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Petcoke for Cement Industry

Raman Srinivasan

Head Technical Services

Essar Oil Limited

Benefi ts & Modif icat ions Required

Apr il 17, 2013

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2

Essar Group A Global Diversified Conglomerate

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70,000people

Over 25countries worldwide

$ 20Billion revenue

Presence in

Oil & Gas

Power

Steel

Projects

Ports, Shipping & Logistics

Minerals

Telecom

Services

Scale & Diversity

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Essar at a Glance

* Listed on London Stock Exchange

Capacities stated represent gross capacity

Projects Minerals

Among Indias

top 3 EPC(EngineeringProcurement &Construction)contractors

Has built all of

Essarsindustrial assets

Rapidlyintensifyingthird-partyfocus; executinga range ofprojects forexternal clients

Telecom Services

Essar Group

Owns 33percent stake inVodafoneEssar; 135 mnsubscribers

Telecomoperations in

Kenya

Chain of over1,300 telecomretail outlets inIndia, brandedTheMobileStore

Owns 1.6 bntonnes of ironore reserves;mines in India &the USA

Owns 450 mntonne of thermal

& coking coalReserves;mines in India,Indonesia,Mozambique &the USA

Managingbusinessprocesses forFortune 500companies

Present in 10countries

across47 deliverylocations

Ports &Shipping

Steel

A globallyintegrated steelproducer

14 mn tonnescapacity, withplants in India,Indonesia,

Canada & USA

Global networkof steel retailoutlets andprocessingcentres; ownsServosteel a tollprocessor in theUK

Among Indias

largest portoperators:76 MTPA of portcapacity;expanding toover 150 mntonnes across 5

ports in India

Fleet of 27vessels(including crudecarriers);expanding to 39

13 oil rigs

Essar Energy Plc*

Second largestprivate sectorrefiner in India

680,000 bpdcapacity;refineries inIndia, UK &

Kenya

Global portfolioof oil & gasblocks; 2.1 bnbarrels ofreserves &resources

1,380 retail

outlets in India

PowerOil & Gas

Five plants inIndia & Canadagenerating1,600 MW

13 new plantsto take capacityto 11,470 MW

by 2014

450 mn tonnesof coal reserves

Presence intransmission &distribution

Essar Energy Plc*

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Fully integrated oil & gas company of international scale with strong

presence across the hydrocarbon value chain from E&P to oil retail

Global portfolio of onshore and offshore oil & gas blocks, with about

45,000 sq km available for exploration across Asia, Africa & Australia

Over 300,000 bpsd (barrels per stream day) of crude refining capacity

that is being expanded to 405,000 bpsd at Vadinar, Gujarat

Captive power plant

Dispatch facilities by rail, road, sea and pipeline

Associated tankages, pipelines, water intake facilities

Fifty percent controlling stake in Kenya Petroleum Refineries Ltd, which

operates a refinery in Mombasa, Kenya, with a capacity of 80,000 bpsd

Recent takeover of Shells300,000 bpsd Stanlow refinery in UK

Over 1,380 Essar branded oil retail outlets in various parts of India, with

250 outlets under construction.

Tie-ups with other oil marketing companies to access their terminals and

facilities for placing and marketing our products

Essar Oil & GasOverview

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Petcoke for Cement Industry

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Flow of Presentation

Petcoke

Advantages Challenges

1

Petcoke Use in Global Cement Industry2

Technological Challenges & Solutions3

Financial Benefits

Opex Savings Bottom line improvement

4

Petcoke in India5

Essar Facilities6

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Petcoke

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Petcoke Advantage

Government administered prices for coal and natural gas are lower than market prices

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Challenges

High carbon higher calorific value High fixed carbon higher combustion time Lower volatile matter difficult to ignite Lower ash less waste disposal High sulphur increased corrosion &

pollution

Petcoke

Very low carbon very low calorific value Very low fixed carbon lower combustion

time High volatile matter easier to ignite Very high ash heat loss, disposal problem Low sulphur lower corrosion & pollution

Dom. coal

Strengths Weaknesses

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Petcoke use in Global Cement Industry

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Petcoke share as fuel

World Europe

Petcoke is the preferred fuel of choice for the Global cement industry after coal and lignite Petcoke is by far the preferred fuel of choice for European cement industry Cement industry is the largest consumer of petcoke in India (3.7 million tons per annum) Technology to use petcoke in cement plants is mature and easily available

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Annual World Petcoke Production

Global production in 2011 was about 140 million tons, out of which about 75% is fuel grade. US production was 56 million tons, while China produced about 24 million tons.

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Share of Petcoke in Production Capacity

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Challenges & Solutions

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Challenges & Solutions

Issue Description Modification RequiredHGI Petcoke is harder than coal

and is more difficult to grind.Finer grinding is required toincrease surface area, asvolatile matter is lower.

Depends on the existing coal grinding mill.

If the coal mill can grind petcoke with minormodifications, then the cost will be lower.Otherwise a new Vertical Roller mill will berequired.

Volatile Matter Petcoke has lower volatilematter and hence moredifficult to burn.

Finer grinding improves burning. Increasing the flame momentum helps to improve

burning. This is achieved by installing a Higher

capacity blower in place of the primary air fan.

Fixed Carbon Petcoke has higher fixedcarbon and needs moreresidence time to burncompletely.

Introduce petcoke feed in the precalciner tofacilitate complete combustion

Increasing the height of existing precalciner toallow higher residence time

Ash As petcoke has lower ash,more raw feed will berequired per unit of clinker.

Raw mix feed rate has to be changed

Oxygen requirement More oxygen is required forcomplete combustion Provision of more secondary air

NOx Higher flame temperatureincreases NOx emissions NOx control technologies if NOx levels are higherthan regulated levels

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Challenges & Solutions

Issue Description Modification RequiredClinker hardness Clinker becomes harder

caused by longer burningzone.

Finish mills need more power to grind

Refractory damage Petcoke burning causes morerefractory damage Selective upgrading of refractory bricks andhigher maintenance

SulphurSulphur alkali ratio Due to higher sulphur, the

sulphur alkali ratio in the feedis disturbed Modification of the raw mix so that combinability

temperature is reduced.Sulphur cycle Sulphur volatilizes in the

burning zone and condensesin the calcining zone

Bypass line might be required

Coating in riser duct Volatile compounds (formedby alkali with sulphur and

chlorides in petcoke)condense and form a thickcoating.

Refractory bricks can be replaced with Alumina-Zirconia-Silica or silicon carbide based castable

which has low adherence property.

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Technical Characteristics of Cement Kiln

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Composition across the Kiln with temperature

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Temperatures and retention time in apreheater cement kiln

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SO2 Evaporation and Circulation Factor

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Process Diagram

Modify raw mix to account forhigher S & lower ash

Finer grinding of petcokeLarger blower for primary airMore secondary air

More grinding capacity

Refractory upgrade

Bypass line

Burning petcoke during precalcinationIncreasing precalciner height

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Second levelThird levelFourth levelFifth levelFinancial Benefits

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Profit Improvement

% Revenue Basis

$ / MT Basis

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Sensitivity Analysis

EBITDA compared to Base Case: $ 1.33 /MT Cement

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Sensitivity Analysis

PAT compared to Base Case: $ 0.9 /MT Cement

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Second levelThird levelFourth levelFifth levelPetcoke in India

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Production & Consumption

Product

Relatively new in India Mostly fuel grade

Supply

< 0.5 MMTPA to > 7 MMTPA in the

last decade

Addition of coker units to boost

supply

Demand

< 0.5 MMTPA to > 7 MMTPA in the

last decade

Coal shortage boosting demand Cement & Power major users

Prices Generally set relative to imported

coal prices

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Regional Supply & Demand

Major petcoke production and consumption in West Surplus in West and deficit in South Consumption in other zones to increase with addition of cokers in those zones

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Market Segments

Major offtake by cement industry, as Sulphur doesnt create problems for them Boilerspower and process steam applications Early adopters from other industries

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Production

New cokers to

produce fuel gradepetcoke

Surplus in West toincrease

Fuel grade petcokewill be produced inEast and South too by2015

Refinery Coker DateVadinar Q1 FY 2013Bhatinda Q4 FY 2012Koyali Q2 FY 2012Bina Q2 FY 2012Paradip Q1 FY 2015Mangalore Q4 FY 2013Manali Q4 FY 2013

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Second levelThird levelFourth levelFifth levelEssar Petcoke

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Facilities

Production

1.8 million tons per annum petcoke production capacity

Storage

2 silos with capacity of 1000 tons each Open storage yard Storage near rail siding

Logistics

24 7 road loading Integrated rake loading Coastal loading facilities from Bedi port

Quality

Stringent quality control at all stages State of the art quality control lab

Customer Service

Dedicated sales team for customer delight Customized solution for converting from other fuels Support in troubleshooting

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Specifications

S.No Parameter Unit Limits1

Moisture (ARB)

% wt

8.0 max

2 Ash % wt 1.0 max3 Volatile Matter % wt 8.0 min4 Fixed Carbon % wt 85 min5 Gross Calorific Value (ARB) Kcal/Kg 7,800 min6 Sulphur % wt 6-87 HGI - 28 - 52

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Second levelThird levelFourth levelFifth levelWhy Petcoke?

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Benefit

Cost

Cheaper than many fuels on a calorific basis

Capture of entire calorific value of fuel leading to higher efficiency

Availability

Increasing supply Reliable supplies from various refineries

Calorific Value High net calorific value

Ash

Lower ash with no disposal problems

Lower abrasion

Handling

Lower quantity of fuel to be handled Lower area required for storage Non hygroscopic - doesn't absorb moisture Lower handling and transportation losses

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Thank You