Design and feasibility study of an ethanol distillery in ... · PDF fileProject document Economic Comission for Latin America and the Caribbean (ECLAC) Design and feasibility study

Project document

Economic Comission for Latin America and the Caribbean (ECLAC)

Design and feasibility study of an ethanol distillery in Guyana

Eduardo Algodoal Zabrockis Manlio F. Coviello

This document has been prepared by Eduardo Algodoal Zabrockis, consultant of the Natural Resources and Infrastructure Division of ECLAC and Manlio Coviello, Economic Affairs Officer of the same Division, within the activities of the project “Energías Renovables para el Desarrollo Productivo Endógeno de Países Alto-Andinos y del Caribe Meridional” (ITA/06/001), in collaboration with the Government of the Republic of Guyana. The views expressed in this document, which has been reproduced without formal editing, are those of the authors and do not necessarily reflect the views of the Organization. United Nations Publication LC/W.276 Copyright © United Nations, october 2009. All rights reserved Printed in Santiago, Chile – United Nations.

ECLAC – Project Documents collection Design and feasibility study of an ethanol distillery in Guyana

3

Contents

Overview ...................................................................................................................................7 I. Introduction................................................................................................................................. 11 II. Basic design data and technical criteria ...................................................................................... 13 III. Engineering design basis....................................................................................................19

III.1 Process............................................................................................................................ 19 III.2 Raw material .................................................................................................................. 20 III.3 Product ........................................................................................................................... 20 III.4 Process description......................................................................................................... 22 III.5 Input requirements.......................................................................................................... 25 III.6 Other operating parameters ............................................................................................ 26 III.7 Specifications of inputs .................................................................................................. 26

IV. General investment items............................................................................................................ 31 V. Basic layout and site location ..................................................................................................... 33 VI. Economical - Financial analysis ................................................................................................. 37

VI.1 Guyana’s Ethanol demand estimate ............................................................................... 38 VI.2 The Ethanol sales price definition .................................................................................. 39

VII. World economic reorganization.................................................................................................. 59 VIII. Conclusion .................................................................................................................................. 61

VIII.1 The project...................................................................................................................... 61 VIII.2 The macro-economic scenario........................................................................................ 62 VIII.3 The funding .................................................................................................................... 62

IX. Recommendations....................................................................................................................... 63 Bibliography ...................................................................................................................................... 65

Annex A- Supplier’s detailed package ....................................................................................... 67 Annex B - Oil, Mogas, Ethanol Prices Statistical General References ...................................... 83 Annex C - Ethanol Production, Import-Export General Statistics.............................................. 89 Annex D - CBI Ethanol Production, Import-Export Data .......................................................... 90 Annex E - PRAJ’s Project Similar Ethanol Plants ..................................................................... 93 Annex F - Typical Vinasse Fertigation in Dry Land, Brazil....................................................... 94


4

Tables

Table 1 Personnel and shifts ...................................................................................................... 13 Table 2 Plant capacity ................................................................................................................ 15 Table 3 Typical molasses specification...................................................................................... 15 Table 4 Typical viscosity range of cane molasses ..................................................................... 16 Table 5 Specifications recommended by the Brazilian International Trade

Association (IETHA) .................................................................................................... 16 Table 6 The vinasse of molasses composition ........................................................................... 18 Table 7 The preliminary design is based on molasses C............................................................ 20 Table 8 Fuel grade ethanol as per ASTM D-4806 ..................................................................... 21 Table 9 Vinasse production and solids concentration................................................................ 21 Table 10 Utilities and chemicals .................................................................................................. 25 Table 11 Lees and steam condensate ........................................................................................... 26 Table 12 Molasses-c quality process specification ...................................................................... 26 Table 13 Efficiencies according to volatile acids variation in molasses-C .................................. 28 Table 14 Yields of ethanol per ton of molasses-C ....................................................................... 28 Table 15 Petroleum consumption ................................................................................................ 38 Table 16 Growth of gross domestic product ............................................................................... 38 Table 17 Project general data....................................................................................................... 38 Table 18 Mogas average CIF prices............................................................................................. 39 Table 19 Ethanol world market prices ......................................................................................... 39 Table 20 Assumptions.................................................................................................................. 40 Table 21 Revenue and costs ........................................................................................................ 42 Table 22 Disbursement cronogram ............................................................................................. 43 Table 23 Capital expenditures ..................................................................................................... 46 Table 24 Amortization schedule ................................................................................................. 48 Table 25 Cashflow ...................................................................................................................... 49 Table 26 Income statement ......................................................................................................... 50 Table 27 Sensivity........................................................................................................................ 52 Table 28 Cashflow - price ........................................................................................................... 53 Table 29 Cashflow - molasses price ............................................................................................ 54 Table 30 Cashflow - investment ................................................................................................. 55 Table 31 Macro economical scenarios......................................................................................... 57 Table 32 Critical and proprietary equipment provided by supplier’s on

CIF Georgetown Guyana basis ..................................................................................... 69 Table 33 Capital bought out equipment within packet on CIF Georgetown Guyana basis ........ 70 Table 34 Equipment to be fabricated by project on site under supplier’s specification............... 71 Table 35 Critical and proprietary equipment and components by supplier on

CIF Georgetown Guyana basis ..................................................................................... 71 Table 36 Bought out items by the supplier on CIF Georgetown Guyana basis ........................... 72 Table 37 Equipment to be fabricated by the project on site under the supplier’s specifications . 73 Table 38 Critical and proprietary equipment provided by the supplier on CIF

Georgetown Guyana basis............................................................................................. 73 Table 39 Bought out items by the supplier on CIF Georgetown Guyana basis ........................... 73 Table 40 Equipment to be fabricated by the project on site under the supplier’s specifications . 74 Table 41 Stage I ........................................................................................................................... 74 Table 42 Stage II .......................................................................................................................... 74 Table 43 Bought out items by the supplier on CIF Georgetown Guyana basis Stage I ............... 75 Table 44 Equipment to be fabricated by the project on site under the supplier’s specifications 75 Table 45 Instrument list for “hiferm” fermentation section ......................................................... 75 Table 46 The description relates the instruments which belong to the distillation system,

bought by the supplier................................................................................................... 76 Table 47 Instrument list for molsieve section .............................................................................. 77


5

Table 48 Instrument list for “ecovap” evaporation section.......................................................... 78 Table 49 PLC & basic specification............................................................................................. 78 Table 50 Bought out components ................................................................................................ 80 Table 51 Front - end battery limits............................................................................................... 80

Figures

Figure 1 Project Location ............................................................................................................ 14 Figure 2 Basic Layout ................................................................................................................. 34 Figure 3 Site Location Layout reference drawing ...................................................................... 35 Figure 4 Site Location Aerial View............................................................................................. 36 Figure 5 Variation graph ............................................................................................................. 52 Figure 6 Sensitivity Variation ..................................................................................................... 62 Figure 7 Typical PLC basic control automation system.............................................................. 79 Figure B1 Oil, Mogas, Ethanol Prices Statistical General References........................................... 83 Figure B2 US Real Gasoline Price: Annual Average 1919-2009 .................................................. 84 Figure B3 US Regular Gasoline Prices: Nominal and Real........................................................... 84 Figure B4 US Imported Crude Oil Prices: Nominal and Real ....................................................... 85 Figure B5 Platts Ethanol NY 5-15 x Nymex Gasoline .................................................................. 85 Figure B6 Platts NY 5-15 x Brazilian Domestic Price................................................................... 86 Figure B7 Price Index .................................................................................................................... 86 Figure B8 Landed Costs of Crude Oil Import from Selected Countries ........................................ 87 Figure B9 US Ethanol Market Prices............................................................................................. 88 Figure C1 Ethanol Production, Import, Export General Statistics ................................................. 89 Figure D1 US Ethanol Imports - 2007 ........................................................................................... 90 Figure D2 Dehydration Capacity ................................................................................................... 90 Figure D3 CBI Capacity Share – 2007........................................................................................... 91 Figure D4 CBI Capacity x Quota................................................................................................... 91 Figure D5 US Ethanol Imports from CBI - 2007 ........................................................................... 92 Figure E1 Manuelita, Colombia..................................................................................................... 93 Figure E2 British Sugar, United Kingdom..................................................................................... 93 Figure F1 Typical Vinasse Fertigation in Dry Land, Brazil .......................................................... 94 Figure F2 Typical Vinasse Fertigation in Dry Land, Brazil .......................................................... 94


7

Overview

This study envisages the basic technical and economic-financial model for the implementation of a fuel ethanol distillery plant in Skeldon, Guyana at the Guyana Sugar Corporation’s (Guysuco) new Skeldon industrial site.

Under optimal conditions, the plant will be able to produce, a maximum of about 35,000 cubic meters (m³) of ethanol per year or 7.7 million imperial gallons per year. The plant will produce about 23,400 m³ during the first operational year, according to the available feedstock.

The Economic Commission for Latin America and the Caribbean (ECLAC) developed a general study on ethanol production based on the fermentation and distillation of sugar cane molasses. The molasses for the project will be obtained from the sugar process at Guysuco.

The ECLAC study proposes a mixture of up to 10% ethanol in the imported mogas volume, which in 2007 reached approximately 124,000 m³. This mogas volume indicates, at a 10% blending level, a demand of 13,000 m³ of anhydrous ethanol in the first year of operation.

The Guyanese economy is growing and therefore an estimated 2.5% per year growth was added to the mogas volumes to be imported during the tenor period.

The ECLAC study was not able to foresee or assess a decision recently made by Guysuco management related to the project’s basic construction plans. Guysuco determined that the Skeldon plant will not be able to supply the distillery’s utilit ies needs, requiring the distillery to install its own equipment, which substantially increases the overall investment costs. On the operation side, there will also be a negative impact on costs because the main utility, the required process steam, will be generated by wood and/or rice waste combustion.

Another fact is the need to process the distillery’s main effluent, namely vinasse, which cannot be disposed of in the existing water canals, because of its negative environmental impact. This issue was technically solved by the use of an appropriate technology, which obtains a concentrated vinasse with a solid content level that can be used as a partial feedstock for a fertilizer preparation to be applied at the sugar cane fields.

The necessary vinasse concentration equipment will also increase the investment cost. The final costs will have to take these additional expenses into account, as well as the costs for the various buildings, such as the laboratory, the water treatment station, biomass fuel storage and handling systems, and other such structures.


8

After considering this unforeseen situation, a new strategy was designed. The simulation had to look for an economy-scale project engineering design that could process all the available molasses, some 90,000 tons per year according to Guysuco. This can be processed by a 120,000 litres per day distillery, producing 23,400 m³ per year of anhydrous ethanol, during 205 operation days.

This production corresponds to an ethanol mixture level of up to 17%, which is feasible in electronic fuel injection engines in existing car models. Flex fuel cars are expected to become more common in the near future, and this will increase ethanol demand.

The countries that have started using ethanol as fuel have adopted a low blending grade, of 5% to 10%, because they have huge or much higher mogas consumption than Guyana. It would require a huge amount of ethanol to reach a 20% grade, for instance, at the beginning of the initiative in those countries. Brazil has an E-23/25 mogas grade currently, but it began blending in 1975.

Guyana has preferential trading arrangements, and is part of the CTP-Caribbean Trading Partnership and Carican-Canada, which will allow it to access favorable market conditions if it needs to export surplus ethanol during the first few years of the project.

Capital expenditures are estimated at US$ 18 million, which with the higher project production cost and with the adopted ethanol sales price conditions does not make the enterprise feasible. The capital expenditures could be adjusted to approximately US$ 12 million if the vinasse concentration plant were not necessary.

The ethanol initiative is valid under Guyana’s macro-economic scenario, which can support and create mechanisms that will aggregate value to the ethanol sales price via the elimination of import duties and consumption taxes, in addition to other incentives that may eventually be available to make the project viable.

From the macroeconomic perspective, the replacement of about 23,400 m³ per year of imported mogas by the ethanol project means a hard currency savings of G$ 16.85 billion or US$ 83 million on the energy import bill , during the ten years of the project analysis.

The oil market price was considered to be between US$ 60 and US$ 80 per barrel.

Official Cooperation in Guyana

Mr. Navin Chandarpal, Presidential Adviser on Sustainable Development.

Mr. Mahender Sharma, Guyana Energy Agency, Chief Executive Officer.

Mr. Geoffrey Da Silva, Guyana Office for Investment, Chief Executive Officer.

Mr. Dhanpaul Dhanraj, Guyana Office for Investment, Investment Officer.

Mr. Badrie Persaud, Guyana Oil Company, Chief Executive Officer.

Mr. Nick Jackson, Guyana Sugar Corporation, Chief Executive Officer.

Mr. Harold B. Davis, Guyana Sugar Corporation, Agriculture Research Director.

Mr. Paul Hough, Booker Tate Limited, Skeldon Project Manager.

Special Assistance in Guyana

Mrs. Charmaine Gomes, Environmental Affairs Officer, ECLAC Port of Spain Subregional Headquarters.


9

Technical Support

Praj Industries Limited, Pune, India.

Feasibility Study Assistance

Ricardo Raoni Werlang Prioste, Brazil; Graduation in Economics - University of São Paulo, Ribeirão Preto, SP, Brazil.

Document Preparation Assistance

Vinicius Agostinho da Nóbrega - Management Graduation Course, University Barão de Mauá, Ribeirão Preto, SP, Brazil.

ABBREVIATIONS UNITS AND PREFIXES

s second W watt

h hour kW kilowatt

d day kWh kilowatt hour (3.6 mega joule)

h/d hour per day MW megawatt

h/y hour per year MWh megawatt hour

J joule (0.293 cal)

m metre kJ kilo joule

cm centimetre MJ mega joule

mm millimetre V volt

m2 square metre kV kilovolt

m3 cubic metre Hz hertz

m3/d cubic metre per day LV low voltage

km kilometre cfu/mg colony forming unit per milligram

ha hectare pH acidity-alkalinity scale

ppm parts per million

L litre M million

ml millilitre max maximum

L/s litre per second min minimum

gal gallon (3.785 L) °C

Cal

degree Celsius

Calorie

Imp. gal Imperial gallon (4.546 L) kcal

Mcal

Kilocalorie

Mega Calorie

bbl barrel GDP Gross Domestic Product

1 bbl = 158.99 L = 42 gal = 34.97 Imp. gal IRR Internal Rate of Return

1 m3 = 1,000 L = 264.17 gal = 219.96 Imp. gal NPV Net Present Value

v/v volume by volume SA Sensitivity Analysis

w/w weight by weight DSCR Debt Service Coverage Ratio

g gram CAPEX Capital Expenditure

kg kilogram OPEX Operational Expenditure

mg milligram ERP Enterprise Resources Planning

t metric ton G$ Guyanese Dollar

t/h metric ton per hour US$ United States Dollar

mg/kg milligram per kilogram FOB Free On Board

g/L gram per litre FOT Free On Truck


10

kg/m kilogram per metre CIF Cost Insurance Freight

kg/h kilogram per hour CC Carbon’s Credit

kgf/cm2 kilogram force per square centimetre PLC Programmable Logic Controller

kPa kilo Pascal B.O.D. Biochemical Oxygen Demand

MPa mega Pascal C.O.D Chemical Oxygen Demand

hp horsepower NBR Brazilian Standards

FS fermentable sugars ASTM American Society For Testing and Materials Standards

VA volatile acid AISI American Iron and Steel Institute

Nm³/t Normal Cubic Metre per Ton


11

I. Introduction

Given the project’s location and the fact that sugarcane grows in wet areas, it was necessary to select a proven system to manage properly the distillation and dehydration effluent. This effluent, normally known as vinasse, is generated at high volumes and it can not be disposed of in local water sources. Vinasse has agricultural fertilization properties, and can thus be placed directly on cultivated land via fertigation, in the ethanol-producing countries.

The adopted design specifies equipment to concentrate the vinasse to levels that can then be used as fertilizer, as already installed and in operation in Colombia.

In addition to solving the vinasse issue, this technology also involves adequate and up-to-date parameters for the consumption of molasses, water, steam, energy, and chemicals, and proposes an efficient control and automation system.

The project is designed to be highly efficient overall.


13

II. Basic design data and technical criteria

Location

The distillery plant is to be located at the Guysuco Skeldon plant, at Skeldon, East Berbice District, Courentyne, region 06.

Latitude: N 52º 52”

Longitude: W 57º 08”

The location was picked to make use of the molasses supplied by the Skeldon plant and from Guysuco’s other mills in the region.

The project envisages a direct pipe connection to the Skeldon plant’s molasses storage facilities.

The site selection was approved by Guysuco.

TABLE 1 PERSONNEL AND SHIFTS

Personnel N° Shifts Manager 01 01

Administration chief 01 01

Operation chief 01 01

Quality control chief 01 01

Administration 03 03

Operators 05 15 Maintenance 03 09

Quality control 03 09

Services and security 03 09

Total 49

Source: Prepared by the authors.


14

FIGURE 1 PROJECT LOCATION

Source: Google Map.

Note: The boundaries and names shown on this map do not imply official endorsement or acceptance by the United Nations.

Project


15

TABLE 2 PLANT CAPACITY

Plant capacity 1 - Nominal ethanol production capacity 120 m3/d

2 - Operation 310 d/y 3 - Time efficiency 95%

4 - Continuous operation (2x3) 294 d

5 - Full production capacity (4x1) 35,280 m3/y

6 - Ethanol per molasses 260 L/t

7 - Molasses required for full capacity(5/6) 135,700 t/y

8 - Molasses availability 90,000 t/y 9 - Ethanol project production(8x6) 23,400 m3

10 - Operation days for production (9/1x3) 206 d/y


Typical Molasses Specification

The exact composition of the molasses is difficult to predict. It is influenced by soil and climatic conditions, variety and maturity of cane and the processing conditions in the factory. For this reason, only ranges with indicative averages of the composition can be given. Dry matter ranges between 74-79%; the analysis below is based on 75%.

TABLE 3 TYPICAL MOLASSES SPECIFICATION

Cane Total Sugars 46-52% Sucrose 30-40% Reducing Sugars 15-20% Unfermentable Sugars 2 - 4% Raffinose Non-Sugar Organic Matter 9-12% Nitrogen components as protein (6.25 * N) 2-3% Betaine Glutamic Acid Non-nitrogen bodies Soluble gums/other carbohydrates Organic acids Crude Ash 8-11% Sodium (as Na) 0.1-0.4% Potassium (as K) 1.5-4.0% Calcium (as Ca) 0.4-0.8% Phosphorus (as P) 0.6-2.0% Chloride (as Cl) 0.7-3.0%

Source: Schuumans & Van Ginneken

Cane molasses contains small amounts of citric acid, succinic acid, waxes, stereols and vitamins. The viscosity of molasses varies widely. It depends on several factors: dry matter, the area of production and temperature.


16

TABLE 4 TYPICAL VISCOSITY RANGE OF CANE MOLASSES

Temp. (ºC) Viscosity Range (centipoises) 10 20.000-40.000 15 10.000-25.000 20 5.000-10.000 25 3.000-5.000 30 2.000-3.000 35 1.500-2.500 40 1.000-2.000

Source: Schuumans & Van Ginneken

Anhydrous Fuel Ethanol Specification

Considering that ethanol is a relatively new fuel, there are international standardization committees working to establish the standards for different ethanol grades. Committees from Europe, the United States, and Brazil are working together in a special task force.

The growing global consumption of ethanol as fuel or for industry feedstock requires accurate methodologies for analysis and derived procedures for certification and trading.

The following specifications are the ones recommended by the Brazilian International Trade Association (IETHA).

TABLE 5 SPECIFICATIONS RECOMMENDED BY THE BRAZILIAN INTERNA TIONAL

TRADE ASSOCIATION (IETHA)

Characteristics Unit Density @ 20°C kg/m³ max. 790.8 NBR 5992 / ASTM D4052

Alcoholic strength @ 20°C %m/m min. 99.5* NBR 5992 / ASTM D4052

Alcoholic strength @ 20ºC %v/v min. 99.7* NBR 5992 / ASTM D4052

Ethanol Content %v/v min 97.1** ASTM D5501

Water (Karl Fischer) %m/m max. 0.5 ASTM E203 / E1064

Water (Karl Fischer) %v/v max. 0.4 Calculated

Total Acidity -max mg/L max. 30 NBR 9866 / ASTM D1613-06

Electrical Conductivity uS/m max. 500 NBR 10547

pHe 6.5 -9.0 ASTM D6423

Copper mg/kg max. 0.07 NBR 10893/ASTM D1688A

Chloride mg/kg max. 1 NBR 10894, ASTM D7319-07, ASTM D7328-07e1

Solvent-washed gum mg/100mL max. 5 ASTM D381

Aspect Clear Visual

Methanol %v/v max. 0.5 ASTM D5501

C3-C5 %v/v max. 2.0 ASTM D5501

Sulphur mg/kg max. 10 ASTM D2622, D3120, D5453, D6428

Sulphate mg/kg max. 4 NBR 10894, ASTM D7319-07, D7328-07e1

Non-volatile material mg/L max. 100 ASTM D1353

Source: IETHA International Ethanol Trading Association , Oct 1st´ 20.

* Densimetry

** Chromatography (100 -% water-%methanol -%C3-C5)

Calculated = Density @ 20°C x water% m/m / 1000


17

Process

As described in chapter III.

Equipment

As described in annex A.

Process Quality Control

The distillery is to have its own laboratory and specialized personnel, to keep ethanol specifications according to the established standards. Personnel will control all process segments, utilities, feedstock, chemical inputs, and the legal limitations of the disposal of effluents.

Plant Flexibility

The plant can operate at 70% of nominal capacity and keep the same efficiency.

Plant capacity allows for the management of different production risks such as labour strikes, energy defaults, and the lack of molasses and chemicals, among other things.

The plant can produce 35,280 m³ of ethanol per year if there is a greater availability of molasses, (approximately 135,700 t/y).

Utilities

Considering the fact that the Skeldon plant cannot supply treated water, steam, electricity, compressed air, quality control services, or even bagasse as a boiler fuel, the distillery project had to specify the necessary equipment in order to produce these required utilities and provide the above-mentioned services.

The capacities and quality specifications were based on the main supplier’s process packet requirements, as described in chapter III.

Therefore it was necessary to add a compact boiler, 25 steam t/h, burning biomass fuel (rice waste and/or wood), a turbo-generator that can supply the energy demand, and a water treatment station, with their peripherical and auxiliary installations.

Operation Control and Maintenance

An up-to-date instrumentation and automation system will be provided, which will allow the operators to control the process and utilities operations both on-site and remotely.

The project specifies the adequate facilities for day-to-day operation maintenance and for the storage of spare parts.

Civil Works

All necessary buildings have been included in the project proposal. The technical specifications for site preparation, soil study, piling, and costs were provided by Guysuco, which has recent data related to the execution of the new Skeldon project.

Buildings:

• Administration


18

• Maintenance & Warehouse

• Quality Control Laboratory & Operation Control Center

• Social assistance & Amenities

• Steam and Power Plant

Ethanol Storage

There will be a 5,000 m3 tank for ethanol storage.

An ethanol loading station to fill 30 m3 truck tanks, observing the existing security standards for the operation, is also specified in the project’s plans.

Effluents

The effluents are vinasse, resulting from the distillation process, boiler flue gases, process lees, general used water, laboratory analysis residues, and human waste.

The vinasse requires a special industrial treatment, because of the huge volume produced: it is generated in a proportion of 11 litres of vinasse per litre of ethanol, varying according to the molasses specification. Therefore there will be a daily production of 1,320 m3 of vinasse. According to environmental protection legislation, the vinasse cannot be directly disposed of into the water canal because of its B.O.D and C.O.D content.

A special technology is used by the project to concentrate the solid content of this effluent up to 54-55%. At this concentration it can be used as a component for fertilizer production. As a result, this requires special equipment, installations and utilities inputs to be resolved, and this negatively impacts the feasibility study.

TABLE 6 THE VINASSE OF MOLASSES COMPOSITION

Elements Units Value

N

P2O5

K2O

CaO

MgO

SO4 *OM

Mn

Fe

Cu

Zn pH

kg/m3

kg/m3

kg/m3

kg/m3

kg/m3

kg/m3 kg/m3

mg/dm3

mg/dm3

mg/dm3

mg/dm3

0.75 - 0.79

0.10 - 0.35

3.50 - 7.60

1.80 - 2.40

0.84 - 1.40

1.50 37 - 57

6 - 11

52 - 120

3 - 9

3 - 4 4.0 - 4.5

Source: CTC Sugarcane Technology Center, Piracicaba, SP, Brazil.

*OM: Organic Material Content.


19

III. Engineering Design Basis

The main issue related to the project’s technical definition is to establish the adequate quality and quantity parameters to run the process, and to observe the existing operation periods for selecting the required personnel, equipment and installation.

The process will also facilitate a study of the procedures for effluent treatment, which will need to be submitted to the environmental authorities.

The authors researched and concluded that the invited company already had experience in this field in similar scenarios in India, the Caribbean and Latin America. This supplier can provide an invaluable contribution to the project in this regard. The annual operation period for the project has been extended to 310 days per year because there is no process operation connection (utilities) with the Skeldon plant.

The molasses produced by Skeldon and other mills will be stored during the sugar cane milling season, for approximately 180 days.

III.1 Process

Ethanol is produced through the fermentation of the molasses in a semi-continuous process. The fermentation is developed in controlled temperature conditions, by the addition of the supplier’s selected yeasts.

The water used to dilute the molasses for fermentation requires compatible quality standards.

During fermentation there must be continuous bacterial control in order to avoid yeast infections, which consequently affects efficiency.

The fermentation stage finishes when all fermentable sugars are reduced to almost zero. Thence there is the formation of the “wine”, which is sent for distillation. The wine contains about 7-9% ethanol.

During distillation the ethanol is separated from the wine and the final product is hydrous ethanol.

Hydrous ethanol is continuously sent to the molecular sieves and turned into the final anhydrous grade ethanol. After cooling, this is sent to the storage tanks.

The whole process is performed in a continuous operation, under instrumentation and automation control systems, which are supervised by quality control personnel.


20

The selected process envisages the integration of the different production stages in order to reduce a) steam consumption and, consequently, the necessary fuel (rice, straw, or wood); and b) the volume of the vinasse by evaporation.

The following process stages will provide more accurate information:

• Semi-continuous fermentation;

• Total vacuum distillation;

• Molecular sieve dehydration; and

• Evaporation of vinasse.

III.2 Raw Material

The feedstock specifications were established by information provided by Guysuco and by the supplier’s technical background.

It is necessary to adopt average parameters to specify equipment capacities, but always considering the related operational security margins.

The supplier’s engineering reports confirmed the yields and the process consumption ratios, such as the daily necessity of 484 tons of molasses to produce 120,000 litres of the specified ethanol, based on the adopted parameters.

TABLE 7 THE PRELIMINARY DESIGN IS BASED ON MOLASSES C Parameter (% by w/w) Molasses C • Fermentable Sugars 44% min. • Unfermentable Sugars 3 – 4% • Total Sugars as Invert 47 – 48% • Moisture 18 – 20% • Volatile Acids Less than 6000 ppm • Butyric Acid Less than 140 ppm

Source: PRAJ.

Note: Requirement of Molasses: 484 t/d (Based on 44% Fermentable Sugars).

III.3 Product

The project will produce fuel grade anhydrous ethanol. As mentioned before, the standards for the sale and distribution of this type of fuel are being developed by international committees. Once established, the project will make any needed adjustments to conform to the international standards.

The supplier has offered its ethanol specifications, which are accepted by the market. At this stage of the study the matter is considered acceptable by the authors.

The project contains a complete quality control laboratory network and its required qualified personnel, envisaging continuous ethanol production and storage under the related acceptable standards.


21

TABLE 8 FUEL GRADE ETHANOL AS PER ASTM D-4806

Moisture 0.2% v/v or 2000 ppm Other specifications ASTM specifications Methanol 5000 ppm max Solvent washed gums 50 ppm max Chloride ions 40 ppm max Copper 0.1 ppm max Acidity 70 ppm max

Source: American Society for Testing and Materials

Quantity: Capable to produce 120,000 L/d of Anhydrous Alcohol with 0.2% v/v moisture (approx. 99.8% v/v alcohol content).

Concentrated Vinasse after Evaporation: This segment of the process provides the solution to the project’s core problem.

Vinasse, the liquid effluent produced during distillation, with an average rate of 11L/ L of ethanol, can not be disposed of into water canals. The B.O.D and C.O.D levels would harm the environment.

Vinasse is the non-alcohol content of the wine to be distilled. Its quality depends directly on the processed molasses contents, which in turn depends on sugar cane quality and sugar production procedures.

The supplier’s technology offers an engineering design that is energy efficient and supports the solids concentration of the vinasse by evaporation as mentioned below. The concentrated vinasse can than be used as fertilizer.

TABLE 9 VINASSE PRODUCTION AND SOLIDS CONCENTRATION

Description Specifications Vinasse quantity and solids concentration 360 t/d with 54 ~ 55% w/w solids or

approximately 288 m³/d or 2.4 L/L of Ethanol depending upon the exact characteristics of the molasses.

Source: PRAJ.

Note: Solids composition depends on solids in feedstock and quantity of vinasse (stillage) recycled.

Notes:

• The specifications of products such as rectified alcohol shall depend on plant operation. The plant is capable of producing desired specifications of spirits by changing its operating parameters.

• It is important to have a steady and uninterrupted supply of utilities such as steam and electricity to obtain a uniform and high quality alcohol.

• The test methods for detecting any above-mentioned impurities will be as per BP 1993/ASTM D4806 or PRAJ standard analytical manuals.


22

III.4 Process Description

The main segments of the process (later detailed in this chapter) offered by the supplier are:

• Fermentation (Hiferm)

• At this stage the mash, which is prepared with molasses, water and prepared yeast, develops a controlled process that transforms the sugar into ethanol. The final product is a wine that has a 7-8% ethanol content, and which will be sent to the distillation columns, to eliminate the non-alcohol content.

The installation has 4 fermentors and offers an efficiency of 88-89% (percentage of fermentable sugars transformed into ethanol).

• Distillation (Ecofine- TVS)

At this stage the ethanol is separated from the other non-alcoholic content that becomes the vinasse.

There is an intense use of steam in this project design, which is generated in house and comes from the turbo generator.

The main technical specs are the use of a vacuum and the heat integration of the supplier’s design. These are the strong points of the supplier’s engineering design.

• Dehydration (Ecomol-XP)

At this stage the hydrous ethanol coming from the columns is processed through a molecular sieve (MSDH) plant, which also operates with low-pressure steam and with a very small quantity of medium-pressure steam.

The operation extracts water from the feed hydrated ethanol, and than produces the final fuel grade according to the required specifications. The resulting product is then sent to the storage tank.

• Vinasse Evaporation (Ecovap-FB)

The vinasse is concentrated up to 55% w/w in a combined flubex forced circulation evaporation system.

The flubex is an installation of 4 stages evaporators.

The concentrated vinasse is sent to a storage tank for further processing into fertilizer by third parties.

“Hiferm” Semi – Continuous Fermentation.

Molasses Receipt Handling and Storage

The molasses is unloaded into the weighted molasses tank and pumped to two yeast activation vessels and to the four fermentors.

Cell Mass Preparation

During plant start up yeast is propagated in the laboratory. Later, the laboratory grown yeast culture is propagated in (diluted pasteurized media) yeast vessels. Optimum temperature is maintained in the yeast vessel by recirculation of cooling water. A specially designed gas sparger ensures optimum mass transfer for high cell mass generation. The yeast grown in yeast vessels is transferred to the yeast activation vessel using a cell mass transfer pump for further scale up of the cell mass required to start fermentation. Optimum temperature is maintained in the yeast activation vessel by using a dedicated mash cooler. After activation, the activated cell mass is transferred to the fermentor.


23

Fermentation

Fresh biomass propagated in the yeast propagation section is seeded in the fermentor. The yeast converts the fermentable sugars into alcohol and carbon dioxide under optimum conditions. As alcohol fermentation is an exothermic process, heat is released during the process. Dedicated forced recirculation coolers for each fermentor cool the mash to maintain the optimum temperature required for yeast activity.

After the reaction is completed, the mash is sent to the mash charger and then to distillation.

CO2 scrubbing

CO2 produced during fermentation carries with it some entrained alcohol. This CO2 is taken to a CO2 scrubber where it is scrubbed with water to remove the entrained alcohol. The scrubbed CO2 can then be taken to a CO2 plant or vented out.

Ecofine-TVS – Total Vacuum Distillation

The Ecofine-TVS vacuum distillation scheme has all the distillation columns operating under a vacuum. Fermented mash is preheated and fed to the de-gasifying column. Top vapors are fed to the degassifier column while bottom liquid is stripped in the mash column. Heat input is given to the mash column reboiler and vapors from the reboiler are fed to the mash column as a source of energy.

A head cut of 2% can be drawn from the aldehyde column if required. While the bottom of the aldehyde column is sent to an exhaust column.

The vapors of the mash column are fed to the rectifier column, which is also operated under vacuum pressure. The rectifier column vapor is condensed and the condensate is sent back to the column as a reflux. The fusel oil draws are taken out from a few plates above the feed plate and fusel oil is decanted out. Rectified spirit is drawn from the top trays and is sent to the MSDH plant or to storage. Heat input is supplied to the exhaust column through the reboiler assembly. Liquid from the exhaust bottom is sent to the reboiler where vapors are generated and fed back to the exhaust column. The exhaust column reboiler is driven by MSDH vapors.

Ecomol-XP – Molecular Sieve Dehydration Plant (MSDH )

Rectified spirit containing at least 94% v/v alcohol is pumped from the rectifier draw tank/RS collection tank to the dehydration section. The rectified spirit is preheated in a feed pre-heater with the help of product vapors and then fed to the vaporizer flash tank. The objective of the vaporizer is to evaporate rectified spirit. The vaporizer operates under pressure. Energy is supplied to the vaporizer flash tank by the vaporizer reboiler with low pressure exhaust steam condensing on the shell side. The steam condensate can be recycled back to the boiler.

Overhead feed alcohol vapors from the vaporizer flash tank are then passed through a super heater. Energy for superheating is supplied by medium pressure steam condensation on the shell side of the super heater.

Superheated hydrous alcohol vapors are sent to twin adsorbent beds. The twin adsorbent beds operate in a cyclical manner. Twin beds are provided to allow for bead regeneration in continuous operation. While one bed is in dehydration mode, the other is in regeneration mode. Depending on the feed and product specifications, dehydration-regeneration exchange takes place approximately every few minutes. The feed alcohol vapors are passed through the bed under dehydration mode. The adsorbent bed will absorb moisture present in feed vapors and dehydrated product alcohol vapors (with moisture content less than 0.2%v/v) are obtained from the bottom of the bed.

The product alcohol vapors are then passed through the regeneration pre-heater and feed pre-heater for heat recovery. Condensed alcohol is collected in the product receiver.


24

The alcohol from the product receiver is pumped to the product cooler and then sent to the anhydrous alcohol storage.

During regeneration mode, a vacuum is applied to the bed under regeneration. A small amount of product alcohol vapors are purged through the bed in regeneration mode under a high vacuum, to prepare the desiccant for cycle changeover when this bed goes online. The purged alcohol vapors act as a carrier for the removal of moisture from the bed. These alcohol vapors along with moisture are obtained from the top of bed. These alcohol-water vapors (regeneration stream) are condensed in the regeneration condenser, which is attached to a vacuum eductor.

The vacuum is pulled in the system with the help of a vacuum eductor. Regeneration stream is used as motive fluid for the vacuum eductor. The regeneration stream coming from the regeneration condenser is pumped, preheated in the regeneration pre-heater and fed to the rectifier column for the recovery of alcohol.

Moisture present in the feed alcohol is removed from the bottom of the rectifier column in the form of spent lees containing less than 500 ppm of ethanol.

After one cycle is over, the beds are interchanged, that is, the bed on dehydration mode will switch over to regeneration mode and the bed on regeneration mode will switch over to dehydration mode, with the help of an automated system.

Ecovap-FB Evaporator

Effect Combination of Flubex Finisher System on Ste am:

There are two stages in the evaporation section. The first stage consists of a two effect falling film evaporator that operates on steam. The second stage consists in a train of four effect flubex followed by a finisher and also operates on steam. The finisher will be a forced circulation type evaporator. For stage one falling film will have one common standby and for second stage forced circulation (Finisher) evaporators will have one standby.

Stage I (2 Effect FF Reboiler)

Vinasse from the distillation section will be preheated with steam condensate and then fed to the first falling film effect. Steam will be used as a heat source for first effect evaporation. Steam condensate from the shell of the first effect will be collected in the steam condensate tank in stage two. Water vapors generated from the first falling film effect will be used as a heating source for the second falling film effect. Partially concentrated vinasse will be fed to the second effect. Water vapor generated in the second falling film effect will be sent to the mash column in the distillation section. Condensate generated from the second effect will be collected in the process condensate tank from where it will be sent for further treatment. Partially concentrated vinasse from the reboiler stage will be pumped to the second stage.

Stage II (4 Effect Flubex + Finisher)

Partially concentrated vinasse from the first stage is fed to the first effect flubex in the second stage.

Steam will be used as a heating medium for this effect. Steam condensate will be collected in steam condensate tank and will used to preheat the vinasse. After that it will be recycled to the boiler. Vapors generated from the first effect will be sent to the second effect as a heat source. Partially concentrated vinasse will be fed to the second effect flubex. Vapors generated in the second effect will be sent to the third effect and the finisher. Partially concentrated vinasse will be fed to the third effect flubex. Vapors generated in the third effect will be sent to the fourth effect and partially concentrated vinasse will be send to the fourth effect Flubex. Vapors generated in the fourth effect will be condensed in a surface condenser followed by a vent condenser. Partially concentrated vinasse will be


25

fed to the finisher where it will be concentrated up to 54~55% w/w. Vapors generated in the finisher will also be condensed in the same condenser. Process condensate generated from the second, third, and forth effects, the condensers and the finisher will be collected in the process condensate tank and will be sent for further treatment. The necessary vacuum will be created by a water ring vacuum pump. Concentrated vinasse from the finisher will be collected in a concentrated syrup tank and then will be sent for further treatment or storage.

III.5 Input Requirements

The following inputs, classically known as utilities, are the basic support to run the process.

The specified necessities support the engineering design. Furthermore they are a relevant part of the ethanol production cost estimate.

TABLE 10 UTILITIES AND CHEMICALS

Process Water • Fermentation 1235 ~ 1245 m³/d

Cooling water circulation rate • Fermentation 1350 Mcal/h • Distillation 4520 Mcal/h • Dehydration 1600 Mcal/h • Evaporation 7720 Mcal/ h

Electricity All figures are approximate Operating Connected

• For Fermentation 210 - 220 kW 290 - 300 kW • For Distillation 40 - 50 kW 75 - 85 kW • Dehydration 25 - 30 kW 48 - 58 kW • For Evaporation 740 - 760 kW 980 - 1000 kW

Steam for: • Distillation, Dehydration

including integrated evaporation at 1.5 kgf/cm²

** 284 t/d or 11.8 t/h. (2.38 kg/L of Fuel Ethanol)

• Dehydration at 3.5 kgf/cm² 6 t/d or 0.25 T/h (0.05 kg/L of fuel ethanol) • Stand Alone Evaporation at

1.5 kgf/cm² for 36650 kg/h water evaporation rate

298.2 t/d or 12.43 t/h (2.48 kg/L of fuel ethanol)

Instrument air: • Fermentation 50 - 60 Nm³/t • Distillation 70 - 80 Nm³/t • Dehydration 40 - 50 Nm³/t • Evaporation 70 - 80 Nm³/t • Cleaning / sealing water As necessary • Ammonium Sulfate / Urca /

DAP - For Fermentation 240 - 300 kg/d - to be confirmed after analysis of nitrogen content of molasses

• Sulphuric Acid - For Fermentation

240 - 360 kg/d approximately - to be confirmed after molasses analysis

• Antifoam Agent Sulfonated castor oil (turkey red oil). Consumption will depend on type of anti foam being used

Source: PRAJ. Notes: - Electricity consumption figures depend upon the final layout, pipe routing, and the efficiency of the pumps. - If the FAN content of the molasses is less than 0.5% w/w, the additional nitrogen required would be

supplemented by using ammonium sulphate, apart from DAP.


26

- The above parameters are indicative and the exact parameters can be confirmed only after analysis of molasses-C samples and after detailed engineering.

- Process water should be filtered potable water and shall not contain any E. COLI or COLIFORM bacteria with total the germ count being limited to 60 Nos/ml. The chloride content shall be less than 25 ppm.

III.6 Other Operating Parameters

These parameters come from the intermediate process and utilities items which are reutilized or reprocessed within the continuous operation. These inputs are also basic for the detailed engineering design of the plant.

TABLE 11 LEES AND STEAM CONDENSATE

Parameters • Spent lees generated 160 - 170 m³/d (to be sent for treatment). • Steam condensate

generation 540 - 550 m³/d (to be sent back as boiler feed water).

• Process condensate generated

1095 m³/d (to be sent for treatment).

Source: PRAJ.

III.7 Specifications of Inputs

This section specifies the basic utilities, the chemicals used by the process, and the effluents. It also remarks on matters related to norms and efficiencies.

Furthermore the main mechanical, hydraulic, ground and climate impacts or specs are referred to in order to establish the limits of liability and compliance with applicable standards.

Molasses-C

Molasses-C should be free from caramelisation products and known inhibitory elements of yeast metabolism, such as lead and arsenic polyelectrolytes or microorganisms producing side products. The molasses-C will have:

TABLE 12 MOLASSES-C QUALITY PROCESS SPECIFICATION

Fermentable sugars 44% (w/w) min F/N Ratio Min 1.2 Sulphated ash Max 15% (w/w) Organic Acids Max. 4000 ppm Bacterial content Max. 1000 cfu/mg Caramel content < 0.3 absorbance at 375 Nm Butyric Acid content 140 ppm max FAN Content 0.5% w/w min

Source: PRAJ.


27

Process Water

Process water should be filtered, potable and shall not contain any E. COLI or COLIFORM bacteria with the total germ count limited to 60 Nos/ml. The chloride content shall be less than 25 ppm.

Cooling Water For Circulation

Cooling water should be at a temperature of 32 ºC maximum and 2.5 kg/cm² pressure, with a total hardness of 500 ppm total dissolved solids of 3000 ppm. The cooling water shall be available at constant pressure at cooling water headers in the fermentation section.

Sulphuric Acid

Concentrated, Commercial Grade, Composition as below value in % w/w

• Sulphuric Acid : 98 min • Lead : 0.001 max • Arsenic : 0.0001 max • Iron : 0.03 max • Moisture : 2 max

Diammonium Phosphate (D A P)

In the form of granules. Composition as below. Values in % w/w

• P2O5 : 50 min • Nitrogen : 20 min • Arsenic : 0.0001 max • Iron : 0.01 max • Lead : 0.001 max

Antifoam

Turkey red oil. Composition as below, Value in % w/w

• Degree of sulphation : 50 min • Total alkali (KOH) : 20 min • Total fatty matter : 0.0001 max • Total Ash : 0.01 max • pH : 0.001 max

Steam for Fermentation and Distillation

Dry, saturated steam should be provided at the respective steam header in the plant. The maximum variation in the steam pressure shall not be more than +/- 1.0 kgf/cm². The steam supply during the fermentation process and for steaming of equipment can be at 1.0 kgf/cm².

Distillation:

• Minimum pressure of steam: 1.5 kgf/cm².

Dehydration:

• Minimum pressure of steam: 1.5 kgf/cm². for vaporizer

• Minimum pressure of steam: 3.5 kgf/cm². for sper heater

Evaporation:

• Minimum pressure of steam: 1.5 kgf/cm².


28

Instrument Air

Compressed, dry and oil free air should have a pressure of 7.0 kgf/cm² with a dew point of (-) 40 ºC.

Vinasse (stillage) For Evaporation

• Vinasse solids : 12 – 13 % w/w total solids • Vinasse temperature : 37 – 38ºC • Vinasse pH : 4.0 – 4.5

Electric Power

For all motors: 480 +/- 5 % V, 3 phase, 60 Hz supply, 4 - wire supply.

For control system: 120 V, 60 Hz (+3), 1-phase, 2-wire supply.

Performance Parameters Norms

The unit design shall meet the local applicable codes for this type of operation. The supplier will demonstrate the unit’s capability to achieve the key process objectives to include the ethanol production rate, product ethanol specifications, and other key process objectives as outlined herein.

Capacity of plant

The plant has a capacity of 120,000 L/d of anhydrous ethanol with 0.2% v/v moisture (approx. 99.8% v/v ethanol content) at a steady state.

Yield of Alcohol

Performance norms for various raw materials having a volatile acid content less than 5000 ppm.

TABLE 13 EFFICIENCIES ACCORDING TO VOLATILE ACIDS VARIATION IN MOLASSES-C

Raw Material Overall Efficiency (Fermentation + Distillation + Dehydration) at different volatile acids in Molasses-C:

Molasses C

87.7% when VA of Molasses C < 5000 ppm

86.33% when VA of Molasses C > 5000 ppm & < 7000 ppm

85.35% when VA of Molasses C > 7000 ppm & < 9000 ppm

Source: PRAJ.

Notes: For the molasses C with VA of 9000 to 11,000 ppm, the fermentation efficiency will be 86%.

The butyric acid content of molasses C should be less than 140 ppm. Molasses C should also be free from any caramelized products that inhibit yeast activity.

Yield: Based on the above the exact yield of alcohol per t of raw material is as follows:

TABLE 14 YIELDS OF ETHANOL PER TON OF MOLASSES-C

FS % w/w in Raw Material Yield of Alcohol in litre of 99.8% v/v t of raw material

Raw Material consumed for 120,000 L/d of 99.8% v/v alcohol

Molasses C: 44%w/w F.S. 245.10 - 247.80 484.3 - 489.6 Molasses C: 46%w/w F.S. 256.25 - 259.13 463 - 468.3

Source: PRAJ.


29

Steam consumption for Plant Capacity of 120,000 L/d of Anhydrous Ethanol

Steam for:

• Distillation, Dehydration including integrated evaporation at 1.5 kgf/cm² : 284 t/d or 11.8 t/h (2.38 kg/L of fuel ethanol)

• Dehydration at 3.5 kgf/cm² : 6 t/d or 0.25 t/t (0.05 kg/L of fuel ethanol) • Stand Alone Evaporation at 1.5 kgf/cm²

for 36650 kg/h water evaporation rate. : 298.2 t/d or 12.43 t/h (2.48 kg/L of fuel ethanol)

Mechanical design basis

• For the design of static equipment such as distillation columns, condensers, reboilers, and tanks, among others, the following factors have been taken into consideration:

• Wind Velocity = 100 km/h

• Seismic coefficient = Zone 2 (High Risk-0.15 G Acceleration)

• However, in case the seismic factor is higher, the structure on which the equipment is supported will have to be designed for a higher factor.

• All equipment excluding columns will be supported laterally to the structural members; the direct load due to wind and seismic forces has not been considered. All tanks and vessels will be supported/rested on existing foundations. All columns will be self-supporting.

• The construction material for the equipment will be specified as per ASTM 240 for stainless steel sheets and coils.

• The construction material for all body flanges and bolts will be carbon steel (CS) and the gaskets will be EPDM.

• All pressure vessels such as distillation columns and condensate pots, among others, will be generally designed as per Good Engineering Practices of PRAJ.

• All shell and tube type heat exchangers will be generally designed as per Good Engineering Practices of PRAJ.

• Hydro testing of critical equipment wherever applicable will be carried out at the Praj fabrication facility before dispatch.

• Piping and valves will be specified as per ANSI standards.

• The safe bearing capacity of soil in the area under consideration = 20 - 22 t/m².

Note: If the seismic factor changes, the cost and structural thickness of the equipment will change.


31

IV. General Investment Items

This chapter identifies the main items needed for the project, which weere reasonably assessed through specific research procedures for the investment cost estimate.

It comprises licenses, services, equipment, installations, civil works and vehicles.

• Permits

• Project Management

• Organizational, Management and Legal Expenditures

• Pre-Operational Tests and General Cleaning

• Terrain and Soil Preparation

• Piling and Structural Bases

• Pavement, Parking, and Rainfall Water Drainage

• Fencing

• Buildings

• Internal Illumination

• Topography

• Transportation

• Erection on Site

• Quality Inspection

• Molasses Piping Connection to the Skeldon Plant

• Molasses Tank

• Treated Water Tank

• Water Treating Station

• Fermentation Vats/Steel Structures, etc

• Yeast Treatment Cubes Wine Tank - Ethanol Storage Tank

• Distillation Plant

• Dehydration Plant


32

• Vinasse Concentration Plant

• Ethanol Truck Loading Station

• Miscellaneous Tanks

• Chemicals and Nutrients Storage Tanks

• Inlet Water Pumping Station

• Steam Generation

• Power Generation

• Electrical System

• Fire Protection and General Security Systems

• Piping and pipe racks

• Process Screens and Filters

• Thermal Isolation Applications

• Painting

• Laboratory Equipments and Instruments

• Furniture, Utensils, Communications, Informatics and Disposal

• Vehicles


33

V. Basic Layout and Site Location

The concept for the site location was based on the assessment of the existing Skeldon plant facilities, its molasses storage unit location and its expansion program.

The project location within the Skeldon plant layout optimizes the shipment of the molasses.

The study also offers an alternative for the location, as shown in V.2. This second location would leave more space for the Skeldon mill expansion, when considering that the mill will only supply the molasses and not the utilities. This issue will depend on final approval by Guysuco.

The project layout concept is based on the inputs/outputs logistics and by the process, utilities and effluent flow sheets.

Different areas within the layout are basically for:

a) social, administration, services and quality control; b) boiler biofuel yard, power plant, water treatment, process and utilities tanks; c) fermentation, distillation, dehydration and evaporation units; and d) ethanol storage tank and truck loading station.


34

FIGURE 2 BASIC LAYOUT

Block Description Block Description 1 - Gate 12 - Ethanol storage tank 2 - Administration 13 - Ethanol truck loading station 3 - Social Assistance and Amenities 14 - Chemical storage tanks 4 - Maintenance warehouse 15 - Chemicals warehouse 5 - Quality control laboratory 16 - Fire protection central station 6 - Molasses storage tank 17 - Electric energy gate 7 - Inlet water storage tank 18 - Effluent treatment plant 8 - Water treatment station 19 - Auxiliary oil tank 9 - Treated water storage tank 20 - Steam and power plant 10 - Fermentation 21 - Fuel biomass storage/handling 11 - Distillation, dehydration 22 - Water pumping station 23 - Yeast preparation plant

Source: The Authors, July 2008.

35

EC

LAC

– Proje

ct Do

cum

ents collectio

n D

esign

and fe

asibility study o

f an e

thano

l distillery in

Gu

yana

FIGURE 3 SITE LOCATION

LAYOUT REFERENCE DRAWING

Source: Prepared by the authors. Note: Basic layout drawing by Guysuco´s Skeldon Engineering.


36

FIGURE 4 SITE LOCATION AERIAL VIEW

Source: Prepared by the authors, July 2008.


37

VI. Economical - Financial Analysis

The scope of the study is to assess the Internal Rate of Return (IRR), the Net Present Value (NPV) and the different possible scenarios though the Sensitivity Analysis (SA).

The first stage was to determine the possible ethanol consumption volumes, using data provided by the Guyana Energy Agency and from the authors’ experience.

A 2.5% annual increase was included to account for economic growth during the project period.

The ethanol production was fixed at 23,400 m3 per year because the molasses availability is also fixed at 90,000 t/y.

A methodology was defined for the project ethanol price, taking into account the historical mogas CIF prices and the estimate of future oil prices, as demonstrated at VI.2.

Table 20 shows all the considered inputs for the calculation, which are derived from the technical project and from the historical official data. It shows a negative percentage of minus 23.60% and an NPV of minus US$ 21.94 million, which determines that the enterprise is not feasible.

Tables 21 through 25 contain the linked and crossed calculations that converge to the IRR and NPV values.

Table 26 assumes variations of plus to minus 10% and 5% on a) ethanol price, b) molasses price and c) investment. Tables 27, 28, and 29 show the respective cash-flow calculations.

Table 31 demonstrates that, within this broader approach, it is still an interesting project to be considered, because in 13 years, beginning at the zero point, the country could save up to US$ 83 million.

Reference: US$ 1= G$ 203.


38

VI.1 Guyana’s Ethanol Demand Estimate

TABLE 15 PETROLEUM CONSUMPTION (1,000 IMP. GAL)

Year 2000 2001 2002 2003 2004 2005 2006 2007 Mogas 24 764 25 562 25 572 25 085 26 143 25 495 25 192 27 205 Gasoil 68 064 67 516 66 534 62 644 67 407 63 792 55 641 64 813 Jet A-1/Kero 8 411 6 914 7 018 6 937 6 513 6 518 5 654 6 141 Fuel oil 32 969 30 633 32 301 40 456 31 517 23 684 19 899 32 654 Avgas 477 231 251 301 285 205 352 307 L.P.G 2 568 3 250 3 509 3 773 4 589 4 319 4 470 3 814 TOTAL 137 253 134 107 135 186 139 197 136 454 124 014 111 209 134 933 ∆ % Mogas* 3.2% 0.0% -1.9% 4.2% -2.5% -1.2% 8.0% ∆ % TOTAL* -2.3% 0.8% 3.0% -2.0% -9.1% -10.3% 21.3%

Source: Guyana Energy Agency. Note:* ∆ % = Percentage Growth.

TABLE 16 GROWTH OF GROSS DOMESTIC PRODUCT (1.000.000)

2000 2001 2002 2003 2004 2005 2006 2007 GDP (G$) 108 087 112 219 117 762 123 261 130 405 137 633 154 000 171 190 GDP (‘MUS$)

533 553 580 607 642 678 759 843

∆ % GDP - 3.8 4.9 4.7 5.8 5.5 11.9 11.2

Source: Bureau of Statistics of Guyana. TABLE 17

PROJECT GENERAL DATA Year* 3 4 5 6 7 8 9 10 11 12 13

Mogas Consumption (m³) (+ 2.5%/y)

136 513 139 926 143 424 147 010 150 685 154 452 158 313 162 271 166 328 170 486 174 748

Molasses (t) 90 000 90 000 90 000 90 000 90 000 90 000 90 000 90 000 90 000 90 000 90 000

Ethanol Production (m3) 23 400 23 400 23 400 23 400 23 400 23 400 23 400 23 400 23 400 23 400 23 400

Ethanol Production (1.000 Imp. Gal)

5 147 5 147 5 147 5 147 5 147 5 147 5 147 5 147 5 147 5 147 5 147

Mixture (%)

17.14 16.72 16.32 15.92 15.53 15.15 14.78 14.42 14.07 13.73 13.39

Source: The Author. Note: Project year 3 eventually corresponds to 2011.


39

VI.2 The Ethanol Sales Price Definition

TABLE 18 MOGAS AVERAGE CIF PRICES

2000 2001 2002 2003 2004 2005 2006 2007 US$/L 0.252 0.230 0.227 0.282 0.350 0.464 0.537 0.581 US$/Imp. Gal 1 145 1 047 1 030 1 284 1 590 2 107 2 439 2 642 ∆ % -8.6% -1.6% 24.6% 23.9% 32.5% 15.7% 8.3%

Source: Guyana Energy Agency.

TABLE 19 ETHANOL WORLD MARKET PRICES

2005 2006 2007 2008 Brazil (US$/Imp. Gal) 1.83 2.07 1.86 2.20

Source: CEPEA/ESALQ/Brazil.

Note: USA: See Annex B - Figure B9.

Price Establishing Methodology

The ethanol FOB project price is calculated at 70% of the CIF mogas price, which depends directly on the petroleum price and its supply logistics.

The recent global economic crisis has distorted most of the international markets and as a result, the authors have set the ethanol price over the price of a barrel of petroleum of approximately US$ 70.

This seems to be a reasonable price for petroleum in the long term, when the world economy returns to its normal standards.

It is estimated that the mogas C.I.F price is US$ 760 per m³ or US$ 3.45550 per imperial gallon (G$ 701.36 per imp. gallon) in Guyana. Therefore the ethanol project price is considered to be 70% of that price, US$ 0.53 per litre or US$ 2.41 per imp. gallon. This value corresponds to G$ 107.59 per litre or G$ 489.10 per imp. gallon.

Economic-financial analysis

The economic-financial analysis evaluates the project’s viability. For this purpose, three main parameters are used, the Internal Rate of Return (IRR), the Net Present Value (NPV) and the Sensitivity Analysis (SA):

• IRR : The Internal Rate of Return is a capital budgeting parameter used to check the efficiency of an investment. It is the rate that makes the Net Present Value of all cash flows equal to zero. The project is a good investment if the IRR is higher than the interest rate used that would be earned if the capital was invested in another project.

• NPV: The Net Present Value is a capital budgeting parameter used to check the magnitude of an investment. It consists of the present value of cash flows, comparing the time value of the money. If the NPV is higher than 0 the project is a good investment.

• SA: The Sensitivity Analysis is used to determine how variations in the data used for a study weighs more on its conclusions. It is a way to predict the outcome of a decision if a situation turns out to be different from the key prediction.


40

TABLE 20 ASSUMPTIONS

Abbreviations Product and Operation Criteria

VAT Value Added Tax 1. Product: Anhydrous Ethanol

Imp. Gal Imperial Galloon Specifications:

y Year - Maximum acidity (mg/L) 30

d day - Maximum conductivity (micro Siemens) 500

tm ton of molasses - Specific weight (kg/m3) 791.5

Eth Ethanol - Ethanol by weight (%) 99.3

IRR Internal Rate of Return 2. Mogas Consumption (2007)

NPV Net Present Value 2.1 Imp. Gals (thousands) 27,205

WK Working Capital 2.2 Litres (thousands) 123,674

EBITDA 2.3 Yearly Growth rate (%) 2.5

3. Feedstock for Ethanol Production

Earnings Before Interest, Tax, Depreciation and Amortization

3.1 Molasses

Unity 3.2 Specifications:

m3 Cubic meter - Brix: 83.2

l Litre - Purity: 35

t ton 3.3 Molasses per year (000 t) 90

mg/L milligram per liter 4. Ethanol per Molasses

kg/m3 kilogram per cubic meter 4.1 Litres/ton 260

Financial 4.2 Imp Gals/ton 57

Interest Rate (%) 7.5 5. Litres per Imp. Gal 4.54609

Grace Period (y) 2 6. Operation days per year 310

Tenor (y) 10 7. Ethanol Blend (%) 17.14

VAT (%) 16 8. Plant Capacity

Working Capital (d) 60 8.1 Plant Maximum Capacity (m3/d) 120

Fees on Bank Guarantee (%)

1.5 8.2 Plant Maximum Capacity (1000 Imp. Gals/y)

8,183

Market $/Imp Gal 8.3 Plant Operational Capacity (m3/d) 114

Guyana 2.41 8.4 Plant Operational Capacity (1000 Imp. Gals/y)

7,774

Brazil 2.35 9. Plant Utilities

US 2.84 9.1 Steam, own generation (fuel; wood chips/rice straw) (t/h)

25.00

9.2 Process water, treated, own plant (m3/h) 50.00

9.3 Cooling water, untreated, from existing canal NA

9.4 Electric energy, own plant (kW) 2,000

Source: Prepared by the Authors.


41

Revenue and costs

This table shows the yearly costs and revenues of the plant, obtaining the EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) which is the company’s raw income.

In the table there are also yearly data about the estimated ethanol consumption, the plant’s ethanol production capacity and the molasses consumption. These data show when the plant has production higher than demand, creating the possibility of exportation, or also when the molasses provided by Skeldon is not enough for the plant to operate at full capacity. The table also shows the working capital loan schedule.

For operational purposes it was established that the plant will use all the molasses Skeldon can provide, which will lower the ethanol blend year by year because the mogas consumption is increasing and the ethanol production is constant (due to the molasses constraint).

Disbursement Schedule

The disbursement table identifies the different items of the investment, pointing out the value to be paid and the period when the items should be purchased or executed. Interest is calculated during the project’s construction. This interest shall be paid during the construction period.

42

EC

LAC

– Proje

ct Do

cum

ents collectio

n D

esign

and fe

asibility study o

f an e

thano

l distillery in

Gu

yana

TABLE 21 REVENUE AND COSTS (‘000 US$)

Discrimination 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Mogas Consumption Per year (m³) 126 766 129 935 133 183 136 513 139 926 143 424 147 010 150 685 154 452 158 313 162 271 166 328 170 486 174 748 179 117

Mogas Consumption Per year (‘000 Imp. Gal) 27 885 28 582 29 296 30 029 30 779 31 549 32 338 33 146 33 975 34 824 35 695 36 587 37 502 38 439 39 400

Ethanol Production Capacity (m³) - - 23 400 23 400 23 400 23 400 23 400 23 400 23 400 23 400 23 400 23 400 23 400 23 400

Ethanol Production Capacity (‘000 Imp. Gal) - - 5 147 5 147 5 147 5 147 5 147 5 147 5 147 5 147 5 147 5 147 5 147 5 147

Molasses Consumption per Year (t) 90000 90000 90000 90000 90000 90000 90000 90000 90000 90000 90000 90000

Ethanol Blend (%) 17.14 16.72 16.32 15.92 15.53 15.15 14.78 14.42 14.07 13.73 13.39 13.06

Project Years 01 02 03 04 05 06 07 08 09 10 11 12 13 14

Revenues

Ethanol Sales (US$) 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405

Costs US$/L

Molasses 0.3270 7 652 7 652 7 652 7 652 7 652 7 652 7 652 7 652 7,652 7,652 7,652 7,652

Energy (steam and electric power) 0.0883 2 067 2 067 2 067 2 067 2 067 2 067 2 067 2 067 2 067 2 067 2 067 2 067

Chemicals 0.0303 709 709 709 709 709 709 709 709 709 709 709 709

Wages 0.0097 227 227 227 227 227 227 227 227 227 227 227 227

Maintenance 0.0082 192 192 192 192 192 192 192 192 192 192 192 192

Other Fixed Costs 0.0051 119 119 119 119 119 119 119 119 119 119 119 119

Total Costs 0.4686 10 966 10,966 10 966 10 966 10 966 10 966 10 966 10 966 10 966 10 966 10 966 10 966

Ebitda 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439

Working Capital Loan

Days of WK 60

Interest 9%

Equivalent Amount 1 803 1 803 1 803 1 803 1 803 1 803 1 803 1 803 1 803 1 803 1 803 1 803

Interest Payment 162 162 162 162 162 162 162 162 162 162 162 162


43

EC

LAC

– Proje

ct Do

cum

ents collectio

n D

esign

and fe

asibility study o

f an e

thano

l distillery in

Gu

yana

TABLE 22 DISBURSEMENT CRONOGRAM (‘000 US$)

Year 1 Bimesters

Year 2 Bimesters

Item Discrimination

1 2 3 4 5 6 7 8 9 10 11 12

TOTAL

1 Studies and projects 50

1.1 Permits 50 50

2 Pre operational expenditures 800

2.1 Project Management 60 60 60 60 60 60 60 60 60 60 60 660

2.2 Organizational, Controlling and Legal Expenditures 80 80

2.3 Pre Operational Tests and General Cleaning 60 60

3 Civil works 1 075

3.1 Terrain and Soil Preparation 60 60 120

3.2 Piling and Structural Bases 75 75 75 75 75 75 450

3.3 Pavement, Parking and Rainfall Water Drainage 70 70 70 210

3.4 Fencing 30 30

3.5 Buildings 5 90 90 185

3.6 Internal Illumination 20 30 30 80

4 Services 1 030.5

4.1 Topography 40 40

4.2 Transportation 0

4.2.1 Personnel 4 4 8 8 8 8 8 8 8 8 8 8 88

4.2.2 Equipment 31.3 31.3 31.3 31.3 31.3 31.3 31.3 31.3 250

4.3 Erection on Site 62.5 62.5 62.5 62.5 62.5 62.5 62.5 62.5 62.5 562.5

4.4 Quality Inspection 10 10 10 10 10 20 20 90


44

EC

LAC

– Proje

ct Do

cum

ents collectio

n D

esign

and fe

asibility study o

f an e

thano

l distillery in

Gu

yana

TABLE 22 (CONTINUED)

Year 1 Bimesters

Year 2 Bimesters

Item

1 2 3 4 5 6 7 8 9 10 11 12

TOTAL

5 Facilities and equipment 4 902 5.1 Molasses Piping Connection to the Skeldon Plant 50 50 40 140 5.2 Molasses Tank 25 25 25 75 5.3 Treated Water Tank 50 50 50 150 5.4 Water Treating Station 37 37 38 112 5.5 Fermentation Vats/Steel Structures, etc 100 100 75 75 75 75 500 5.6 Ethanol Storage Tank 150 150 150 150 600 5.7 Ethanol Truck Loading Station 160 160 5.8 Miscellaneous Tanks 40 40 80 5.9 Chemicals and Nutrients Storage Tanks 120 120

5.10 Inlet Water Pumping Station 90 90 5.11 Steam Generation 150 150 75 75 450 5.12 Power Generation 250 200 200 200 850 5.13 Electrical System 62.5 62.5 62.5 62.5 250 5.14 Fire Protection and General Security Systems 100 100 200 5.15 Piping and pipe racks 62.5 62.5 62.5 112.5 300 5.16 Process Screens and Filters 30 20 20 20 90 5.17 Thermal Isolation Applications 75 75 150 5.18 Painting 140 140 280 5.19 Laboratory Equipments and Instruments 40 40 40 120 5.21 Furniture, Utensils, Communication, Informatics and

Disposal 30 70 100

5.22 Vehicles 20 65 85 6 PRAJ Equipment, Components, Services, etc. 9 360

6.1 CIF Georgetown 3 213 1 377 1 469 1 469 1 652.4 9 180 6.2 Services 20 20 20 20 20 20 20 20 20 180

7 Contingencies (3%) 98 6 18 49 10 68 14 77 30 36 55 56 517 Total 3 375 210 626 1 698 329 2 318 485 2 642 1 019 1 230 1 882 1 919 17 734 Accumulated debt 3 375 3 585 4 212 5 910 6 239 8 557 485.4 3 127 4 147 5 376.9 7 258.5 9 177 9 177 Interest during implementation 685 734 1 419 Source: Prepared by the Authors.


45

Capital expenditures

The Capital Expenditures table lays out the expenditures for the industrial site, as well as the depreciation and amortization schedules.

Depreciation is calculated dividing the value of the depreciating items by the time (in years) that they will take to fully depreciate. The amortization is calculated dividing the total investment amount by the tenor (length of time until the loan is due). Consequently, the yearly amortization has the same value during the repayment period. The interest on the amortization is calculated over the amount that is outstanding. The sum of the amortization payments and the interest expenses are the total annual payment for the capital expenditures.

Cash Flow

The Cash Flow table shows the project’s receipts, consisting of the EBITDA minus loan and interest repayments.

In the first ten years of operation the project’s cash flow is always negative. This fact is reflected by the Internal Rate of Return: - 23.62% (an acceptable IRR would be 7.5%, the interest rate that the invested money would receive if it was used for another purpose). The Net Present Value is US$ 21.94 million when the minimum acceptable value should be US$ 0 (the company would be able to pay for all its liabilities by itself, acquiring no additional debts). These values demonstrate that under the given parameters the project is not profitable and therefore not feasible from the financial point of view.

Income Statement

The Debt Service Coverage Ratio (DSCR) is found in the income statement.

The DSCR is a measure that indicates if the amount of cash flow available is sufficient for the company to pay its annual interest and principal repayments. The DSCR should be over 1.

In this case, the DSCR is below 1 in the first ten years, showing that in these years the enterprise cannot pay its debts with its own net income and will have to use other funds to continue its activity.

46

EC

LAC

– Proje

ct Do

cum

ents collectio

n D

esign

and fe

asibility study o

f an e

thano

l distillery in

Gu

yana

TABLE 23 CAPITAL EXPENDITURES (‘000 US$)

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12

Discrimination

Years to depreciate

1 2 3 4 5 6 7 8 9 10 11 12

Pre Operational Tests and General Cleaning 5 0 62

Terrain and Soil Preparation 10 124 0

Piling and Structural Bases 10 155 309

Pavement, Parking and Rainfall Water Drainage 5 0 216

Fencing 5 31 0

Buildings 10 0 191

Internal Illumination 10 0 82

Molasses Piping Connection to the Skeldon Plant 10 0 144

Molasses Tank 10 0 77

Treated Water Tank 10 0 155

Water Treating Station 10 0 115

Fermentation Vats/Steel Structures, etc 10 103 412

Ethanol Storage Tank 10 464 618

Ethanol Truck Loading Station 10 0 165

Miscellaneous Tanks 10 0 82

Chemicals and Nutrients Storage Tanks 10 0 124

Inlet Water Pumping Station 5 0 93

Steam Generation 10 309 155

Power Generation 10 464 412

Electrical System 5 64 258

Fire Protection and General Security Systems 5 0 206

Piping and pipe racks 5 0 309

47

EC

LAC

– Proje

ct Do

cum

ents collectio

n D

esign

and fe

asibility study o

f an e

thano

l distillery in

Gu

yana

TABLE 23 (CONTINUED)

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Discrimination Years to depreciate

1 2 3 4 5 6 7 8 9 10 11 12

Process Screens and Filters 5 0 93

Thermal Isolation Applications 5 0 155

Painting 5 0 288

Laboratory Equipment and Instruments 5 0 124

Furniture, Utensils, Communication, Informatics and Disposal

10 31 72

Vehicles 5 88 0

PRAJ Equipments and Components 10 4 728 4 728

TOTAL 6 560 9 645

10 Year Items 10 6 376 7 840

5 Year Items 5 183 1 803

Total 6 559 9 643

Depreciation Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12

10 years items

Ethanol 1 422 1 422 1 422 1 422 1 422 1 422 1 422 1 422 1 422 1 422

Beginning Balance 14 216 12 794 11 373 9 951 8 530 7 108 5 686 4 265 2 843 1 422

Ending Balance 12 794 11 373 9 951 8 530 7 108 5 686 4 265 2 843 1 422 0

5 years items

Ethanol 397 397 397 397 397 0 0 0 0 0

Beginning Balance 1 985 1 588 1 191 794 397 0 0 0 0 0

Ending Balance 1 588 1 191 794 397 0 0 0 0 0 0

Total 1 819 1 819 1 819 1 819 1 819 1 422 1 422 1 422 1 422 1 422

48

EC

LAC

– Proje

ct Do

cum

ents collectio

n D

esign

and fe

asibility study o

f an e

thano

l distillery in

Gu

yana

TABLE 23 (CONCLUDED)

Months Disbursement

1-6 7-12 13-18 19-24 Total

% 23.7% 24.5% 23.4% 28.4% 100%

To be disbursed 4 212 4 345 4 147 5 030 17 734 Source: Prepared by the Authors.

TABLE 24 AMORTIZATION SCHEDULE

(‘000 US$)

Discrimination Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12

Debt BB 0 0 17 734 15 961 14 187 12 414 10 640 8 867 7 094 5 320 3 547 1 773

Amortization 0 0 1 773 1 773 1 773 1 773 1 773 1 773 1 773 1 773 1 773 1 773

Debt EB 0 0 15 961 14 187 12 414 10 640 8 867 7 094 5 320 3 547 1 773 0

Interest Expenses 0 0 1 419 1 277 1 135 993 851 709 567 426 284 142

Total Payment 0 0 3 192 3 050 2 908 2 767 2 625 2 483 2 341 2 199 2 057 1 915


49

EC

LAC

– Proje

ct Do

cum

ents collectio

n D

esign

and fe

asibility study o

f an e

thano

l distillery in

Gu

yana

TABLE 25 CASHFLOW (‘000 US$)

Year

Receipts 01 02 03 04 05 06 07 08 09 10 11 12 13 14

EBITDA 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439

Loan Receipts 8 557 9 177

Total Receipts 8 557 9 177 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439

Disbursements

Interest Payments 1 419 1 277 1 135 993 851 709 567 426 284 142 0 0

Debt Principal Repayment 1 773 1 773 1 773 1 773 1 773 1 773 1 773 1 773 1 773 1 773 0 0

Total Disbursements 3 192 3 050 2 908 2 767 2 625 2 483 2 341 2 199 2 057 1 915 0 0

Cash-flow

Cash Flow with Financing -8 557 -9 177 -1 753 -1 611 -1 470 -1 328 -1 186 -1 044 -902 -760 -618 -477 1 439 1 439

Financial Parameters Returns at US$/gal: 2,94

IRR (%) -23.62

NPV (US$) - 21 937 000.00


EC

LAC

– Proje

ct Do

cum

ents collectio

n D

esign

and fe

asibility study o

f an e

thano

l distillery in

Gu

yana

50

TABLE 26 INCOME STATEMENT

(‘000 US$)

Debt Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14

Debt Service Coverage Ratio: 1. Net Income+Depreciation+Senior loan Interest 1 277 1 277 1 277 1 277 1 277 1 277 1 277 1 277 1 277 1 277 1 021 1 021 2. Working Capital Interest 162 162 162 162 162 162 162 162 162 162 162 162 3. Senior Loan Principal + Interest 3 192 3 050 2 908 2 767 2 625 2 483 2 341 2 199 2 057 1 915 0 0 4. Working Capital Interest 162 162 162 162 162 162 162 162 162 162 162 162 Coverage Ratio: (1+2+)/(3+4) 0.43 0.45 0.47 0.49 0.52 0.54 0.57 0.61 0.65 0.69 7.29 7.29 Income statement Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Revenues 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 Industrial Costs 10 966 10 966 10 966 10 966 10 966 10 966 10 966 10 966 10 966 10 966 10 966 10 966 Ebtida 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 Depreciation & Amortization 3 592 3 592 3 592 3 592 3 592 3 592 3 592 3 592 3 592 3 592 0 0 Ebit -2 153 -2 153 -2 153 -2 153 -2 153 -1 756 -1 756 -1 756 -1 756 -1 756 1 439 1 439 Interest on LT Debt 1 419 1 277 1 135 993 851 709 567 426 284 142 0 0 Working Capital Interest 162 162 162 162 162 162 162 162 162 162 162 162 Total Interest 1 581 1 439 1 297 1 155 1 013 872 730 588 446 304 162 162 Earnings Before Tax & Profit Sharing -3 734 -3 592 -3 451 -3 309 -3 167 -2 628 -2 486 -2 344 -2 202 -2 060 1 277 1 277 Employee Participation Earnings before Tax -3 734 -3 592 -3 451 -3 309 -3 167 -2 628 -2 486 -2 344 -2 202 -2 060 1 277 1 277 Tax Rate 0 0 0 0 0 0 0 0 0 0 0 0 Tax Expense/Credit -747 -718 -690 -662 -633 -526 -497 -469 -440 -412 255 255 Tax Expense/Credit Balance -747 -718 -690 -662 -633 -526 -497 -469 -440 -412 255 255 Income Tax Expense 0 0 0 0 0 0 0 0 0 0 255 255 Net Income -3 734 -3 592 -3 451 -3 309 -3 167 -2 628 -2 486 -2 344 -2 202 -2 060 1 021 1 021 Source: Prepared by the Authors.


51

Sensitivity study scenarios

• Price Variation

International Petroleum Market

As established above, the ethanol price depends on the mogas and petroleum prices. Therefore, variations in the international oil market will directly affect the ethanol price either in a positive or in a negative way.

Tax Incentives

When developing a new area of the economy, it is customary that the host government will concede tax incentives in order to protect and incentivize the new project and allow it to be competitive during its early years. The price sensitivity analysis will stand for variations that can happen in both cases above.

• Investment Cost Variations

Due to changes in the exchange rate, in prices, and moreover, the value of the investment, costs may vary from the one estimated in this study. The investment sensitivity analysis will consider the impact of these variations on the return of the project.

• Operation Cost Variation

The operational costs are a key issue when evaluating the viability of an industrial undertaking. The operational cost sensitivity analysis will check the impact of variations in these costs on the return of the project. Note that the molasses cost represents almost 70% of the operational cost, which makes the price of molasses the main determinant in this case. Because of this, the sensitivity analysis for operation cost will be done by examining variations in the molasses price in the range of plus or minus 10%.

a) Ethanol Price Variation

The sensitivity analysis using the IRR as a comparison parameter shows that the project is more sensitive to variations in the price of ethanol (derived from changes in the petroleum market or taxes, as explained above). When the ethanol price ranges from -10% to +10 %, the IRR varies by 60%, which is a considerable change.

b) Molasses Price Variation

The price of molasses is the second factor that causes the most variation in the project’s returns: for the range between -10% to +10% the IRR varies by almost 31%.

c) Investment Cost Variation

The factor the project is least sensitive to is the value of the investment, with the IRR varying only 5% when the investment value varies in the range of -10% to +10%.

Note that even in the most positive scenarios, the project is still not viable: if the ethanol price increases +10%, the IRR will be -8%, a value well below the 7.5% minimum attractiveness rate.


52

-68.4%

-7.8%

-43.5%

-26.1%

-14.4%

-38.5%

-12.7% -17.5%

-31.8%

-23.6%

-20.9%-24.9%

-22.3%

-0.8-0.7-0.6-0.5-0.4-0.3-0.2-0.1

0

-0.1 -0.05 0 0.05 0.1

IRR

Ethanol Price Molasses Price Investment

TABLE 27 SENSIVITY

Ethanol prices

∆ -10% -5% 0% 5% 10%

Price (US$/Imp Gal) 2.17 2.29 2.41 2.53 2.65

IRR -68.4% -38.5% -23.6% -14.4% -7.8%

Molasses price

∆ -10% -5% 0% 5% 10%

Price (US$/t) 76.5 80.75 85 89.25 93.5

Cost (US$/Litre) 0.2943 0.3107 0.327 0.3434 0.3597

IRR -12.7% -17.5% -23.6% -31.8% -43.5%

Investment

∆ -10% -5% 0% 5% 10%

Investment 15,961 16,847 17,734 18,621 19,507

IRR -20.9% -22.3% -23.6% -24.9% -26.1%


FIGURE 5

VARIATION GRAPH


53

EC

LAC

– Proje

ct Do

cum

ents collectio

n D

esign

and fe

asibility study o

f an e

thano

l distillery in

Gu

yana

TABLE 28 CASHFLOW - PRICE

(‘000 US$)

Cash Flow Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14

For -10% Price ∆:

Total Receipts 8 557 9 177 198 198 198 198 198 198 198 198 198 198 198 198

Total Disbursements 3 192 3 050 2 908 2 767 2 625 2 483 2 341 2 199 2 057 1 915 - -

Cash Flow with Financing -8 557 -9 177 -2 994 -2 852 -2 710 -2 568 -2 426 -2 284 -2 143 -2 001 -1 859 -1 717 198 198

IRR -68.4%

For -5% Price ∆:

Total Receipts 8 557 9 177 819 819 819 819 819 819 819 819 819 819 819 819

Total Disbursements 3 192 3 050 2 908 2 767 2 625 2 483 2 341 2 199 2 057 1 915 - -

Cash Flow with Financing -8 557 -9 177 -2 374 -2 232 -2 090 -1 948 -1 806 -1 664 -1 522 -1 380 -1 239 -1 097 819 819

IRR -38.5%

For +5% Price ∆:

Total Receipts 8 557 9 177 2 059 2 059 2 059 2 059 2 059 2 059 2 059 2 059 2 059 2 059 2 059 2 059


Cash Flow with Financing -8 557 -9 177 -1 133 -991 -849 -707 -566 -424 -282 -140 2 144 2 059 2 059

IRR -14.4%

For +10% Price ∆:

Total Receipts 8 557 9 177 2 679 2 679 2 679 2 679 2 679 2 679 2 679 2 679 2 679 2 679 2 679 2 679


Cash Flow with Financing -8 557 -9 177 -513 -371 -229 -87 55 197 338 480 622 764 2 679 2 679

IRR -7.8%


54

EC

LAC

– Proje

ct Do

cum

ents collectio

n D

esign

and fe

asibility study o

f an e

thano

l distillery in

Gu

yana

TABLE 29 CASHFLOW - MOLASSES PRICE (‘000 US$)


For -10% Molasses Price ∆: Revenue 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 Total Cost 10 201 10 201 10 201 10 201 10 201 10 201 10 201 10 201 10 201 10 201 10 201 10 201 Total Receipts 8 557 9 177 2 204 2 204 2 204 2 204 2 204 2 204 2 204 2 204 2 204 2 204 2 204 2 204 Total Disbursements 3 192 3 050 2 908 2 767 2 625 2 483 2 341 2 199 2 057 1 915 0 0 Cash Flow with Financing -8 557 -9 177 -988 -846 -704 -563 -421 -279 -137 5 147 289 2 204 2 204 IRR -12.7% For -5% Molasses Price ∆: Revenue 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 Total Cost 10 584 10 584 10 584 10 584 10 584 10 584 10 584 10 584 10 584 10 584 10 584 10 584 Total Receipts 8 557 9 177 1 821 1 821 1 821 1 821 1 821 1 821 1 821 1 821 1 821 1 821 1 821 1 821 Total Disbursements 3 192 3 050 2 908 2 767 2 625 2 483 2 341 2 199 2 057 1 915 0 0 Cash Flow with Financing -8 557 -9 177 -1 371 -1 229 -1 087 -945 -803 -661 -520 -378 -236 -94 1 821 1 821 IRR -17.5% For +5% Molasses Price ∆: Revenue 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 Total Cost 11 349 11 349 11 349 11 349 11 349 11 349 11 349 11 349 11 349 11 349 11 349 11 349 Total Receipts 8 557 9 177 1 056 1 056 1 056 1 056 1 056 1 056 1 056 1 056 1 056 1 056 1 056 1 056 Total Disbursements 3 192 3 050 2 908 2 767 2 625 2 483 2 341 2 199 2 057 1 915 0 0 Cash Flow with Financing -8 557 -9 177 -2 136 -1 994 -1 852 -1 710 -1 568 -1 427 -1 285 -1 143 -1 001 -859 1 056 1 056 IRR -31.8% For +10% Molasses Price ∆: Revenue 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 12 405 Total Cost 11 731 11 731 11 731 11 731 11 731 11 731 11 731 11 731 11 731 11 731 11 731 11 731 Total Receipts 8 557 9 177 674 674 674 674 674 674 674 674 674 674 674 674 Total Disbursements 3192 3050 2908 2767 2625 2483 2341 2199 2057 1915 0 0 Cash Flow with Financing -8 557 -9 177 (2 519) -2 377 -2 235 -2 093 -1 951 -1 809 -1 667 -1 525 -1 384 -1 242 674 674 IRR -43.5%


EC

LAC

– Proje

ct Do

cum

ents collectio

n D

esign

and fe

asibility study o

f an e

thano

l distillery in

Gu

yana

55

TABLE 30 CASHFLOW - INVESTMENT

(‘000)


For -10% Investment ∆:

Total Receipts 7 701 8 260 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439

Debt BB 15 961 14 365 12 768 11 172 9 576 7 980 6 384 4 788 3 192 1 596 0 0

Debt Repayment 1 596 1 596 1 596 1 596 1 596 1 596 1 596 1 596 1 596 1 596 0 0

Debt EB 14 365 12 768 11 172 9 576 7 980 6 384 4 788 3 192 1 596 0 0 0



Cash Flow with Financing -7 701 -8 260 -1 434 -1 306 -1 179 -1 051 -923 -796 -668 -540 -413 -285 1 439 1 439

IRR -20.9%

For -5% Investment ∆:

Total Receipts 8 129 8 718 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439

Debt BB 16 847 15 163 13 478 11 793 10 108 8 424 6 739 5 054 3 369 1 685 0 0

Debt Repayment 1 685 1 685 1 685 1 685 1 685 1 685 1 685 1 685 1 685 1 685 0 0

Debt EB 15 163 13 478 11 793 10 108 8 424 6 739 5 054 3 369 1 685 0 0 0



Cash Flow with Financing -8 129 -8 718 -1 594 -1 459 -1 324 -1 189 -1 055 -920 -785 -650 -516 -381 1 439 1 439

IRR -22.3%


56

EC

LAC

– Proje

ct Do

cum

ents collectio

n D

esign

and fe

asibility study o

f an e

thano

l distillery in

Gu

yana



For +5% Investment ∆:

Total Receipts 8 985 9 636 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439

Debt BB 18 621 16 759 14 897 13 035 11 172 9 310 7 448 5 586 3 724 1 862 0 0

Debt Repayment 1 862 1 862 1 862 1 862 1 862 1 862 1 862 1 862 1 862 1 862 0 0

Debt EB 16 759 14 897 13 035 11 172 9 310 7 448 5 586 3 724 1 862 0 0 0

Interest Payments 1 490 1 341 1 192 1 043 894 745 596 447 298 149 0 0


Cash Flow with Financing -8 985 -9 636 -1 913 -1 764 -1 615 -1 466 -1 317 -1168 -1 019 -870 -721 -572 1 439 1 439

IRR -24.9%

For +10% Investment ∆:

Total Receipts 9 412 10 095 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439 1 439

Debt BB 19 507 17 557 15 606 13 655 11 704 9 754 7 803 5 852 3 901 1 951 0 0

Debt Repayment 1 951 1 951 1 951 1 951 1 951 1 951 1 951 1 951 1 951 1 951 0 0

Debt EB 17 557 15 606 13 655 11 704 9 754 7 803 5 852 3 901 1 951 0 0 0

Interest Payments 1 561 1 405 1 248 1 092 936 780 624 468 312 156 0 0


Cash Flow with Financing -9 412 -10 095 -2 073 -1 917 -1 760 -1 604 -1 448 -1 292 -1 136 -980 -824 -668 1 439 1 439

IRR -26.1%


57

EC

LAC

– Proje

ct Do

cum

ents collectio

n D

esign

and fe

asibility study o

f an e

thano

l distillery in

Gu

yana

TABLE 31 MACRO ECONOMICAL SCENARIOS

Basic Data 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

1 - Mogas Consumption (m3)) 129 935 133 183 136 513 139 926 143 424 147 010 150 685 154 452 158 313 162 271 166 328 170 486 174 748

2 - Molasses Provision (t) 90000 90000 90000 90000 90000 90000 90000 90000 90000 90000 90000 90000 90000

3 - Ethanol Consumption (m3) 0 0 23 400 23 400 23 400 23 400 23 400 23 400 23 400 23 400 23 400 23 400 23 400

4 - Ethanol Blend (%) 0 0 17.14% 16.72% 16.32% 15.92% 15.53% 15.15% 14.78% 14.42% 14.07% 13.73% 13.39%

Products Prices

5 - Molasses Price (US$/t) 85

6 - Mogas Price (US$/L) 0.756

7 - Ethanol Price (US$/L) 0.53 First Scenario - Molasses Export (‘000US$) Year

Receipts 01 02 03 04 05 06 07 08 09 10 11 12 13

8 - Molasses Exports Gain (2 x 5) 7 650 7 650 7 650 7 650 7 650 7 650 7 650 7 650 7 650 7 650 7 650

Disbursements

9 - Mogas Imports (1 x 6) 103 204 105 784 108 428 111 139 113 918 116 766 119 685 122 677 125 744 128 887 132 110

10 -Cash flow (8 - 9) -95 554 -98 134 -100 778 -103 489 -106 268 -109 116 -112 035 -115 027 -118 094 -121 237 -124 46

Second Scenario - Ethanol Consumption

Receipts

11 - Mogas Import Gain (3 x 6) - - 17 690 17 690 17 690 17 690 17 690 17 690 17 690 17 690 17 690 17 690 17 690

12 - Enterprise Project Gain -8 557 -9 177 -1 753 -1 611 -1 470 -1 328 -1 186 -1 044 -902 -760 -618 -477 1 439

Disbursements

13 - Mogas Imports ([1 - 3] x 6) 85 513 88 093 90 738 93 449 96 227 99 075 101 994 104 986 108 053 111 197 114 419

14 - Cash flow (12 - 13) -87 267 -89 705 -92 208 -94 777 -97 413 -100 119 -102 896 -105 747 -108 672 -111 674 -112 98

Balance (Second Scenario x First Scenario)

∆ (10 - 14) -8 557 -9 177 8 287 8 429 8 571 8 713 8 855 8 996 9 138 9 280 9 422 9 564 11 479

Accumulated -8 557 -17 734 -9 447 -1 018 7 553 16 265 25 120 34 116 43 255 52 535 61 957 71 521 83 000 Source: Prepared by the Authors.


59

VII. World economic reorganization

The current global financial crisis will have an impact on all the parameters in the statistical series used for the feasibility study, namely, GDP growth, energy production and prices, exports and imports, interest, payback period, consumption, pricing criteria, and logistics, among others.

The project was developed using a US$ 60-70 price per barrel of oil range. When the study began, the price of oil was about US$ 140 and in November 2008, it had come down to less then US$ 50 per barrel.


61

VIII. Conclusion

The conclusion embraces three approaches: a) the project itself, b) the macro-economic scenario and c) the funding.

a) The project would require special financial support from the government to be feasible. It is estimated that an IRR of 18.88% could be reached if the FOB ethanol price equals the mogas CIF price.

b) The macro economic scenario is positive and gives a gain of US$ 83 million of the export-import bill.

c) The funding was based on borrowed capital with an interest rate of 7.50% per year. This important matter could be further explored if a more efficient financial model is adopted.

VIII.1 The Project

The economic-financial analysis demonstrated no feasibility. This is mainly because the model is a completely independent operation bearing all investments and operational costs, and is highly impacted by the necessity of concentrating the vinasse, and also due to the ethanol reference price being 70% of the mogas CIF price.

From the renewable energy approach, in terms of reducing GHG and introducing a new technology into the country, the project is positive.

The 17% mixture grade, the E 17, will also reduce the retail price.

Brazilian scientist and energy expert Jose Goldemberg states that at the start of the initiative only subsidized production of biofuels is possible, until the project matures and finds the adequate scale-economy size.

Therefore the government of Guyana has to look for a strategic support design and implement specific legislation to make the initiative viable.

In this case the resulting parameters are:

• IRR: 18.88%

• NPV: US$ 13.55 million

• Sensitivity


62

27.3%

14.1%

23.2%

9.0%

14.8%16.8%

20.7%22.6%

18.8% 15.6%17.1%20.6%22.5%

0

0.05

0.1

0.15

0.2

0.25

0.3

-0.1 -0.05 0 0.05 0.1IR

R

Ethanol Price Molasses Price Investment

FIGURE 6 SENSITIVITY VARIATION


VIII.2 The Macro-Economic Scenario

When the project is considered in the broader national interest, there are other positive effects.

One main point is the amount the government will save on the energy import bill by replacing mogas with the ethanol produced in Guyana.

The analysis estimates that in 13 years, the project would result in savings of approximately US$ 83 million, see table 16, page 58.

The operation expenditures are stated in Guyanese dollars.

VIII.3 The Funding

The specific financial resources and the strategic funding model were not established prior to the development of the project feasibility study.

A standard discount rate of 7.50% per annum was applied, as adopted by the authors.


63

IX. Recommendations

A technical and strategic assessment of the Guysuco Skeldon project should be conducted again to see if capital and operational expenses can be optimized to allow for better feasibility conditions for the project. If the project were to be implemented as an internal ethanol division at the Skeldon plant, as happens in all sugar mills, performance would surely garner better results. Notwithstanding, the vinasse impact issue would be the same.

If the equation to make the project viable is not found, an alternative plan may be possible to keep the ethanol initiative on track.

This refers to the Brazilian model in which the sugarcane is produced on dry land. An adequate land area, with the required conditions for sugarcane development and viable logistics should be found without any impact on food production. In this case the vinasse could be directly sent to the sugarcane crops to be used through a fertigation system.

Food production territories should be avoided within this land selection.

This project would process evaporated sugarcane juice and the available Guyanese molasses could proceed through the existing market routes, or eventually also be part of this project model as a market alternative.

This alternative project should have a higher volume of ethanol production than the original project, supplying the internal market and maintaining previous negotiated export contracts with off-takers.

Guyana could take advantage of the Preferential Trade Arrangements that it has with Canada and the United States.

Similar projects are being implemented in Guatemala, Costa Rica, Colombia, Peru and the Caribbean, as well as in Brazil, which does not have the above-mentioned Preferential Trade Arrangements.


65

Bibliography

Coviello Manlio F., (2006) “Fuentes Renovables de Energía en América Latina y el Caribe: Dos Años después de las Conferencia de Bonn”, Economic Commission for Latin America and the Caribbean, LC/W 100. Santiago, Chile, September.

Davis H., L Stuart and P. Bhim, (2005) “Potential for fuel ethanol in the Guyana sugar industry”. Proceedings of the twenty-fifth Congress of the International Society of Sugar Cane Technologists. Guatemala.

EIA, Energy Information Administration, DOE - Department of Energy. United States. GEA, (2008) Westphalia Separator do Brasil. Budgetary Proposal OM-005483-0. Campinas, Brazil. Goldemberg José, (2008) “The Challenge of Biofuels”, The Royal Society of Chemistry, University of

Sao Paulo. Brazil, September. Horta Nogueira Luiz, (2007) “Biofuels Potential in Guyana”, Economic Commission for Latin

America and the Caribbean, United Nations. Santiago, Chile. IETHA, International Ethanol Trading Association. Sao Paulo, Brazil JW Indústria e Comércio de Equipamentos em Aço Inoxidável Ltda. Proposal 08-020. Sertaozinho,

Brazil, 2008 Pereira Henrique, (2007) “New Frontiers of Ethanol”, GM Engines Engineering Department Manager.

Ethanol Summit. Sao Paulo, Brazil. PRAJ Industries Limited, (2008) Proposal BDN: SAM: GSP: O: 034. Pune, India. Rodrigues Tarcilo Ricardo, (2008) “The CBI Market”. Bioagencia. Sao Paulo, Brazil. Schneider Jackson, (2008) Flex Cars, Brazilian Automotive Manufacturer’s Association

(ANFAVEA), Journal Valor Special - Biofuels. November. Sharma M., (2002) “Ethanol Production from Sugar Cane for Export and Use as a Mogas Blend in

Guyana”. Master’s Degree Project. University of Calgary. Szengel Ruediger, (2007) “New Frontiers of Ethanol”, Volkswagen Engineering Supervisor,

Germany. Ethanol Summit. Sao Paulo, Brazil. Yete Ambiental Industria e Comercio Ltda. (2008) Proposal PTC 2968/08-0. Sao Paulo, Brazil.


67

Annex A- Supplier’s Detailed Package

This Annex exhaustively describes the supply of services, engineering and equipment.

The description is an excerpt from the supplier’s offer mentioned in the References on page 63.

Scope of work Providing process, design, basic and detailed engineering services, supply of critical, proprietary equipment and supervision services for “HIFERM” semi – continuous fermentation, "ECOFINE–TVS” total vacuum distillation, “ECOMOL-XP” molecular sieve dehydration and “ECOVAP–FB” evaporation of vinasse within the defined battery limits. This scope includes the following activities:

Process The scope includes providing a non-exclusive permission to use “HIFERM” Semi - Continuous Fermentation, “ECOFINE-TVS” total vacuum distillation, “ECOMOL-XP” molecular sieve dehydration and “ECOVAP-FB” evaporation plant suitable for production of 120,000 l/d of 99.8 % v/v fuel ethanol.

Deliverable and Contents • Start-up and shut down procedures

• Consumption figures for various inputs & utilities

• Log-sheets

• Analytical / Instrumental measurement procedures

• Operation and trouble shooting manuals

• ‘What-if’ analysis and suggestions for plant operation

Basic Engineering Prior to procurement, fabrication and manufacture of the plant and machinery by project owner. Following activities and services will be carried out by the supplier in relation to the battery limits under the package for the main process plants.

• Results of mass and energy balance.

• Process flow diagram showing various unit operations.

• Preliminary layout and elevation drawings including load data.

• Piping and instrumentation (P& I) diagrams for various sections.

• Control logic, loop diagrams and interlock safety logic.

• Preparation of inputs and data for instrument selection.

• Single line electrical diagrams.


68

Detailed Engineering • Typical bill of material, quantities for stainless steel, carbon steel and piping items.

• Typical general arrangement drawings for all equipment.

• Typical layout and elevation drawings including load data for client to design and implement civil, structural and foundation work.

• Specifications of field instruments and control panel.

• Operation & maintenance manual including consumption figure, trouble shooting & maintenance schedule.

Kick-off Meeting and Review Meetings The supplier will undertake a) kick-off visit: 1 visit to GUYANA of 2 engineers for a period of 3 days for kick-off meeting, b) design review visit: 1 visit of 2 engineers for 3 days for piping & instrumentation design review meeting. For all these visits, international travel cost including air tickets (India-GUYANA-India) and man-day charges are included in the price. All expenses in GUYANA like lodging (hotel) and boarding (food), domestic flights within GUAYANA and transport within GUAYANA are to be made by the buyer.

Supply of Critical, Proprietary and Bought-out Equi pment and Components:

The Supplier shall design, manufacture and supply all equipment like static mixers, spargers, CO2 scrubber, distillation column, condensers, coolers and reboilers, plate pack for parallel plate clarifiers, sieve beds, in distillation, dehydration and evaporation as well as items like pumps, plate heat exchangers, vacuum pump, piping, manual valves within listed under, on CIF GEORGETOWN, GUYANA basis in a containerized cargo.

Supervision of Installation and Construction on man -day basis: This is to guide Project owner, customer's contractors for piping, installation, modification of the entire plant and machinery in customer's scope. The objective is to ensure accurate assembly and erection of various equipments as per correct specifications, with high quality of workmanship and as per predefined time schedule.

These services will be offered on above mentioned basis and include:

• Dimensional checks as per drawings.

• Technical guidance in erection of various equipments, if required.

• Technical guidance in assembly of piping and installation of various equipments.

• Checking pipe routing, piping layout and quality of piping work.

Typically 2 visits of 1 engineer 60~75 days each are required for supervision of piping, installation and 1 visit of 1 engineer for 30 days for instrumentation is required. For vinasse evaporation, 1 visit of 1 engineer for 20~30 days would be required. The exact schedule is to be decided jointly.


69

Supervision of Start-up and Commissioning Based on the start-up schedule, typically 1 visit of 3 expert engineers, technologists for assisting, guiding customer’s operating personnel for a period of around 45 days for the distillery and 1 visit of 1 instrumentation engineer for 30 days. Such a visit would be on chargeable basis.Class-room training: Prior to starting water trials, these 2 personnel will provide class room training to customer's operating staff on the process, parameters, analytical procedures and operation of the plant.

• Pre-commissioning checks for conformity of mechanical completion of the work.

• Water trials or pre-commissioning trials with the help of customer’s operators.

• Commissioning guidance including that of start-up and shutdown with the help of customer’s operators.

A 1 - Equipment list This section describes all equipment provided by the Supplier and also the equipment to be bought or manufactured by the project owner under the supplier’s engineering specifications.

The commercial items to be bought locally by the supplier are also specified.

The instruments supply package provided by the upplier is described and specified.

“Hiferm” Fermentation Section

This item describes and specifies special stainless steel vessels to be manufactured and imported by the supplier.

TABLE 32 CRITICAL AND PROPRIETARY EQUIPMENT PROVIDED BY SUPP LIER’S ON CIF

GEORGETOWN GUYANA BASIS

Description Tech. Data MOC Qty. Molasses broth mixers for fermentors, YAV

Mixer with static mixing elements

AISI 304 6

CO2 scrubber Type of trays Number of trays Tray spacing

Dia.: 1100 mm. Sieve trays 6 200 mm

AISI 304

1

Culture vessel – 1 Capacity. 0.35 m³ AISI 304 1 Culture vessel – 2 Capacity. 2.3 m³ AISI 304 1 Culture vessel – 3 Capacity. 15.3 m³ AISI 304 1 Sparger system for yeast Activation vessel

Std. AISI 304

2

Source: PRAJ.


70

The description relates and specifies special commercial items to be bought locally by the supplier.

TABLE 33 CAPITAL BOUGHT OUT EQUIPMENT WITHIN PACKET

ON CIF GEORGETOWN GUYANA BASIS

Description Tech. Data MOC Qty.

Weighed molasses pump Lobe type, Capacity: 45 TPH

C.I. 1+1

Safety system for fermentor and YAV Supplier’s design Standard

AISI 304 6

Fermentor re-circulation pump and motor Centrifugal, Capacity: 300 m³/t

Wetted parts:CF8

4+1

Yeast activation vessel pump & motor Centrifugal, Capacity: 75 m³/t

Wetted parts:CF8

1+1

Mash transfer pump and motor Centrifugal, Capacity: 70 m³/t

Wetted parts:CF8

1+1

Fermentor washing transfer pump and motor Centrifugal, Capacity: 10 m³/h

Wetted parts:CF8

1+1

Acid dosing pump and motor Diaphragm, Capacity: 2 m³/t

Teflon Coated 1+1

Antifoam dosing pump and motor Centrifugal, Capacity: 1 m³/h

C.I. 1+1

Nutrient dosing pump and motor Centrifugal, Capacity: 3 m³/h

Wetted parts:CF8

1+1

CIP pump and motor Centrifugal, Capacity: 35 m³/h

Wetted parts:CF8

1+1

Molasses weighing system Load cell type, Capacity: 6 t

1

Air filter HEPA CS FRAME 1 Blower-water ring type with liquid separator &motor Capacity: 200 Nm³/h C.I. 1+1 Cooler for fermentors Plate heat exchangers Plates:AISI 316

Frames:CS 4

Description Tech. Data MOC Qty. Cooler for yeast activation vessel Plate heat

exchangers Plates: AISI 316 Frames: CS

2

Agitator for fermentors, YAV and mash charger Supplier std. AISI 304 7 Agitator for nutrient tank. Supplier std. AISI 304 1 Cleaning nozzles for fermentor, mash charger, YAV self operated with

360 0 C AISI 304 7

Spray nozzles for antifoam self operated AISI 304 7 Piping & valves As per Supplier norms As per enclosed

list Lot

Instrumentation As per Supplier norms As per enclosed list

Lot

Source: PRAJ


71

TABLE 34 EQUIPMENT TO BE FABRICATED BY PROJECT ON SITE

UNDER SUPPLIER’S SPECIFICATION

Description Tech. Data MOC Qty. Antifoam tank Capacity: 1 m³ AISI 304 1 Acid dosing tank Capacity: 1 m³ CS 1 Nutrient tank Capacity: 2 m³ AISI 304 1 Yeast activation vessel Capacity: 102 m³ AISI 304 2 Fermentors Capacity: 680 m³ CS with Epoxy / AISI 304 4 Mash charger Capacity: 320 m³ CS with epoxy / AISI 304 1 Weighed molasses tank Capacity: 119 m³ CS 1 Molasses receiving tank Capacity: 4.6 m³ CS 1 CIP tank Capacity: 35 m³ CS 1

Source: PRAJ

Notes: The above equipment list is tentative and the exact technical specifications will be confirmed only after detailed engineering.

Construction material mentioned above is only for wetted parts. Construction material for other parts like flanges and nut-bolts shall be carbon steel (CS).

“Ecofine - TVS" Total Vacuum Distillation Section

The description relates and specifies special stainless steel items to be manufactured and imported by the supplier for the distillation section.

TABLE 35 CRITICAL AND PROPRIETARY EQUIPMENT AND COMPONENTS B Y SUPPLIER

ON CIF GEORGETOWN GUYANA BASIS Description Tech. Data MOC Qty. Remarks

Mash column (Rh Grid) trays

2750 mm dia. 20 Nos.

AISI 304 1 Vacuum

Degassifier column (Sieve) trays

1535 mm dia. 5 Nos.

AISI 304 1 Vacuum

Aldehyde column (Bubble Cap) trays

560 mm dia. 24 Nos.

AISI 304 1 Vacuum

Rectifier column Sieve trays

2930 mm dia 42 Nos.

AISI 304 1 Vacuum

Exhaust column (Bubble cap) trays

930 mm dia 14 Nos.

AISI 304 1 Vacuum

Aldehyde condenser I Shell and tube type,HTA

25.4 mm OD tubes, 3m long 13 m²

AISI 304 1 Shell under vacuum

Aldehyde condenser II Shell and tube type, HTA

25.4 mm OD tubes, 3m long 1.4 m²


Rectifier condenser I Shell and tube type, HTA

25.4 mm OD Tubes, 3m long 445 m²


Rectifier condenser II Shell and tube type, HTA

25.4 mm OD Tubes, 3m long 163 m



72


Description Tech. Data MOC Qty. Remarks Exhaust column Reboiler I Shell and tube type, HTA

25.4 mm OD Tubes, 2m long 22 m²

AISI 304 1

Exhaust column Reboiler II Shell and tube type, HTA

25.4 mm OD Tubes, 2m long 76.3 m²

AISI 304 1

RS cooler Shell and tube type, HTA

25.4 mm OD Tubes, 3 m long 57 m²

AISI 304 1

FO cooler Shell and tube type, HTA

25.4 mm OD Tubes, 2 m long 4 m²

AISI 304 1

Fusel oil decanter Standard AISI 304 1 Alcohol scrubber Supplier standard AISI 304 1 Rectifier reflux tank 6.0 m³ AISI 304 1 Vacuum Aldehyde reflux tank 0.5 m³ AISI 304 1 Vacuum Rectifier draw tank 1 m³ AISI 304 1 Vacuum FO washing tank 0.5 m³ AISI 304 1 FO draw tank 0.5 m³ AISI 304 1 Steam condensate pot 2 m³ CS 1 Flash tank for exhaust column 1.5 m³ AISI 304 1 Vacuum

Vapour bottle & feed bottles Supplier standard AISI 304 Lot FO washing tank 0.5 m³ AISI 304 1

FO draw tank 0.5 m³ AISI 304 1 Steam condensate pot 2 m³ CS 1 Flash tank for exhaust Column

1.5 m³ AISI 304 1 Vacuum

Vapour bottle & feed Bottles

Supplier standard AISI 304 Lot

Source: PRAJ The description relates and specifies the items to be locally bought by Supplier for the

distillation section.

TABLE 36 BOUGHT OUT ITEMS BY THE SUPPLIER ON CIF GEORGETOWN GUYANA BASIS

Description Tech. Data MOC Qty. Remarks Mash column bottom transfer pump and motor 72 m³/h Wetted Parts:CF8 1+1 Aldehyde column bottom transfer pump and motor 1 m³/h Wetted Parts:CF8 1+1 Aldehyde column reflux pump and motor 1 m³/h Wetted Parts:CF8 1+1 Rectifier bottom pump and motor 10 m³/h Wetted Parts:CF8: 1+1 Rectifier reflux pump and motor 30 m³/h Wetted Parts:CF8 1+1 Exhaust column bottom pump and motor 10 m³/h Wetted Parts:CF8 1+1 FO draw pump and motor 1 m³/h Wetted Parts:CF8 1+1 FO washing pump and motor 1 m³/h Wetted Parts:CF8 1+1 FO transfer pump and motor 0.5 m³/h Wetted Parts:CF8 1+1 Steam condensate transfer pump and motor 20 m³/h Wetted Parts:CF8 1+1 Fermented mash pre-heater Plate Heat

Exchanger Plates: AISI 316 Frame:CS

1+1

Vacuum pump and motor 475 Am³/h Wetted Parts:CF8 1+1 Piping and valves within battery limit As per

Supplier standards

Process: AISI 304 Utilities :CS

Lot

Instrumentation & PLC based control automation As per Supplier standards

Lot

Source: PRAJ


73

The description refers to items to be locally manufactured and installed by the project owner according to the supplier’s specification.

TABLE 37 EQUIPMENT TO BE FABRICATED BY THE PROJECT ON SITE U NDER

THE SUPPLIER’S SPECIFICATIONS

Description Tech. Data Qty. Installation and insulation for equipment and piping As per Supplier Spec. Lot

Source: PRAJ

“Ecomol-XP” Molecular Sieve Dehydration Section

The item describes and specifies special stainless steel vessels to be manufactured and imported by the supplier.

TABLE 38 CRITICAL AND PROPRIETARY EQUIPMENT PROVIDED BY THE SUPPLIER

ON CIF GEORGETOWN GUYANA BASIS

Description Tech. Data Qty. Sieve bed, molsieves and inserts AISI 304 2 Vaporiser reboiler AISI 304 1 Regeneration condenser AISI 304 1 Super-heater AISI 304 1 Feed pre-heater AISI 304 1 Regeneration pre-heater AISI 304 1 Product cooler AISI 304 1 Vacuum eductor AISI 304 1 Vaporiser flash tank AISI 304 1 Regeneration receiver AISI 304 1 Product receiver As per Supplier 1 Sieve control program and software for the control system Standards Lot

Source: PRAJ

The description relates and specifies special commercial items to be bought locally by the supplier.

TABLE 39 BOUGHT OUT ITEMS BY THE SUPPLIER ON CIF GEORGETOWN GUYANA BASIS

Description Tech. Data Qty. Regeneration pump and motor Wetted part: CF8 1+1 Product transfer pump and motor Wetted part: CF8 1+1 Feed pump with motor Wetted part: CF8 1+1 Regeneration cooler (PHE) Plates: AISI 316

Frame: CS 1

Piping and valves within the battery limits for process, steam, cooling water, instrument air and steam condensate.

AISI 304: Process C.S.: Utilities

Lot

Instrumentation, sieve bed and all control valves and control automation

As per Supplier standards

Lot

Source: PRAJ

The description lists the items to be locally manufactured by the project owner under the supplier’s specifications.


74

TABLE 40 EQUIPMENT TO BE FABRICATED BY THE PROJECT ON SITE U NDER THE SUPPLIER’S

SPECIFICATIONS Description Tech. Data Qty. Installation and insulation for equipment, and piping As per Supplier Specs. Lot

“ Ecovap” Vinasse Evaporation Section

The description refers to items to be manufactured and imported by the supplier for the vinasse concentration section.

It also refers to minor items under the project owner’s responsibility based on the supplier’s engineering.

Critical & proprietary equipment by the supplier on CIF Georgetown Guyana Basis

The description refers to items to be locally bought by the supplier.

TABLE 41 STAGE I

Description Tech. Data M.O.C. Qty. Heat exchanger for effect I (falling film) HTA 675 m² AISI304 Shell with AISI 316 Tubes. 1 Heat exchanger for effect – II (falling film) HTA 675 m² AISI304 shell with AISI 316 Tubes. 1+1 Vapour liquid separator 1 18 m³ AISI 316 1 Vapour liquid separator 2 24 m³ AISI 316 1+1

Source: PRAJ TABLE 42 STAGE II

Description Tech. Data

M.O.C. Qty.

Heat exchanger for effect I (Flubex) HTA 531 m² AISI304 shell with AISI 316 tubes. 1 Heat exchanger for effect – II (Flubex) HTA 531 m² AISI304 shell with AISI 316 tubes. 1 Heat exchanger for effect – III (Flubex) HTA 531 m² AISI304 shell with AISI 316 tubes. 1 Heat exchanger for effect – IV (Flubex) HTA 531 m² AISI304 shell with AISI 316 tubes. 1 Heat exchanger for finisher (forced circulation) HTA

366 m² AISI304 shell with AISI 316 tubes. 1+1

Surface condenser HTA 511 m² AISI304 1 Vent condenser HTA 89 m² AISI304 1 Surface condenser for finisher HTA 374 m² AISI304 1 Vapour liquid separator 1 66 m³ AISI 316 1 Vapour liquid separator 2 66 m³ AISI 316 1 Vapour liquid separator 3 66 m³ AISI 316 1 Vapour liquid separator 4 102 m³ AISI 316 1 Vapour liquid separator For finisher 20 m³ AISI 316 1+1 Spent wash feed tank 20 m³ AISI 316 1

Process condensate tank 8 m³ AISI304 1 Steam condensate tank 4.5 m³ CI 1 Concentrated product tank 5 m³ AISI 316 1 CIP tanks 50 m³ AISI304L 2

Source: PRAJ


75

TABLE 43 BOUGHT OUT ITEMS BY THE SUPPLIER ON CIF GEORGETOWN GUYANA BASIS STAGE I

Description Tech. Data M.O.C. Qty. Effect – I recirculation pump 300 m³/h Wetted part CF8M 1 Effect – II recirculation pump 300 m³/h Wetted part CF8M 1+1 Transfer pump – II 60 m³/h Wetted part CF8M 1 Spent wash feed pump 85 m³/h Wetted part CF8M 1+1 Thin slop intermediate feed pre-heater AISI SS316 1+1 Effect – I recirculation pump 1900 m³/h Wetted part CF8M 1 Effect – II recirculation pump 1900 m³/h Wetted part CF8M 1 Effect – III recirculation pump 1900 m³/h Wetted part CF8M 1 Effect – IV recirculation pump 1900 m³/h Wetted part CF8M 1 Recirculation pump for finisher 550 m³/h Wetted part CF8M 1+1 Transfer pump – I 55 m³/h Wetted part CF8M 1 Transfer pump – II 30 m³/h Wetted part CF8M 1 Transfer pump – III 35 m³/h Wetted part CF8M 1 Transfer pump – IV 40 m³/h Wetted part CF8M 1 Transfer pump for finisher 25 m³/h Wetted part CF8M 1+1 Process condensate pump 55 m³/h Wetted part CF8 1 Steam condensate pump 40 m³/h C.I. 1 Conc. product transfer pump 25 m³/h Wetted part CF8M 1+1 Vacuum pump – water ring type 1600 Am³/h Wetted part C.I. Body 1+1 CIP pump 45 m³/h Wetted part CF8M 1 CIP drain pump 45 m³/h Wetted part CF8M 1 Piping & valves As per Supplier norms Lot Instrumentation As per Supplier norms As per enclosed list Lot Mist eliminator with spray nozzles Supplier standard AISI 316 10

Source: PRAJ.

TABLE 44 EQUIPMENT TO BE FABRICATED BY THE PROJECT ON SITE U NDER

THE SUPPLIER’S SPECIFICATIONS

Description Tech. Data Qty. Installation and insulation for equipment, and piping As per Supplier specs. Lot

Source: PRAJ.

The description relates the instruments which belong to the fermentation control and automation system, bought by the supplier.

TABLE 45 INSTRUMENT LIST FOR “HIFERM” FERMENTATION SECTION

Instrument Qty Remark Pressure gauges : 28 Temperature sensors : 35 Foam Sensors : 4 Flow-meters Glass tube rotameters : 6 Magnetic flow meter with totalizer

: 3

Pneumatic Controlled On-Off Valves

: 12

On discharge of pumps At various locations. On Fermentors and YAV


76


Instrument Qty Remark Control loops Liquid flow control loops Process water flow control loop

: 4

Orifice flow meter Transmitter Flow control valve Cooling water flow control loop in

: 4

cascade with temperature Orifice flow meter Transmitter Flow control valve Fermented mash flow control loop

: 1

Magnetic flow meter Transmitter Flow control valve Molasses Feed flow control

: 4

Magnetic flow meter Transmitter Flow control valve Total Control loops : 13

Source: PRAJ

Note: Fermentation section has been designed with the optimum required level of automation.

Instrument list for “Ecofine – TVS” Distillation Se ction

TABLE 46 THE DESCRIPTION RELATES THE INSTRUMENTS WHICH BELON G TO THE

DISTILLATION SYSTEM, BOUGHT BY THE SUPPLIER

Instrument Qty Remark Pressure gauges : 26 Nos. Vacuum gauges : 6 Nos. Temperature indicators (RTD type) : 48 Nos. Flow-meters Metal tube rotameters : 8 Nos. Magnetic flow meter with totalizer : 1 No. Pressure transmitter : 6 No. Control loops Steam flow control loops Exhaust steam flow control : 1 No. Mash steam flow control : 1 No. Liquid flow control loops FO draw control loop : 2 Nos. Rectified Spirit to Storage : 1 No. Cooling water flow control loop : 2 Nos. Level control loops Mash column bottom level control loop : 1 No. Exhaust column bottom level control loop : 1 No. Aldehyde reflux tank level control loop : 1 No.

On discharge of pumps and columns. At various locations in distillation columns Single point local indicators.


77


Instrument Qty Remark Rectifier reflux tank level control loop : 1 No. F.O. draw tank level control loop : 1 No.

F.O. washing tank level control loop : 1 No. Pressure control loops Rectifier vacuum control loop : 1 No. Total control loops 14 Nos Safe and testers 1 No.

Source: PRAJ

TABLE 47 INSTRUMENT LIST FOR MOLSIEVE SECTION

The description relates the instruments, which belong to the dehydration control and automation system, bought by the supplier.

Instrument Qty Remark Pressure gauges 15 Nos. Temperature indicators (RTD type) 18 Nos. Flow-meters Metal tube rotameters 1 No. Glass Tube rotameters 2 Nos. Pressure transmitters 5 Nos. Control loops Feed flow control valve. : 1 No. Vortex flow meter Flow transmitter Flow control valve Steam flow to the vaporizer reboiler : 1 No. control valve Orifice flow meter

On discharge of pumps and columns. At various locations in distillation columns. Single point local indicators.

Flow transmitter Flow control valve Control valve for Super heater outlet : 1 No. temperature. Temperature Sensor (RTD) Temperature control valve Pressure control valves for the sieve : 2 Nos. beds Pressure transmitter Pressure control valves Vacuum control valves for the sieve : 2 Nos. beds Pressure transmitter Pressure control valves : 2 Nos. Vapor feed isolation valves for sieve beds Automated control valve : 1 No. Level control valve for Vaporizer Flash Tank. Level transmitter Level control valve : 1 No. Level control valve for Product Receiver.


78


Instrument Qty Remark Level transmitter Level control valve

Flow control valve for regeneration : 1 No. feed to Rectifier column. Vortex flowmeter Flow transmitter Flow control valve : 12 Nos. Total Control loops

Source: PRAJ

TABLE 48 INSTRUMENT LIST FOR “ECOVAP” EVAPORATION SECTION

The description relates the instruments which belong to the vinasse evaporation control and automation system, bought by the supplier.

Instrument Qty Remark Pressure gauges : 48 Nos. Temperature indicators (RTD type) : 45 Nos. Pressure transmitter : 2 Nos. Flow-meters Rotameter

:

66 Nos.

On – Off solenoid valves : 1 No. Density meter : Control loops Steam flow control loops Steam flow control : 2 Nos. Level control loops Level control loops 16 Nos.

On discharge of pumps and on equipment Single point local indicators At various locations All VLS, condensate pots, tanks

Flow control Loops : 3 Nos. Vinasse Feed and Product control loop Pressure control Loops : 1 Nos. Effects vacuum control Loop Total control loops 22 Nos.

Source: PRAJ

Configuration of PLC control automation

This PLC is common for the sections of fermentation, distillation, dehydration and evaporation sections. The necessary software licenses for the control system must be bought if PLC is not included.

TABLE 49 PLC & BASIC SPECIFICATION

Particulars (PLC of SIEMENS or Allen Bradley from India Qty Control Panel for PLC Consisting of Lot Marshalling panel CPU cards with redundancy Power supply with redundancy Analog input module Analog output module Digital input module


79


Particulars (PLC of SIEMENS or Allen Bradley from India Qty Digital output module 24 VDC field power supply I/O installation racks Interposing relay board Communication device & accessories between PLC & operating station, accessories and connecting cables Zener barriers

Operator station with 19" Monitor 2 Nos. With desktop mounted PC (Dell) Windows XP operating system Licensed system software Licensed report generation software Licensed engineering software

2 Nos.

DeskJet color printer (HP) 1 No. Modem 1 No.

Source: PRAJ

Note on instrumentation: The instrumentation considered is based on a system of instrumentation cables connecting the field instruments to the PLC.

Typical PLC basic control automation system

All these control loops shall consist typically of a process variable transmitter (like RTD, Flow meter, Pressure transmitter, level transmitter etc.) I to P converter and a control valve. The process variable is passed on to a PLC from where it is viewed on a PC. The Set variable can be set through the PC. The following block diagram shows the schematic sketch of the overall system.

FIGURE 7 TYPICAL PLC BASIC CONTROL AUTOMATION SYSTEM

Source: PRAJ

Variable transmitter, I to P converter and control valve shall be situated in the field. The PLC and the personal computer are located in the control room. Fermentation, distillation dehydration and evaporation plant shall be controlled by a common PLC.

List of bought makes

The supplier’s proposal for bought-out items, piping and valves and instrumentation and control is based on the following makes. Change in these makes would call for the change in the price and other commercial terms.


80

TABLE 50 BOUGHT OUT COMPONENTS

Item Standard makes Air compressors- non-lubricated Ingersall Rand or Chicago Pneumatics (India) Agitators for fermentors and digesters Lightnin Air and biogas blowers Nash (Brazil) or equivalent Vacuum pumps Nash (Brazil) or equivalent Cleaning nozzles Lechler Electrical motors WEG or SIEMENS-Brazil Instrumentation – cables Thermopads or GI Instrumentation – control valves Samson or Fischer Instrumentation – differential pressure Transmitter (DPT)

SIEMENS, ABB , E or H

Instrumentation – IP converters Moore or Samsons equivalent Instrumentation – level transmitters SIEMENS, ABB, E or H Instrumentation – magnetic flow-meters E & H, Krone (India) Instrumentation – PLC SIEMENS or Allen Bradley (all from India) Instrumentation – butterfly control valves Tyco or Flowserve (mostly from India) Instrumentation – pressure gauges Wika or Goa Thermostatic Instrumentation – rotameters Eureka Instrumentation – solenoid valves Asco, Avcon or Rotex Instrumentation – steam flow-meters – orifice Starmech Instrumentation – vortex flowmeters E & H Instrumentation – temp. sensors E & H, Pyroelectric Plate Heat exchangers ALFA LAVAL or APV ( both from India) Pumps – centrifugal Flowserve India or (Durco design) Pumps – hygienic Fristam Pumps – metering Milton Roy-Asia LMI or Heidelberg Prominent Valves – ball Keystone or Microfinish Valves – butterfly Tyco-Keystone or Microfinish Valves – safety Fainger Leser or Darling Muesco Variable frequency drives ABB, SIEMENS or Schneider

Source: PRAJ

Battery Limits

The description establishes the points where the supplier receives the feedstock, the utilities and chemicals and where the ethanol, the by-products and the effluents are delivered.

Outside these limits, whatever is built is under the project owner’s responsibility although the main process and utilities connections are built under the supplier’s engineering and supervision.

TABLE 51 FRONT - END BATTERY LIMITS

Cane molasses At the inlet of molasses receiving tank in fermentation section

Process water At the sectional boundary of each section Sulphuric acid Inlet flange of the acid dosing tank in fermentation

section. Antifoam Inlet flange of the antifoam dosing tank in fermentation

section. Nutrient Inlet flange of the nutrient dosing tank in fermentation

section. Soft water At the sectional boundary of each section


81


Electricity At the terminal box of each motor & electrical instrument in each section

Rectified alcohol At the outlet of safe and testers in distillation section. Fuel ethanol At the sectional boundary in MSDH section. Spent lees At the sectional boundary in distillation section Fusel oil At the sectional boundary in distillation section Steam At the sectional boundary of each section Steam condensate At the sectional boundary of each section Instrument air At the sectional boundary of each section Vents and drains At the sectional boundary of each section Cooling water supply At the sectional boundary of each section Warm water (cooling water return) At the sectional boundary of each section vinasse /spent mash At the sectional boundary of evaporation section

Source: PRAJ

Items by direct project responsibility (excluded fr om supplier)

• Dismantling of any existing structure, demolishing existing building, leveling of plot for civil construction. Contour plan and trial pits for soil data.

• Civil design, engineering, architecture, structural engineering, supervision and construction of all foundations, buildings, structures, supports, cooling tower basins and other civil, masonry tanks.

• Landscaping, construction of internal roads, storm water drains, main drains fencing, gate, security cabin, yard lighting, plant illumination, etc.

• Design and supply of all the structural work including equipment supports, walkways, pipe racks and pipe bridges.

• Design & supply of the entire electrical system including power generation, power distribution, cables, switch gears, earthing, MCC, starters and switch-gears up to battery limits.

• Detailed engineering, fabrication and implementation of bulk alcohol storage system.

• Laboratory equipment, apparatus and lab chemicals.

• Storage disposal and treatment of other output streams such as vinasse, spent lees, floor-washing streams etc. (floor washings, spent lees and cooling water purge stream can be mixed with vinasse prior to treatment).

• Execution of all site work such as installation of tanks, site erection of columns including the site weld for the Suppliers column segments, piping, erection, insulation, instrumentation installation and cabling, electrification, insulation of all columns and hot piping and painting.

• Supply of utilities like steam, cooling water, process soft water, electricity, instrument air etc. All piping, wiring required for supply of utilities like steam, cooling tower, cooling and process water, instrument air up to respective battery limits of Supplier’s scope.

• Foundation, support, roof and various inlet and outlet connections for rectified alcohol, cooling water, steam, instrument air and electricity.

• Boiler, supply of steam from existing boiler and piping of steam up to battery limits.

• Supply of molasses up to the battery limits and withdrawal of products from the battery limits.


82

• Office equipment, furniture, communication equipment, computers, printers, vehicles, all offices and administrative facilities.

• Applications and license fees to various statutory Government Authorities for obtaining various clearances permissions, work permits for Supplier’s engineers and no objection certificates etc.

• Various facilities for Supplier and Supplier’s vendor's personnel visiting for supervision in Guyana, such as local travel, accommodations like housing, guest house, hotel close to the site, communication facilities like telephone, fax, email, internet, computer, furnished site office, access to canteen, cafeteria, restaurant close to the site, first aid and recreation facilities.

• Guidance and cost for obtaining work permits, long duration visas including paper work, formalities and payment of fees to appropriate authorities.

• Fire-fighting facility & fire extinguishers for the distillation and dehydration plant.

• Workshop, maintenance facilities close to the site required for minor modifications, repair of equipment and machinery of Supplier’s responsibility.

• Any other item activity not specifically mentioned in the scope of work and equipment list.


83

Annex B - Oil, Mogas, Ethanol Prices Statistical General References

FIGURE B1

OIL, MOGAS, ETHANOL PRICES STATISTICAL GENERAL REFE RENCES

U.S. Gasoline and Diesel Fuel Prices, 11/24/08

Gasoline (Cents per Gallon) Diesel Fuel (Cents per Gallon)

11/24/08 Change from 11/24/08 Change from

Price Week Ago

Year Ago

Price Week Ago

Year Ago

U.S. 189.2 -18.0 -120.5 U.S. 266.4 -14.5 -78.0

East Coast 195.3 -16.1 -113.9 East Coast 278.8 -13.6 -66.5

New England 195.1 -17.0 -115.1 New England 299.7 -15.1 -59.3

Central Atlantic 205.0 -15.5 -106.9 Central Atlantic 292.5 -14.7 -64.9

Lower Atlantic 188.0 -16.4 -118.8 Lower Atlantic 271.0 -13.0 -67.9

Midwest 175.0 -18.3 -130.9 Midwest 262.4 -14.0 -79.9

Gulf Coast 180.5 -15.1 -116.1 Gulf Coast 259.8 -14.7 -76.2

Rocky Mountain

184.7 -18.6 -121.6 Rocky

Mountain 264.4

-17.8 -88.3

West Coast 211.7 -24.0 -118.8 West Coast 260.8 -16.0 -97.9

California 211.2 -26.2 -128.6 California 260.5 -14.9 -101.5

Source: EIA - Energy Information Administration, November 2008.


84

FIGURE B2 US REAL GASOLINE PRICE: ANNUAL AVERAGE 1919-2009

(cents per gallon)

Source: EIA - Energy Information Administration, November 2008

FIGURE B3

US REGULAR GASOLINE PRICES: NOMINAL AND REAL (cents per gallon)


350

300

250

200

150

100

50

0

1919

1923

1927

1931

1935

1939

1943

1947

1951

1955

1959

1963

1967

1971

1975

1979

1983

1987

1991

1995

1999

2003

2007

450

400

350

300

250

200

150

100

50

0

Jan

– 80

Jan

– 82

Jan

– 84

Jan

– 86

Jan

– 88

Jan

– 90

Jan

– 92

Jan

– 94

Jan

– 96

Jan

.- 9

8

Jan

– 00

Jan

– 02

Jan

– 04

Jan

– 06

Jan

– 0

8


85

FIGURE B4 US IMPORTED CRUDE OIL PRICES: NOMINAL AND REAL

(dollars per barrel)


FIGURE B5 PLATTS ETHANOL NY 5-15 X NYMEX GASOLINE

(s/gl)

Source: Tarcilo Ricardo Rodrigues. The CBI Market. BIOAGENCIA. Sao Paulo, Brazil, 2008.

140

120

100

80

60

40

20

0

Jan

– 80

Jan

– 82

Jan

– 84

Jan

– 86

Jan

– 88

Jan

– 90

Jan

– 92

Jan

– 94

Jan

– 96

Jan

.- 9

8

Jan

– 00

Jan

– 02

Jan

– 04

Jan

– 06

Jan

– 0

8

7 000

6 000

5 000

4 000

3 000

2 000

1 000

0.000

1/3/

04

1/5/

04

1/7/

04

1/9/

04

1/11

/04

1/1/

05

1/3/

05

1/5/

05

1/7/

05

1/9/

05

1/11

/05

1/1/

06

1/3/

06

1/5/

06

1/7/

06

1/9/

06

1/11

/06

1/1/

07

1/3/

07

1/5/

07

1/7/

07

1/9/

07

Ethanol NYH 5-15 Days Brg nymex gasoline


86

FIGURE B6 PLATTS NY 5-15 X BRAZILIAN DOMESTIC PRICE

(US$/GL)


FIGURE B7 PRICE INDEX

(USD/litro)


Difference (US$/gallon) Domestic price FOB Brazil (US$/gallon) Platts based FOB Brazil (US$/gallon)

4.50

4.00

3.50

3.00

2.50

2.00

1.50

1.00

0.50

0.00

-0.50

9.00

8.00

7.00

6.00

5.00

4.00

3.00

2.00

1.00

0.00

-1.00


87

FIGURE B8 LANDED COSTS OF CRUDE OIL IMPORT FROM SELECTED COUN TRIES

Selected Countries

Angola Canada Colombia Mexico Nigeria Saudi Arabia

United Kingdom

Venezuela Persian Gulf

Nationsa

Total OPECb

Total Non-

OPECb

1973 Averagec W 5.33 W - 9.08 5.37 - 5.99 5.91 6.85 5.64

1975 Average 11.81 12.84 - 12.61 12.70 12.50 - 12.36 12.64 12.70 12.70

1980 Average 34.76 3.11 W 31.77 37.15 29.80 35.68 25.92 30.59 33.56 33.99

1985 Average 27.39 25.71 - 25.63 28.96 24.72 28.36 24.43 25.50 26.86 26.53

1990 Average 21.51 20.48 22.34 19.64 23.33 21.82 22.65 20.31 50.55 21.23 20.98

1995 Average 17.66 16.65 17.45 16.19 18.25 16.84 17.91 14.81 16.78 16.61 16.95

1996 Average 21.86 19.94 22.02 19.64 21.95 20.49 20.88 18.59 20.45 20.14 20.47

1997 Average 20.24 17.63 19.71 17.30 20.64 17.52 20.64 16.35 17.44 17.73 18.45

1998 Average 13.37 11.62 13.26 11.04 14.14 11.16 13.55 10.16 11.18 11.46 12.22

1999 Average 18.37 17.54 18.09 16.12 17.63 17.48 18.26 15.58 17.37 16.94 17.51

2000 Average 29.57 26.69 29.68 26.03 30.04 26.58 29.26 26.05 26.77 27.29 27.80

2001 Average 25.13 20.72 25.88 19.37 26.55 20.98 25.32 19.81 20.73 21.52 22.17

2002 Average 25.43 22.98 25.28 22.09 26.45 24.77 26.35 21.93 24.13 23.83 23.97

2003 Average 30.14 26.76 30.55 25.48 31.07 27.50 30.62 25.70 27.54 27.70 27.68

2004 Average 39.62 34.51 39.03 32.25 40.95 37.11 39.28 33.79 36.53 36.84 35.29

2005 Average 54.31 44.73 53.42 43.47 57.55 50.31 55.28 47.87 49.68 51.36 47.31

2006 January 61.35 47.43 61.95 51.30 65.91 56.23 67.33 53.93 55.70 58.10 53.18

February 61.48 44.72 55.99 49.48 63.03 56.26 63.01 52.97 55.16 56.72 50.14

March 62.44 46.59 55.89 51.05 67.04 58.89 65.21 57.70 57.98 60.38 52.74

April 70.68 56.61 64.06 58.02 73.72 62.92 71.35 63.81 62.49 65.76 60.99

May 68.62 63.47 68.80 56.37 72.93 65.10 71.29 62.63 64.26 66.09 63.14

June 68.64 61.14 66.06 55.91 72.70 66.49 71.12 62.65 65.81 67.16 62.03

July 72.89 64.69 70.94 61.26 77.43 65.50 74.59 66.19 65.62 69.21 66.52

August 71.47 63.77 66.67 60.78 74.94 62.11 W 62.15 62.11 65.49 64.81

September 60.38 55.22 57.25 45.78 65.21 56.29 W 53.94 55.80 57.86 56.59

October 57.25 47.83 55.50 48.33 60.90 54.00 59.70 50.74 53.48 54.98 50.89

November 59.49 47.83 56.06 48.91 62.88 52.57 58.67 50.75 52.43 54.77 51.44

December 60.46 50.91 56.91 50.93 63.94 54.05 58.69 50.95 53.95 56.21 52.92

Average 64.85 53.90 62.13 53.76 68.26 59.19 67.44 57.37 58.92 61.21 57.14

2007 January 53.12 46.86 52.22 44.32 58.55 51.21 56.59 47.20 50.65 52.81 47.56

February 57.78 50.25 59.08 48.45 61.16 54.94 59.30 51.97 54.18 56.06 51.69

March 61.91 52.58 59.37 51.07 66.47 58.22 65.96 54.34 57.49 59.60 54.71

April 67.78 54.60 61.77 55.16 71.15 61.53 65.92 58.67 60.98 63.73 57.43

May 67.51 56.46 63.70 56.40 72.99 66.15 W 60.17 65.02 66.38 58.91

June 72.40 57.54 67.87 60.68 77.15 69.53 W 63.24 68.18 69.58 61.65

July 78.73 62.66 73.15 65.46 80.84 72.37 77.73 67.95 71.29 73.63 66.95

August 70.28 64.10 72.72 62.52 76.67 74.11 W 65.64 72.79 71.73 65.76

September 77.76 66.76 77.32 66.55 81.96 80.60 79.48 70.64 78.56 77.37 69.42

October 81.92 67.36 79.74 72.68 90.13 84.73 81.77 76.74 84.29 83.58 73.62

November 92.56 76.60 80.74 79.70 95.54 86.92 W 85.23 86.17 88.53 80.39

December 90.96 69.62 94.68 81.53 97.88 83.72 94.58 82.55 84.00 88.30 79.02

Average 71.27 60.38 70.91 62.31 78.01 70.78 72.47 66.13 69.83 71.14 63.96


88

FIGURE B8 (CONCLUDED) Selected Countries

Angola Canada Colombia Mexico Nigeria Saudi Arabia

United Kingdom

Venezuela Persian Gulf

Nationsa

Total OPECb

Total Non-

OPECb

2008 January 93.21 77.83 85.22 81.28 96.81 92.42 W 83.23 89.70 89.61 82.10

February 97.58 81.37 85.20 81.33 101.23 97.64 W 86.22 96.02 94.64 85.13

March 106.19 93.33 102.88 88.54 109.73 108.26 W 93.59 105.39 103.94 94.65

April 117.34 103.08 105.95 95.31 118.07 118.50 W 100.57 115.52 112.31 103.20

May 127.06 111.83 118.42 104.42 130.93 127.77 128.95 111.77 125.36 123.28 114.83

June R133.08 R119.80 127.35 117.29 R142.39 R125.91 W R122.65 R125.61 R128.45 R122.78

July R130.86 R122.89 126.58 R124.28 R137.22 R122.08 W R124.91 R120.68 R126.22 R124.37

August 112.49 111.05 113.14 109.79 124.23 112.83 - 112.68 110.79 113.11 110.85

Source: Energy Information Administration, November 2008. Notes: a Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi Arabia, Unides Arab Emirates, and the Neutral Zone (between Kuwait and Saudi Arabia) b See Organization of the Petroleum Exporting Countries (OPEC)* in Glossary. On this table, Total OPEC for all years includes Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, Unides Arab Emirates, and Venezuela. for 1973-1992 and again beginning in 2008, also includes Ecuador (Although Ecuador rejoined OPEC in November 2007, on this table Ecuador in included in “Total Non-OPEC* for 2007); for 1974-1995, also includes Gabon (although Gabon was a member of OPEC for only 1975-1994); and beginning in 2007, also includes Angola. Data for all countries not included in “Total OPEC” are included in “Total Non-OPEC”*. c Based on October, November, and December data only. R= Revised. - = No data reported. W = Value withheld to avoid disclosure of individual company data. Notes: �See note 3 at end of section. �Values for the current 2 months are preliminary. �Prices through 1980 reflect the period of reporting: prices since then reflect the period of loading. �Annual averages are averages of the monthly prices, including prices not published, weighted by volume. �Cargoes that are purchased on a “netback” basis, or Ander similar contractual arrangements acquired for importation into the United Status, are not included in the Publisher coverage is the 50 States and the District of Columbia. �See “Nominal Price* in Glossary. Web page: See http://www.eia.doe.gov/emeu/mer/prices.html for all available data beginning in 1973. Sources: �October 1973- September 1977: Federal Energy Administration, From FEA-F701-M-0. *Transfer Pricing Report.” �1978-2007: EIA, Petroleum Marketing Annual 2007, Table 22. �2008: EIA, Petroleum Marketing Monthly, November 2008, Table 22.

FIGURE B9 US ETHANOL MARKET PRICES

Source: CME Group. Ethanol Derivatives. September, 2008.


89

Annex C - Ethanol Production, Import-Export General Statistics

FIGURE C1 ETHANOL PRODUCTION, IMPORT, EXPORT GENERAL STATISTI CS

(milhares m3)



90

Brazil 48.6%

Others1.1%

China0.4%

CBI49.8%

Others Brazil China CBI

Annex D - CBI Ethanol Production, Import-Export Dat a

FIGURE D1 US ETHANOL IMPORTS - 2007


FIGURE D2 DEHYDRATION CAPACITY

Source: Tarcilo Ricardo Rodrigues. The CBI Market. BIOAGENCIA. Sao Paulo, Brazil, 2008. Note: The boundaries and names shown on this map do not imply official endorsement or acceptance by the United Nations.


91

Virgin Islands11%

Jamaica36%

El Salvador19%

Trinidad & Tobago

19%

Costa Rica15%

1 059,91

1 438,45

1 968,41

1 424,897

1 643,061

1 855,98

0

500

1 000

1 500

2 000

2 500

2006 2007 2008

Total CBI Capacity 12 months (000 cm3) Total CBI Quota (000 cm3)

FIGURE D3 CBI CAPACITY SHARE – 2007

(Million Gallons)


FIGURE D4 CBI CAPACITY X QUOTA


2007 JAMAICA 135 EL SALVADOR 70 TRINIDAD & TOBAGO 70 COSTA RICA 55 VIRGIN ISLANDS, USA 40


92

0

5

10

15

20

25

30

35

40

Jan Feb Mar Apr May Jun

1 00

0 C

ubic

Met

ers

El Salvador Jamaica Trinidad & Tobago Costa Rica

FIGURE D5 US ETHANOL IMPORTS FROM CBI - 2007

(1000 cubic meters)



93

Annex E - PRAJ’s Project Similar Ethanol Plants

FIGURE E1 MANUELITA, COLOMBIA

Source: PRAJ.

FIGURE E2 BRITISH SUGAR, UNITED KINGDOM

Source: PRAJ.


94

Annex F - Typical Vinasse Fertigation in Dry Land, Brazil

FIGURE F1 TYPICAL VINASSE FERTIGATION IN DRY LAND, BRAZIL


FIGURE F2 TYPICAL VINASSE FERTIGATION IN DRY LAND, BRAZIL
