Rusal exploring ethane for Alpart plant
Published:Sunday | July 20, 2014 | 12:00 AM
Daraine Luton, Senior Staff Reporter
UC RUSAL is considering the use of ethane - a gas more widely used in the petrochemical industry for the manufacture of the plastic polyethylene - to fire its 1.7- million tonne alumina refinery in Jamaica's southwestern parish of St Elizabeth.
The plant has been closed for five years, largely because of low market price for its product and high production costs, which is primarily because of the expensive oil it burns for energy.
But a fortnight ago, Jamaica's Mining and Energy Minister Phillip Paulwell announced that he had given Rusal, the world's largest producer of alumina and aluminium, six months to reopen Alpart and another facility, the 601,000-tonne Kirkvine works in the centre of the island, or risk 200 million tonnes of bauxite ore concessions that go with the refineries.
But last Friday, Igor Dorofeev, who runs Rusal's operations in Jamaica, told The Gleaner that Rusal was close to finalising an energy strategy for Alpart, in collaboration with a US outfit called American Ethane, which would see the construction of a 150- megawatt power plant, one-third of whose output would be utilised by the refinery, leaving 100 megawatts of power to be sold the national grid.
"We have let the contract on the initial studies, both on the receiving terminals and the power plants," said Walt Teter, senior vice-president, American Ethane, which is based in Houston, Texas.
"Our engineers are down here working on these things," Teter said.
The project would involve building an ethane-receiving and regasification facilities at Port Kaiser, on Jamaica's north shore, then deliver the gas either via pipeline or rail tanks to the power plant.
Nor would Dorofeev say what would be the cost of the project, but insisted it would be substantially cheaper than the construction of infrastructure for natural gas, on which Jamaica had intended to rest its energy future, or coal, the solution that Rusal proposes for its 670,000-tonne refinery at Ewarton, in the southern parish of St Catherine.
A 30-megawatt power plant is planned for that facility. It is expected to be started early in 2015 and completed by the end of 2017. The cost of that project would be US$200 million, Dorofeev said.
Dorofeev said that the expects to, within weeks, present to Paulwell "a complete list of documents plus drafts papers, plus our proposals" for the project.
"Hopefully, we would have an agreement signed with the Government in early September," he said.
Paulwell, who has in the past expressed frustration at being strung out by Rusal over its long-term plans for its Jamaica facilities, responded cautiously at the weekend to Dorofeev's remarks, including the Russian's declaration that Rusal was in Jamaica "for the long haul".
He wanted to see the specifics of what is on offer.
"I have not seen the proposal so I am awaiting it," he said. "It is an original proposal."
Ethane is one of the so-called natural gas liquids (NGLs), including propane, butane and pentane, that can be extruded from the processing of natural gas. But because of its relative scarcity in the past it has been primarily been channelled to the production of plastics.
However, things have changed substantially with the development/enhancement of technology to extract oil and gas from shale fields, leading to a major expansion of oil and gas reserves in North America.
Moreover, while NGLs prices have moved up in recent years, they lag significantly behind natural gas and oil. And that, according to Teter, would add to the viability of using ethane in Jamaica, including for power to the national grid.
"Our focus is utilising the ethane as a fuel to make the systems more economically efficient," said Teter.
In fact, the Rusal/American Ethane proposal is emerging at a time when the Government is returning to the market for its several-times derailed 380-megawatt generating capacity, which initially was based on gas-fired generators.
There are, however, suggestion that the Jamaica Public Service Company (JPS), the monopoly power and transmission and distribution company, which could be invited to sole-source on the project, is likely to offer a coal-based solution.
Energy World International (EWI), who were the preferred bidders for gas-fired plant until deal collapsed several months ago, had said that they could product energy to the grid at around US$0.12 per kilowatt- hour. Dorofeev and Teter suggested that their ethane plant would be cheaper, but offered no figure.
And while Teter said his outfit had as yet had no discussion with JPS, he conceded that being able to supply power to the national grid "would be substantially beneficial for our project".
Environmentally, too, he said, ethane would be a better product. "As a fuel, it is equivalent to natural gas in its cleanliness, and so there is an environmental benefit as well," Teter said.