Comparative Advantages
A. FEEDSTOCK ADVANTAGES
• TAQAT integrated cluster capitalizes on the scarce petroleum needle coke, low production cost, and lack of graphite producers in MENA region.
• Less than 5% of the global supply of petroleum coke can be thermally transformed into synthetic graphite
• Decant oil at PRC facility is a high-quality feedstock - currently the only untapped viable potential needle coke feedstock
• TAQAT is uniquely placed to fulfill MENA graphite demand
• GrafTech and TAQAT shall produce finished synthetic graphite products at price that competitors pay to purchase needle coke
•TAQAT needle coke production cost shall be the most competitive globally.
Total needle coke cost (USD / Ton): TAQAT 900-1,050, GrafTech 1,500, Other Competitors * Import purchase price: 3,500*
• TAQAT needle coke’ feedstock is reliable supply, long term, and high-quality
• TAQAT needle coke feedstock is ready made decant oil by PRC, while GrafTech has to process upstream products first to produce the required decant oil (i.e. 2.5 times higher capex production plant).
B. INTEGRATED CLUSTER
•Top quartile graphite manufacturing companies have an average annual production capacity of > 70 thousand tons. Only four (4) graphite manufacturing companies belong to this quartile. TAQAT manufacturing plant capacity to be ranked among the top 2-3 largest graphite manufacturers, by site capacity
•Once the proposed cluster is completed; TAQAT and GrafTech will be the only two vertically integrated companies to have upstream needle coke and downstream largest downstream graphite plants
• Such economy of scale plants enjoy an average of 10% saving on graphite production cost over competitors
C. ENERGY INTENSIVE
• Synthetic graphite production is an energy intensive industry with average consumption of 7 MWh / ton
• KSA competitive energy provides an average advantage of 12- 15% cost saving
• Typical cost of energy and needle coke accounts for 70% of the graphite production cost. TAQAT’s captive needle coke feedstock and KSA competitive energy provides an advantage of more than 50% saving on the graphite production cost, in comparison to competitors
D. MARKET DEMAND
• Only petroleum needle coke is used in UHP graphite electrode
• Synthetic needle coke, main petroleum, expects to account for 70% of Li-ion Battery anode use by the year 2020
• By the Year 2030:
• Annual demand for graphite electrode is to grow by 4.5% CAGR
• Annual demand for graphite anode is to grow by more than 20%
• Annual demand for synthetic graphite to reach more than 3.5 million tpy
• Huge shortage expected in petroleum needle coke, as annual demand reach more than 1.5 million tpy vs 780 thousand tpy currently.
Partnership & Cooperation
STRONG GOVERNMENT & STAKEHOLDERS SUPPORT
TAQAT enjoys a strong and continued support from many stakeholders and partners :
Ministry of Energy has provided continued support to TAQAT for the project. Facilitating discussions with PetroRabigh Refinery Co (PRC). The Ministry has been facilitating discussions between PRC and TAQAT and has been closely monitoring the progress with an intention to fast-track the project. Also allocating 22 MMSCFD of natural gas at a competitive price for the cluster energy requirement
The Industry Clusters is an agency of the Saudi Government established to support the development of export- oriented industrial sectors in the country. They are in talks with international battery manufacturers for establishing of manufacturing units in KSA. . The Industry clusters group has been in touch with TAQAT for the offtake of a minimum 30 kty graphite anode for the forthcoming local EV industry
The Saudi Industrial Development Fund (SIDF) is the Financial wing of the Saudi government that provides mid-term and long-term loans to the private industrial sector in KSA. They showed interest to participate through debt financing: TAQAT team has presented an initial business plan to SIDF and SIDF has indicated a preliminary interest to participate in the project as a debt provider.
PRC signed off MOU for the allocation of feedstock, utility and land for TAQAT needle coker project. PRC offered TAQAT an option to establish downstream graphite manufacturing in PetroRabigh Facility. Utility incentives will be provided by PRC per Saudi guidelines for supporting local manufacturing.
Chevron Lummus Global (CLG) is the only available commercial licensor for needle coke technology. CLG conducted the feasibility study for the subject needle coker project, conducted the required pre analysis for the decant oil feedstock. CLG will be the FEED contractor for the needle coker project. Technology Services Agreement will be signed off with CLG for support post plant operation