Southern Oil Managing Director Tim Rose talks about the new biofuels plant

QLD biofuels plant getting closer

Southern Oil’s Managing Director has talked to Waste Management Review about progress for its biofuels plant in Queensland after it received Environmental Approval to progress last month.

The Department of Environment and Heritage Protection granted an Environmental Authority for Northern Oil Refinery’s new biofuels facility at Yarwun, near Gladstone, on 15 August.

The authority will allow Northern Oil to install equipment on site for it to receive and process a broader range of waste materials, convert them into renewable oil. This can then be treated to become suitable for a range of uses.

Northern Oil is part of Southern Oil’s group of businesses, which Tim Rose leads.

He says that the next steps are for it to lay civil works then, towards the end of this year, install pyrolysis unit and two hydro thermal liquefaction units on site.

“Essentially, what we’ll be doing a range of feedstock – some tyres, plastics, construction and demolition, and biomass –and run them through the different types of processes to see what works best for each feedstock, the best yield and economic return, and that will give us a biocrude at the end,” explained Tim. “Then we’ll be able to examine what we need to process that biocrude through to a fuel.”

He said he hopes that the first pyrolysis unit will be commissioned for December, and the other two will likely be ready for February or March 2017.

Unique production process

Tim explains that there are effectively three phases to make biofuel.

The first step is to take the waste material and make a crude, the second is to refine it, which produces a distillate. That needs to be processed into a drop-in fuel: Northern Oil is aiming for fuels for diesel, aviation, land transport and marine transport.

“To do that final stage, we will build a hydrotreater plant. We’ll be taking the distillates to its plant and running it through in various combinations to make the drop-in fuel, and will to give us the design parameters for the larger commercial-scale plant that we hop to build in two or three years’ time.”

Tim shares that he and his team have travelled around the world look at what’s happening in the biofuels sector.

“What we’re trying to do is unique here in Australia, where we don’t have the luxury of using just one feedstock, compared with countries with bigger markets, like Europe and America,” Tim says.

In contrast, Northern Oil will need to take in a whole range of waste products and try and convert them into a crude, as each produces distinctly different crude products. Then, they need a process to refine successfully four or five different crudes.

“This is tricky and there’s nobody else doing it,” states Tim. “In fact there isn’t much of the single feedstock biofuel process going on either. It’s quite experimental at this stage, but the market for renewable fuels is enormous.”

Feedstocks and markets

In terms of funding, Tim says that Northern Oil has had a small amount of money from the Queensland Government, which was to cover some of the gap between undertaking the project in Queensland to meet their biofuels mandate, as opposed to Wagga Wagga, New South Wales, where operating costs are slightly cheaper.

It also received funding on a 50/50 basis from ARENA (the Australian Renewable Energy Agency) to establish a laboratory to assess biocrudes.

The location of the new biofuels project in Gladstone is ideal, according to Tim, as Queensland has huge volumes of biomass available to process, for example converting sugarcane to gas. It will also form a part of the program to help tackle the woody weed issue, especially with prickly acacia on cattle properties.

Overall, Tim says that the Environmental Approval for the site will secure Northern Oil’s future and offers potential for growth.

“We’re diversifying our business. The lubes market is okay, but not great,” he says. “Biofuel will give us another string to our bow.”

So far, Northern Oil doesn’t have any contracts in place for supply of the biofuels when production starts, deliberately so according to Tim.

“A number of parties with an obligation to use renewable fuel are very keen, such as the US Navy and airlines,” he adds. “We’re waiting to see what type of product we make first, as it may not be suitable for certain applications. Then it will go to the highest bidder.”

Tim says that until they do the first trials, it won’t know what the economics are involved or how much feedstock will be available in what quantities.

He emphasises that his company’s focus is on getting these products right for the benefit of the environment.

“We’re an environmental company. The world needs more renewable fuels,” Tim said. “We try and stay ahead of the curve on this knowledge, and if we get this right there’s an opportunity for us to export our intellectual property.”