Meeting on JCM FS 2012 in Indonesia

Feb 22, 2013

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1. Outline of Sumatera SNG Project

Project Objectives
1. ESDM and MHI agreed to promote this project as the Strategic National Flagship Project. SNG(Substitute Natural Gas)is synthesized from Low Rank Coal(LRC) Additional source for Indonesian Natural Gas network CO2, byproduct of this project, is injected into existing oil fields and utilized for EOR(Enhanced Oil Recovery) and CCS(Carbon Capture Storage). 2. This project is an ideal model for studying the Joint Crediting Mechanism(JCM).

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1. Outline of Sumatera SNG Project

Project Outline (1/2)

MHI provides SNG plant as an equipment manufacturer and EPC contractor.
SNG Plant
11.4M ton/yr
SGC

Low Rank Coal

Coal Supplier

PreDrying

Coal Gasifier (Oxygen Blown)

4.55 Mton/yr

Gas Purification
Synthesis Gas

CO2

CO2 Compression

CO
EOR/CCS
150MMSCFD

SNG Synthesis

SNG Compression

SNG
To existing pipeline
SNG Offtaker 2

Note : Coal consumption and production rate of each product shall be confirmed in Feasibility Study
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1. Outline of Sumatera SNG Project

Project Outline (2/2)

South Sumatera is promising plant location. SNG plant is constructed beside a Low Rank Coal mine. SNG product is transported to West Java through existing pipeline. Byproduct CO2 is injected into existing oil fields for EOR and CCS. Singapore Oil Plant

SNG Plant

SNG Plant
JAKARTA

CO2 Injection

Low Rank Coal Mine

NG Pipeline

Oil

CO2

CO2 EOR Concept

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JAKARTA

1. Outline of Sumatera SNG Project

Future Project Development Time-Line

July 2011 -Feb 2012 July 2012 -Feb. 2013 April 2013-Sep 2014 April 2014-Sep 2014 Oct. 2014- Sept. 2018 Sept. 2018 Feasibility Study (done) Follow-up Feasibility Study Feed Study Finance Arrangement, etc. EPC Implementation Commercial Operation

2010 Milestone Development Time-Line

Pre-Study

2011
Start of FS

2012

2013
Start of Feed

2014
Start of EPC

2015

2016

2017

2018
Commercial Operation

Follow-up FS FS

LNTP

EPC Phase

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2. Feasibility Study 2011

Outline of Feasibility Study 2011 Design of coal gasification and SNG synthesis process with Low Rank Coal Estimation of Plant Capital and Operating Cost Oxygen-blown gasification test with Indonesian Low Rank Coal at the Gasification Pilot Plant in Nagasaki Japan Study on EOR and CCS opportunity of CO2, byproduct of SNG Plant Study on application to the Joint Crediting Mechanism (JCM) Study of business model for the Project

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2. Feasibility Study 2011

Coal Gasification Pilot Plant Test

Oxygen-blown Gasification test using Indonesian Low Rank Coal was conducted at 50ton per day class Pilot Plant in MHIs Nagasaki R&D center. Test results, such as main syngas components and gasification efficiency, will be reflected to the design of Commercial class gasifier.
Gasifier Coal Feeder

Control Room

Appearance of 50 t/d class Coal Gasification Pilot Plant

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2. Feasibility Study 2011

Coal Gasification Test

Combustor

Slag hole camera Slag Water Bathe Gasifier Vessel

Slag

Water bathe camera

Coal gasification test was completed successfully. Slag is discharged very stably. No unburned carbon falls down from slag hole.

slag hole camera

Discharged Slag is grassy. (Good appearance)

water bathe camera Discharged slag Mitsubishi Heavy Industries, Ltd. owns all intellectual property rights concerning these materials.
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3. Follow-up Feasibility Study 2012

Initial Screening Study of CO2/EOR

- Initial CO2 EOR/CCS Screening Study around potential site was completed. The study was screening of oil fields in South Sumatera Basin of 100km radius of the SNG plant. - The study collected data for half of the oil fields in the radius. 2/3 of reservoirs show CO2/EOR miscible flooding. - Detailed study for CO2/EOR for two representative reservoirs has been conducted. This study consists of core sampling, slim tube test and geological simulation, etc.

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3. Follow-up Feasibility Study 2012

Follow-up Feasibility Study in 2012

2011 Feasibility Study Following items are confirmed in 2011 Feasibility Study. SNG plant using low rank coal can be built technically in South Sumatra Indonesia. SNG price is enough feasible compared to commercial LNG price in Asia. There is enough possibility of CO2/EOR around the potential site in South Sumatera in Indonesia. 2012 Follow up Feasibility Study Indonesia and Japanese Governments decided to continue FS focusing on the economical study of CO2/EOR in South Sumatra Indonesia. The study items are described as below. Schedule for CO2 Injection to Oil field CO2 EOR CAPEX / OPEX CO2/EOR Geological Simulation Study MRV methodology
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3. Follow-up Feasibility Study 2012

Organization Chart of Follow-up FS in 2012

PJ Consortium

Mitsubishi Morgan Stanley

JCM MRV Study

Mitsubishi Heavy Industries, LTD.

Business Model

Indonesia Gov. /Ministry of Energy and Mining Resource (Energi dan Sumber Daya Mineral )

JCOAL

Lemigas
Schedule for CO2 Injection to Oil Field

EOR Consultant
CO2/EOR Simulation Study Review

Lemigas
CO2 EOR Study

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3. Follow-up Feasibility Study 2012

Schedule for CO2 Injection to Oil Field

Initial CO2 EOR/CCS Screening Study around potential plant site was conducted. The oil fields in South Sumatera Basin of 100km radius SNG Plant have been studied. The long term schedule of CO2 injection to each oil field considering field capacity will be confirmed in this study.

Potential Plant Site

100 km

CO2 Pipeline (to be studied)

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3. Follow-up Feasibility Study 2012

CO2 EOR CAPEX / OPEX

Conceptual Design for CO2/EOR Facility Economical Study for CO2/EOR considering PSC (Product Sharing Contract) Site Survey of potential EOR field

Study Item

Facility Scope

CO2

CO2 recycle facility

Gas

SNG Plant
By MHI
Plant B.L

CO2 : 99% 576 t/h (4.55 Mton/y)

Pipe Line Injection Well

Gas/Oil Separator
Production Well

Oil Product

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3. Follow-up Feasibility Study 2012

CO2/EOR Geological Simulation Study

Geological Simulations of two representative oil reservoirs have been carried out. These simulation results are reviewed by the 3rd Party Company. Review Items - Laboratory Test Result - Core and Reservoir Fluid Sampling Result - Geological Model for Simulation - Reservoir Simulation Results

Geological Reservoir Model for Oil Field

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3. Follow-up Feasibility Study 2012

CO2/EOR Economical Study CO2/EOR Economical Study in South Sumatera Indonesia will be confirmed according to the following steps.
CO2 /EOR Screening Study CO2 /EOR Simulation Study
Feasibility Study 2011 Feasibility Study 2012

CO2 Pipeline Plan Study of PSC Contract for EOR Plan of CO2 Injection Schedule

3rd Party review for the CO2 EOR Simulation Study

CO2 EOR CAPEX / OPEX

CO2 /EOR Economical Study

Conceptual flow of CO2/EOR

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4. MRV methodology study

Coal Gasification and CCS-EOR: MRV Methodology

Oil Plant

SNG Plant

Need separate methodologies for coal gasification and CCS-EOR No applicable approved CDM methodologies (AM) => Need to develop a new methodology (NM)

CO2 Injection

Pipeline

SNG production methodology

Oil

CO2

CO2 EOR Concept

Important to refer to basic approaches taken by CDM methodologies

CCS-EOR methodology

< Reference sources for the methodology development> CDM methodologies (e.g. AM0037, AM0087, NM0167) Draft American Carbon Registrys methodology on CCS & CCS-EOR CDM guidelines for a new methodology for CCS Other guidelines and best practices for CCS and CCS-EOR
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4. MRV methodology study

Emission Reduction Calculation Method

SNG
CO2Emission Reduction in coal consumption
CO2 Emission Reductions

CCS-EOR
CO2Emission

Reduction in CO2 venting to the atmosphere

CO2 Emission Reductions

Coal Coal Reference Scenario Project Scenario

CO2 Energy
consumption

Reference Scenario

Project Scenario

Emissions Reductions at the SNG production site

Reference Emissions/ SNG

Project Emissions/ SNG

SNG Production

Emission Reductions by CCS-EOR

CO2 injected

Project emissions from CCS, fuel & electricity consumption at treatment facilities (incl. a recycling plant) and seepage

*Monitor parameters framed with bold lines in the above equations

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4. MRV methodology study

Overall Block Flow Diagram for the SNG Production Site and Monitoring Points
Steam 1279 t/h 1038 t/h
(H2O:23.5wt%)

Steam

Low Rank Coal

(H2O:58.5wt%)

Syngas Gasifier 3

Dryer

Gas Quench and Cooled

Sour Shift

241 t/h
(H2O:23.5wt%)

O2 Particulate, Tar removal

H2, CO, CO2 H2, CO Methanation 5

147.3 MMSCFD

Auxiliary Boiler 1

ASU

Acid Gas Cleaning (Rectisol)

SNG

BEBoiler,y

2 Air

PEBoiler,y Flue gas (CO2 : 214.0 t/h)

H2S/COS Wet gas Sulphuric Acid 3.2 t/h

(H2SO4:97wt%)

CO2

Compression

EOR (CO2 : 575.8 t/h)

BEGasification,y PEGasification,y

H2SO4

Off Gas (CO2 : 15.9 t/h)

BEWSA,y PEWSA,y

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4. MRV methodology study

CCS-EOR Project Diagram and Monitoring Points

< Monitoring > Aboveground: Measuring points are clear Belowground: Monitoring points and methods: i)Fulfill the national regulations and guidelines ii)Fulfill any guidelines to be established under the JCM iii)Flexible and tailored-made based on the site characteristics
Measuring points from the draft MRV methodology developed in 2011 (based on NM0167 of CDM methodology)
These treatments will be conducted by the gasification plant in the proposed project. Therefore, no need to take into account monitoring point A and B.

20-30% recycled

PEflare
,y

C O
2

C O
2

PEleakage,y

PEEC,
y

PEFC,
y

PEsee
page,y

PEleak
age,y

PEflare
,y

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4. MRV methodology study

Emission Reduction Calculation Results: Summary Coal Gasification

ERy:
REy: PEy: LEy:

2,975,874
10,582,242 7,606,368 0

tCO2/yr
tCO2/yr tCO2/yr tCO2/yr

GHG emission reductions at the Coal Gasification Plant in year y

Reference emission reductions in year y Project emission reductions in year y Leakage in year y

CCS-EOR
ERy:
REy: PEy: LEy:

3,316,404
4,560,270 1,243,866 0

tCO2/yr
tCO2/yr tCO2/yr tCO2/yr

GHG emission reductions in year y by CCS-EOR

Reference emission reductions in year y Project emission reductions in year y Leakage in year y

Combined Result
ERy:
REy: PEy: LEy:

6,292,278 tCO2/yr
10,582,242 tCO2/yr 4,289,964 tCO2/yr 0 tCO2/yr

GHG emission reductions by Coal Gasification and CCS-EOR in year y

Reference emission reductions in year y Project emission reductions in year y Leakage in year y

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4. MRV methodology study

Methodology and Project Summary Evaluation

Conducted by a DOE of CDM (ISO certified, J-VER validator/verifier) Evaluation only on the methodology and PS of the SNG production plant project Three different levels of evaluation along with the guidance given by NEDO Results:
Evaluation results # of criteria satisfied # of criteria unsatisfied 0 for not being able to meet the requirements

Evaluation levels

# of evaluation criteria *

Step 1 evaluation: Completeness check on methodology Step 2 evaluation: PS validation Step 3 evaluation: Detailed check on Methodology

15

15

-- Checking criteria on EIA could not be fulfilled - Detailed monitoring plan not ready yet; can be checked during the verification - Lacking detailed information to suggest QA/QC measures

15

12

19

18

*Excluding the items that were not applicable

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