UK-incorporated company Regius Synfuels is, through its Mozambican subsidiary Regius Synfuels Mozambique, developing an integrated 10 000 bbl/d clean diesel and gasoline and a 409 000 t/y fertiliser project, in the Tete province of Mozambique.
The project is registered with the Investment Promotion Centre, in Mozambique, and the Council of Ministers of the Government of Mozambique approved the project through a decree issued on May 7.
The recently completed prefeasibility study has confirmed exceptional project economics with a pre-tax internal rate of return of 53.62% and a pre-tax net present value of $4.93-billion.
Construction is expected to start in the third quarter of 2021, with commercial operations scheduled to start in 2023.
In June, Regius signed a memorandum of understanding with China Tianchen Engineering Corp – a Chinese engineering, procurement and construction company with extensive coal chemicals experience and fundraising abilities.
The company is currently in advanced discussions with various funding and development partners.
“This project is an absolute game changer for Mozambique as it looks to use some of the country’s stranded thermal coal in a highly efficient process to produce fuels and fertilisers for Mozambican and regional markets,” Regius Synfuels Mozambique chairperson Felicio Zacarias commented in a statement issued this week.
The project will produce 300 000 t (2.25-million barrels) of ultraclean-burning diesel, 112 000 t (946 000 bbl) of gasoline and 409 000 t of high-grade urea (fertiliser) a year, all highly sought after products in the local and regional markets.
The selected products serve to increase the efficiency of the overall plant, eliminate the carbon footprint and enhance the economics of the project.
MARKET OPPORTUNITY
The diesel and gasoline produced will be distributed in the local Mozambican and regional markets to replace existing expensive imports.
Mozambique uses about 1.5-million tonnes a year of diesel and gasoline, all of which is imported.
Diesel and gasoline demand in the surrounding region also collectively exceeds 2.1-million tonnes a year, all of which is imported via Mozambique.
Owing to increasing mining activities in Tete, the region is also considered a high-growth diesel market, which is estimated to consume more than 5 000 bbl/d of diesel.
A considerable and fast-growing regional market also exists for the urea fertiliser produced, as all fertiliser is currently imported resulting in significantly higher prices.
Since 2008, the demand for fertiliser in sub-Saharan Africa has grown by, on average, 8% a year.
LEVERAGING PROVEN TECHNOLOGY
The project technology is designed by South African chemical engineering firm Holland & Hausberger (H&H), licensing Clean Coal Technology South Africa’s Fischer-Tropsch (FT) reactor technology.
The H&H coal-to-liquids and urea (CTLU) process, as the project technology is called, is predicated on the proven FT process.
The H&H CTLU process will be deployed at a modular scale of 10 000 bbl/d, requiring shorter project timelines and less capital, making it suitable for implementation in Mozambique.
The process incorporates key improvements that have been made to proven technology resulting in higher plant efficiency, zero carbon dioxide, less carbon feed required and lower water dependency.
These improvements in FT reactors and process design have been successfully demonstrated by way of an operational plant in China, where the reactors have been proven on a full commercial scale.
The H&H CTLU process has an inherent cogeneration capability, allowing multiple high-value product streams namely diesel, gasoline, liquefied petroleum gas, urea and electricity.