With the local demand for petroleum products currently standing at 1.2 billion litres per annum, the newly established Botswana Oil is musing on setting up a scalable plant that will produce enough petroleum products through the conversion of coal into liquid fuels, also known as coal liquefaction. BusinessWeek Correspondent ISAAC PINIELO talks to the company CEO Willie Mokgatle to find out more about the project.
BusinessWeek: You recently indicated plans to start the conversion of coal into liquid fuels. When will this project commence?
Mokgatle: The project is still at conception stage. A business case of the project is yet to be developed, therefore it is still too early for us to be talking specifics. Following a pre-feasibility study, we will initiate media contact to brief the public on the way forward.
BusinessWeek: What liquid products will be produced from liquefying coal?
Mokgatle: A variety of products come from this process. These include petrol, paraffin, diesel, liquefied petroleum gas (LPG), ammonia, wax and chemicals to mention a few.
BusinessWeek: What are these coal-to-liquid products used for?
Mokgatle: The products have an assortment of uses, for example the chemicals are mainly for industrial use, wax for candles and soap, ammonia for fertiliser, paraffin for industrial and domestic use, diesel and petrol for powering machinery (fuel).
BusinessWeek: Where will this technology be carried out?
Mokgatle: The site will be informed by the business case, which will be guided by availability, quality and location of coal, access to water and ability to generate electricity for own requirements and feed excess to main grid, as well as commercial viability for the plant. Logistical implications will also be taken into consideration when locating the site.
BusinessWeek: How many volumes do you intend to produce?
Mokgatle: For starters, a scalable plant which will meet our local demand. Our current demand stands at 1.2 billion litres of petroleum products per annum.
BusinessWeek: Is Botswana Oil the first company to come up with such a project in the country?
Mokgatle: We are working with government on this initiative. We understand that some private companies are also working on a similar initiative. Since this being a national project, we will engage them to look for opportunities and synergies, which may exist.
BusinessWeek: Which other companies are doing coal liquefaction?
Mokgatle: In Botswana, all the companies are conducting investigations for this project at this stage. In RSA, Sasol has a plant that is operational. China also has a CTL plant operated by Shenhua Group.
BusinessWeek: How many jobs will be generated by this project?
Mokgatle: The project has potential to produce significant job opportunities, but this number will be dependent on the size of the plant. For a plant size that will meet Botswana’s petroleum product requirements of about 33,000 barrels per day, we anticipate that this may be 15,000 to 20,000 people, during construction and about 3,000 people during operation.
BusinessWeek: How will the country benefit from such a project?
Mokgatle: Developing a coal to liquids facility is a mega project by global standards and involves the integration of complex technology and process plants to achieve a successful project delivery and commissioning. Furthermore, a CTL project also requires the development of a range of associated infrastructure and support services to make CTL feasible, including mine development, water supply development, roads and rail infrastructure, the development of a township and associated community services to cater for the workforce as well as all the potential business and service providers for the town and it’s community.
In this context, the CTL facility not only provides direct benefits in terms of local petroleum fuel supplies, improved security of fuel supply and national revenue earner, but also as the foundation and stepping stone for significant socio-economic benefits for Botswana as a result of the infrastructure development projects.
The result can be a national GDP multiplier creating additional jobs, driving the development of local technical expertise and human resource capacity and providing incentives for local and international investment in new businesses supporting the project development and ongoing production post commissioning. Because of the variety of products from the process itself, substantial industries will emerge. To this end, to ensure the attractiveness of the project including its by-products, a fuels market study must be completed in order to avoid stranded products and by products.
CTL therefore, has the potential for significantly adding to the diversity of the Botswana economy and providing synergistic support for the current Botswana national development plans well into the future.
BusinessWeek: How environmentally-friendly will the process be?
Mokgatle: CTL plants emit significant amounts of greenhouse gases and the design of the plant will have to include means of mitigating the emissions of carbon dioxide (CO2).
It is understood that carbon dioxide, a leading cause of global warming, is released during the liquefaction of coal.
BusinessWeek: What has Botswana Oil put in place to limit carbon dioxide emissions?
Mokgatle: The feasibility study will identify and recommend mitigation processes and measures for implementation during the project.
BusinessWeek: Can you elaborate on the process of liquefying coal?
Mokgatle: Coal is converted into liquid fuels, including chemicals using several liquefaction processes, which can be divided into two general categories.
Indirect liquefaction is a multi-step procedure that first requires the gasification of coal to produce a “syngas.” This syngas is then converted to liquid fuel via two methods: the Fischer-Tropsch process or the Mobil process.
In the Fischer-Tropsch process, which is much more common, the syngas is then cleansed of impurities and subjected to further chemical refinement to produce a sulphur-free diesel or petrol. The initial syngas can be derived from coal alone, or from a coal / biomass mixture. The process is the same when biomass is included, but the amount of CO2 emitted during the process decreases as the proportion of biomass increases.
In the less-common Mobil process, the syngas can be converted to methanol, which is subsequently converted to petrol via a dehydration sequence. Indirect liquefaction of coal during Fischer-Tropsch produces a significant amount of CO2 that is removed from the fuel as a necessary step during the final stages of the process. However, recent research has suggested a modified Fischer-Tropsch method that could significantly reduce CO2 emissions during liquefaction.
Direct coal liquefaction converts coal to a liquid by dissolving coal in a solvent at high temperature and pressure. This process is highly efficient, but the liquid products require further refining (‘hydrocracking’ or adding hydrogen over a catalyst) to achieve high-grade fuel characteristics.