Background Information Document - Eskom

Proposed location of the LNG terminal and CCGT Power Plant within the Port of Ngqura and Coega IDZ
ABOUT THE PROJECT
Eskom Holdings (Eskom) and the South African Gas
Development Company (iGas, a national gas infrastructure
company) have been investigating the feasibility of developing
an integrated power project within the Coega Industrial
Development Zone (IDZ) near Port Elizabeth. The project is
referred to as the Coega Integrated LNG-to-Power Project (CIP).
The CIP is proposed within the Port of Ngqura which is an
integral component of the Coega IDZ, located within the
Nelson Mandela Metropolitan Municipality (NMMM) in the
Eastern Cape Province, approximately 15 km north-east
of Port Elizabeth. Phase 1 of the port construction is
nearing completion. The project will ultimately consist of the
following components:
• A liquefied natural gas 1 (LNG) terminal, consisting of a
berth with off-loading arms within the Port of Ngqura,
cryogenic pipelines, storage and handling facilities and
re-gasification modules (covered in this EIA);
• A combined cycle gas turbine (CCGT) power plant, to
generate electricity by burning natural gas or diesel
(covered in this EIA);
• Gas pipelines for the transmission, distribution and
reticulation of natural gas within the Coega IDZ and Port of
Ngqura (to be covered in a separate EIA process); and
• Electricity transmission lines to transmit electricity into
the national grid (being covered in a separate EIA for
transmission lines, currently in progress).
Coega Integrated LNG-to-Power Project
NEED AND JUSTIFICATION FOR THE PROJECT
South Africa is an energy intensive country, largely as a result
of our historic economic focus on energy intensive industries
such as mining and primary metal processing. With current
energy and electricity demands projected to continue
increasing, new investments in electricity generation
capacity are required. Future increases in electricity
demand are particularly expected for the regions around the
Nelson Mandela Metropolitan Municipality and Southern
Cape, the Western Cape and KwaZulu-Natal.
1 LNG is a natural gas associated with oil extraction that has been liquefied (i.e. changed
into a liquid by subjecting it to very low temperatures) for easier transportation and storage.
What is your role as a stakeholder?
The EIA process provides you with the opportunity to:
• Attend meetings and obtain information (such as this
Background Information Document) to find out more
about the proposed project and the EIA process;
• Raise any issues or concerns which you may have
regarding the proposed project;
• Provide us with additional information which should be
taken into account in the assessment of impacts and the
decision-making process;
• Comment on the EIA process and contents of the reports
prior to submission of these reports to the authorities for
decision-making; and
• Appeal the Record of Decision issued by the authorities.
How can you get involved?
• By responding to our invitation for your involvement,
which will be advertised in local, regional and national
newspapers, and by registering as an I≈
• By mailing or faxing a comment form to the public
participation consultant indicated below;
• By attending the public meetings which will be held
during the EIA process;
• By telephonically contacting the public participation
consultant if you have a query, comment, or require
further project information;
• By reviewing the Draft Reports within the timeframes
provided.
All registered I&APs will be sent personal newsletters with
information updates on the EIA process and invitations to
attend public meetings. The meeting dates will also be
advertised in local and regional newspapers.
Should you consider yourself to be an interested and / or
affected party we encourage you to ensure you are registered
on the project database by providing your contact details to
the participation consultants indicated below. Registration will
ensure that you are kept informed of developments relating to the
EIA process, are invited to attend meetings and are informed of
the location and availability of draft reports for comment.
Where can I find Information on this project?
Relevant project and EIA information is included on the EIA
website at: http://eia.csir.co.za/cip as well as on the Eskom
website at: www.eskom.co.za/eia.
WHO SHOULD YOU CONTACT?
Public Process Consultants - Coega Integrated Project EIA
120 Diaz Road, Adcockvale, Port Elizabeth 6001
PO Box 27688, Greenacres, 6057
Phone: 041 - 374 8426 • Fax: 041 - 373 2002
E-mail: sandy@publicprocess.co.za
Background
information
document
for the Scoping and Environmental Impact Assessments (EIAs)
for the proposed Coega Integrated
LNG-to-Power Project
Eastern Cape, South Africa
August 2006
Prepared on behalf of: Eskom and iGas
Prepared by: CSIR and Public Process Consultants

Electricity planning in the national context
The South African Energy Policy, published in December
1998 by the Department of Minerals and Energy (DME),
identifies five key objectives, namely:
• Increasing access to affordable energy services;
• Improving energy sector governance;
• Stimulating economic development;
• Managing energy-related environmental impacts; and
• Securing supply through diversity.
The Department of Minerals and Energy’s Integrated Energy
Plan (IEP) projected that the current growth in electricity
demand would require that additional electricity generation
capacity would be required by approximately 2007, with further
base load generating capacity required by 2010. The IEP
recognises that South Africa is likely to be reliant on coal for
the next 20 years as the predominant source of energy.
The National Energy Regulator’s second National Integrated
Resource Plan (NIRP), which focussed on planning options
for meeting the long term increases in electricity demand,
confirmed that coal-fired power options were still required
over the next 20 years.
In order to meet these objectives and the developmental and
socio-economic objectives in South Africa, the country needs
to optimally use the available energy resources. The South
African Government, through the Department of Minerals and
Energy, the National Electricity Regulator of South Africa
(NERSA) and Eskom are required to address what can be
done to meet these electricity needs both in the short- and
long-term.
The Department of Minerals and Energy performs Integrated
Energy Planning (IEP) to identify future energy demand and
supply requirements. The National Energy Regulator performs
National Integrated Resource Planning (NIRP) to identify the
future electricity demand and supply requirements. Similarly,
Eskom continually assesses the projected electricity demand
and supply through a process called the Integrated Strategic
Electricity Plan (ISEP).
Through these assessment and planning processes, the
most likely future electricity demand based on long-term
Southern African economic scenarios is forecasted, and provides
the framework for Eskom and South Africa to investigate a
wide range of supply and demand-side technologies and
options. Eskom’s ISEP provides strategic projections of
supply-side and demand-side options to be implemented in
order to meet these long-term load forecasts. It provides the
framework for Eskom to investigate a wide range of new
supply-side and demand-side technologies, with a view to
optimising investments and returns.
The most attractive supply-side option identified is to Returnto-Service
three mothballed coal-fired Simunye Power
Stations, i.e. Camden, Komati and Grootvlei. These stations
are currently being returned to service. A variety of supplyside
options are being investigated, including conventional
pulverised fuel power plants (i.e. coal-based power), pumped
storage schemes, gas-fired power plants, nuclear plants (eg.
PBMR), greenfield fluidised bed combustion technologies,
renewable energy technologies (mainly wind and solar projects),
and import options within the Southern African Power
Pool. As older Eskom power plants reach the end of their
design life from approximately 2025, the use of all available
technologies will need to be exploited in order to supply the
country’s growing electricity demand.
The demand for electricity in South Africa has grown, on
average, at more than 4% over the past few years, with a
concomitant reduction in the surplus generating capacity.
The DME, NERSA and Eskom planning processes all indicate
that South Africa will require an additional 5000 MW of
electricity within the next 5 years, with this consisting of both
base load electricity generating capacity 2 and peaking electricity
generating capacity 3 . The planning processes also indicate that
new base load capacity will be required by approximately 2010.
In 2004, the South African Cabinet took the decision that
Eskom will build approximately 70% of the new capacity
required in South Africa. The balance is expected to come from
Independent Power Producers (IPPs).
Hence as part of the increased electricity supply plan, Eskom
is considering a combined cycle gas turbine (CCGT) in the
Coega IDZ. CSIR has been appointed by Eskom and iGas as
independent consultants to undertake an Environmental
Impact Assessment (EIA) process for the proposed new facility.
Electricity Planning: Eastern Cape region
At present, the bulk of power used in the Eastern Cape is
generated predominantly in Mpumalanga and Limpopo
provinces and transported via transmission lines to the
region. The amount of power currently being provided to the
Eastern Cape - approximately 1400 Megawatts (MW) - is
approaching the maximum limit that the existing infrastructure
can deliver. Yet it is expected that power demand will increase
significantly in the next 5 to 25 years. The NMMM area is predicted
to experience a growth in power demand from current
levels of approximately 730 MW to in the order of 5000 MW,
largely as a result of energy intensive industrial developments
located within the Coega IDZ. This will require additional
power generation capacity, in which the proposed CIP would
play a crucial role. The location of a major source of power
2 “Base load electricity generating capacity” refers to power station technology designed specifically
to generate electricity continuously for all hours of the day and night (i.e. 24 hours per day).
3 “Peaking electricity generating capacity” refers to power station technology designed specifically
to generate electricity during periods of very high demand for electricity, normally on weekday
mornings around 07:00 to 09:00 and weekday evenings around 18:00 to 20:00.
generation within the Eastern Cape will assist in stabilizing the
power grid. It will also avoid energy losses that would occur if
additional power was generated elsewhere (eg. Mpumalanga
and Limpopo Provinces) and transmitted to the Eastern Cape.
The CIP is therefore proposed within the context of the need
for additional national and local electricity generating capacity.
There is a need for additional electricity generation capacity to
meet increasing electricity demands within the Eastern Cape,
and specifically the NMMM.
WHAT DOES THIS PROJECT ENTAIL?
The proposed CIP would involve importing 1.7 million tonnes
per annum (mtpa) of liquefied natural gas (LNG) via ship
(referred to as an LNG carrier) to the Port of Ngqura, and the
storage, re-gasification and utilization of 1.4 mtpa in a 2400
MW CCGT power plant. The remaining 0.3 mtpa LNG would be
available, if required in the future, for distribution to gas users in
the Port and IDZ via a gas reticulation network. This amount
could then increase in step with the demands of the IDZ. The
maximum imported LNG will be limited by the port shipping
constraints. The LNG imported may rise over a long period to 5
mtpa. This EIA is based on a proposed LNG import of 1.7 mtpa
and additional import would need to be covered in a separate
future EIA process should the need arise.
The LNG terminal and CCGT power plant are both predicted
to operate for a minimum of 35 years. The approximate area
required for the project is 60 hectares, including options for
expansion. Construction of the LNG terminal and CCGT plant
concurrently is estimated to take 3 years, with 2 years
required prior to construction for design, approvals and
financing. Direct investments associated with the CIP are
estimated in the region of US$ 1 billion.
The following provides more detailed information on each of
the various components that make up the project.
LNG berth and terminal
The LNG berth is being designed to accommodate LNG carriers
up to 300 m long and 50 m wide, with a maximum draft of 12 m
and an LNG capacity of approximately 160 000 cubic metres.
Based on current assumptions, an LNG off-take of 1.4 mtpa for
the CCGT plant will require one LNG carrier at berth approximately
every 14 days (or 26 times per year). The LNG is transported
and stored at atmospheric temperature and is kept at
minus 160 degrees Celsius in order to keep it in a liquid form.
During offloading, the LNG will be transferred in cryogenic
pipelines (i.e. insulated pipes that keep the LNG cold) from the
berth to the LNG storage tanks. It is planned that there will be two
LNG storage tanks each approximately 50m high and 80m in
diameter and with a capacity of approximately 165 000 cubic
metres. From there, the LNG is sent to the re-gasification plant
where the temperature of the LNG is raised in a warming process
using sea water to convert the liquid back to gas. The key infrastructural
components of the proposed LNG terminal are:
• LNG berth, with offloading arms
• Cryogenic pipelines from the berth to the on-land
storage tanks
• On-land terminal facilities, including storage tanks and a
loading facility for future LNG distribution using trucks
• Re-gasification plant.
LNG berths and activities worldwide are governed by strict
safety zones and codes of practice. During offloading, a safety
zone of up to 200m radius is required around the LNG carrier
manifold offloading arm (i.e. where the offloading pipe couples
to the vessel); or 50m from the side of the vessel itself.
CCGT power plant
A combined cycle gas turbine (CCGT) plant uses a cycle
configuration of combustion turbines, heat recovery steam
generators (HRSG), and steam turbines, to generate
electricity. In the combustion turbine component, air is
compressed to a high pressure and thereafter mixed with
natural gas or liquid fuel (eg. diesel), which is subsequently
ignited to develop mechanical energy that drives an electrical
generator. When run in open cycle mode, the excess heat
from the combustion turbines is released via the exhaust
stacks. In the combined cycle mode, hot exhaust gases from
the combustion turbine are used to produce steam, which
drives a steam turbine coupled to an electrical generator.
Because of this composite thermodynamic process, CCGT’s
have thermal efficiencies far greater than other generation
technology options.
The proposed CCGT plant consists of two power blocks
each producing 1200 MW in CCGT mode. The facility will
have dual fuel capacity, i.e. be able to run off either liquid fuel
(diesel) or natural gas. The CCGT plant includes the following
key components:
• Combustion turbines located in two power blocks and
producing approximately 800 MW per power block
• Heat recovery steam generators with associated chimneys
• Steam turbines located in two power blocks and
producing approximately 400 MW per power block, with
associated sea water cooling system
• Electrical generator
• On-site liquid fuels storage tanks totalling approximately
13.5 million litres
• Desalination plant for production of potable water for
use in the CIP facility
• Administration buildings.
The LNG terminal takes longer to construct than the CCGT
power plant. Due to the need to provide the power to the grid
before the completion date for the LNG terminal, the CCGT
power plant is planned to run on diesel for the first approximately
two years of operation. Diesel will be imported by ship via the
bulk liquids berth at the Port of Ngqura and stored within the
vicinity of the port, in diesel storage tanks with a total storage
capacity of approximately 47.7 million litres.
Integration of the CIP into the national grid
The proposed CCGT power plant will transfer power into the
national grid via the Grassridge substation (located on the northern
boundary of the IDZ approximately 10 km north-west of
the proposed CIP site) and the proposed Dedisa substation
(within the IDZ). Currently 3 x 400 kV and 4 x 132 kV transmission
lines are being planned between the new proposed
power station and the new proposed Dedisa substation. This
high voltage transmission infrastructure is the subject of a separate
EIA currently being conducted jointly by Eskom
Transmission and the Coega Development Corporation
(CDC). Further information on this particular EIA can be
obtained from: www.eskom.co.za/eia.
OVERVIEW OF THE ENVIRONMENTAL
IMPACT ASSESSMENT PROCESS
On 21st April 2006, new EIA Regulations were published under
Chapter 5 of the National Environmental Management Act
(NEMA, Act 107 of 1998). The regulations commenced on 3rd
July 2006. Government Notices published in terms of NEMA list
activities that require either a basic assessment or scoping and
environmental assessment (i.e. a “full EIA”). The proposed CIP
requires a “full EIA”, in particular because it includes inter alia the
following activities listed under Activity Number 1 in GN R 387
in Government Gazette No 28753 of 21 April 2006:
“The construction of facilities or infrastructure, including
associated structures or infrastructure, for -
(a) the generation of electricity where -
(i) the electricity output is 20 megawatts or more; or
(ii) the elements of the facility cover a combined area in
excess of 1 hectare; ....
(c) the above ground storage of a dangerous good,
including petrol, diesel, liquid petroleum gas or paraffin, in
containers with a combined capacity of 1 000 cubic metres
or more at any one location or site including the storage of
one or more dangerous goods, in a tank farm;...”
The EIA process is used as a planning, design and decisionmaking
tool in order to identify the biophysical, social and
economic impacts (positive and negative) and consequences
of the proposed project upfront in order to support more
informed decision-making. If the project is authorised to
proceed, the EIA process provides recommendations for
management actions which will minimise potential negative
impacts and maximise the benefits associated with the project.
This EIA is being conducted as one integrated process that
covers two applications in terms of the EIA Regulations; an
application by iGas for the LNG component; and from Eskom
for the CCGT component.
The EIA process is planned to be undertaken in five phases:
(1) Project initiation and scoping (June to December 2006)
(2) Specialist studies (July 2006 to January 2007)
(3) Preparation of the integrative Environmental Impact
Report (December 2006 to May 2007)
(4) Preparation of a draft Environmental Management Plan
(December 2006 to May 2007)
(5) Authority decision-making (approximately May to August
2007).
The following key environmental issues have been identified
for further investigation:
• Impact of atmospheric emissions
• Impacts of water consumption, wastewater generation
and implications for integrated water management
• Impact of water discharges to the marine environment
• Impacts of materials handling and solid and chemical
waste management
• Impact of noise
• Visual impacts
• Socio-economic impacts
• Heritage impacts (eg. archaeology)
• Macro-economic impacts.
PUBLIC PARTICIPATION PROCESS
Proactive engagement with stakeholders forms a key component
of the entire EIA process. The public and key stakeholders
will be informed via newspaper adverts, letters and a public
meeting about the proposed project at the outset of the EIA
process and invited to register as stakeholders. Stakeholders will
be consulted during the Scoping phase to identify issues and
concerns which should be addressed through the EIA process,
identify additional information which will be of value to the EIA
process and assist in defining the scope and terms of reference
for the EIA specialist studies. The draft Scoping Report and draft
Environmental Impact Report will be presented to stakeholders
with the opportunity to submit comments on the draft version
prior to the submission of the final reports to the authorities for
decision-making. Responses to all issues raised and comments
made will be included in the reports submitted to the authorities.