Alternative Feedstock Opportunities in APIC Member & Surrounding Countries
Dr Charles Fryer
General Matters & Raw Materials Committee Meeting at APIC 2014
Pattaya, 16 May 2014
• Ethylene from ethane in the USA
• Ethylene production economics -- from shale NGLs, naphtha, ethanol
• Methanol to olefins processes
• Propane dehydrogenation
• New bio-routes to chemicals e.g. to adipic acid
• Bio-routes to MEG, PX, PTA and PET
• Conclusions
Source: Tecnon OrbiChem
APIC 2014WHAT WE WILL COVER TODAY
0
5
10
15
20
25
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
$/mmBtu
Source: Tecnon OrbiChem
APIC 2014NATURAL GAS, CRUDE OIL & COAL PRICES
US Nat Gas $/mmBtu
Oil $/mmBtuequivalent
Coal $/mmBtuequivalent
WE Nat Gas $/mmBtuequivalent
0
5
10
15
20
25
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
$/mmBtu
Source: Tecnon OrbiChem
APIC 2014US NATURAL GAS & ETHANE PRICES
US Nat Gas $/mmBtu
US Ethane $/mmBtuequivalent
ktpa
APIC 2014US ETHYLENE CAPACITY BASED ON ETHANE
EthyleneCapacity Using Ethane
Ethane Capacity to Consume
EthaneProduction Capacity
Note:The USA has in
addition 8,700 kptaof ethylene capacity based on light liquid
feeds (propane, butane, naphtha)
Ethane ExportCapability
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
2012 2013 2014 2015 2016 2017 2018 2019 2020
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
0 100 200 300 400 500 600 700 800 900 1000 1100 1200 1300
50 100 150 200 250 300 350 400 450 500 550 600 650 7000
10 20 30 40 50 60 70 80 90 100 110 120 130 1400
1 2 3 4 5 6 7 8 9 10 11 12 13 140 15 16
Propylene/EthylenePrice Ratio
Middle East – old gasMiddle East – new gas
Naphtha $/ton
Heavy Fuel Oil $/ton
Crude Oil $/bbl
Natural Gas $/mmBtu
ex naphtha
A
B
C
D
Note:This graph enables typical plant cash production costs of ethylene to be estimated from the price of a given hydrocarbon feedstock, plus, in the case of naphtha, the current propylene to ethylene price ratio prevailing in the market in question
0.96
ex ethane priced at heat value
USA – shale gas
Spot Ethylene price NE Asia April 2014
NaphthaEurope-AsiaApril 2013$/ton
APIC 2014CASH PRODUCTION COST OF ETHYLENE: MEDIUM SIZED CRACKER
Source: Tecnon OrbiChem
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2012
2014
Dollars per Ton
Source: Tecnon OrbiChem
APIC 2014PROPYLENE vs ETHYLENE PRICES - TAIWAN
EthyleneContractTaiwan
PropyleneContractTaiwan
$/ton
APIC 2014CASH PRODUCTION COST OF ETHYLENE: MEDIUM SIZED CRACKER
Source: Tecnon OrbiChem
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
0 100 200 300 400 500 600 700 800 900 1000 1100 1200 1300
50 100 150 200 250 300 350 400 450 500 550 600 650 7000
10 20 30 40 50 60 70 80 90 100 110 120 130 1400
1 2 3 4 5 6 7 8 9 10 11 12 13 140 15 16
Propylene/EthylenePrice Ratio
0.8
Middle East – old gasMiddle East – new gas
Naphtha $/ton
Heavy Fuel Oil $/ton
Crude Oil $/bbl
Natural Gas $/mmBtu
ex naphtha
A
B
C
D
Note:This graph enables typical plant cash production costs of ethylene to be estimated from the price of a given hydrocarbon feedstock, plus, in the case of naphtha, the current propylene to ethylene price ratio prevailing in the market in question
0.9
1.0
0.7
1.1
1.2
1.3
ex ethane priced at heat value
USA – shale gas
Spot Ethylene price NE Asia April 2014
NaphthaEurope-AsiaApril 2014
$/ton
APIC 2014CASH PRODUCTION COST OF PROPYLENEin a MEDIUM-SIZED NAPHTHA CRACKER
Source: Tecnon OrbiChem
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
0 100 200 300 400 500 600 700 800 900 1000 1100 1200 130050 100 150 200 250 300 350 400 450 500 550 600 650 7000
10 20 30 40 50 60 70 80 90 100 110 120 130 1400
1 2 3 4 5 6 7 8 9 10 11 12 13 140 15 16
Propylene/EthylenePrice Ratio
1.2
Naphtha $/ton
Heavy Fuel Oil $/ton
Crude Oil $/bbl
Natural Gas $/mmBtu
ex naphtha
A
B
C
D
Note:This graph enables typical plant cash production cost of propylene, from a naphtha cracker, to be estimated according to the price of naphtha, plus the current propylene to ethylene price ratio prevailing in the market in question
1.1
1.0
1.3.
0.9
0.8
0.7
Spot Propylene price NE Asia April 2014
NaphthaAsia
April 2014
Note:Propylene/Ethylene Price Ratio was 0.96 in East Asia in April 2014
Dollars per Ton
APIC 2014BIO-ETHYLENE PRODUCTION COSTS 2013
0
500
1,000
1,500
2,000
2,500
3,000
Brazil, SugarCane
India, SugarCane
China, SweetSorghum
USA, Corn(maize)
European UnionSugar Beet
Ethylene Taiwan Contract Price 2013 Average
Ethylene USA Contract Price 2013 Average
Source: International Renewable Energy Agency
APIC 2014
METHANOL TO OLEFINS (MTO)
Source: UOP
OUTPUT FROM a UOP/Hydro MTO PLANTConfigured for 1:1 Ethylene : Propylene Ratio
Propylene
Ethylene
SyngasUnit
MethanolSynthesis
MTOUnit
Higher olefins,by products
DMESynthesis
ktpaINPUTNatural gas (2.1 x 109 m3) 1515Methanol 2358
OUTPUTEthylene 400Propylene 400Butenes 123C5+ hydrocarbons 46Fuel gas 40Other (water, COx, coke) 1349Total 2358
-800
-600
-400
-200
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Dollars per Ton
Source: Tecnon OrbiChem
Margin overfeedstock cost= 3.0 tons Methanol
MethanolImport E Asiax 3
EthyleneImport E Asia
APIC 2014VIABILITY OF ADVANCED MTO (Methanol-to-Olefins)
Dollars per Ton
Source: Tecnon OrbiChem
APIC 2014VIABILITY OF ADVANCED MTO (Methanol-to-Olefins)
Margin overfeedstock cost
EthyleneImport E Asia
-800
-600
-400
-200
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Feedstock = 3.0 tons of imported methanol at cash cost made from $4/mmBtu natural gas, plus $60/ton freight
MTONot Viable
Fixed andother costs
APIC 2014METHANOL-TO-PROPYLENE - LURGI MTP® PROCESS
Source: Lurgi GmbH
3.8 Mio Nm³/d48 Mio mmBtu/a
Natural Gas
SyngasPlant
PropylenePlant (MTP)
Methanol Plant
1.7 Mt/aMethanol
0.47 Mt/aPropylene
12.3 Mio Nm³/d Syngas
936 000 t/aWater
143,000 t/aGasoline
CoalGasification
& Shift Conversion
OR4.3 Mt/a
Coal
-1,000
-600
-200
200
600
1,000
1,400
1,800
2,200
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Dollars per Ton
Source: Tecnon OrbiChem
APIC 2014VIABILITY OF MTP (Methanol-to-Propylene)
Margin overfeedstock cost= 3.5 tons Methanol
MethanolImport E Asiax 3.5
PropyleneImport E Asia
Dollars per Ton
Source: Tecnon OrbiChem
APIC 2014 VIABILITY OF MTP (Methanol-to-Propylene)
Margin overfeedstock cost
PropyleneImport E Asia
-1,000
-600
-200
200
600
1,000
1,400
1,800
2,200
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Dec
Feedstock = 3.5 tons of imported methanol at cash cost made from $4/mmBtu natural gas, plus $60/ton freight
MTPNot Viable
Fixed andother costs
APIC 2014FEEDSTOCK REQUIREMENTS FOR MTP®MAXIMUM PRICES FOR CASH BREAKEVEN
Source: Tecnon OrbiChem
Propylene1 ton$1400/ton
Methanol3.5 tons@$240/ton= $840
Natural Gas2600 m3 = 100 mmBtu@$6.30/mmBtu= $630
or
Coal9.15 tons totall�6.25 t feedstock�2.90 t fuel@$46/ton= $420
+ Freight$60/ton
APIC 2014PROPANE DEHYDROGENATION
Source: Tecnon OrbiChem
Propane1.19 tons
DehydrogenationUnit
Steam2.20 tons
Propylene1.00 tons
Off-gases0.16 tons
Hydrogen0.03 tons
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2012
2014
Dollars per Ton
Source: Tecnon OrbiChem
APIC 2014
TAIWAN PROPYLENE CONTRACT vs.PROPANE EAST ASIA x 1.20
PropyleneContractTaiwan
PropanePriceEast Asiax 1.20
Dollars per Ton
Source: Tecnon OrbiChem
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2012 2014
Difference
PDH Cash break-even
APIC 2014
TAIWAN PROPYLENE CONTRACT vs.PROPANE EAST ASIA x 1.20
PropyleneContractTaiwan
PropanePriceEast Asiax 1.20
APIC 2014NEW BIO-ROUTES TO ADIPIC ACID
Source: Tecnon OrbiChem
Alpha-D-Glucose D-Glucose
=
Micro-organism
Glucaric acid
Hydro-deoxygenation
Adipic acid
Verdezyne’sRoute
Rennovia’sRoute
PalmKerneloil
yeast microorganism
APIC 2014TOWARDS 100% BIO-NYLON - ADIPIC ACID
Source: Tecnon OrbiChem
New availability of 1,5-pentanediamine means 100% bio-based PA5,6 may soon be achievable.Several approaches to Bio-adipic acid are being pursued, but low prices in today’s over-supplied market are slowing progress.Verdezyne (supported by BP and DSM)
� Pilot plant in operation in California, USA. Claims production cost 30% lower than benzene-based production. Uses a metabolic (fermentation) methodology.
� Various non-food feedstocks being experimented -- mostly vegetable oils� Bio-based adipic acid has been used to make PA66 polymer, carpet fibre and textile
filament• Rennovia
� Pilot plant in operation in California, USA. Competitive with the benzene process if crude oil is above $50/barrel. Uses chemo-catalytic technology.
� Glucose (from biomass) is oxidised to glucaric acid with air and hydrogenated to adipic acid
• BioAmber (supported by Mitsui & Co.)� First to market with bio-succinic acid, made via fermentation of glucose from wheat,
in a 2 ktpa plant in France� BioAmber aims to adapt the bio-Succinic acid process, which employs a metabolic
process, to make adipic acid, working in conjunction with Celexion• Other companies with plans for bio-based adipic acid include DSM and Genomatica
APIC 2014BIO-ROUTES TO ETHYLENE GLYCOL
Source: Tecnon OrbiChem
SyngasCO + H2
EthyleneOxide
Bio-Ethanol Biomass
MEG
Micro-organism
Dimethyloxalate
Ethylene Synthesis
Catalyticconversion
Biomass
Glycerol
Carbonmonoxide
Carbondioxide
Catalyticelectrochemistry
Glucose
Micro-organism
APIC 2014TOWARDS 100% BIO-PET - BIO-MEG
Source: Tecnon OrbiChem
1. Semi-Conventional Route• Bio-Based Ethanol is Dehydrated to Ethylene
� An old process, revived in recent years in Brazil to make polyethylene. Ethanol from sugar, production from biomass is the way of the future.
• Bio-Ethylene is Oxidised to EO, then Hydrated to MEG� India Glycols, capacity 125 ktpa, mostly with local ethanol� Also Greencol Taiwan (130 ktpa) with ethanol from Brazil, and Global Biochem
(China), M&G Chemicals (China) to start production in 2015 on 200 ktpa plant.2. Conversion of Glycerol or Sorbitol
� Archer Daniels Midland is operating a pilot plant, making MEG in addition to MPG3. Conversion of Carbon Monoxide - Sourced from Biomass?
� MEG made from synthesis gas via dimethyl oxalate. Methyl nitrite converts CO to dimethyl oxalate, with release of NO, which is recycled to make fresh methyl nitrite. The dimethyl oxalate is hydrogenated to MEG. Process was invented by Ube Industries and developed in China.
� Eastman Chemical and Davy have developed a proprietary technology for the production of MEG from synthesis gas, different from the oxalate process
4. Conversion of Carbon Dioxide� Liquid Light, a US-based start-up company, uses catalytic electrochemistry followed
by hydrogenation to convert CO2 to MEG. Multiple reactors cell units will be stacked together in a planned pilot plant.
APIC 2014
TOWARDS 100% BIO-PET - PARAXYLENE & PTA
Source: Tecnon OrbiChem
• Bio-Paraxylene, Semi-Conventional� Sugars are converted to mono-oxygenated chemicals (alcohols, ketones)
by reforming in water � Oxygenated chemicals are converted to hydrocarbons by catalytic
condensation/hydrotreating� The hydrocarbons are converted to high aromatic content by
conventional reforming� The aromatics are separated by conventional techniques into benzene,
toluene and xylenes� Xylenes and then Paraxylene are isolated from the aromatics using
existing technology• Bio-Paraxylene made from iso-Butanol
� Isobutanol, made from sugar, can be dehydrated to iso-butene� Gevo has demonstrated a process to dimerise iso-butene and convert the
dimer (2,4,4-trimethylpentene) to paraxylene (bioPX)• PTA (Terephthalic Acid)
� Gevo to make PTA by conventional chemical means from bio-based paraxylene, and then produce 100% bio-based PET working with Toray
APIC 2014
NEW BIO-ROUTE TO PARAXYLENE
Source: Tecnon OrbiChem
D-Glucose
micro-organism dehydration
Iso-butanol
2,4,4-trimethylpentene
Iso-butene
dimerisation
p-Xylene
isomerisation
APIC 2014BIO-PBS FEEDSTOCK REQUIREMENTS
Source: IfBB (Institute for Bioplastics and Biocomposites); Tecnon OrbiChem
Esterification
Corn
Corn Starch
Succinic Acid
Hydrolysis
Filtration
2.00t
1.45t
1.00t
PBS0.72t
H2O
Enzymes Dextrins
Glucose1.25t
Fermentation
H2O
H2O 0.08 t
Polycondensation
H2O 0.08 t
1,4 BDO0.38t
Hydrogenation0.51t
0.49t
APIC 2014CONCLUSIONS
• Over-supply of ethane from shale gas in the USA means that ethylene prices will stay low, giving the US chemical industry a crushing advantage
• Olefin units based on naphtha will look increasingly to propylene as a cash generator
• Methanol-to-olefin plants need low cost natural gas or coal to be viable
• Bio-routes to chemicals are starting to become credible for the production of well known, large volume chemicals, such as:
� Adipic acid
� MEG
� maybe Paraxylene and PTA
� PET
• The need to demonstrate environmental awareness will increasingly force the chemical industry to seek bio-based alternatives to products in the public gaze, such as packaging plastics
Source: Tecnon OrbiChem
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