Biodiesel in Thailand less costly than petro-diesel, as Bangchak Petroleum plans new facility
Some interesting numbers come from Thailand, where Bangchak Petroleum Plc plans to invest between 900 million and 1 billion baht (€20.5-22.8/$27.8-30.9 million) to build a biodiesel plant by the end of this year.
Patiparn Sukorndhaman, Bangchak's senior executive vice-president, told reporters that biodiesel produced locally costs 70 satang (70 cents) per litre less than conventional diesel. Since 2005, diesel has seen a continuous price hike, with the government feeling the pinch of subsidizing the fuel. First-generation biodiesel being competitive at current prices, Sukorndhaman thinks the alternative fuel will become increasingly popular locally.
Starting in April next year, the Thai government will call on local oil companies to switch all their diesel products to B2, a blend of 2% biodiesel and 98% diesel fuel. The move would encourage and build up confidence among motorists to use the much cheaper B5 fuel currently marketed by Bangchak Petroleum. Bangchak Petroleum offers B5 at 300 of its fuel stations and is planning to increase the number to 500 before the end of 2007.
A recent project coordinated by the Thai government and executed by Bangchak Petroleum in the city Chiang Mai, saw 1,300 public-transport buses utilizing unsubsidized B2, which was 0.5 bath per liter less costly than diesel (overview of this and other projects).
The biodiesel currently produced by the company relies on waste vegetable oils. Bangchak Petroleum has opened units to buy used vegetable oils from towns and communities for the production of biodiesel at its oil refinery in Sukhumvit. It also sources waste oil from various markets in Bangkok.
Bangchak Petroleum's new plant, with a daily production capacity of 300,000 litres per day (78,000 gallons), will use waste and palm oil. It is scheduled to be completed within 20-23 months. The plant would be located near Bangchak's existing oil storage facilities in Bang Pa-in, Ayutthaya (see map, click to enlarge), to save the company's logistics cost:
energy :: sustainability :: ethanol :: biodiesel :: biomass :: bioenergy :: biofuels :: Thailand ::
Bangchak is now the leader in Thailand's biodiesel market, with a share of 78.6% of total market volume of 30 million litres per month, followed by PTT Plc with 21.4%. Patiparn said the company's biodiesel production output rose by 47% to 28.7 million litres per month over the past six months.
Of the total investment in the new plant, up to 300 million baht would come from the company's capital and the rest from loans, which would lift its debt-to-equity ratio to two times from 0.6 currently.
Patiparn said Bangchak forecast its total revenue would grow 15% this year to 107.57 billion baht although its gross refining margin would decline to below US$2.90 per barrel this year on average compared to more than $3 per barrel on average last year.
The revenue growth would be contributed by the company's promising exports of fuel oil, which account for 30% of its total output, to China. This year, it will ship around 25,000 barrels per day of fuels to China, almost double the 14,000 barrels per day last year. The export price is now around $8-10 per barrel.
Nevertheless, the exports would have to be terminated in the fourth quarter when its product quality improvement (PQI) facilities have been completed. The facilities will transform fuel oil into more lucrative lighter fuel products including gasoline and diesel.
Bangchak will shut down two-thirds of its production capacity for 12 days in February next year, which will cause its capacity to decrease to 40,000-50,000 barrels per day from 70,000 barrels currently.
Bangchak now ranks fourth in the local fuel retail market, with a 12.5% share or 180 million litres per month, after PTT (32.9%), Esso (17.5%), and Shell (15.9%).
The company is also investing in the production of ethanol made from cassava.
References:
Bangchak Petroleum: renewable energy.
Bangkok Post: Bangchak plans biodiesel plant - B900m facility to be located in Ayutthaya - August 23, 2007.
Article continues
Patiparn Sukorndhaman, Bangchak's senior executive vice-president, told reporters that biodiesel produced locally costs 70 satang (70 cents) per litre less than conventional diesel. Since 2005, diesel has seen a continuous price hike, with the government feeling the pinch of subsidizing the fuel. First-generation biodiesel being competitive at current prices, Sukorndhaman thinks the alternative fuel will become increasingly popular locally.
Starting in April next year, the Thai government will call on local oil companies to switch all their diesel products to B2, a blend of 2% biodiesel and 98% diesel fuel. The move would encourage and build up confidence among motorists to use the much cheaper B5 fuel currently marketed by Bangchak Petroleum. Bangchak Petroleum offers B5 at 300 of its fuel stations and is planning to increase the number to 500 before the end of 2007.
A recent project coordinated by the Thai government and executed by Bangchak Petroleum in the city Chiang Mai, saw 1,300 public-transport buses utilizing unsubsidized B2, which was 0.5 bath per liter less costly than diesel (overview of this and other projects).
The biodiesel currently produced by the company relies on waste vegetable oils. Bangchak Petroleum has opened units to buy used vegetable oils from towns and communities for the production of biodiesel at its oil refinery in Sukhumvit. It also sources waste oil from various markets in Bangkok.
Bangchak Petroleum's new plant, with a daily production capacity of 300,000 litres per day (78,000 gallons), will use waste and palm oil. It is scheduled to be completed within 20-23 months. The plant would be located near Bangchak's existing oil storage facilities in Bang Pa-in, Ayutthaya (see map, click to enlarge), to save the company's logistics cost:
energy :: sustainability :: ethanol :: biodiesel :: biomass :: bioenergy :: biofuels :: Thailand ::
Bangchak is now the leader in Thailand's biodiesel market, with a share of 78.6% of total market volume of 30 million litres per month, followed by PTT Plc with 21.4%. Patiparn said the company's biodiesel production output rose by 47% to 28.7 million litres per month over the past six months.
Of the total investment in the new plant, up to 300 million baht would come from the company's capital and the rest from loans, which would lift its debt-to-equity ratio to two times from 0.6 currently.
Patiparn said Bangchak forecast its total revenue would grow 15% this year to 107.57 billion baht although its gross refining margin would decline to below US$2.90 per barrel this year on average compared to more than $3 per barrel on average last year.
The revenue growth would be contributed by the company's promising exports of fuel oil, which account for 30% of its total output, to China. This year, it will ship around 25,000 barrels per day of fuels to China, almost double the 14,000 barrels per day last year. The export price is now around $8-10 per barrel.
Nevertheless, the exports would have to be terminated in the fourth quarter when its product quality improvement (PQI) facilities have been completed. The facilities will transform fuel oil into more lucrative lighter fuel products including gasoline and diesel.
Bangchak will shut down two-thirds of its production capacity for 12 days in February next year, which will cause its capacity to decrease to 40,000-50,000 barrels per day from 70,000 barrels currently.
Bangchak now ranks fourth in the local fuel retail market, with a 12.5% share or 180 million litres per month, after PTT (32.9%), Esso (17.5%), and Shell (15.9%).
The company is also investing in the production of ethanol made from cassava.
References:
Bangchak Petroleum: renewable energy.
Bangkok Post: Bangchak plans biodiesel plant - B900m facility to be located in Ayutthaya - August 23, 2007.
Article continues
Wednesday, August 22, 2007
Researchers look at impacts of fossil fuel choices; find LNG to have high carbon footprint
In the upcoming September 1 edition of the journal Environmental Science and Technology, Paulina Jaramillo, W. Michael Griffin and H. Scott Matthews compared the greenhouse gas as well as SOx, and NOx life-cycle emissions for different fossil fuel combinations used to generate electricity: natural gas, liquefied natural gas (LNG), synthetic natural gas (SNG) via coal gasification-methanation, and coal. The objective of this study was to compare the emissions of NG/LNG/SNG versus coal.
At first instance, their estimates suggest that with the current fleet of power plants, a mix of domestic NG, LNG, and SNG would have lower GHG emissions than coal. But if advanced technologies with carbon capture and sequestration (CCS) are used coal and a mix of domestic NG, LNG, and SNG would have very similar life-cycle GHG emissions. For SOx and NOx they find there are significant emissions in the upstream stages of the NG/LNG life-cycles, which contribute to a larger range in SOx and NOx emissions for NG/LNG than for coal and SNG. Thus, LNG imported from foreign countries and used for electricity generation could have 35 percent higher lifecycle greenhouse gas emissions than coal used in advanced CCS power plants.
The 1990s saw a surge in construction of natural gas power plants, fueled by cheap natural gas, low investment requirements and the idea that natural gas was less carbon-intensive than coal. Since these plants were constructed, natural gas prices have skyrocketed as the North American natural gas supply has become more limited. These gas plants are now operating at a very low capacity, fueling the energy industry's interest in increasing gas supply by using LNG:
energy :: sustainability :: Bioenergy with Carbon Storage :: biomass :: biogas :: fossil fuels :: coal :: natural gas :: LNG :: carbon capture and storage ::
Those decisions are complicated by the fact that natural gas prices may stay high because of maturing North American gas fields. Natural gas production in North America has been flat or down in each of the past six years, according to the federal government's Energy Information Administration. Increasingly, domestic natural gas will be drawn from nontraditional and more expensive sources that require the development of more complex networks to extract and deliver it to the U.S. market.
However, the increased imports of LNG and all of its indirect impacts could eliminate the environmental benefits of natural gas over coal when future carbon mitigation technologies such as carbon capture and storage (CCS) are adopted.
The researchers point out that LNG has many indirect impacts compared to domestic gas. LNG is extracted in a foreign country, liquefied, put into a tanker to cross oceans, and then regasified and put into pipelines when it reaches the U.S. Each of these steps leads to indirect environmental impacts, such as carbon dioxide emissions from changing from gas to liquid and back. In addition, the facilities and tankers necessary to liquefy, move and regasify the natural gas expected are not plentiful and those in the works will not be up-and-running for several years.
The Carnegie Mellon research team also argues that the U.S. shouldn't rush to invest large amounts in a new infrastructure, such as the LNG infrastructure, without analyzing all the indirect implications of those investments compared to alternative supply options. In addition, utilities and the government should put more effort into conservation and energy efficiency that could help reduce the need for large investments. As the options grow more complicated, the choices become harder and harder.
Carbon-negative biomethane
The Carnegie Mellon suggestions are fundamental, but they do not take into account the emergence of a new energy concept, based on coupling biogas production to LNG export infrastructrues. Biopact is currently conducting a basic lifecycle and economic feasibility assessment of the opportunity to produce biogas close to such existing LNG facilities. The concept consists of capturing and storing carbon dioxide from biogas which results in carbon-negative and ultra-clean biomethane (schematic, click to enlarge). This upgraded bio-based gas is then integrated into the existing LNG upstream.
Given the fact that separating CO2 from biogas before it is combusted is considerably less costly than capturing carbon from fossil fuels, we predict it might become a feasible option to couple biogas with CCS to existing LNG infrastructures. Storage of the carbon dioxide can occur in oil and gas fields to enhance the recovery of these resources, or in (onshore) saline aquifers which hold large potential and are found to be abundant near some of the largest current LNG sites in the Global South (more here: "Deep geological CO2 storage: principles, and prospecting for bioenergy disposal sites", *.pdf).
In December of this year, the United Nations Climate Change Conference will convene in Bali, Indonesia, to prepare the post-Kyoto future. This meeting will be crucial for the future of carbon markets. Some are working towards the adoption of measures that allow bioenergy producers to bank in on carbon-negative biofuels. It is within this context that the commercial feasibility of carbon-negative biogas production coupled to LNG will be determined. If enough voices favor a transition towards a global carbon market, then such projects might become profitable.
Biopact will share preliminary results of its assessment at the upcoming Sparks & Flames energy conference at which the organisation will chair a session on carbon-negative energy, part of the Gas Storage and Trading Summit.
The Carnegie Mellon insights on the GHG emissions of LNG might have to be adapted with these new perspectives in mind, and vice-versa.
On another note, even though co-firing biomass with coal is already practised on a relatively large scale in Europe, the study did not look at the use of biomass in CCS-power plants.
References:
Jaramillo, P.; Griffin, W. M.; Matthews, H. S., "Comparative Life-Cycle Air Emissions of Coal, Domestic Natural Gas, LNG, and SNG for Electricity Generation", Environ. Sci. Technol. 2007; ASAP Article; DOI: 10.1021/es063031o
Haszeldine, R. S.,"Deep geological CO2 storage: principles, and prospecting for bioenergy disposal sites", Draft for Paris IEA meeting - September 24, 2004
Biopact: Pre-combustion CO2 capture from biogas - the way forward? - March 31, 2007.
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posted by Biopact team at 11:14 PM 1 comments links to this post