Arckaringa Basin CTL project offers fuel security to SA
03/05/2011
Altona Energy's proposed US$3.5 billion coal to liquids and power project in the Arckaringa Basin offers long-term security of supply of transportation fuels to South Australia, according to the energy giant.
Speaking at the Paydirt 2011 South Australian Resources & Energy Investment Conference, Altona Executive Director, Peter Fagiano, said the project could also augment existing grid electrical supply to meet SA's growing power demand.
"The project's planned diesel production meets the forecasts demand for SA up until at least 2030, easing the pressure on SA which currently relies on international imports and 'out of the State' supply of transportation fuels," Peter said.
"SA is subject to price volatility for its fuels due to fluctuating crude oil price, freight costs and foreign exchange rates and additionally has exposure to security of supply due to factors such as politics in the Middle East and North Africa.
"(The Arckaringa CTL project) provides 'homeland security of supply' and competitive supply – as the cost of production sits at around US$53 per barrel of diesel (33 cents a litre) based on current plant costings.
"Today, international crude oil prices sit in excess of US$110 per barrel to which you would normally add another $15 to $20 per barrel to allow for refining costs to produce diesel plus transport. OPEC is forecasting that crude oil prices will settle at between US$80 to US$90 per barrel.
"Based on these economics, the development of the Arckaringa project looks attractive both in the medium and long term."
Altona's project has coal reserves estimated at 7.8 billion tonnes of which 1.3 billion tonnes is JORC complaint.
The project has a proposed annual throughput of 10 million tonnes of coal to produce 10 million barrels of diesel/naptha products while exporting 4.5 million megawatts of electricity.
The coal to liquids and power plant components are estimated to cost US$2,990 million with mine facilities adding a further US$535 million to the cost.
Annual revenue is estimated at US$1,000 million.