INTRODUCTION OF DME

CTL Project

Project owners• “Baganuur Energy Corporation” LLC

• 50:50 joint venture company between MCS (Mongolia) and POSCO (South Korea)

Project progress status

• Feasibility study of CTL plant was completed. • The joint venture company is established. • Acquired special license of "Produce petroleum products" • Selecting main technology licensors• Conducting environmental studies

Project site • 3rd khoroo, Industrial zone B, Baganuur district, Ulaanbaatar

Purpose

• To decrease fuel import dependency• To decrease air pollution of Ulaanbaatar by introducing gas fuels• To decrease foreign trade deficit and support economic development and

stability

CAPEX • USD 2 billion

Capacity• Diesel 456 ktpa• Gasoline 90 ktpa• DME 100 ktpa

Ulaanbaatar (UB) air-pollution

• UB is the most air-polluted capital city in the world:

The level of UB air-pollution is clearly exceeds all international air-pollution standards.

The Ger area households’ burning of raw coal is the largest contributor to the ground level pollution people inhale, which causes many severe health problems

*Source: World Bank report

Air-pollution ranking of PM10

• Ger district is the main reason for air-pollution:

Ger: (coal) 1.2 mil t/y

60%~90% of pollution

HOB (heat-only boilers): 0.5 mil t/y (coal)

Automobile: ~100,000 vehicles

CHP: (coal) 3.4 mil t/y

Air-pollution contribution per each sector

Potential options

Improved stove Semi Coke

Build more apartments/ connect to central heating system

Introduce gas fuel

What is DME?

DME:– Chemical composition: CH3-O-CH3

– Chemical name: Dimethyl ether

– Clean, colorless liquid gas fuel.

– No Particular Matter (PM) during combustion.

• No SОх , very little NOx.

– Similar to LPG /Liquefied Petroleum Gas/.

• Can be stored and transported as same as LPG.

Usage:

•Residential gas (gas cooker, heater)

•Source of power

•Diesel substitution fuel

•Spray /non toxic for humans/

•Blend with LPG, etc

DME is the most suitable gas fuel to use in Mongolian ger households.

•Environment friendly: No PM, SОх and very little NОx No solid waste, therefore will decrease soil contamination.

•Economically beneficial: Can be produced by using low quality coal, and it can compete with raw coal. Easy to use, and usage can be monitored and controlled, therefore can be cost saving.

Coal gasification technologies

• Synthetic gas is main feedstock of fuel, gas, and chemicals production.

Coal Gasification

FT reaction

Methanol synthesis

Methanazation

• Diesel• Naphtha

• GasolineMTG

• DMEDME

synthesis

• SNG

Ammonia • Fertilizer

MTP

MTO

• Polypropylene

• Olefins

Syngas

DRI • Steel

IGCC • Power

2011-2013 Heating season

DME Tests at households 2011-2012

DME Consumption

Test

Heating and cooking test

House boiler test -2

households

Small houses/≤50m2/ -10 households

Traditional Ger – 20households

DME Appliances for households

Heater Cooker /Cylinder Box

DME cylinder

№ Appliance Price

1 Heater $69

2 Cooker $42

3 Governor $10

4 Hose for heater and cooker $10

5 Safety sensor $7

6 Cylinder warmer $25

7 Cylinder box $60

8 Transportation $25

9 Installation $10

Appliance set for households $258

DME gas fuel consumption

-

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

200.0

August Sept Oct Nov Dec Jan Feb March April May June JulyConsumption per day, kg 0.5 0.7 1.4 3.8 5.8 6.0 5.4 4.4 1.6 0.7 0.5 0.5

Heating usage, kg - 5.8 28.5 100.4 164.6 169.5 136.2 122.0 32.3 5.8 - -

Cooking usage, kg 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0

DM

E, k

g

Household’s average DME consumption

DME consumption: 945 kg/yearHeating: 765 kgCooking: 180 kg

Heater and fuel test

DME heater test

1. Stove testing laboratory - ADB.

2. Environment and Energy Project - MCA

Mongolia

3. National Emergency Management Agency’s

test

Result:

- DME has very low emissions of particulate

matter(PM) and carbon monoxide(CO).(Traditional

stove: 10,000ppm.)

- DME heater will reduce PM and CO concentrations

in ger.

DME fuel test

1. DME heating and cooking test to identifyavailability and fuel consumption in 2011-2013 in 30 households. (gers, small housesand house)

2. Joint study with Mr. Kirk Smith and Mr.Rufus D. Edwards (University of California)on indoor air quality test on DME heater.

3. Joint study with Mongolian University ofScience and Technology (MUST) on DMEheating test in ger and small houses.

4. Joint study with Building Energy EfficiencyCenter (MUST) on indoor air quality test.

Result:o DME heater is suitable for gers and small

houses (till 50m2)o DME boiler is suitable for houses (50m2-250m2)o No negative impact in indoor air.

DME EMISSIONS MONITORING RESULTS

MCA Mongolia – Environment and Energy Project - Social ImpactElaborated by: Mike Duthie1, Cleo Roberts, Rufus Edwards, Jay Turner, and Dustin Homer1

University of California – Irvine Washington University – Saint Louis

Stove TypeDwelling

TypeNCE Coal (kg) Coal type Wood (kg) CO2 CO CH4 NMHC PM2.5 SO2

MCA-approved ger 0.85 8 Nalaikh 0 1579 173.6 3.3 0.33 2.9 0.47

MCA-approved ger 0.85 6.9 Nalaikh 1.9 1975 211.4 3.1 0.42 1.3 0.32

MCA-approved ger 0.94 6.1 Nalaikh 0.5 1877 70.8 0.0 2.14 0.6 0.02

MCA-approved ger 0.96 7.2 Nalaikh 0.5 1897 52.8 0.0 0.56 0.3 0.09

Traditional ger 0.88 1.63 Nalaikh 1.5 2864 231.4 3.5 7.00 8.2 0.25

Traditional ger 0.87 10.95 Alagtolgoi 0.53 2038 186.3 1.8 0.37 12.7 no data

Traditional ger 0.84 7.5 Nalaikh 0.2 1598 184.8 2.0 0.07 6.1 0.25

MCA-approved house 0.88 24.2 Nalaikh 2.3 1799 146.0 5.2 0.12 0.5 0.26

MCA-approved house 0.87 24 Nalaikh 0.8 1663 155.9 2.9 1.22 7.0 1.34

MCA-approved house 0.94 24* Nalaikh 2 1792 75.2 1.2 0.18 1.4 0.17

MCA-approved heating wall house 0.90 22.5 Nalaikh 4.5 1987 121.4 5.6 1.78 5.6 0.28

traditional heating wall house 0.82 17.94 Nalaikh 0.3 1527 194.7 6.9 5.62 12.5 0.18

traditional heating wall house 0.73 18.6 Nalaikh 1 1421 311.9 16.1 0.24 5.8 0.20

DME ger 0.98 6.05 0 1189 -0.35 0.8 5.15 0.3 0.00

DME ger 0.97 5.55 0 1174 -0.76 1.0 9.54 0.0 0.00

*estimated based on typical consumption

a comparison with tradional stoves in gers

Emissions (g substance/kg fuel)

Cost comparison (Coal vs. DME)

Raw Coal

1. One Household uses 4 tone Coal inheating season. (coal price is 100USD/t)

2. Also uses 1 bag wood/day for fireignition. (wood price 1 USD/bag)

3. Total cost is 624USD for heating season

DME fuel (produce locally)

1. Household will use 870 kg DME for heatingand cooking for heating season.

2. DME price for households will be 700 USD/tfrom CTL plant.

3. Total cost is 609USD for heating season

• DME can compete with raw coal when produced locally or subsidized.

DME implementation cost

Costs 1household 100 households 200 households

DME Price in China (USD/t) 680 680 680

Transportation cost (USD/t) 250 250 250

Storing, Filling, distribution cost in UB (USD/t) 266 266 255

DME cost (USD/t) 1,196 1,196 1.185

DME consumption (t) 0.87 87 174

Appliance price (USD/set) 258 25,800 51,600

Total cost for heating season (USD) 1,298 129,852 257,790

DME distribution and sales network

14

Distribution

Distribution center

Transportation

DME storage, filling station

Transportation Storage

Customer

DME tank capacity: 100m3 or 50 tons

DME distribution truck:50 cylinders at one time

delivery.

DME filling stationCompressor capacity: 1,1m3/minPump capacity: 15m3/hourNumber of cylinder filling: 36pieces/hour

DME cylinder sales center-10:

Capacity to deliver to 25households.

DME truck: 27 tons capacity.

Usage

Heating DME heaterCooking DME cooker

Thank you for your attention