$3.2bn SA coal to liquids project
05/05/2011
Altona Energy's $3 billion proposed Arckaringa Basin coal to liquids project could insulate South Australia's transport industry against fluctuating fuel costs, the company's executive director Peter Fagiano said at a recent Paydirt conference.
"The project's planned diesel production meets the forecast demand for South Australia up until at least 2030, easing the pressure on South Australia which currently relies on international imports and out of the State supply of transportation fuels.
"South Australia 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."
Fagiano went on to explain the Arckaringa 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."
Fagiano also said the project could also augment existing grid electrical supply to meet the State's growing power demand. It has a proposed throughput of 10mtpa of coal to produce 10 million barrels of diesel/naptha products, while exporting 4.5 million megawatts of electricity.
Altona's project has coal reserves 1.3 billion tonnes of JORC compliant coal reserves and the coal to liquids and power plant components are estimated to cost $2.8 billion, with mine facilities adding a further $500 million to the cost. Altona estimate annual revenue at $900 million.