Petcoke in Cement Industry

Srinivasan Raman Essar Oil Limited

Essar Group A Global Diversified Conglomerate

2

Scale & Diversity

75,000 people 25 countries worldwide $ 27.3 Billion revenue

(FY12)
Presence in
Oil & Gas Power Steel Ports Projects Shipping BPO Telecom services

Essar at a Glance

International Footprint

Essar Oil & Gas Overview

Petcoke

Petcoke Advantage

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

Challenges
Petcoke 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 Dom. coal 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

Strengths

Weaknesses

Petcoke in Global Cement Industry

Petcoke in Global Cement

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

Challenges & Solutions

Challenges & Solutions

Issue HGI Description Petcoke is harder than coal and is more difficult to grind. Finer grinding is required to increase surface area, as volatile matter is lower. Petcoke has lower volatile matter and hence more difficult to burn. Modification Required Depends on the existing coal grinding mill. If the coal mill can grind petcoke with minor modifications, then the cost will be lower. Otherwise a new Vertical Roller mill will be required. 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. Introduce petcoke feed in the precalciner to facilitate complete combustion Increasing the height of existing precalciner to allow higher residence time Raw mix feed rate has to be changed

Volatile Matter

Fixed Carbon

Petcoke has higher fixed carbon and needs more residence time to burn completely. As petcoke has lower ash, more raw feed will be required per unit of clinker. More oxygen is required for complete combustion Higher flame temperature increases NOx emissions

Ash

Oxygen requirement NOx

Provision of more secondary air NOx control technologies if NOx levels are higher than regulated levels

Challenges & Solutions

Issue Clinker hardness Description Clinker becomes harder caused by longer burning zone. Petcoke burning causes more refractory damage Due to higher sulphur, the sulphur alkali ratio in the feed is disturbed Sulphur volatilizes in the burning zone and condenses in the calcining zone Volatile compounds (formed by alkali with sulphur and chlorides in petcoke) condense and form a thick coating. Modification Required Finish mills need more power to grind

Refractory damage Sulphur Sulphur alkali ratio

Selective upgrading of refractory bricks and higher maintenance

Modification of the raw mix so that combinability temperature is reduced. Bypass line might be required

Sulphur cycle

Coating in riser duct

Refractory bricks can be replaced with AluminaZirconia-Silica or silicon carbide based castable which has low adherence property.

Process Modifications
Finer grinding of petcoke Larger blower for primary air More secondary air Modify raw mix to account for higher S & lower ash

More grinding capacity

Refractory upgrade Bypass line

Burning petcoke during precalcination Increasing precalciner height

Financial Benefits

OPEX Savings
Cement production is energy intensive Energy cost is around 20% of sales Any saving in energy cost boosts profits tremendously

Base Case
Total Energy Cost ($ K) Saving % 13,316 -

Petcoke in Kiln
12,248 8%

Petcoke in Kiln & CPP

11,828 11%

Profit Improvement
% Revenue Basis

$ / MT Basis

Sensitivity Analysis
EBITDA compared to Base Case: $ 1.33 /MT Cement

Sensitivity Analysis
PAT compared to Base Case: $ 0.9 /MT Cement

Petcoke in India

Supply & Demand

Product
Relatively new in India Mostly fuel grade

Supply
< 0.5 MMTPA to > 10 MMTPA in the last decade Addition of coker units to boost supply

Demand
< 0.5 MMTPA to > 10 MMTPA in the last decade Coal shortage boosting demand Cement sector is the major user

Prices
Generally set relative to imported coal prices

Regional Data

Production
New cokers to produce fuel grade petcoke Surplus in West to increase Fuel grade petcoke will be produced in East and South too by 2015

Refinery Paradip Mangalore Manali

Coker Date Q3 FY 2014 Q1 FY 2014 Q4 FY 2015

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

Specifications
S.No 1 2 Ash Parameter Moisture (ARB) Unit % wt % wt Limits 8.0 max 0.5 max

3
4 5 6

Volatile Matter
Fixed Carbon Gross Calorific Value (ADB) Sulphur

% wt
% wt Kcal/Kg % wt

8.0 min
85 min 8,200 min 4-7

HGI

36 - 52

Benefits
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

Thank You