Gamechanger? The possible economics1 Feb 2021 12:34
Post copied from QFI board, ref today's RNS, serious potential implications for the Utah project.
Could this not dramatically change the economics of the Asphalt Ridge project, in fact massively increase the potential profitability of QFI generally?
In the last Quorum article which dustofnations posted last July, he argued that MSAR technology could dramatically reduce the price of production in Utah, since the condensates which currently make up a large part of the costs would no longer be required to thin the residue. From Figure 1's data, if we remove the price of those condensates used, that would give us the price of the raw sweet residue extracted at about $14 a barrel, almost exactly $100 per ton of low sulphur residue.
From an article I posted last year -
https://farm-energy.extension.org/new-uses-for-crude-glycerin-from-biodiesel-production/
"Their crude glycerol is usually sold to large refineries for upgrading. In recent years, however, with the rapid expansion of biodiesel industry, the market is flooded with excessive crude glycerol. As a result, biodiesel producers only receive 2.5-5 cents/lb for this glycerol (Johnson and Taconi, 2007). Therefore, producers must seek new, value-added uses for this glycerol."
There are 2204 lbs in a metric ton, so at 2.5c a lb, that would make a ton of glycerol about $55, almost half the price of the residue, worst case scenario it's $110 a ton. There is a glut of the stuff on the west coast of the USA at the moment, many refineries in California which were to be mothballed have instead been kept open and turned into "bio-refineries".
For ease of counting, let's say the glycerol is the same price as the residue, so both the major input components of bioMSAR are $100 a ton. What else gets added, 10% water (free) and the special Nouryon chemicals, from memory they're about $35 for each ton of MSAR. So we should be looking at maximum production costs of $140 per ton of bioMSAR, but possibly up to 20% less than that.
The big difference now is what price do we sell it at? This is no longer a synthetic version of HFO, or in the case of Asphalt Ridge with its sweet residue, a synthetic version of VLSFO, this is a synthetic diesel, a green bio-diesel if you like. It has to be if the results of the tests on the Cummins engine are to be believed. The current price of MGO is averaging about $500 a ton, but that's still much lower than the pre-Covid prices, when things get back to normal hopefully by the end of the year, MGO could be back to its usual average of between $600 and $700 a ton. If you can produce something at $140 a ton and sell it at those prices, that's one hell of a profit, a money-making machine.
The CO2 reductions are in the region of 25% we've been told, but the well-to-wake figure would be even higher, there is no refinery process, it comes out of the ground, gets stuck through a colloid mill and voilà. What is the CO2 footprint of an oil refinery? Gamechanger inde
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