UMATAC Industrial ProcessesA company of Polysius

UMATAC Industrial Processes Inc. October 2010A company of Polysius

The FMG ATP Processor, shown above, issimilar in size to the Processor for the StuartOil Shale Research and Development pro-ject, built in Gladstone, Australia in 1999.

ATP Oil Shale Plant in China

Fushun Mining Group

The Fushun Mining Group (FMG) is alarge state owned coal mining, coalprocessing, and manufacturing com-pany based in the city of Fushun,Liaoning province, China. FMG hasnow completed construction of an oilshale processing plant that uses theAlberta Taciuk Process (ATP) technol-ogy under license from UMATAC In-dustrial Processes Inc., a company ofPolysius.FMG is famous in China for their WestOpen Pit coal mine, one of the largestmines in the world – 6 km long x 2.2 kmwide x 400 m deep. Coal productioncapacity is 8.4 million tonnes/year.

John Barge, Senior Mechanical Engineer, in frontof the Fushun West Open Pit Coal Mine, Fushun.

Oil shale lies above the coal depositand is mined as over-burden. FMGproduces oil from a portion of the oilshale using an older vertical retorttechnology, but the vertical retorts can-

not process the fine portion of thecrushed oil shale. The fines are cur-rently being discarded. Once the ATPSystem is in operation, the rejectedfines will be redirected to the ATPplant.

Project Highlights

First application of the ATP Technol-ogy to Chinese oil shale.

Design teams located in Canada,Germany, and China.

Leading edge field machining tech-nique was proven. This has over-come a previous equipment size limi-tation.

Environmental performance has beenenhanced and greenhouse gas emis-sions reduced.

Project Development

UMATAC, in cooperation with PolysiusAG, a ThyssenKrupp company basedin Germany, began discussions withFMG in 2002 to explore use of the ATPTechnology with the Fushun oil shale.UMATAC obtained small oil shalesamples from FMG in 2003. Thesewere tested in UMATAC’s Calgary pilotplant facility. Based on the test results,the parties held a series of technicaldiscussions and review meetings inChina in 2003, 2004, and 2005. In2004, FMG shipped 100 tonnes of oilshale to Calgary.

This material was tested in 2005 inUMATAC’s 5 tonne/ hour pilot plant.Following the test program, the partiesheld further technical discussions andreview meetings, culminating in De-cember 2005 with signing the contractfor design and construction of the firstATP System for FMG.

The FMG Project, Fushun, China

Design and construction of the firstFMG ATP plant commenced in early2006 and was originally scheduled forcompletion in mid to late 2008. A com-bination of equipment delivery delays,high demand for commodities world-wide, pressures within China due to theOlympic preparations and limited Chi-nese engineering availability resulted indelay of the plant completion. Plantconstruction is now complete and is incommissioning phase.The FMG ATP facility has a rated oilshale processing capacity of 1,750,000tonnes/year (230 t/h).If operating results from the first unitmeet expectations, FMG will installthree to five additional ATP Systemtrains, and opportunities for expansioninto other locations in China areopened.

UMATAC Industrial Processes Inc., a company of Polysius (Calgary, Canada)

UMATAC Industrial ProcessesA company of Polysius

UMATAC Industrial Processes Inc. October 2010A company of Polysius

The ATP Technology for the FMG Project

The ATP Technology

The main component of the ATP Sys-tem is the ATP Processor, which is alarge diameter, horizontal, rotating cy-lindrical vessel. Inside the vessel areheat transfer and recovery tubes(called the preheat and cooling zones)that provide high thermal efficiency tothe machine, a retorting zone where oilis extracted from the shale, and a com-bustion zone where all of the processheat is generated by burning the car-bon by-product after extracting the oil.When compared to the existing verticalretort technology, the ATP has the fol-lowing advantages: Processes 100% of the mined oilshale. The existing retorts are notable to process shale smaller than 12mm in size, and approximately 20%of the mined shale is discarded.

Uses the by-product coke as the pri-mary process fuel. The existing re-torts burn a portion of the producedhydrocarbon gases to provide proc-ess heat. The ATP plant will use allof these gases to generate electricpower, improving plant efficiency.

The ATP System yield and recoveryof oil from the shale is higher than theexisting vertical retorts. Processingconditions in the vertical retorts resultin incomplete extraction of oil fromthe shale.

The ATP System produces a concen-trated hydrocarbon stream. The ver-tical retorts produce a gas streamthat is diluted with steam and combi-nations of inert gases and flue gases.This results in lower recovery of thehydrocarbon products that have beenextracted from the shale.

High capacity – the single FMG ATPProcessor has the same capacity asapproximately 60 of the existing ver-tical retorts. New ATP Processors indesign will have twice the capacity ofthe FMG ATP.

Environmental performance – theATP System will emit less pollutantand recover more oil from the re-source than the vertical retorts.

Environmental Performance

The first ATP System being con-structed at FMG will be used to confirmand demonstrate the plant’s ability to

achieve the targets set for the project.The design teams have implementednew equipment configurations and de-sign changes to improve environmentalperformance, including the following: Installing equipment to recover heatfrom the hot flue gas and spent shaleleaving the ATP Processor. Thisequipment reduces greenhouse gasemissions by 15%.

Including a preheat gas thermal oxi-dizer to destroy potentially odorouscompounds.

Scrubbing sulphur dioxide and am-monia from the flue gas to reducepollutant emissions.

Using high efficiency baghouse dustcollectors to minimize particulateemissions.

Improving resource utilization bymaking use of the 20% of the shalethat is currently discarded.

Achieving fuel self-sufficiency - noimported fuel (such as natural gas) isrequired to operate the ATP Proces-sor.

VapoursHydrocarbon

Spent Solids

Steam

Flue Gas

Feed

BurnerAuxiliary

Combustion

Preheat

Retort Zone

Heat Transfer

Combustion

Preheat Zone SteamEvolved

Zone

Air

Cooling Zone

SolidsCoked

SolidsCombusted

SolidsCooling Zone

Preheat Zone:Feed enters ATP unitIndirect heat transfer from the cooling zoneFeed heated to ~250°C to 300°CFeed is dried, generating steamSteam-rich vapors are removedPreheated and dried kerogen-bearing solids moved to theretort zone through a solids transport seal

Retort Zone:Direct heat transfer from hot spent solids recycled from thecombustion zoneMaterial heated to ~480 to 550°C in the absence of oxygenPyrolysis occurs yielding hydrocarbon gas, hydrocarbon vapours,and coked-coated solids. Hydrocarbon vapours sent tohydrocarbon recovery system for recovery as liquid andgaseous products.Coked solids move to the combustion zone through solidtransport seal

Combustion Zone:Addition of air to burn portion of coke byproduct from pyrolysisCoke combustion usually sufficient to supply all process heatSolids heated to ~700°C to 750°CA portion of the solids are recycled to the retort zone through asolids transport sealCombusted solids and combustion flue gases flow into thecooling zone

Cooling Zone:Heat recovery: hot solids and gases indirectly supply heat tothe preheat zoneSolids and flue gases are cooled to ~350°C to 425°CSolids and gases leave the ATP Processor

The ATP Processor

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UMATAC Industrial ProcessesA company of Polysius

UMATAC Industrial Processes Inc. October 2010A company of Polysius

Project Organization

The project was organized to maximizeChina based engineering and equip-ment supply. The primary parties in-volved and their scopes of work are:Fushun Mining Group – Owner Project management, procurement,design and supply of general infra-structure and oil shale preparationfacilities, project construction, andplant operations.

Luoyang Petrochemical EngineeringCompany (LPEC) – Detail Engineer Detail engineering for plant layout,civil, structural, piping, electrical, andinstrumentation. Specification ofequipment for procurement.

Polysius AG – ATP ProcessorMechanical Design and Supply Detail mechanical design and supplyof key ATP Processor components,including riding rings and bearings,drive gear and pinions, supply ofspecialized high alloy fabricationsand large castings, other specialtyitems, and technical assistance forfield erection and quality assurance.

UMATAC Industrial Processes Inc. –a company of Polysius ATP technology licensor. ATP System basic process design,process flow and basic process in-strumentation diagram generation,process equipment datasheet devel-opment, detail engineering support.

ATP Processor detail process design,process sizing and configuration, andmechanical configuration.

ATP System operator training andstart-up assistance to FMG.

UMATAC worked as a sub-contractorto Polysius.

Project Construction

Since the FMG plant site is locatedinland and approximately 450 km fromthe nearest port, many of the large di-ameter components of the ATP Proc-essor had to be shipped in sectionsthen welded and field machined tomeet the required tolerances.A series of pictures of the assemblyand construction of the ATP Processoras well as development of the plant sitefollow to illustrate the equipment sizesand erection procedures that had to bepracticed in order to meet the specifica-tions set out by Polysius and UMATAC.These erection procedures includedfield-welding and leading edge field-machining process that has over-come a previous machine size limita-tion.The ATP Processor has a rotatinglength of 63 m (206 ft), an outer shelldiameter of 8.5 m (28 ft), and a supporttyre diameter of 11 m (36 ft).The empty rotating weight of the ATPProcessor is 2,500 tonnes, and onceoperating on oil shale, the machineweight will increase to 2,800 tonnes(3,100 tons).

World-Wide Fabrication

Due to the large size of the ATP Proc-essor components, Polysius selectedshops from around the world that hadthe capabilities to manufacture compo-nents of this scale to the required qual-ity requirements. Key portions of theATP were fabricated in Germany, Ma-laysia, Czech Republic, Netherlands,United States, and China, then shippedto site for assembly.Construction Photographs

Fushun city – a major industrial centre – at night.

FMG’s existing vertical retort facility.

Oil Shale Light Shale Oil Inside the ATP Processor

UMATAC Industrial ProcessesA company of Polysius

UMATAC Industrial Processes Inc. October 2010A company of Polysius

FMG ATP System Plant Construction Photos

View of the site for the ATP System plant, show-ing preparations for installation of concrete pile.The pile excavations were dug by hand! Thegantry crane extends the length of site for useduring construction.

Design review meeting with UMATAC and Poly-sius engineers in Germany.

Design review meeting with UMATAC, Polysius,FMG, and LPEC engineers in China.

Casting and rough machining of the ATP supporttyres was done in the Czech Republic. Thetyres were shipped to China in 180° segmentsand welded together on site. Each tyre weighs120 tonnes (note workers in behind the tyre).

Field machining of the 11 m (36’) diameter sup-port tyres on-site by Self-Levelling Machines(SLM) of Australia.

This was a leading edge field-machining op-eration successfully completed under challeng-ing conditions in China.

Unloading the “ATP Centre Support” section ofthe outer shell – a high alloy fabrication manufac-tured in Malaysia. Shipping weight was 164tonnes.

Field welding of the centre support section inChina. A total of fourteen 8.5 m diameter circum-ferential welds in steel up to 100 mm thick wererequired to join 15 outer shell segments together.

Lifting one section of the ATP Processor outershell and one support tyre onto the foundation.Balloons and fireworks were provided by FMG tocelebrate this achievement.

Installing the girth gear, manufactured in theNetherlands, onto the outer shell.

UMATAC Industrial ProcessesA company of Polysius

UMATAC Industrial Processes Inc. October 2010A company of Polysius

FMG ATP System Plant Construction Photos

View of the plant site for the ATP System, show-ing steel frame platforms being erected.

View of ATP Plant showing control room on righthand side and steel platforms being erected.

View of baghouse and ATP Processor preheatzone tubes.

View of ATP System plant and hydrocarbon cy-clone installation.

UMATAC engineers on site in March 2010 train-ing control room operators.

UMATAC engineers on site in March 2010 train-ing control room operators in the field.

View of combustion zone of ATP Processor,hydrocarbon cyclone, and oil recovery system.

View of preheat zone and ATP flue gas system. View of oil recovery system.

UMATAC Industrial ProcessesA company of Polysius

UMATAC Industrial Processes Inc. October 2010A company of Polysius

Future Opportunities

Oil Shale

Oil shale is a sedimentary rock contain-ing a solid organic material called kero-gen. Kerogen is a complex hydrocar-bon molecule resulting from the gradualdecomposition of organic residue fromplant and animal life and can bethought of as an immature form of oiland gas. Given sufficient time, geo-logic forces could convert kerogen intoconventional oil and gas. This naturalprocess would take millions of years.Using modern processing techniques,the transformation can be rapidly ac-complished and kerogen can be con-verted into non-conventional oil andgas using the Alberta Taciuk Process.

Oil Shale Resource and Potential

Oil shales are distributed throughoutthe world and differ widely in oil contentand shale oil characteristics.The largest identified oil shale depositsare located in the United States. Thesedeposits dwarf all the others, and areestimated to contain more than twotrillion barrels of oil, of which 560 billionbarrels of this resource are consideredrecoverable “under present and ex-pected local economic conditions withexisting available technology” (in 2001).For comparison, the Alberta Depart-ment of Energy estimates that the Ath-abasca oil sands contain 1.7 trillion bar-rels of oil, of which 174 billion barrelsare considered proven reserves that

can be recovered using current tech-nology. Over one million barrels perday of bitumen are currently being pro-duced from the Alberta oil sands.The World Energy Council has pre-pared a 2004 survey of the shale oilpotential of member countries. Asummary of that survey is shown be-low.

By Country Shale Oilbillion bbl

United States 2,587Jordan 34

Australia 32Estonia 16China 16

By RegionNorth America 2,602

Europe 368Africa 159

South America 82Asia 46

Middle East 38Oceania 32World 3,328

Shale oil plants are currently in opera-tion in Estonia, China, and Brazil.These plants mostly use variations ofthe stationary vertical retort technology.

The ATP Technology History

The Alberta Taciuk Process technologyfor oil extraction was developed in Al-berta in the late 1970’s for oil sandsextraction and is equally suited to shaleoil extraction.

The ATP technology is owned, devel-oped, and licensed by UMATAC Indus-trial Process Inc., a company of Poly-sius, based in Calgary, Alberta, Can-ada.The first large scale-up of the ATP Sys-tem was the 250 t/h Stuart Oil ShaleDemonstration facility, commissioned inAustralia in 1999. This plant proc-essed 2.6 million tonnes of oil shaleand produced 1.65 million barrels ofshale oil before the end of the demon-stration program.A 230 t/h ATP is currently being com-missioned for FMG to supplement theirexisting vertical retort shale oil plant.

Future Opportunities

A 1000 t/h ATP plant is currently in pre-liminary design for Jordan. Two 500 t/hATP trains will be installed in parallel toextract oil from the oil shale. A hy-drotreater, sulphur recovery plant, andpower plant will treat the products re-covered by the ATP Processors to pro-duce 15,000 bbl/d of synthetic crudeoil, 320 t/d of sulphur, and 70 MW ofelectricity. The plant will be both fueland electricity self-sufficient.UMATAC is continually testing oilshales and oil sands from around theworld. Promising oil shale prospects inthe United States, Australia, Jordan,Estonia, and China have been testedand project development with the re-source holders is on-going.

ATP System Plant and Upgrader in Australia