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Summary Report:
Technical and Economic Feasibility Study of
Linear Alkyl Benzene Plant Production
Consultant:
Zistfannavaran Amir Kabir Company(Ltd)
Employer:
Kerman Petrochemical Company (Ltd)
2014
Table of Contents Abstract ......................................................................................................................................................... 5
Chapter 1 ....................................................................................................................................................... 6
Introduction .................................................................................................................................................. 6
1.1 Introduction .................................................................................................................................. 7
2.1 box flow diagram ................................................................................................................................ 7
3.1 plant feedstock ................................................................................................................................... 8
1.3.1 Kerosene ...................................................................................................................................... 8
2.3.1 Benzene ...................................................................................................................................... 11
4.1 Products and their specifications ...................................................................................................... 11
1.4.1 Linear Alkyl Benzene (LAB) ......................................................................................................... 11
2.4.1 Normal paraffin .......................................................................................................................... 11
3.4.1Heavy Alkyl Benzene (HAB) ......................................................................................................... 11
5.1Kerman petrochemical plant production rate and required raw materia ......................................... 12
6.1 Infrastructure requirements ............................................................................................................. 12
7.1 Plant location .................................................................................................................................... 12
8.1 Estimation of staff ............................................................................................................................. 13
8.1.1 Market Overview ....................................................................................................................... 13
8.1.2 Evaluation of operational capacity in Iran ................................................................................. 13
9.1 Consumption ..................................................................................................................................... 14
10.1 Global Market analysis and conclusion ........................................................................................... 14
11.1 Determination of production capacity according to market research ........................................... 15
12.1 LAB production technology ............................................................................................................. 15
13.1 introduction of manufacturing process .......................................................................................... 15
14.1 Introduction of technical knowledge owners and estimation of the cost ...................................... 16
15.1 Process selection ............................................................................................................................. 16
Chapter 2 ..................................................................................................................................................... 17
Economic analysis ....................................................................................................................................... 17
2.1 Basics of economic estimation of linear Alkyl benzene project ....................................................... 18
Economic Evaluation of linear alkyl benzene production plant ......................................................... 18
2.1.1 Overall project assumption ........................................................................................................ 18
2.1.2 Investment ................................................................................................................................. 18
2.1.3 Feedstock price .......................................................................................................................... 19
2.1.4 Production capacity ................................................................................................................... 19
2.2 Economic calculations ....................................................................................................................... 20
2.2.1 Sources of capital ....................................................................................................................... 20
2.2.2 Dollar Exchange rates and taxes ................................................................................................ 20
3.2 Estimation of economic indicators ................................................................................................... 21
3.2.1 Estimation of break-even point ................................................................................................. 21
3.2.2 Calculation of payback period .................................................................................................... 21
Return on investment and internal rate of return .................................................................................. 21
Table 1 Results of feed analysis .................................................................................................................... 9
Table 2 total hydrocarbons based on group ............................................................................................... 10
Table 3 total hydrocarbons based on carbon number ............................................................................... 10
Table 4 Products and required raw material .......................................................................................... 12
Table 5 Required utilities ............................................................................................................................ 12
Table 6 Estimation of staff .......................................................................................................................... 13
Table 8 production schedule....................................................................................................................... 18
Table 9 project investment schedule .......................................................................................................... 18
Table 10 total capital investment ............................................................................................................... 19
Table 11 Raw material prices ...................................................................................................................... 19
Table 12 production capacity and prices .................................................................................................... 19
Table 13 Sources of capital ......................................................................................................................... 20
Table 14 Share of parties ............................................................................................................................ 20
Table 15 Loan .............................................................................................................................................. 20
Table 16 Dollar Exchange rates and taxes .................................................................................................. 20
Table 17 return on investment (ROI) and internal rate of return (IRR) ...................................................... 21
Table 18 summary of Economic analysis ....................................................... Error! Bookmark not defined.
Figure 1 Flow box diagram ............................................................................................................................ 8
Figure 2 contribution of processes around the world ................................................................................ 15
Abstract
Product Name Linear Alkyl Benzene
Plant capacity 150000 tons Linear Alkyl benzene per year 112500 tons Linear Alkyl benzene per year
/32500tons normal paraffin per year
Raw material Kerosene, Benzene
Raw material source National Refining and Distribution Company,
Bandar Abbas oil refinery
Operation day 330 operation day, 8000 hours
Land area 99 acres
Plant location Rafsanjan County or Baft County
Total investment first: 668 million US dollar
second :567 million US dollar
Product price 1750 $ per tons
IRRE second: 42.96% considering Tax exemption
first: 38.11% considering Tax exemption
IRR second: 28.16% considering Tax exemption
first: 24.5% considering Tax exemption
Break Even Point second: 42.5%
first: 51.7%
Payback period second: 3.55 years
first: 4.01 years
Chapter 1
Introduction
1.1 Introduction Construction of Iranian refineries and petrochemical plants is one of the old aspirations of the Iranian
oil industry and industrial society. Today by efforts of researchers and support of managers the Islamic
Iran has reached a stage of confidence that claim to provide native technical knowledge and design of
petrochemical plants. Using an internal maximum power, both in research and in design and
construction is promising a bright future of industrial and economic development of Islamic republic of
Iran.
Existence of vast oil resources in Iran with the policy to prevent the sale of crude oil provided a
unique economic capacity for entrepreneurs and investors to pursue profitable business opportunities in
the oil industry. One of the most favorable areas is the use of primary refinery’s products such as
kerosene to product value added ones.
Currently only a portion of kerosene produced at the refineries is converted to jet fuel and the rest is
inevitably mixed with diesel for heating purposes to substitute natural gas. Due to this, production of
large amount of benzene within the country and growing domestic and international demand for
detergents conversion of kerosene to linear alkyl benzene can be profitable. In the following the process
of producing linear alkyl benzene is discussed and a brief process description is given.
2.1 box flow diagram Linear alkyl benzene production process involves the following main steps:
1. separation
2. desulphurization
3. deparaffinization
4. hydrogenation
5. alkylation unit
Necessary to mention, in addition to processing units, it is also required other units including utility.
BFD of the process is shown below.
Figure 1 Flow box diagram
3.1 plant feedstock
1.3.1 Kerosene
Kerosene is a cutting of crude oil that is separated by distillation from crude oil and other
components. Feed stock is supplied from pipeline of Bandarabbas-Rafsanjan. Its specifications are as
follows:
H2 Package
Unit 300
N-paraffin
separation
Unit 200 Cutting
treatment center
Unit 100 Pre-separation
Unit 400
Hydrogenatio
n
Unit 500
Alkylation
Benzene Raffinate
Hydrogen Heavy cutting
Light cutting
Kerosen
e
Natural Gas
LAB
HAB
Table 1 Results of feed analysis
Standard results Type of analyze
ASTM D2622 10/1> 1. total sulfur
ASTM D1319 5/36 6/1
22 2/01
2. PONA
ASTM D4052 3. Density
ASTM D445 (C°21)06936 (C°21)0615
4. Viscosity
Osmomat 3/031 5. molecular weight
3/071 7/079
087 6/091 0/096
099 0/215
200 208
7/225 1/265 5/210 5/251 9/237
281
IBP 5
01 05 21 61 11 51 31 71 81 85 91 95
FBP
6. distillation analysis
Table 2 total hydrocarbons based on group
Mol% Vol % Wt% Type
41.804
2.698
12.918
4.327
3.282
19.088
15.885
100.00
35.449
3.697
12.849
3.756
3.757
22.267
18.226
100.00
39.058
3.548
11.995
3.782
3.575
20.940
17.102
100.00
Aromatics
C14+
Iso-Paraffins
Naphthenes
Olefins
Paraffins
Unknowns
Total
Total
Total
Total
Total
Total
Total
Total:
Table 3 total hydrocarbons based on carbon number
Ave. Sp. Gr. Ave. Mw. Mol % Vol % Wt % Group
0.627
0.807
0.766
0.777
0.811
0.814
0.796
0.767
0.765
0.774
0.771
0.771
0.771
0.797
72.150
95.870
110.964
125.489
138.120
150.952
166.382
183.333
198.153
211.482
226.440
240.440
254.440
153.413
0.055
0.255
1.387
9.358
29.586
25.068
18.210
9.701
4.033
1.794
0.434
0.095
0.024
100.00
0.033
0.157
1.043
7.851
26.150
24.150
19.754
12.037
5.424
2.545
0.662
0.154
0.041
100.00
0.026
0.159
1.004
7.655
26.636
24.666
19.749
11.593
5.210
2.473
0.641
0.149
0.040
100.00
Pentanes:
Heptanes:
Octanes:
Nonanes:
Decanes:
C11's:
C12's:
C13's:
C14's:
C15's:
C16's:
C17's:
Total:
2.3.1 Benzene
Benzene by weight of at least 99.9 is liquid in normal conditions and has a characteristic odor. Its
boiling point is 80.1 ◦C and freezes at 5.5 ◦C. its specific weight than water is 0.978, benzene is a good
solvent, it is insoluble in water, sparingly soluble in alcohol and completely soluble in ether. Its density in
15 ⁰C is 0.882-0.886.
The required benzene will be provided from aromatic manufacturers like Isfahan petrochemical
company, Bandar imam petrochemical company, Tabriz petrochemical company and buali sina
petrochemical company.
4.1 Products and their specifications
1.4.1 Linear Alkyl Benzene (LAB)
Linear alkyl benzene refers to compound containing a benzene ring or an alkyl group attached to it.
Alkyl group attached to linear alkyl benzene is an organic linear hydrocarbon. LAB is an intermediate
substance in production of detergents. This material consists of a linear chain and a benzene ring.
Kerosene is the raw material of linear paraffin with high purity which finally is converted to linear olefin
by dehydrogenation. As a result linear mono olefin reacts with benzene in presence of a catalyst that
produces linear alkyl benzene. LAB is use for production of sulfonate alkyl benzene (LAS). LAS is a main
ingredient in most detergents and is biodegradable.
2.4.1 Normal paraffin
Normal paraffin with carbon range of C10-C13 is used for linear alkyl benzene production. In addition
it is used in production of fatty alcohols and solvents used in paint and resin industry.
3.4.1 Heavy Alkyl Benzene (HAB)
Heavy alkylate is a by-product of LAB production process. This material is a mixture of di phenyl
alkane and di alkyl benzene which Due to dielectric properties, high oxidation stability and very low pour
point has very good performance in heat transfer oils and industrial lubricants and also used in industrial
detergents.
5.1Kerman petrochemical plant production rate and required raw material
Kerman petrochemical plant production rate and required raw material are provided in the table
below.
Table 4 Products and required raw material
Amount of required Raw material
(thousand tons per year)
Final product amount (thousand tons per year)
product
Kerosene-1270 Benzene :
75%:38 100%:57
first 150 Linear alkyl benzene (LAB) second 112.5
first 0 Normal paraffin
second 32.5
first 14.6 Heavy Alkylate (HAB)
second 19.5
6.1 Infrastructure requirements Utilities need for the project and amount of their consumption is provided in the table below:
Table 5 Required utilities
Required Utilities For annually production of 150000 tons LAB
Electricity (thousand megawatt hour) 29
Natural gas (thousand cubic meter per day) 271
Plant water (million cubic meter per year)
Cooling water 28.5
Auxiliary water (2.5 %) 0.71
Water for other tasks 0.02
Total amount of required water 0.73
It is planned to provide initial and auxiliary water through the purchase of raw water wells in the
area.
Also produced wastewater is treated through physical, chemical and biological treatments. To biological
treatment a modern process, bioreactor membrane, is considered in this project. Finally, a reverse
osmosis water system is used to return treated wastewater to the cycle of consumption.
7.1 Plant location The Desired location is situated at the vicinity of Rafsanjan-Kerman road and is the suburb of
Rafsanjan city in Kerman province, Iran. The site has an area of 99 Acres with geographical coordinates
of:
Between 30 degrees, 29 minutes, 13 seconds to 30 degrees 30 minutes 2 seconds north latitude and 55 degrees, 36 minutes, 29 seconds to 55 degrees, 37 minutes, 38 seconds east longitude. The Desired location is situated at 35 kilometers of Baft, in the vicinity of Baft-Arzunyeh road and is
the suburb of Baft city in Kerman province, Iran. The site has an area of 90 Acres with geographical
coordinates of:
Between 27 degrees, 52 minutes, 9 seconds to 28 degrees 52 minutes 55 seconds north latitude and 56 degrees, 38 minutes, 57 seconds to 56 degrees, 39 minutes, 53 seconds east longitude. Project location map is provided in appendix.
8.1 Estimation of staff According to organizational chart of manufacturing sectors, office and contractual, staff requirements
of the plant are 811/953 people, which is given in the table below:
Table 6 Estimation of staff
Person(100%) Person (75%) Unit
592 450 Production plant
200 200 Utility
81 81 Office
30 30 Treatment Plant
50 50 HSE
953 811 Total
8.1.1 Market Overview
8.1.2 Evaluation of operational capacity in Iran
8.1.2.1 Chemical industry of Iran Company
Chemical industry of Iran Company (LLP) was established in 1984 (1363) sponsored by bank of
industry and mine. Executive operations of linear alkyl benzene plant was started in early 1991 (late
1369) in a region with an area of 3.42 million square meters in the industrial area of northwest of
Isfahan and finally this production complex came into operation on 1st June 1994 (11th khordad 1374).
Technical knowledge of the project was purchased for annual production of 50000 tons linear alkyl
benzene and 46000 tons of normal paraffin. In 2000 with increase in domestic consumption as well as
improving consumer market in the region, the implementation of development plan for annual
production of 75000 tons of linear alkyl benzene and 140000 tons of normal paraffin was strengthened
and in 2003 in collaboration with LGC&C, company was able to successfully carry out the development
plan.
8.1.2.2 Bistoon Petrochemical Plant
Bistoon petrochemical company is located in the northeast of Kermanshah at 8 km of Kermanshah-
Bistoon road. This complex is the first petrochemical plant in the west, Iran, which was founded in
1998(1373) on an area of 63 acres and in February 2005(1383) was officially put into operation. Bistoon
petrochemical plant produces 50000 tons per year linear alkyl benzene which is the raw material for
detergents and 6500 tons heavy alkyl benzene which is used for lubricants and transformer oils.
9.1 Consumption Considering that nearly all the LAB produced in downstream plants are converted to LAS after
sulphurization which are used as main ingredient of household and industrial detergents, estimated
consumption of LAB in production of detergents is investigated6 Table 7 shows the list of Iran’s largest
producers of detergents based on production capacity. The nominal detergent production capacity of
companies that use LAS in their formulations and their development plans and percentage of the LAS
required is presented in table 86 Currently the factory’s required amount of LAB is not produced within
the country, also due to sanctions these companies are not able to import high amount of it; thus
companies produce lower than relative capacity of production on this basis, the amount of consumed
LAS (and in the condition of working all units with their nominal capacity) in 2013, will be 946 thousand
tons in Iran and considering the fact that 70.7 Wt.% of the LAS constitutes LAB, the amount of required
LAB for units to achieve their nominal capacity will be 670 thousand tons. In addition if under
construction units come into operation the amount will increase into one million tons.
10.1 Global Market analysis and conclusion According to what was said in most parts of the world, most of produced LAB is converted to LAS and
finally most of LAS becomes to detergent.
Supply and demand, production and consumption are function of consumption of product detergents
which are based on this type of detergents as the final product. Several factors is affected the global
need of these two substances and consequently the production rate in each region and thus effect the
entire world. The most important of them are summarized below:
1. Feedstock
2. Production cost
3. Conditions of other competitions in area as detergent (such as ease of processing, prices and
feedstock availability, performance, etc.)
4. Environmental considerations
5. Population and its changes
6. Economic conditions of each region and detergent purchasing power for local people
7. Lifestyle and type of detergent
In view of above, the process of reducing and increasing the production and consumption of these
substances can be analyzed in different regions which is mentioned in detailed report.
As a general conclusion, production-consumption of these materials remains stable or decreases in
recent years in developing countries and in the future a similar pattern is predictable. In contrast in
developing countries such as south Asia and Middle East countries, due to the low price of crude oil
compared to the price of alcohol (natural) and high demand the production of these substances is
increasing. New plants are being set up and operated. In fact many countries in this area have imagined
trading in this zone as good opportunity for development. It seems that most of this market will be in
the hands of developing countries in future.
11.1 Determination of production capacity according to market research According to the results of the market reviews, three trains each consisting of feedstock with capacity
of 10000 barrels of kerosene is intended so overall production capacity of plant would be 150000 tons of
linear alkyl benzene per year. The plant will work 330 days a year equivalent to 8000 hours per year.
12.1 LAB production technology
13.1 introduction of manufacturing process Linear alkyl benzene production process includes:
1. Catalyst solid-Detal
2. Olefins and catalyst HF
3. Paraffin and catalyst HF
4. Paraffin and catalyst AlCl3
The contribution of the processes mentioned above which are applied in various plants around the
world is shown below:
Figure 2 contribution of processes around the world
14.1 Introduction of technical knowledge owners and estimation of the cost The most prominent holder of technical knowledge of LAB production is UOP. Other well-known
companies in addition to UOP which have the technical knowledge of LAB production are IFB France and
Chi mica Augusta. There are other companies with expertise in construction of LAB units which some of
the largest include:
LG E&C (LG Engineering and Construction) ,Foster Wheeler ،UHDE India and SNC-Lavalin.
15.1 Process selection As shown in the figure above, today most of LAB units in the world are based on HF catalyst, which
are currently, constitute about 79 percent of the total units in the whole world. So given that the
UOP/HF n-paraffin are most frequent in comparison with other methods, in this project, due to its high
prevalence worldwide, Access to technical Knowledge and the independence of having technical
knowledge to provide a solid catalyst are fully taken into consideration.
Chapter 2
Economic analysis
2.1 Basics of economic estimation of linear Alkyl benzene project
Economic Evaluation of linear alkyl benzene production plant
An economic evaluation of a linear alkyl benzene production plant, using HF n-Paraffin process, has
been made by considering the following assumption.
2.1.1 Overall project assumption
2.1.1.1 The project schedule
a) The production Schedule
The three year production schedule is considered as described below:
Table 7 production schedule
Production capacity 150 000 tons per year LAB 112500 tons per year LAB
32500 tons per year Normal paraffin
Production schedule
First year 75%
Second year 85%
Third year 100%
Annual operation days 330 operation day, 8000 hours
Shifts per 24hr-day 3 ,8-hour shifts
Production capacity is considered, Based on domestic market demand and exports, and the
standard scale of IFB. (Ref. SRI)
b) Scheduling of project investment
A four-year investment plan in accordance with the following table is intended.
Table 8 project investment schedule
Project investment period
Beginning of construction 2015 (1394)
Completion of construction 2019 (1398)
Duration of construction 4 years
Currency/Rial budgeting during construction phase
First year 15%
Second year 30%
Third year 30%
Fourth year 25%
2.1.2 Investment
Estimation of total investment cost of the project
The total investment of the project includes the total cost of fixed capital and working capital, which
is estimated 1730 million dollar.
Table 9 total capital investment
currency exchange rates 1 dollar Ξ26500 Rial
Separating the fixed capital and working capital investment of the plan
Total fixed capital investment Currency (m dollar/euro)
first 660
second 560
Rial (m Rial) -
Sum of Total fixed capital investment (currency and Rial) (m Rial)
first 17481997 second 1483986.75
Total working capital investment (million Rial) first 668420 second 567080
Sum of Total fixed capital and working capital investment(million Rial)
first 17713130 second 15027620
2.1.3 Feedstock price
Principal raw material for this project is natural gas, which is funded domestically. Raw material prices
are based on Persian Gulf FOB prices, is calculated as follows.
Table 10 Raw material prices
Material Raw material consumption (ton per year)
Raw material price
(US dollar per ton)
Total price (thousand
dollar )
Raw material consumption (ton per year)
Raw material price (US dollar
per ton)
Total price (thousand
dollar )
kerosene 1269972 912 1158214 1269972 912 1158217
Benzene 380480 969 36868 57071 969 55302
Total (thousand dollar): 1195083
Total (thousand dollar): 1213517
The final price of product is estimated by the average Persian Gulf FOB price. In this estimation
rise of price (inflation) is not considered.
2.1.4 Production capacity
Production capacity and the prices are as follows:
Table 11 production capacity and prices
Production capacity(ton per year) Products prices (US dollar per ton) first second
LAB 112551 150000 1750
HAB 14595 19460 1340
Light cut 225720 225720 1094
Heavy cut 384912 384912 1094
Normal Paraffin 0 32504 1547
Rafinate 574968 574968 1000
2.2 Economic calculations
2.2.1 Sources of capital
Sources of capital are presented in the table below:
Table 12 Sources of capital
Source of capital percentage participation The opportunity cost
Stockholder 30% 20%
Loan 70% 7%
In this case, the discount of the total investment is calculated as following:
(30%*20%)+(70%*7%)=10.9%
2.2.1.1 Share of parties Table 13 Share of parties
Share of parties
amount 25%
Requirements(first) 46% for first year, the rest in second, third and fourth year, equal to 18%
Requirements(second) 48% for first year, the rest in second, third equal to 22% and fourth year, equal to 8%
2.1.2.2 Loan
Loan assumptions are presented in the following table:
Table 14 Loan
Amount 70% investment
Interest rate (annual) 7% added to loan amount during the loan Considered as part of investment
Condition 3 year, rest in second, third, fourth year, equal to 33.3%
Payments 48 monthly equal installments starting one year after operation begins.
Breathing 12 months
2.2.2 Dollar Exchange rates and taxes Table 15 Dollar Exchange rates and taxes
Dollar to Rial exchange rate 26500
Tax rate 0
Discount rate 10.9%
3.2 Estimation of economic indicators Due to above assumptions and the investment estimation made by SRI institute for Germany in 2014,
the investment analysis of this project was carried out. the economic calculations were done, using
COMFAR.
In this project, four different price of feedstock, is considered. According to 1527 million dollar total
investment (considering interest on loans as part of the investment cost), Economic calculations are as
follows:
3.2.1 Estimation of break-even point
The annual production rate, which the fixed and working costs of production are equal to revenues from the sale, is called break-even point.
Break-even point(first) Break-even point(second)
51.7% 42.5%
3.2.2 Calculation of payback period
Payback period (PBP) is the time period required for the amount invested in an asset to be repaid by the net cash outflow generated by asset.
Payback period (first) Payback period (second)
4.01year 3.55year
Return on investment and internal rate of return Due to above assumptions, Internal rate of return on investment (IRR) , internal rate of return on
equity (IRRE) and NPV is given in the following table:
Table 16 return on investment (ROI) and internal rate of return (IRR)
IRR IRRE% NPV
first 24.5 38.11 739750
second 28.16 42.96 897750
