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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
3
1. Enefit Overview Enefit (Eesti Energia in Estonia) is the largest oil shale mining and processing company in the world
• 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.14 – 16 mt • 4 operating mines
u 2 surface u 2 underground
• 2,900 mining employees • Experienced in remediation
12,000 hectares restored
Oil Shale Mining • Over 50 years of continuous surface retort
production with more than 200 million barrels of shale oil produced to date
• Technology involves: u Drying unit u Rotary kiln reactor u 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
Shale Oil Production
• Vertically integrated utility (oil shale mining, shale oil production, generation, distribution, supply) • State owned
Eesti Energia
Eesti Power Plant 1615 MW
Balti Power Plant 765 MW
Narva Oil Plant Narva Open Pit Mine
• 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
Oil Shale Power Generation
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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
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3. Enefit Global Activities
Project: Enefit 280 construction Developer: Eesti Energia (Enefit) Project status: construction ongoing
Projects: shale oil production Enefit interest: technology sale Developers: Local mining
companies Project status: MoU signed
negotiations ongoing
Projects: shale oil + power
Project status:
MoU with local partners for power opportunity analysis for oil
Projects: 38,000 bbl/d shale oil 600-900 MW power
Enefit interest: project development technology sale
Project status: concession agreement signed on 11. May 2010
USA
Estonia
China
Morocco
Jordan
Project: 50,000 bbl/d shale oil Enefit interest: technology sale Developer: OSEC, Mitsui,
Petrobras Project status: conceptual study
completed
Enefit worldwide oil shale projects for oil and power production
The Enefit Projects in Jordan are most advanced
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4. Enefit in Jordan
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
The Oil Project in Jordan was started in 2006
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5. Enefit oil shale deposit in Jordan
Location in Jordan Map of Concession Area (incl. Right of First Refusal Area) in Attarat Um Ghudran
• 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
u Area: 70 km2
u In place oil shale: 4.4 bn t oil shale
Red Sea
Jordan
Saudi Arabia
Syria
Israel
Egypt
Iraq
Dead Sea
Amman
Attarat Um Ghudran (Concession Area)
Aqaba
Al Qatrana
Zarqa Refinery West Bank
Gaza
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)
AUG 28
Area = 23.5km2
Reserve = 1560t
Area = 14.2km2
Reserve = 1153t
AUG 23 (INCOSIN)
AUG 22
AUG 25 AUG 21
Area = 11km2
Reserve = 1253t
Area = 11.2km2
Reserve = 1700t Area = 15.5km2
Reserve = 1701t
(PETROBRAS)
282000 284000 286000 288000 290000 292000
1087
000
1084
000
1081
000
1087
000 Other Blocks
OSEJ Concession Area
AUG30
Right of First Refusal Area
Area = 32.0km2
Reserve = 1.8 bn t oil shale (1.1 bn bbl shale oil)
Concession Area
Area = 38km2
Reserve = 2,6 bn t oil shale (1.5 bn bbl shale oil)
1078
000
1075
000
1084
000
1081
000
1078
000
1075
000
282000 284000 286000 288000 290000 292000
Right of First Refusal area
Road
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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
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 m3 and in the Right of First Refusal Area 1.7 bn m3
Oil Shale Seam
• Oil shale layer variation from 10m-88m
• Total over the 70km2 area 4,530 m t
u Concession Area 2,670m t
u Right of First Refusal Area 1,860m t
Groundwater
• Aquifer at depth of 150m-200m
• 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
Views on the Attarat Oil Shale deposit
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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
Mines
Upgrader / Treatment
Direct Burning Power Station Oil Recovery (Enefit)
Sulphur 1200 t/d
Syncrude 38.000 bld/l
Electricity 440 MW
Electricity 600-900 MW
Oil Shale (c. 26 m/t per annum)
Oil Shale (c. 12 m/t per annum)
Oil Project Power Project
Shale Oil Gas
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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
8. Development Plan
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Oil
Proj
ect
Dire
ct B
urni
ng
Pow
er S
tatio
n R
esou
rce
& m
inin
g • Geological and hydrogeological survey • Shaft for pilot testing • Mining Studies
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
Pre-Development • Feasibility Study • Boiler Design (Foster Wheeler) • FEED • EPC and PPA negotiations • Capital Raising
Construction 300MW
Operation 600(900)MW
Operation 300MW
Mine Operation Mine Opening
Construction 900MW
Industrial Complex Stage I construction 19,000 bbl/d
Industrial Complex Stage II construction 19,000 bbl/d
Construction 600MW
Stage II Operation
Stage I Operation
Pre-Development Construction Operation
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9. Key Terms for the Concession Agreement (Oil Project)
• Exclusive rights to exploit oil shale within Concession Area
• 4 years for project development, 40+10 years for commercial production
• Environmental regime established
• Hydrogeology rights granted
• Agreed fiscal regime
The Concession Agreement fixes the framework for developing and implementing the oil project
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10. Fiscal Regime - Royalty + Petroleum Tax The concession will operate under a Tax & Royalty fiscal regime.
0%
1%
2%
3%
4%
5%
6%
0 30 60 90 120 150Oil Price (US $ / Barrel)
Roy
alty
Rat
e
Royalty Petroleum Tax
0%
10%
20%
30%
40%
50%
60%
70%
0 1 2 3 4 5 6R-Factor (Cumulative revenue / cumulative costs)
Tax
Rat
e
Payable on the revenues: • Minimum 1% if Brent (Real) < US$60/bbl; linear to • Maximum 5% if Brent (Real)> US$120/bbl
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
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11. Next Steps – Pre-Development Period
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 u Geophysics u Drilling u Mapping u Sample preparation and
conducting laboratory analyses
u Geological modeling u Mineral Resource
estimations and Recoverable Reserves
Hydrogeological Survey u Drilling water wells u Performing pumping tests u Water analyses u Composing a groundwater
flow model u Determine water extraction
rates and design well field for the industrial complex
Access to Resource u Large diameter drilling for
accessing the resource for testing purposes
Testing + Engineering u Performing retorting tests in
bench and pilot units
Preparing FEED package u Study updates based on the
new geological information and test results
u Preparing of basic engineering (FEED) package for :
• Mining • Oil Processing (retorting) • Oil Upgrading • Power Production • Common Facilities and
Infrastructure • Housing
Environmental Studies u Weather monitoring and
baseline data collection u Ash and overburden leaching
tests u Waste disposal plan u Land remediation u Studies for reusing of ash and
by products
Environmental Impact Assessment (EIA)
u EIA for the oil and power projects
u Assessing and fixing the environmental limit values, quality standards and monitoring regime
Product Marketing u Updating market study u Consultations and pre-
agreements with potential off takers
Feasibility Study Update u Implementation Plan u Key project risks and mitigation
measures u Updating of financial analyses u Updating the Bankable
Feasibility Study
Financing of the Project u Arrange financing for the
Development Stage of the Project
During the Pre-Development Phase, Enefit will focus on the following tasks with a view to reaching a bankable status with the project
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11. Next Steps - Resource Studies
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
Current Geological Database
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
u Phase I: 62 boreholes (1km spacing) u Phase II: 43 boreholes (750m spacing)
• Oil Shale analyses u Fischer assay + heating values u Macro- & microelements u Mineralogy
• Geological & topographical mapping • Water well drilling and hydrogeological modeling • Leaching tests
Further geological studies are required
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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:
u Fast drilling the preparation, mobilization and drilling can be completed within 3 months
u Exact sampling it is possible to take 1m interval samples
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13. Next steps – Testing + Engineering CFB combustions tests at Outotecs 700mm CFB pilot unit
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
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
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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
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A Reality