shale mined to date Remaining reserves of ca. 500 mt Annual production ca mt 4 operating mines 2 surface Oil Shale Mining 2 underground 2,900 mining employees Experienced in remediation 12,000 hectares restored Oil Shale Power Generation Provides 95% of Estonia s electricity generation with more than 550 TWh produced to date Comprises over 2,380 MW of oil shale fired capacity largest oil shale fired plants in the world Allows significant electricity exports to Baltic region and Finland Ensures security of supply 1,350 employees Shale Oil Production Over 50 years of continuous surface retort production with more than 200 million barrels of shale oil produced to date Technology involves: Drying unit Rotary kiln reactor Combustion unit for spent shale 2 x Enefit 140 units (operating) New Enefit 280 unit under construction Enefit proprietary technology considered to be best available processing technology Narva Open Pit Mine Eesti Power Plant 1615 MW Balti Power Plant 765 MW Narva Oil Plant 3

4 2. Enefit portfolio for oil shale developing Technology Provider Enefit Technology license Opportunity Analyses Conceptual Studies Pre-Design (bench tests) FEED (pilot testing) Technology package (design, construction, operation) Project Developer Enefit Technology license Resource assessment Feasibility studies including mining, retorting, upgrading, power production Testing Plant construction & operation Possible investment 4

5 3. Enefit Global Activities The Enefit Projects in Jordan are most advanced Enefit worldwide oil shale projects for oil and power production Estonia USA Project: Developer: Enefit 280 construction Eesti Energia (Enefit) Project: 50,000 bbl/d shale oil Project status: construction ongoing Enefit interest: technology sale Developer: OSEC, Mitsui, Petrobras Project status: conceptual study completed China Projects: shale oil production Enefit interest: technology sale Developers: Local mining companies Morocco Project status: MoU signed negotiations ongoing Projects: Project status: shale oil + power MoU with local partners for power opportunity analysis for oil Projects: Enefit interest: Jordan 38,000 bbl/d shale oil MW power project development technology sale Project status: concession agreement signed on 11. May

6 4. Enefit in Jordan The Oil Project in Jordan was started in 2006 September 2006 Enefit initial visit to Jordan November 2006 Shale Oil / Mining Memorandum of Understanding with NRA signed October 2007 Power Project Memorandum of Understanding signed by NEPCO, Government of Jordan and Eesti Energia April 2008 Oil Project Feasibility Study submitted to NRA April 2008 Power Project Development Agreement signed by NEPCO, Government of Jordan and Eesti Energia October 2008 Commencement of Concession negotiations with NRA May 2010 Signing of the Concession Agreement with the Government June 2010 Royal Assent 6

7 5. Enefit oil shale deposit in Jordan Attarat Um Ghudran - the total in place oil shale resource of Concession Area ca. 2.6 billion tons (1.5 billion barrels of shale oil) Location in Jordan Map of Concession Area (incl. Right of First Refusal Area) in Attarat Um Ghudran Syria Jordan West Bank Zarqa Refinery Amman Gaza Dead Sea Attarat Um Ghudran (Concession Area) Israel Al Qatrana Iraq Area = 23.5km 2 Reserve = 1560t AUG 28 AUG30 Area = 15.5km 2 Reserve = 1701t AUG 25 Area = 11.2km 2 Reserve = 1700t AUG 21 (PETROBRAS) Area = 11km 2 Reserve = 1253t AUG 22 Area = 14.2km 2 Reserve = 1153t Other Blocks OSEJ Concession Area Right of First Refusal area Road AUG 23 (INCOSIN) Egypt Aqaba Saudi Arabia Red Sea Approximately 110 km south of Amman 50km east of Al Qatrana on the desert highway Approximately 270 km north of Aqaba Total OSEJ Concession Area and Right of First Refusal Area Area: 70 km 2 Right of First Refusal Area Area = 32.0km 2 Reserve = 1.8 bn t oil shale (1.1 bn bbl shale oil) Concession Area Area = 38km 2 Reserve = 2,6 bn t oil shale (1.5 bn bbl shale oil) In place oil shale: 4.4 bn t oil shale

8 6. Key Characteristics of the oil shale deposit Attarat Deposit is the biggest known oil shale deposit in Jordan Surface Very scarce vegetation of grass and bush No land use; nearest farm is 20km northwest Views on the Attarat Oil Shale deposit Overburden Muwaqqar Chalk Marl Formation, partly covered by Umm Rijam Chert Limestone Formation Thickness varies from 25m-90m Total overburden in Concession Area 2.0 bn m 3 and in the Right of First Refusal Area 1.7 bn m 3 Oil Shale Seam Oil shale layer variation from 10m-88m Total over the 70km 2 area 4,530 m t Concession Area 2,670m t Right of First Refusal Area 1,860m t Aquifer at depth of 150m-200m Groundwater Aquifer has a thickness of 150m-180m Groundwater flows southwest to northeast No spring or other discharge of groundwater Oil Shale Quality Oil Yield 9% over the two areas in average Heating Value of ca 5.5 MJ/kg 8

9 7. Enefit Projects in Jordan Oil & Power Enefit has two parallel projects in Jordan Oil Shale based Oil Production and Oil Shale based Power Production Oil Shale (c. 26 m/t per annum) Mines Oil Shale (c. 12 m/t per annum) Oil Recovery (Enefit) Direct Burning Power Station Shale Oil Gas Upgrader / Treatment Sulphur 1200 t/d Syncrude bld/l Electricity 440 MW Electricity MW Oil Project Power Project 9

10 8. Development Plan Oil Project the industry complex will be established in 2 stages with 2nd stage partially financed by 1st stage cash flows Power Project the project will be built up in stages according to the increase in power demand Resource & mining Geological and hydrogeological survey Shaft for pilot testing Mining Studies Mine Opening Mine Operation Oil Project Pre-Development Enefit bench and pilot testing Oil Upgrading Pilot Program Environmental Studies EIA FEED Capital Raising Applying for licenses and permits Enefit 280 operations in Narva Industrial Complex Stage I construction 19,000 bbl/d Stage I Operation Industrial Complex Stage II construction 19,000 bbl/d Stage II Operation Direct Burning Power Station Pre-Development Feasibility Study Boiler Design (Foster Wheeler) FEED EPC and PPA negotiations Capital Raising Construction 300MW Construction 600MW Operation 300MW Construction 900MW Operation 600(900)MW Pre-Development Construction Operation 10

11 9. Key Terms for the Concession Agreement (Oil Project) The Concession Agreement fixes the framework for developing and implementing the oil project Exclusive rights to exploit oil shale within Concession Area 4 years for project development, years for commercial production Environmental regime established Hydrogeology rights granted Agreed fiscal regime 11

12 10. Fiscal Regime - Royalty + Petroleum Tax The concession will operate under a Tax & Royalty fiscal regime. Royalty Payable on the revenues: Minimum 1% if Brent (Real) < US$60/bbl; linear to Maximum 5% if Brent (Real)> US$120/bbl Petroleum Tax Tax rate depends on the Revenue (R) and Cost (C) ratio Minimum 15% if R/C < 1.25; linear to Maximum 65% if R/C >= 5.0 6% 70% 5% 60% 4% 50% Royalty Rate 3% 2% Tax Rate 40% 30% 20% 1% 10% 0% % Oil Price (US $ / Barrel) R-Factor (Cumulative revenue / cumulative costs) 12

13 11. Next Steps Pre-Development Period During the Pre-Development Phase, Enefit will focus on the following tasks with a view to reaching a bankable status with the project Resource Studies Testing + Engineering Environmental Studies General Studies + Arrangements Geological and hydrogeological surveys will be performed in several stages to increase the knowledge of the deposit step by step and to provide input for associated studies. Additional bench and pilot scale testing is required to complete the necessary engineering studies. Resource access has to be achieved. Environmental studies for understanding the environmental impact of the industry will be conducted. EIA and associated studies will be performed. To bring the project to a bankable status Geological Survey Geophysics Drilling Mapping Sample preparation and conducting laboratory analyses Geological modeling Mineral Resource estimations and Recoverable Reserves Hydrogeological Survey Drilling water wells Performing pumping tests Water analyses Composing a groundwater flow model Determine water extraction rates and design well field for the industrial complex Access to Resource Large diameter drilling for accessing the resource for testing purposes Testing + Engineering Performing retorting tests in bench and pilot units Preparing FEED package Study updates based on the new geological information and test results Preparing of basic engineering (FEED) package for : Mining Oil Processing (retorting) Oil Upgrading Power Production Common Facilities and Infrastructure Housing Environmental Studies Weather monitoring and baseline data collection Ash and overburden leaching tests Waste disposal plan Land remediation Studies for reusing of ash and by products Environmental Impact Assessment (EIA) EIA for the oil and power projects Assessing and fixing the environmental limit values, quality standards and monitoring regime Product Marketing Updating market study Consultations and preagreements with potential off takers Feasibility Study Update Implementation Plan Key project risks and mitigation measures Updating of financial analyses Updating the Bankable Feasibility Study Financing of the Project Arrange financing for the Development Stage of the Project 13

14 11. Next Steps - Resource Studies Current Geological Database Information on 49 boreholes has been incorporated into the geological model 20 boreholes inside the Concession and Right of First Refusal Areas 18 boreholes in direct neighborhood 11 boreholes outside direct neighborhood Further geological studies are required To better understand: Geological setting of the oil shale Possible fault lines and potential areas with no oil shale Overburden thickness and characteristics Quality distribution of the oil shale layers (heating value + oil yields, chemical composition, etc) Groundwater situation and availability The new geological exploration program will include: A geophysical survey Drilling of additional boreholes Phase I: 62 boreholes (1km spacing) Phase II: 43 boreholes (750m spacing) Oil Shale analyses Fischer assay + heating values Macro- & microelements Mineralogy Geological & topographical mapping Water well drilling and hydrogeological modeling Leaching tests 14

15 12. Next steps Testing + Engineering For pilot testings a representative bulk sample of ca 100 tons is needed EE has been considered the following alternatives for getting this sample: (1) Opening of Box Cut (2) Sinking an Exploration Shaft (3) Drilling a large diameter drill hole Currently the preparation for the large diameter drilling is ongoing for the following reasons: Fast drilling the preparation, mobilization and drilling can be completed within 3 months Exact sampling it is possible to take 1m interval samples 15

16 13. Next steps Testing + Engineering CFB combustions tests at Outotecs 700mm CFB pilot unit Attarat oil shale testing For preparing the final design for the CFB plant a 60 ton oil shale sample has to be tested at the pilot plant to: test different qualities of the oil shale test blending according to mining plan fix fuel specifications Equipment It is envisaged that the Outotec CFB pilot facility is used for that purpose: Ø 700 mm recycle cyclone, char and magnetic separator gas cleaning system ancillary equipment 16

17 14. Next steps Testing + Engineering Testing: Characterization of oil shale Bench-scale unit for solid heat carrier process 20 kg/h Bench-scale units to test fluidizing behavior of material Pilot plant for combustion of spent shale or oil shale in CFB Pilot plant for drying of oil shale Modeling: Enefit process model in AspenPlus Fine particles behaviour modeling in SolidSIM CAD drawings Engineering: Conceptual engineering Basic process and plant engineering Detailed plant design (layout, piping, electrical, instrumentation, automation, mechanical, structural) Approach: Conceptual study update 3 months Testing and basic engineering 6-12 months Detailed engineering 9-12 months Steps for proving the Enefit technology for the Jordanian oil shale 17

18 A Reality 18