Enefit Jordan Oil and Power Projects Andres Anijalg Project Director Colorado, USA Oct 17, 2012
Agenda 1. General Introduction 2. Jordan Power Project Overview 3. Jordan Oil Project Overview 2
Enefit in Jordan Key Milestones The projects in Jordan were started in 2006 November 2006 Oil Project: Memorandum of Understanding signed with NRA April 2008 July 2010 July 2011 Oil Project: Feasibility Study submitted to NRA Commencement of Concession Agreement Power Project Development Agreement signed by NEPCO, Government of Jordan and Eesti Energia to develop an Oil Shale Fired Power station in Jordan Oil Project: Concession Agreement approved Commencement of detailed studies (geology, hydrogeology, testing, engineering etc) Power Project: Power Tariff proposal submitted to NEPCO Commencement of negotiations with NEPCO to Design, Erect, Construct and Operate the Oil Shale Fired Power Plant in Jordan June 2012 Power Project EPC tender for constructing the ca 500MWe oil shale fired power plant in Jordan 3
Jordan Oil Shale Deposits Jordan has been actively promoting the development of its oil shale resources. Enefit has signed a concession agreement with the Government of Jordan in May 2010, effective as of July 2010 Jordan Oil Shale Deposits Shell (Concession) Attarat: ENEFIT Concession Attarat: INCOSIN BVI Interest Attarat: PETROBRAS (MoU) Attarat: INCOSIN (MoU) El Lajjun: INCOSIN & JEML UNIVERSAL (MoU) Sultani: Ecoshale Interest Wadi Maghar: PETROBRAS (MoU) JOSECO (MoU) Inter Rao (MoU) An-Nadiyya: APCO Interest
Attarat Um Ghudran Deposit The total in place oil shale resource allocated to JOSE comprises ca 2.3 billion tons (ca 1.1 billion barrels of shale oil) Location in Jordan Map of Concession Area in Attarat Um Ghudran ( AUG ) Syria Jordan West Bank Zarqa Refinery Amman Gaza Dead Sea Attarat Um Ghudran (Concession Area) Israel Al Qatrana Iraq 1087000 1084000 1081000 282000 284000 286000 288000 290000 292000 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 1087000 1084000 1081000 Other Blocks JOSEC Concession Area Mismatch area at release of ROFRA Road AUG 23 (INCOSIN) 1078000 1078000 Egypt Red Sea Aqaba Saudi Arabia 1075000 Mismatch area At release of ROFRA Concession Area Area = 70km 2 Reserve = 2,3 bn t oil shale 1075000 Approximately 110km south of Amman 50km east of Al Qatrana on the desert highway Approximately 270km north of Aqaba Total JOSEC Concession Area u Area: 70 km 2 u 282000 284000 286000 288000 290000 292000 In place oil shale: 2.3 bn t oil shale 5
General - Overview of Projects Enefit has two parallel projects in Jordan Oil Shale based Oil Production and Oil Shale based Power Production Ash Mines Ash Oil Shale (ca. 30 Mt per annum) Oil Recovery (Enefit) (ca. 2 x 20,000 bpsd) Oil Shale (ca. 9 Mt per annum) Direct Burning Power Station (c.500 MW) Shale Oil Gas Upgrader / Treatment Electricity Sales Sulphur Liquids Surplus electricity 3rd Party Sulphur Sales End Customers + 3rd Party Refinery NEPCO NEPCO Oil Project Power Project 6
Enefit - the largest oil shale company in the world Enefit Vertically integrated utility (oil shale mining, shale oil production, generation, distribution, supply) S&P credit rating of BBB+ (as of 31 August 2012), Moody s credit rating Baa1 (as of 9 January 2012) State owned, Bonds listed on the London Stock Exchange Oil Shale Mining Oil Shale Power Generation Shale Oil Production International Development Over 100 years operations, more than 1 bn tons of oil shale mined to date Reserves of more than 1 bn tons Annual production ca. 15-17 M tons 3 operating mines: 1 surface, 2 underground 3 000 mining employees Experienced in remediation 12 000 hectares restored Provides 91% of Estonia s electricity, more than 550 TWh produced to date 2380 MW of oil shale fired capacity world largest oil shale power plants Allows significant electricity exports to Baltic region and Finland Ensures security of supply Approx 1200 employees 50 years of surface retorting experience More than 200 M bbl oil produced to date 30 years of commercial operation of the Enefit140 units 2011 annual production over 1M bbl New generation Enefit280 plant under construction in Estonia, commissioning in 2012 Based on Enefit280 shale oil production technology USA: 50,000 bbl/d oil, resource is owned/leased Jordan: 38,000 bbl/d shale oil production, 474 MW power production, resource is via concession Enefit280 technology is available for licensing Narva Open Pit Mine Mines total annual production 17 M tons Eesti Power Plant 1615 MW Narva Oil Plant 1,2 M bbl Jordan Resource Evaluation
2 Power Project Overview
Geological Exploration Phase 2 drilling campaign has been completed, data interpretation is ongoing Location of boreholes within the Concession Area Site activities Geological drilling 19 boreholes data purchased (ca 1800 m) 150 boreholes drilled by JOSE (ca 16 000 m) Cores were geologically described, gamma-ray logged, analysed and tested for Fischer Assay, Heating Value, chemical and mineralogical compositions, geotechnical parameters etc. Geophysical profiles Seismic studies - 11 profiles within Concession Area performed for interpreting the geological structures. Electrical Resistivity Tomography studies - 3 profiles performed. Geological modeling Modeling for SE block has been completed, modeling for the rest of the concession area ongoing. Hydrogeological exploration wells Well 1 425m (Pumping tests completed) Well 2 700m (Pumping tests completed) Well 3 975m (Pumping tests completed) 9
Geological Exploration The Oil Shale Deposit has been explored and described in detail Oil Shale Seam Stratigraphy Site activities A geological deposit model has been prepared The oil shale seam has been stratigraphically divided into 8 oil shale layers and 3 dolomite/ limestone interlayers (A, A/B, B1, B2, B/C, C, D, D/ E, E1, E2 and E3) The defined index layers have been identified throughout the Attarat deposit area The deposit shows a homogeneous lithology from a lateral profile The chemical and calorific value of the oil shale varies as observed vertically through the seam Overburden has been divided into three main categories (Umm Rijam Chert Limestone Formation, Attarat Chalk and Weathered Oil Shale) 10
Power Project: Electricity Sector in Jordan Government seeking to fill growing supply-demand gap through introduction of IPPs. However, existing IPPs have strong oil price linkage through gas tolling arrangements and subject to continuous interruption of gas supply in 2011/2012. Oil shale fired IPPs as proposed in National Energy Strategy would diversify this risk Single Buyer Model Forecast Peak Demand and Capacity CEGCO (1,750 MW) SEPGCO (500 MW) AES Jordan (370 MW) AI-Qatrana (370 MW) IPP3 (3) (600MW) 9.0 8.0 7.0 6.0 NEPCO GW 5.0 4.0 3.0 EDCO IDECO JEPCO Large Customers 2.0 1.0 Generation Companies Single Buyer / System Operator 0.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Distribution Companies Existing & Committed Capacity Peak Demand Load Key Statistics Electricity Production by Fuel (2010) 2009 2010 Peak Demand (MW) 2,320 2,670 Nameplate Generating Capacity (MW) (1) 2,599 3,096 Electricity Production (GWh) 14,272 14,777 Electricity Consumption (GWh) 11,956 12,843 H eavy'f uel' Oil 24.7% Diesel 3.6% Renewables 0.5% NB! Gas supply interruptions from Egypt have basically stopped gas import since beginning of 2011 Imported Electricity (GWh) 183 670 Exported Electricity (GWh) 139 57 Avg. Consumption per capita (kwh) 2,427 2,518 N atural'g as 71.2% (1) Pre Fuel Constraints and Outages; (2) Foreign Investors: CEGCO (51% Enara (Acwa Power 65%, Malakoff 25%, CCC 10%), 40% GoJ, 9% SSIU); AES Jordan (AES 60%; Mitsui 40%); Al-Qatrana (KEPCO 65%, Xenel 35%); EDCO 100%/IDECO 54% (SSIU 51%, Jordan Kuwait Bank, Kuwait Privatisation Holding Company) (3) Contract awarded to consortion, KEPCO Mitsubishi & Wärtsilä, Jan. 2012 11
Power Project: Project Summary Power Station : Circulating-fluidised-bed mine-mouth oil shale fired units at Attarat Um Ghudran - 2 x 215 MW @ design temperature of 36 C - 2 x 237 MW @ average ambient temperature - Potential option to extend to additional 2 Units Fuel : Jordanian oil shale Environment : Fully compliant with IFC Standards Water : Own extraction and treatment within project area Timing : Financial close 2H 2013 : Operation 2H 2016 / 1H 2017 Developer : Eesti Energia (65%), YTL (30%), Near East (5%) Status : Full proposal (price & terms and conditions) made to NEPCO (July 2011) : EPC tender launched in June 2012 : EPC bids expected early 2013 12
Power Project: Plant Layout and Concept Plant Layout General Plant Description 2 CFB Units (474MW e @ average ambient conditions ) u u 2 x 237MW e net capacity Units Possibility of expansion to 4 Units Oil shale consumption ca 8 M tons per year (dry) Main systems u u u u Fuel handling and feeding system Boiler plant Water steam cycle and related components Ash handling system Oil shale stockpile u u Drying and blending different oil shale qualities Storage for 10 + 4 days operation Ash will be backfilled in u u Initial dump during first 6 years To the open pit mine afterwards Location u Oil shale free area able to accommodate PP, OP and Switchyard 13
Power Project: Indicative Timetable The first 237MW power unit could be commissioned by Q4 2016, followed by one additional unit in 2017 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Resource & mining Geological survey Hydrogeological survey Mining Studies Tendering Mine Opening Mine Operation Direct Burning Power Station Engineering PPA negotiations Tendering Finacing EIA Construction 2 x 237MW Operation 2 x 237MW Pre-Development Construction Operation 14
Power Project: Benefits to Jordan Energy Sector Benefit Cheap Secure Flexible Local Realistic Financeable Description Cheaper levelised tariff than alternatives Tariff substantially without linkage to oil price Abundant domestic storable fuel resource No overseas involvement in fuel cycle Manageable unit size ~ 10% of system size Fully dispatchable and dependable 100% local fuel Avoid ca. $280M per annum of gas or $515M per annum of oil purchases from abroad Ca. 3,000 construction jobs; ca. 1,000 permanent jobs Proven technology Advanced stage development Environmentally compliant with IFC standards No Government guarantees or capital or construction risk support Proven IPP structure with additional fuel supply and water supply risk transfer to developer 15
3 Oil Project Overview
Oil Project: Developments in Estonia Currently, the new generation Enefit280 oil plant is under commissioning in Estonia. Enefit280 plant from concept to reality 17
Oil Project: Project Overview The Oil Project is expected to have the following primary features and is expected to be built in two stages. Mine Oil Shale Enefit Oil Recovery Shale Oil Upgrader Liquids End Customers, 3 rd Party Refinery Sulphur Sold to 3 rd Parties Gas / Steam Power Power Unit Power National Electric Power Company ( NEPCO ) Mine Oil Recovery Upgrader Power Unit Infrastructure / Sales Key Features Extraction via truck and shovel Crushing Ash disposal Retort Condensing unit Storage Utilities (water, waste etc) Tank farm Gas purification Enhanced liquid extraction Hydro-treater Sulphur removal and capture Storage tanks Combined cycle gas turbine Steam turbine Partially used for industrial complex balance sent to grid Additional cost of bringing product to market Admin buildings Housing complex 4km road to complex
Oil Project: Bulk Sampling Bulk sampling to collect material for oil and power project pilot testing was performed from February to March 2011. BAUER BG 40V Drilling Rig Bulk Sampling Description Large diameter drilling (LDD) was performed by German company Bauer Resources. Drilling diameter of Ø 1350 mm. 8 boreholes were drilled for successively extracting different layers of oil shale at 4 selected locations of the Attarat Um Ghudran area. Overburden was collected in piles, oil shale in 1m 3 bags by 0.5 m intervals. Approximately 700 tons of representative oil shale samples were collected. 4 boreholes were kept open for future reference with weld-sealed metal casing and rest of the boreholes filled back in. 19
Oil Project: Bench Scale Testing Enefit bench scale testing unit is located in Frankfurt and operated by Enefit Outotec Technology. Bench scale testing unit Testing Description To verify the assumptions made in 2008 Feasibility Study and to produce a representative shale oil sample for further upgrading studies, the bench (laboratory) scale oil shale retorting tests have been carried through. Jordan Oil Shale samples have been also combusted in a pilot scale CFB plant in Frankfurt Germany. A representative oil sample of 20 litres for further detailed analyses and oil upgrading studies was produced. Pressurized sour semi-coke gas samples were taken for further detailed analyses. Refrigerated shale oil and sour semicoke gas samples were delivered to perform Sophisticated Crude Assay analyses. 20
Oil Project: Sophisticated Crude Assay A Sophisticated Crude Assay is a detailed analysis of the raw shale oil obtained from bench scale unit testing. Shale oil obtained from Attarat um Ghudran oil shale Results on Assay Maxxam Analytics specialised petroleum laboratory with an experience in analysing shale oil was commissioned to perform testing of Jordanian shale oil and semi-coke gas. Overall, current assay qualities are marginally better than previously assumed for the strategic planning study of Jordanian shale oil upgrading plant and should slightly enhance hydroprocessing potentials : - higher organic hydrogen - lower organic nitrogen - lower organic oxygen 21
Oil Project: Enefit retort concept for Jordan Enefit has prepared an updated conceptual design for Jordan Initial Plant Arrangement Key Parameters Unit has been scaled up from Narva Enefit 280 unit. Oil Shale throughput 543 t/h (wet) 450 t/h (dry) The project would need four parallel Enefit retorting units to produce 20,000 bpsd of raw shale oil. Current concept assumes combustion of additional oil shale in the CFB for closing the heat balance of the plant. Other options for closing the heat balance are currently under research. Fischer Assay oil yield in the retort is assumed at ca. 8.5% based on the geological survey. 22
Oil Project: Pilot Plant The pilot plant demonstrates Enefit retorting process on a scale where enough oil can be produced for further testing. Construction of the Enefit Pilot Plant should be completed by end of 2012. Scheme of Pilot Plant Pilot Plant Description Enefit Outotec Technology has designed and currently is building a pilot scale Enefit test plant for the followings purposes: To test specific oil-shales on yield, oil quality, solids behavior, ash characteristics To further improve process conditions and maximize yield and oil quality To produce up to 4000 kg of shale oil from a sample of specific oil shale for upgrading tests To produce enough semi-coke for subsequent or parallel combustion tests in the 700mm CFB pilot plant The Pilot Test will be carried out early in 2013. 23
Thank you 24