BLACKHAM

Blackham is evaluating the development of the Scaddan Energy Project into a premier Australian Coal to Liquids (CTL) operation.

• 15,000 barrels per day CTL operation technically feasible
• Fischer-Tropsch process producing Diesel and Naphtha
• Production of 4.8 million barrels per annum
• 860 million tonne resource gives over 100 years of feedstock
• Import replacement of petroleum products into the domestic market
• Scaddan Energy Project offers substantial leverage to oil price rises

CTL Process Flowsheet

CTL Products

The predominant products from a CTL facility would be a high quality diesel and naphtha with a by-product of sulphur. The diesel produced would be a direct import replacement product for Western Australia. The scoping study has assumed the use of the Fischer-Tropsch (FT) liquids process to produce diesel and naphtha.
 
Milling and Drying
The first stage of the process is for the lignite to be milled and dried to permit it to be fed into the Gasifier. The de-watering process requires low energy consumption. Laboratory scale performance testing of Scaddan lignite was undertaken several years ago and enabled the parameters for dewatering to be determined.

Gasification
Drying of the lignite is required to ensure a suitable feedstock for gasification. The scoping study has recommended a gasification technology best suited to Scaddan lignite. Further gasification testing is required to confirm production yields.

Gas Conditioning, Fischer-Tropsch Production and GT Combined Cycle
The remainder of the plant complex consists of several well proven process units. The technologies and costs of which are based on a substantial background of commercial operation. They include the cryogenic air separation plant, combined cycle power plant, syngas conditioning plant, liquids synthesis plant and coal/ash handling plants.

Processing Costs

The indicative processing cost for a 14,670 bbl/day Scaddan CTL plant has been estimated at US$27 per barrel of FT products. An annual production volume of 4.84 million barrels of FT products equates to an operating cost of US$130 million per annum.

Mining

Based on the depth and thickness of the resource the Scaddan lignite deposit would be suitable for extraction by open cut methods as it lies at depths generally between 25 and 30 meters with an average cumulative coal thickness of 8 meters. The shallow depth and generally unconsolidated sediments overlaying the seam makes the deposit amenable to large scale open pit mining methods. The study assumes an average stripping ratio of 4 BCM to 1 tonne of lignite was undertaken to determine the mining costs. Mining costs have been estimated at A$4.70 per BCM or A$13/tonne which equates to US$20/barrel.

Capital Costs

The business case screening appraisal was based on a nominal 15,000 bbl/day Fischer-Tropsch coal-to-liquids plant using an initial higher grade raw lignite at a rate of 1.57 tonne per barrel of FT fuel produced. The Scaddan Eneryg projects capital cost is estimated at US$172,000 per daily barrel of capacity. With the plant producing in the vicinity of 118 million barrels of FT products over a 25 year plant life, the total capital costs equates to US$21 per barrel.

The study was not a detailed engineering and economic analysis. It is a scoping level analysis using particular specified coal inputs to generic non site specific conceptual CTL plants. As such the accuracy of the costs is expected to be approximately +/- 30 percent.

Further Studies

Blackham has completed two drilling programmes to obtain fresh lignite samples from the centre of the deposit for confirmation of historical proximate and ultimate analysis data as well as laboratory and bench scale testing of drying and gasification processing. The fresh lignite samples obtained from the drilling will be used for resource definition and test work for the selection of preferred processing technologies best suited to the Scaddan lignite deposit. The drilling is also aimed at upgrading the resource in the central portion of the western deposit and extending the resource to the north.

A 15,000 barrels per day CTL FT Diesel operation is technically feasible to produce 4.8 million barrels per annum. The 70 years worth of coal feedstock for the CTL operation provides substantial leverage to oil price rises.

Blackham is currently focused on further studies in relation to drying, gasification and environmental areas as well as assessing the potential for a a larger scale operation.