With southern Africa is facing a petroleum refining shortfall and oil prices soaring, CIC Energy’s planned Coal-to-Hydrocarbons (CTH) Project will convert coal to a variety of downstream products including fuels and petrochemicals, by first gasifying the coal to produce synthesis gas (syngas). The Serorome and Dovedale Blocks at the Mmamabula Coal Field are being considered for the CTH Project. Drilling results have indicated that the coal qualities of both blocks are suitable for gasification. Commercial operations for the CTH Project are envisaged in 2014.
Wood Mackenzie completed an initial market study for the CTH Project in early 2008. The study assessed the potential demand for the different downstream products that can be produced from syngas and indicated several downstream product opportunities for the Southern African Development Community (SADC) and international markets.
A second phase detailed value-chain study, which includes a more comprehensive market study, is now underway by Shell Global Solutions International and is expected to be completed in the third quarter of 2008.
A major technical feasibility study for the CTH Project by Jacobs Engineering was completed in mid-2008 and announced in the Company’s news release of August 5, 2008. The purpose of this study was to develop and evaluate viable CTH Project alternatives as well as provide technical and cost estimates.
Three possible CTH Project alternatives were evaluated by Jacobs, all of which included an upstream coal gasification island to produce syngas, with different combinations of downstream processes to make fuels and petrochemicals. Results from the study were positive and concluded that the coal from the Mmamabula Coal Field was entirely suitable for the production of syngas.
Alternative 1 of the Jacobs study was to convert the syngas to methanol and then to gasoline and dimethyl-ether (DME). DME is being considered for future use as a fuel substitute for diesel for use in power plants and as a transportation fuel or as a fuel additive. Alternative 2 of the Jacobs study was a smaller operation that would produce only gasoline. Alternative 3 was to produce methanol and construct a pipeline to transport the methanol to the industrial heartland of South Africa. Alternative 3 is subject to confirmation of the viability of using methanol as a fuel substitute for gas-fired power stations in South Africa. The final product slates for the CTH Project will only be determined once the Shell value-chain study is completed.
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Jacobs Feasibility Study - CTH Project Alternatives |
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Alternative 1 |
Coal→syngas→2 methanol plants→ gasoline & DME |
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Alternative 2 |
Coal→syngas→1 methanol plant → gasoline |
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Alternative 3 |
Coal→syngas→2 methanol plants→methanol pipeline to South Africa |
In 2008 CIC Energy signed an Option Agreement with Royal Dutch Shell plc (Shell), for the option to acquire a license from Shell for its coal gasification process (SCGP) technology for the CTH Project.
As well, CIC Energy is in active discussions with several potential joint venture partners as possible equity partners and offtakers for the CTH Project.
The major milestones ahead for the CTH Project are:
- Identification of preferred fuel and petrochemical products and their associated technology solutions (2008)
- Identification of preferred markets and logistical solutions (2009)
- Identification of preferred investment partners (2009)
- Completion of environmental impact assessments (2010)
- Completion of a bankable feasibility study (2011)
- Initial commercial operations (2014)
The CTH Project team is led by Dr. Pieter du Toit, Executive Vice President, Coal-to-Hydrocarbons, who has over 30 years of international petrochemical engineering experience. Dr. du Toit previously held the position of Projects Portfolio Manager, Project Management department at Sasol Technology, a division of Sasol. He also worked as Project Director for Saudi International Petrochemical Company, and for petrochemical engineering companies in Japan and South Africa. Dr. du Toit holds a Ph.D. Management of Engineering and Technology from Southern California University, a M.Sc. Construction Engineering and Project Management from the University of Texas and a B.Sc. Civil Engineering from Worchester Polytechnic Institute in Massachusetts.
