Technology Economics: Propylene via Metathesis
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Technology Economics: Propylene via Metathesis

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Intratec Solutions LLC, the unrivalled provider of techno-economic assessments for chemical and allied industries, is proud to announce the publication of Propylene via Metathesis. This publication is ...

Intratec Solutions LLC, the unrivalled provider of techno-economic assessments for chemical and allied industries, is proud to announce the publication of Propylene via Metathesis. This publication is being offered as a free sample. The publication's full content is available online, free of charge.

In this report, the production of propylene via metathesis from ethylene and butenes is reviewed. Included in the analysis is an overview of the technology and economics of a process similar to the CB&I Lummus OCT process. Both the capital investment and the operating costs are presented for a plant constructed in 2011 in the US Gulf and Germany.

Also, alternative ways to produce propylene via butenes-only metathesis, called self-metathesis, as well as via ethylene-only metathesis, through the use of an ethylene dimerization unit together with a metathesis plant, were presented. Discussions regarding the integration of a metathesis unit with an olefin plant are also presented.

Know more at: www.intratec.us/publications/propylene-production-via-metathesis

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Technology Economics: Propylene via Metathesis Technology Economics: Propylene via Metathesis Document Transcript

  • Propylene via Metathesis
  • #TEC001B Technology Economics Propylene Production via Metathesis 2013 Abstract Propylene is the raw material for a wide variety of products, and has established itself as the second major member of the global olefins business, only after ethylene. Globally, the largest volume of propylene is produced in steam crackers and through the fluid-catalytic cracking (FCC) process. The propylene is typically considered a co-product in these processes, which are primarily driven by ethylene and motor gasoline production respectively. As a result, new and novel lower-cost chemical processes for on-purpose propylene production technologies are of high interest to the petrochemical marketplace. Such processes include: Metathesis, Propane Dehydrogenation, Methanol-toOlefins/Methanol-to-Propylene, High Severity FCC, and Olefins Cracking. In this report, the production of propylene via metathesis from ethylene and butenes is reviewed. Included in the analysis is an overview of the technology and economics of a process similar to the CB&I Lummus OCT process. Both the capital investment and the operating costs are presented for a plant constructed in 2011 in the US Gulf and Germany. Also, alternative ways to produce propylene via butenes-only metathesis, called self-metathesis, as well as via ethylene-only metathesis, through the use of an ethylene dimerization unit together with a metathesis plant, were presented. Discussions regarding the integration of a metathesis unit with an olefin plant are also presented. Copyrights © 2013 by Intratec Solutions LLC. All rights reserved. Printed in the United States of America.
  • This Publication Was Not a Publication… How Readers Benefit? … It was actually an advisory service ordered by one of our clients, now disclosed to our readership with his consent. From academics to industry executives, our readers benefit by gaining access to real consulting cases, released for the first time to the market as one-of-a-kind publications at affordable prices. It results from the innovative concept, designed by Intratec for leading companies in the chemical and allied sectors who have asked for more affordable and reliable studies to plan their investments. Intratec’s strategy works by charging clients lower-than-market fees to conduct a technology advisory service with the understanding that such studies may be released, after an agreed upon period of time, as publications. Available through well-known sales channels such as Amazon, Google Books and HP MagCloud, our publications can be purchased by any interested reader. In short, our clients receive traditionally expensive studies for a fraction of the cost, and our readers get unprecedented access to real professional publications at steep discounts. Through our university discount policy, students and faculty members will be able to become familiar with challenges faced by industry for a price similar to a usual textbook. How Clients Benefit? While traditional consulting firms charge their clients hundreds of thousands of dollars, Intratec offers, from the convenience of a web browser, a much better advisory experience for a price 80% lower than market. What is Technology Economics? Advisory services targeting investments on new chemical units, answering: What is the process? What equipment is necessary? What are the raw materials and utilities consumptions? What are the operating and capital expenses? In which locations is this technology more profitable? Each new assignment comprises of a study structured like this publication, valuable spreadsheets and broad support. ii FREE SAMPLE
  • Consulting as Publications at a Glance Reshaping the Advisory Industry 1) Our publications are accessed and attested to by a huge audience . . . 2) . . . including potential clients who like the publication structure . . . 3) . . . and order advisory services based on the same format. 4) If our clients agree, their advisory services are disclosed as publications. Everyone Benefits from Cost Sharing & Online Experience 1) Readers purchase our publications at steep discounts online . . . 4) . . . because they were actually consulting cases . . . 3) . . . requested online by the initial client . . . 2) . . . who shared the costs with the readers. For a better understanding of our innovative concept, please visit www.intratec.us. FREE SAMPLE iii
  • Terms & Conditions Information, analyses and/or models herein presented are prepared on the basis of publicly available information and non-confidential information disclosed by third parties. Third parties, including, but not limited to technology licensors, trade associations or marketplace participants, may have provided some of the information on which the analyses or data are based. Intratec Solutions LLC (known as “Intratec”) does not believe that such information will contain any confidential information but cannot provide any assurance that any third party may, from time to time, claim a confidential obligation to such information. The aforesaid information, analyses and models are developed independently by Intratec and, as such, are the opinion of Intratec and do not represent the point of view of any third parties nor imply in any way that they have been approved or otherwise authorized by third parties that are mentioned in this publication. The application of the solutions presented in this publication without license from the owners infringes on the intellectual property rights of the owners, including patent rights, trademark rights, and rights to trade secrets and proprietary information. Intratec conducts analyses and prepares publications and models for readers in conformance with generally accepted professional standards. Although the statements in this publication are derived from or based on several sources that Intratec believe to be reliable, Intratec does not guarantee their accuracy, reliability, or quality; any such information, or resulting analyses, may be incomplete, inaccurate or condensed. All estimates included in this publication are subject to change without notice. This publication is for informational purposes only and is not intended as any recommendation of investment. Reader agrees it will not, without prior written consent of Intratec, represent, directly or indirectly, that its products have been approved or endorsed by the other parties. In no event shall Intratec, its employees, representatives, resellers or distributors be liable to readers or any other person or entity for any direct, indirect, special, exemplary, punitive, or consequential damages, including lost profits, based on breach of warranty, contract, negligence, strict liability or otherwise, arising from the use of this publication, whether or not they or it had any knowledge, actual or constructive, that such damages might be incurred. Reader shall indemnify and hold harmless Intratec and its resellers, representatives, distributors, and information providers against any claim, damages, loss, liability or expense arising out of reader’s use of the publication in any way contrary to the present terms and conditions. Intratec publications are the product of extensive work and original research and are protected by international copyright law. Products supplied as printed reports or books should not be copied but can be included in schools, universities or corporate libraries and circulated to colleagues to the extended permitted by copyright law. Products supplied digitally are licensed, not sold. The purchaser is responsible for ensuring that license terms are adhered to at all times. PDF documents may be supplied watermarked with the customer’s name, email and/or company. Digital documents are supplied with an enterprise license and can be shared by all employees and on-site contractors of a single organization. Members of the organization may make such copies as are necessary to facilitate this distribution. An enterprise license does not permit sharing with external organizations. Reader agrees that Intratec retains all rights, title and interest, including copyright and other proprietary rights, in this publication and all material, including but not limited to text, images, and other multimedia data, provided or made available as part of this publication. 1
  • Contents About this Study .............................................................................................................................................................. 8 Object of Study.............................................................................................................................................................................................................................8 Analysis Performed ....................................................................................................................................................................................................................8 Construction Scenarios ..............................................................................................................................................................................................................8 Location Basis ...................................................................................................................................................................................................................................9 Design Conditions......................................................................................................................................................................................................................9 Study Background ........................................................................................................................................................ 10 About Propylene ......................................................................................................................................................................................................................10 Introduction.................................................................................................................................................................................................................................... 10 Applications.................................................................................................................................................................................................................................... 10 Manufacturing Alternatives ..............................................................................................................................................................................................11 Licensor(s) & Historical Aspects......................................................................................................................................................................................13 Technical Analysis......................................................................................................................................................... 14 Chemistry.......................................................................................................................................................................................................................................14 Raw Material ................................................................................................................................................................................................................................14 Ethylene ............................................................................................................................................................................................................................................ 15 2-Butenes ......................................................................................................................................................................................................................................... 15 Technology Overview...........................................................................................................................................................................................................16 Detailed Process Description & Conceptual Flow Diagram.......................................................................................................................17 Area 100: Purification & Reaction ......................................................................................................................................................................................17 Area 200: Separation ................................................................................................................................................................................................................. 17 Key Consumptions ..................................................................................................................................................................................................................... 18 Technical Assumptions ........................................................................................................................................................................................................... 18 Labor Requirements.................................................................................................................................................................................................................. 18 ISBL Major Equipment List.................................................................................................................................................................................................20 OSBL Major Equipment List ..............................................................................................................................................................................................21 Other Process Remarks ........................................................................................................................................................................................................22 Typical Complete Process Scheme..................................................................................................................................................................................22 Other Process Scenarios .........................................................................................................................................................................................................22 Economic Analysis........................................................................................................................................................ 25 2 FREE SAMPLE
  • General Assumptions............................................................................................................................................................................................................25 Project Implementation Schedule...............................................................................................................................................................................26 Capital Expenditures..............................................................................................................................................................................................................26 Fixed Investment......................................................................................................................................................................................................................... 26 Working Capital............................................................................................................................................................................................................................ 29 Other Capital Expenses ...........................................................................................................................................................................................................30 Total Capital Expenses ............................................................................................................................................................................................................. 30 Operational Expenditures ..................................................................................................................................................................................................30 Manufacturing Costs................................................................................................................................................................................................................. 30 Historical Analysis........................................................................................................................................................................................................................ 31 Economic Datasheet .............................................................................................................................................................................................................31 Regional Comparison & Economic Discussion.................................................................................................... 34 Regional Comparison............................................................................................................................................................................................................34 Capital Expenses.......................................................................................................................................................................................................................... 34 Operational Expenditures......................................................................................................................................................................................................34 Economic Datasheet................................................................................................................................................................................................................. 34 Economic Discussion ............................................................................................................................................................................................................35 References....................................................................................................................................................................... 37 Acronyms, Legends & Observations....................................................................................................................... 38 Technology Economics Methodology................................................................................................................... 39 Introduction.................................................................................................................................................................................................................................39 Workflow........................................................................................................................................................................................................................................39 Capital & Operating Cost Estimates ............................................................................................................................................................................41 ISBL Investment............................................................................................................................................................................................................................ 41 OSBL Investment ......................................................................................................................................................................................................................... 41 Working Capital............................................................................................................................................................................................................................ 42 Start-up Expenses ....................................................................................................................................................................................................................... 42 Other Capital Expenses ...........................................................................................................................................................................................................43 Manufacturing Costs................................................................................................................................................................................................................. 43 Contingencies ............................................................................................................................................................................................................................43 Accuracy of Economic Estimates..................................................................................................................................................................................44 Location Factor..........................................................................................................................................................................................................................44 Appendix A. Mass Balance & Streams Properties............................................................................................... 46 Appendix B. Utilities Consumption Breakdown ................................................................................................. 48 FREE SAMPLE 3
  • Appendix C. Process Carbon Footprint ................................................................................................................. 49 Appendix D. Equipment Detailed List & Sizing................................................................................................... 50 Appendix E. Detailed Capital Expenses................................................................................................................. 54 Direct Costs Breakdown ......................................................................................................................................................................................................54 Indirect Costs Breakdown ..................................................................................................................................................................................................55 Appendix F. Economic Assumptions...................................................................................................................... 56 Capital Expenditures..............................................................................................................................................................................................................56 Construction Location Factors ...........................................................................................................................................................................................56 Working Capital............................................................................................................................................................................................................................ 56 Other Capital Expenses ...........................................................................................................................................................................................................56 Operational Expenditures ..................................................................................................................................................................................................57 Fixed Costs ...................................................................................................................................................................................................................................... 57 Depreciation................................................................................................................................................................................................................................... 57 EBITDA Margins Comparison...............................................................................................................................................................................................57 Appendix G. Released Publications ........................................................................................................................ 58 Appendix H. Technology Economics Form Submitted by Client ................................................................. 59 4 FREE SAMPLE
  • List of Tables Table 1 – Construction Scenarios Assumptions (Based on Degree of Integration) ......................................................................................9 Table 2 – Location & Pricing Basis ....................................................................................................................................................................................................9 Table 3 – General Design Assumptions .......................................................................................................................................................................................9 Table 4 – Major Propylene Consumers......................................................................................................................................................................................10 Table 5 – Metathesis Reactions for Propylene......................................................................................................................................................................14 Table 6 – Isobutene Side Reactions .............................................................................................................................................................................................14 Table 7 – Typical Crude C4 Stream from an Olefins Plant ............................................................................................................................................15 Table 8 – Raw Materials & Utilities Consumption (per ton of Product)...............................................................................................................18 Table 9 – Design & Simulation Assumptions.........................................................................................................................................................................18 Table 10 – Labor Requirements for a Typical Plant ...........................................................................................................................................................18 Table 11 – Main Streams Operating Conditions and Composition.......................................................................................................................20 Table 12 – Inside Battery Limits Major Equipment List...................................................................................................................................................20 Table 13 – Outside Battery Limits Major Equipment List ..............................................................................................................................................21 Table 14 – Integration of a Metathesis Unit with a Naphtha Steam Cracker ..................................................................................................22 Table 15 – Butenes Auto-Metathesis Reactions ..................................................................................................................................................................24 Table 16 – Base Case General Assumptions...........................................................................................................................................................................25 Table 17 – Bare Equipment Cost per Area (USD Thousands).....................................................................................................................................26 Table 18 – Total Fixed Investment Breakdown (USD Thousands) ..........................................................................................................................26 Table 19 – Working Capital (USD Million) ................................................................................................................................................................................29 Table 20 – Other Capital Expenses (USD Million) ...............................................................................................................................................................30 Table 21 – CAPEX (USD Million)......................................................................................................................................................................................................30 Table 22 – Manufacturing Fixed Cost (USD/ton) ................................................................................................................................................................30 Table 23 – Manufacturing Variable Cost (USD/ton)..........................................................................................................................................................31 Table 24 – OPEX (USD/ton)................................................................................................................................................................................................................31 Table 25 – Technology Economics Datasheet: Propylene via Metathesis at US Gulf..............................................................................33 Table 26 – Technology Economics Datasheet: Propylene via Metathesis in Germany ...........................................................................36 Table 27 – Project Contingency......................................................................................................................................................................................................43 Table 28 – Criteria Description.........................................................................................................................................................................................................43 Table 29 – Accuracy of Economic Estimates .........................................................................................................................................................................44 Table 30 – Detailed Material Balance Stream Properties...............................................................................................................................................46 Table 31 – Detailed Material Balance Stream Properties...............................................................................................................................................47 Table 32 – Utilities Consumption Breakdown ......................................................................................................................................................................48 FREE SAMPLE 5
  • Table 33 – Assumptions for CO2e Emissions Calculation.............................................................................................................................................49 Table 34 – CO2e Emissions (ton/ton prod.)............................................................................................................................................................................49 Table 35 – Reactors..................................................................................................................................................................................................................................50 Table 36 – Heat Exchangers ..............................................................................................................................................................................................................50 Table 37 – Pumps......................................................................................................................................................................................................................................51 Table 38 – Columns.................................................................................................................................................................................................................................52 Table 39 – Utilities Supply...................................................................................................................................................................................................................52 Table 40 – Vessels & Tanks Specifications ................................................................................................................................................................................53 Table 41 – Indirect Costs Breakdown for the Base Case (USD Thousands) ......................................................................................................55 Table 42 – Detailed Construction Location Factor............................................................................................................................................................56 Table 43 – Working Capital Assumptions for Base Case................................................................................................................................................56 Table 44 – Other Capital Expenses Assumptions for Base Case...............................................................................................................................56 Table 45 – Other Fixed Cost Assumptions ..............................................................................................................................................................................57 Table 46 – Depreciation Value & Assumptions ....................................................................................................................................................................57 6 FREE SAMPLE
  • List of Figures Figure 1 – OSBL Construction Scenarios .....................................................................................................................................................................................8 Figure 2 – Propylene from Multiple Sources .........................................................................................................................................................................12 Figure 3 – Process Block Flow Diagram.....................................................................................................................................................................................16 Figure 4 – Inside Battery Limits Conceptual Process Flow Diagram.....................................................................................................................19 Figure 5 – Typical Integration Between Olefin Plant and Metathesis Unit.......................................................................................................23 Figure 6 – Metathesis Technology Alternatives ..................................................................................................................................................................24 Figure 7 – Project Implementation Schedule.......................................................................................................................................................................25 Figure 8 – Total Direct Cost of Different Integration Scenarios (USD Thousands) ......................................................................................28 Figure 9 – Total Fixed Investment of Different Integration Scenarios (USD Thousands) .......................................................................28 Figure 10 – Total Fixed Investment Validation (USD Million).....................................................................................................................................29 Figure 11 – OPEX and Product Sales History (USD/ton) ................................................................................................................................................32 Figure 12 – EBITDA Margin & IP Indicators History Comparison..............................................................................................................................32 Figure 13 – CAPEX per Location (USD Million).....................................................................................................................................................................34 Figure 14 – Operating Costs Breakdown per Location (USD/ton) .........................................................................................................................35 Figure 15 – Methodology Flowchart...........................................................................................................................................................................................40 Figure 16 – Location Factor Composition...............................................................................................................................................................................44 Figure 17 – ISBL Direct Costs Breakdown by Equipment Type for Base Case ................................................................................................54 Figure 18 – OSBL Direct Costs Breakdown by Equipment Type for Base Case..............................................................................................54 Figure 19 – Historical EBITDA Margins Regional Comparison ...................................................................................................................................57 FREE SAMPLE 7
  • About this Study This study follows the same pattern as all Technology Economics studies developed by Intratec and is based on the same rigorous methodology and well-defined structure (chapters, type of tables and charts, flow sheets, etc.). Analysis Performed This chapter summarizes the set of information that served as input to develop the current technology evaluation. All required data were provided through the filling of the Technology Economics Form available at Intratec’s website. The economic analysis is based on the construction of a plant partially integrated to a petrochemical complex, in which feedstock is locally provided but propylene product must be stored to be sent outside the complex. Therefore, storage is only required for the product. Utilities supply facilities must also be built, since there is no utility supply from the existing petrochemical complex. Construction Scenarios You may check the original form in the “Appendix H. Technology Economics Form Submitted by Client”. Since the Outside Battery Limits (OSBL) requirements– storage and utilities supply facilities – significantly impact the capital cost estimates for a new venture, they may play a decisive role in the decision as to whether or not to invest. Thus, in this study three distinct OSBL configurations are compared. Those scenarios are summarized in Figure 1 and Table 1. Object of Study This assignment assesses the economic feasibility of an industrial unit for propylene production via metathesis from ethylene and butenes implementing technology similar to the CB&I Lummus OCT process. The current assessment is based on economic data gathered on Q3 2011 and a chemical plant’s nominal capacity of 350 kta (thousand metric tons per year). Figure 1 – OSBL Construction Scenarios Non-Integrated Partially Integrated Fully Integrated Products Storage Products Storage Products Consumer ISBL Unit ISBL Unit ISBL Unit Raw Materials Storage Raw Materials Provider Raw Materials Provider Petrochemical Complex Petrochemical Complex Unit is part of a petrochemical complex Most infrastructure is already installed Intratec | About this Study Grassroots unit 8 Source: Intratec – www.intratec.us FREE SAMPLE
  • Table 1 – Construction Scenarios Assumptions (Based on Degree of Integration) Storage Capacity (Base Case for Evaluation) Feedstock & Chemicals 20 days of operation Not included Not included End-products & By-products 20 days of operation 20 days of operation Not included All required All required Only refrigeration units Utility Facilities Included Control room, labs, gate house, Support & Auxiliary Facilities maintenance shops, (Area 900) warehouses, offices, change house, cafeteria, parking lot Control room, labs, maintenance shops, Control room and labs warehouses Source: Intratec – www.intratec.us Location Basis The assumptions that distinguish the two regions analyzed in this study are provided in Table 2. Table 2 – Location & Pricing Basis Design Conditions Basis: Q3-2011 US Gulf Germany Location Factor 1.00 1.32 Pricing The process analysis is based on rigorous simulation models developed on Aspentech Aspen Plus and Hysys, which support the design of the chemical process, equipment and OSBL facilities. PG Propylene USD/ton 1690 1294 Raffinate-2 USD/ton 1043 962 Ethylene USD/ton 1304.7 1246.7 Cooling Water USD/m3 0.0005 0.0016 LP Steam USD/ton 15.4 50.2 Inert Gas USD/Nm3 0.10 0.15 Cooling water temperature 24 °C Electricity USD/kWh 0.07 0.12 Cooling water range 11 °C Fuel USD/MMBtu 4.4 14.4 Steam (Low Pressure) 7 bar abs Operator Salaries USD/man-hour 56.8 75.8 Refrigerant (Propylene) -45 °C Supervisor Salaries USD/man-hour 85.3 113.7 Wet Bulb Air Temperature 25 °C The design assumptions employed are depicted in Table 3. Source: Intratec – www.intratec.us Regional specific conditions influence both construction and operating costs. This study compares the economic performance of two identical plants operating in different locations: the US Gulf Coast and Germany. FREE SAMPLE Intratec | About this Study Source: Intratec – www.intratec.us Table 3 – General Design Assumptions 9
  • Study Background About Propylene While CG propylene is used extensively for most chemical derivatives (e.g., oxo-alcohols, acrylonitrile, etc.), PG propylene is used in polypropylene and propylene oxide manufacture. Introduction Propylene is an unsaturated organic compound having the chemical formula C3H6. It has one double bond, is the second simplest member of the alkene class of hydrocarbons, and is also second in natural abundance. PG propylene contains minimal levels of impurities, such as carbonyl sulfide, that can poison catalysts. Thermal & Motor Gasoline Uses Propylene has a calorific value of 45.813 kJ/kg, and RG propylene can be used as fuel if more valuable uses are unavailable locally (i.e., propane – propene splitting to chemical-grade purity). RG propylene can also be blended into LPG for commercial sale. Propylene 2D structure Propylene is produced primarily as a by-product of petroleum refining and of ethylene production by steam cracking of hydrocarbon feedstocks. Also, it can be produced in an on-purpose reaction (for example, in propane dehydrogenation, metathesis or syngas-to-olefins plants). It is a major industrial chemical intermediate that serves as one of the building blocks for an array of chemical and plastic products, and was also the first petrochemical employed on an industrial scale. Commercial propylene is a colorless, low-boiling, flammable, and highly volatile gas. Propylene is traded commercially in three grades: Also, propylene is used as a motor gasoline component for octane enhancement via dimerization – formation of polygasoline or alkylation. Chemical Uses The principal chemical uses of propylene are in the manufacture of polypropylene, acrylonitrile, oxo-alcohols, propylene oxide, butanal, cumene, and propene oligomers. Other uses include acrylic acid derivatives and ethylene – propene rubbers. Global propylene demand is dominated by polypropylene production, which accounts for about two-thirds of total propylene demand. Polymer Grade (PG): min. 99.5% of purity. Chemical Grade (CG): 90-96% of purity. Refinery Grade (RG): 50-70% of purity. Table 4 – Major Propylene Consumers Intratec | Study Background Applications 10 Polypropylene The three commercial grades of propylene are used for different applications. RG propylene is obtained from refinery processes. The main uses of refinery propylene are in liquefied petroleum gas (LPG) for thermal use or as an octane-enhancing component in motor gasoline. It can also be used in some chemical syntheses (e.g., cumene or isopropanol). The most significant market for RG propylene is the conversion to PG or CG propylene for use in the production of polypropylene, acrylonitrile, oxo-alcohols and propylene oxide. Mechanical parts, containers, fibers, films Acrylonitrile Acrylic fibers, ABS polymers Propylene oxide Propylene glycol, antifreeze, polyurethane Oxo-alcohols Coatings, plasticizers Cumene Polycarbonates, phenolic resins Acrylic acid Coatings, adhesives, super absorbent polymers Source: Intratec – www.intratec.us FREE SAMPLE
  • phases. This process converts heavy gas oil preferentially into gasoline and light gas oil. Propylene is commercially generated as a co-product, either in an olefins plant or a crude oil refinery’s fluid catalytic cracking (FCC) unit, or produced in an on-purpose reaction (for example, in propane dehydrogenation, metathesis or syngas-to-olefins plants). Globally, the largest volume of propylene is produced in NGL (Natural Gas Liquids) or naphtha steam crackers, which generates ethylene as well. In fact, the production of propylene from such a plant is so important that the name “olefins plant” is often applied to this kind of manufacturing facility (as opposed to “ethylene plant”). In an olefins plant, propylene is generated by the pyrolysis of the incoming feed, followed by purification. Except where ethane is used as the feedstock, propylene is typically produced at levels ranging from 40 to 60 wt% of the ethylene produced. The exact yield of propylene produced in a pyrolysis furnace is a function of the feedstock and the operating severity of the pyrolysis. The propylene yielded from olefins plants and FCC units is typically considered a co-product in these processes, which are primarily driven by ethylene and motor gasoline production, respectively. Currently, the markets have evolved to the point where modes of by-product production can no longer satisfy the demand for propylene. A trend toward less severe cracking conditions, and thus to increase propylene production, has been observed in steam cracker plants using liquid feedstock. As a result, new and novel lower-cost chemical processes for on-purpose propylene production technologies are of high interest to the petrochemical marketplace. Such processes include: The pyrolysis furnace operation usually is dictated by computer optimization, where an economic optimum for the plant is based on feedstock price, yield structures, energy considerations, and market conditions for the multitude of products obtained from the furnace. Thus, propylene produced by steam cracking varies according to economic conditions. In an olefins plant purification area, also called separation train, propylene is obtained by distillation of a mixed C3 stream, i.e., propane, propylene, and minor components, in a C3-splitter tower. It is produced as the overhead distillation product, and the bottoms are a propaneenriched stream. The size of the C3-splitter depends on the purity of the propylene product. The propylene produced in refineries also originates from other cracking processes. However, these processes can be compared to only a limited extent with the steam cracker for ethylene production because they use completely different feedstocks and have different production objectives. Refinery cracking processes operate either purely thermally or thermally – catalytically. By far the most important process for propene production is the fluid- catalytic cracking (FCC) process, in which the powdery catalyst flows as a fluidized bed through the reaction and regeneration FREE SAMPLE Olefin Metathesis. Also known as disproportionation, metathesis is a reversible reaction between ethylene and butenes in which double bonds are broken and then reformed to form propylene. Propylene yields of about 90 wt% are achieved. This option may also be used when there is no butene feedstock. In this case, part of the ethylene feeds an ethylene-dimerization unit that converts ethylene into butene. Propane Dehydrogenation. A catalytic process that converts propane into propylene and hydrogen (byproduct). The yield of propylene from propane is about 85 wt%. The reaction by-products (mainly hydrogen) are usually used as fuel for the propane dehydrogenation reaction. As a result, propylene tends to be the only product, unless local demand exists for the hydrogen by-product. Methanol-to-Olefins/Methanol-to-Propylene. A group of technologies that first converts synthesis gas (syngas) to methanol, and then converts the methanol to ethylene and/or propylene. The process also produces water as by-product. Synthesis gas is produced from the reformation of natural gas or by the steam-induced reformation of petroleum products such as naphtha, or by gasification of coal. A large amount of methanol is required to make a world-scale ethylene and/or propylene plant. High Severity FCC. Refers to a group of technologies that use traditional FCC technology under severe conditions (higher catalyst-to-oil ratios, higher steam injection rates, higher temperatures, etc.) in order to maximize the amount of propylene and other light products. A high severity FCC unit is usually fed with Intratec | Study Background Manufacturing Alternatives 11
  • gas oils (paraffins) and residues, and produces about 20-25 wt% propylene on feedstock together with greater volumes of motor gasoline and distillate byproducts. These on-purpose methods are becoming increasingly significant, as the shift to lighter steam cracker feedstocks with relatively lower propylene yields and reduced motor gasoline demand in certain areas has created an imbalance of supply and demand for propylene. Olefins Cracking. Includes a broad range of technologies that catalytically convert large olefins molecules (C4-C8) into mostly propylene and small amounts of ethylene. This technology will best be employed as an auxiliary unit to an FCC unit or steam cracker to enhance propylene yields. Figure 2 – Propylene from Multiple Sources Naphtha NGL Steam Cracker Refinery FCC Unit Gas Oil RG Propylene Propane PDH Ethylene/ Butenes Metathesis Methanol MTO/MTP Intratec | Study Background Gas Oil 12 High Severity FCC C4 to C8 Olefins Olefins Cracking Source: Intratec – www.intratec.us FREE SAMPLE CG/PG Propylene
  • Licensor(s) & Historical Aspects By the 1960s, Phillips Petroleum developed the first commercial process of olefin metathesis. The focus, at that time, was to convert propylene into ethylene and 2-butene. This technology was developed in an effort to increase ethylene and butene production from “low value” crackerderived propylene to meet the growing market demand for polyethylene and polybutadiene. A plant based on the Phillips Triolefin technology was operational from 1965 to 1972 by Shawinigan Chemicals, in Canada, until its shutdown due to economic reasons. The plant had the capacity to process 50 thousand tons of propylene per year (kta), that was obtained from a naphtha steam cracker, producing 15 kta of ethylene and 30 kta of butenes. The fact that metathesis is a reversible reaction, and that the demand for polymer grade (PG) propylene grew from the 1970s on, led to the use of the Phillips Triolefin process in a reverse way. This reverse process is known as Olefin Conversion Technology (OCT), and is now offered for license by Lummus Technology, a CB&I Company. Lummus OCT was first used in 1985 by Equistar (now a wholly owned subsidiary of LyondellBasell industries), in the United States, to produce propylene by using ethylene and butenes. The unit's capacity was expanded in 1992. Intratec | Study Background The Institut Français du Pétrole (IFP) and the Chinese Petroleum Corporation (CPC) have jointly worked to develop a process for the production of propylene, called Meta-4. This technology is currently being developed by France’s Axens, a subsidiary of IFP, formed in 2001 through the merger of IFP’s licensing division with Procatalyse Catalysis & Adsorbents; however, until April 2012 Meta-4 was not commercialized. FREE SAMPLE 13
  • Technical Analysis Chemistry Metathesis is a general term for a reversible reaction between two olefins, in which the double bonds are broken and then reformed to form new olefin products. In order to produce propylene by metathesis, a molecule of 2-butene and a molecule of ethylene are combined in the presence of a tungsten oxide catalyst to form two molecules of propylene. Table 6 – Isobutene Side Reactions Isobutene + 2-butene propylene + 2-methyl 2- butene Isobutene + 1-butene ethylene + 2-methyl 2- pentene Fast Slow Source: Intratec – www.intratec.us Ethylene 2-Butene Propylene The following table summarizes the reactions that occur in the metathesis reactor. All reactions are essentially isothermal. The reaction of isobutene with ethylene is also nonproductive. If neglected, the concentration of this nonreactive species in the metathesis unit builds up, due to process recycles, reducing capacity. Raw Material Table 5 – Metathesis Reactions for Propylene As previously explained, the raw materials for the production of propylene via metathesis reaction are ethylene and 2-butenes. Both components are mainly supplied from steam cracker units (olefins plants). FCC units can also be used as a source of such olefins. 2-butene + ethylene 2 propylene Fast 1-butene + 2-butene propylene + 2-pentene Fast 1-butene + 1-butene ethylene + 3-hexene Slow Source: Intratec – www.intratec.us Intratec | Technical Analysis The reaction of 1-butene with ethylene is non-productive, occupying catalyst sites but producing no product. So a magnesium oxide co-catalyst is added to the metathesis reactor to induce double bond isomerization reaction causing the shift from 1-butene to 2-butene and allows continued reaction. 14 When isobutene is present in the metathesis reactor, side reactions occur, as presented in Table 6 – Isobutene Side Reactions. Steam cracker units are facilities in which a feedstock such as naphtha, liquefied petroleum gas (LPG), ethane, propane or butane is thermally cracked through the use of steam in a bank of pyrolysis furnaces to produce lighter hydrocarbons. The products obtained depend on the composition of the feed, the hydrocarbon-to-steam ratio, and on the cracking temperature and furnace residence time. Light hydrocarbon feeds such as ethane, LPGs, or light naphtha produce lighter products, mainly ethylene, propylene, and butadiene, with smaller amounts of heavier by-products. Heavier hydrocarbon feeds such as naphtha produce these lighter products, but also produce aromatic hydrocarbons, and hydrocarbons suitable for inclusion in gasoline or fuel oil. FREE SAMPLE
  • The higher cracking temperature (also referred to as severity) favors the production of ethylene and benzene, whereas lower severity produces higher amounts of propylene, C4-hydrocarbons and liquid products. Table 7 – Typical Crude C4 Stream from an Olefins Plant After the pyrolysis process, the olefins are separated from the other by-products by distillation. C4 acetylenes Traces Butadiene 33 Ethylene 1-butene 15 2-butenes 9 Isobutene 30 Iso-/normal- butanes 13 Besides steam crackers, other common sources of ethylene are FCC off-gas and vents from polyethylene units. FCC offgas is an inexpensive source of ethylene, because this stream is usually valued at fuel gas cost. Pretreatment, fractionation and refrigeration are necessary for recovery of the ethylene product; however, an FCC off-gas recovery system typically has an attractive internal rate of return (IRR). Polyethylene unit vents may not normally provide the quantity of ethylene necessary to supply metathesis units; consequently, other sources of ethylene would supplement any deficit. These vents must be treated to remove water and oxygen and a compressor is usually required to boost the vent streams to a metathesis processing pressure. 2-Butenes The 2-butenes used as feedstock for the metathesis process are obtained from the crude C4 stream produced in olefins plants. This C4 stream consists of C4 acetylenes, butadiene, iso-/n-butenes, and iso-/n-butane. A typical composition is provided in Table 7. The desired C4 stream in a metathesis process consists of nbutenes (mainly 2-butenes), low amounts of isobutene (to avoid excess capacity due to excess recycling) and is almost devoid of butadiene (to avoid rapid catalyst fouling) and acetylenes. Iso-/n-butanes are inert to the metathesis process. Source: Intratec – www.intratec.us Before feeding a metathesis process, the C4 stream from olefins plants must be treated. Usually, the butadiene and C4 acetylenes are removed first to produce the designated raffinate-1. Such removal can be accomplished through either hydrogenation or extractive distillation. The components remaining in the mixture consist of 1butene, 2-butene, isobutene, and iso-/n-butanes from the original feed, in addition to what was produced in the hydrogenation steps, as well as a small quantity of unconverted or unrecovered butadiene. Isobutene can be removed through fractionation of raffinate-1, reaction with methanol, reaction with water, or reaction with itself. In all cases, the resulting mixture may contain both normal and iso-paraffins. The product from isobutene removal is designated raffinate-2, and it consists primarily of normal olefins and paraffins and minimal iso-olefins and iso-paraffins. Raffinate-2 is the most common source of butenes used in metathesis reactions. The paraffin components present in raffinate-2 are essentially inert and do not react in the metathesis process. Such paraffins are typically removed from the process via a purge stream in the separation system that follows the metathesis reactor. 1 The components in a refinery or FCC based C4 cut are similar, with the exception that the percentage of paraffins is considerably greater. FREE SAMPLE Intratec | Technical Analysis High-purity ethylene (min. 99.5 wt% purity) can be obtained from olefins plants. The use of PG ethylene in metathesis processes is desired because it requires minimal pretreatment for trace components, while other sources of ethylene typically require more rigorous pretreatment. Although PG ethylene prices are higher, capital expenditure for the metathesis unit is lower because no investment in pretreatment is required. 15
  • Technology Overview The reactor product is cooled and fractionated to remove ethylene for recycle. A small portion of this recycle stream is purged to remove methane, ethane, and other light impurities from the process. The ethylene column bottom is fed to the propylene column where butenes are separated for recycle to the reactor, and some is purged to remove butanes, isobutylenes, and heavies from the process. The propylene column overhead is high-purity, PG propylene product. The Lummus OCT process for propylene consists of two main areas: purification & reaction, and separation. The simplified block flow diagram in Figure 3 summarizes the process. Ethylene feed plus recycled ethylene are mixed with the butenes feed plus recycled butenes and heated prior to The catalyst promotes the reaction of ethylene and butene2 to form propylene, and simultaneously isomerizes butene1 to butene-2. A small amount of coke is formed on the catalyst, so the beds are periodically regenerated using nitrogen-diluted air. The ethylene-to-butene feed ratio to This process description is for a stand-alone metathesis unit complex. The utility requirements – which include cooling water, steam, electricity, fuel gas, nitrogen, and air – are typically integrated with the existing complex. and maintain the per-pass butene conversion above 60%. Typical butene conversions range between 60 to 75%, with about 90% selectivity to propylene. Figure 3 – Process Block Flow Diagram Ethylene Recycle Ethylene Feed Butene Feed Area 100 Purification & Reaction Area 200 Separation Butene Recycle Intratec | Technical Analysis Source: Intratec – www.intratec.us 16 Light Ends Fuel Gas FREE SAMPLE PG Propylene Heavy Ends Fuel Gas
  • Detailed Process Description & Conceptual Flow Diagram (WO3/SiO2). Also, the co-catalyst magnesium oxide (MgO) is used to perform a double bond isomerization of 1-butene to 2-butene. This section describes the process for production of propylene via metathesis in detail. This description refers to a process similar to Lummus OCT process; however, some differences may be found, as all of the information herein presented is based on publicly available information. The raffinate-2 stream used in the metathesis unit is typically free of butadiene and has low isobutene content. Butadiene is typically removed below 50 wt ppm level and it is done to minimize fouling of the catalyst. Isobutene is removed to reduce the size of the metathesis unit. Isobutene is not a poison to the catalyst, but it reacts in the metathesis reactor at low conversion, which results in buildup of this molecule in the internal butenes recycle stream and increases hydraulic requirement and sizes of the equipment. Commercial units are in operation with about 7 wt% isobutene in the raffinate-2 feed stream. For a better understanding of the process, please refer to the Inside Battery Limits Conceptual Process Flow Diagram; the Main Streams Operating Conditions and Composition; and the Inside Battery Limits Major Equipment List, presented in the next pages. Area 100: Purification & Reaction First, fresh ethylene from ISBL storage tank and recycled ethylene are mixed with fresh and recycled butenes, and are fed through reactor feed treaters. The treaters consist of guard beds to remove potential catalyst poisons for the metathesis reaction, such as oxygenates, sulfur, alcohols, carbonyls, and water. The guard beds have a cyclic operation. One is normally in operation, while the other is regenerating. After treating, the stream is vaporized in a heat exchanger and superheated in a fired heater to the reaction temperature, typically between 280-320°C. The reactor feed contains ethylene and n-butenes, mainly 2butenes, at the desired reaction ratio. Although the theoretical molar ratio between ethylene and butenes is 1:1, it is common to employ significantly greater ethylene/butene ratios to minimize undesirable side reactions, and to minimize C5+ olefin formation. The perpass butene conversion is between 60 and 75%. The metathesis reaction occurs in a fixed bed catalytic reactor. The main reaction that occurs is between ethylene and 2-butenes, to produce propylene. Side reactions also occur, producing by-products, primarily C5-C8 olefins. The reactor exit stream is cooled prior to the separation area. The process selectivity to propylene is typically about 90%. The catalyst used is tungsten oxide supported on silica Coke, a by-product of the reaction, is deposited on the catalyst throughout the process. During regeneration the coke is burned in a controlled atmosphere. Systems required for regeneration include a fired regeneration gas heater and a supply of inert gas (usually nitrogen), compressed air, and hydrogen. Each reactor can run for about 30 days before requiring regeneration. Area 200: Separation The reactor exit stream contains a mixture of propylene, unconverted ethylene and butenes, butane, and some C5+ components from side reactions. Propylene purification is carried out in two columns. The first column separates unreacted ethylene for reuse in the reactor. The second column produces PG propylene as an overhead product and a bottom heavies stream. The stream leaving the reactor is first cooled against the reactor feed stream in an exchanger, and then cooled against cooling water before being sent to the deethylenizer column. The column is re-boiled by low pressure (LP) steam, and uses propylene refrigeration in the top condenser. Cryogenic temperatures exist due to the presence of unconverted ethylene in the top of the column. Pressure of the column is dependent upon the available refrigeration. The deethylenizer column overhead (unconverted ethylene) is recycled back to the reaction area through the column reflux pumps. The recycled ethylene stream is mixed with fresh ethylene, fresh butenes (raffinate-2) stream and recycled butenes stream. A small vent stream containing light paraffins and a small amount of FREE SAMPLE Intratec | Technical Analysis For the purpose of this report, n-butenes, with a purity of 80%, will be considered raffinate-2. The process is divided into two main areas: purification & reaction, and separation. 17
  • unconverted ethylene leaves the overhead of the deethylenizer reflux vessel as a lights purge stream. This stream can be returned to the ethylene cracker for recovery. Table 9 – Design & Simulation Assumptions The bottom stream of the deethylenizer column is sent to the depropylenizer column for propylene recovery. The depropylenizer column separates PG propylene in the overhead from a heavies product stream (C4+) in the bottoms. PG propylene and heavies streams are sent to the product ISBL storage tank and C4+ purge storage tank respectively. LP steam is used in the reboiler and cooling water in the top condenser. Simulation Software Thermodynamic Model 99.9 wt% Butenes on C4 stream 80 wt% Temperature 304 oC Pressure 30 bar abs Conversion (of Butenes) 67% Selectivity (Butenes to Propylene) 90% Ethylene: Butene Molar Feed Ratio Key Consumptions Peng-Robinson Ethylene A side-stream from the bottoms of the column is sent back as butenes recycled stream to the fresh/recycle C4 tank. This rate is set to maintain a high overall n-butenes conversion in the metathesis reactors. The column’s bottoms can be sent to another column for recovery of gasoline and fuel oil. Aspen Hysys 2 MgO and Catalyst WO3/SiO2 Source: Intratec – www.intratec.us Table 8 – Raw Materials & Utilities Consumption (per ton of Product) Labor Requirements Raffinate-2 0.97 ton Ethylene 0.32 ton Cooling Water 68.3 m3 LP Steam 1.0 ton Inert Gas 32.1 Nm3 Electricity 286 kWh Fuel 0.5 MMBtu Fuel By-Product 12.8 MMBtu Table 10 – Labor Requirements for a Typical Plant Non-Integrated Plant 5 1 Partially Integrated Plant 5 1 Fully Integrated Plant 3 1 Source: Intratec – www.intratec.us Source: Intratec – www.intratec.us Intratec | Technical Analysis Technical Assumptions 18 All process design and economics are based on world-class capacity units that are competitive globally. Assumptions regarding the thermodynamic model used, reactor design basis and the raw materials composition are shown in Table 9. All data used to develop the process flow diagram was based on publicly available information. FREE SAMPLE
  • Figure 4 – Inside Battery Limits Conceptual Process Flow Diagram Ethylene from OSBL T-102 Butenes (Raffinate-2) from OSBL 19 1 For Disposal 11 7 2 P-101A/B 10 V-101B P-102A/B 6 F-101 V-101A E-101 8 4 R-102B R-102A 9 Fuel 5 Nitrogen, Hydrogen, Air P-103A/B T-101 F-102 Fuel 13 23 Butenes Recycle Ethylene Recycle CW CW E-201 E-203 14 RF (C3=) Lights Purge CR-201 CW CR-202 24 CV-201 CV-202 CP-201A/B CP-202A/B #1 18 P-202A/B C-201 #1 C-202 #30 PG Propylene to OSBL T-201 #62 #60 LP ST 16 P-201A/B #34 #65 LP ST CC-201 CC-202 15 21 25 CW T-202 E-202 Heavies Purge Intratec | Technical Analysis P-203A/B Source: Intratec – www.intratec.us FREE SAMPLE 19
  • Table 11 – Main Streams Operating Conditions and Composition Phase L L G L/G L L G L Temperature (°C) -29 30 304 53 -25 107 -25 113 Pressure (bar abs) 22 6.0 30 30 22 17 22 17 Mass Flow (kg/h) 12,940 38,950 161,520 161,490 33,820 75,800 120 11,760 Ethylene (wt%) 99.9 21.0 21.0 100.0 100.0 Ethane (wt%) 0.1 traces traces traces traces 24.9 24.9 traces 40.1 5.0 Propene (wt%) Butane (wt%) 20.0 C5+ (wt%) 0.5 0.1 39.9 75.1 63.5 5.1 7.4 22.4 Source: Intratec – www.intratec.us ISBL Major Equipment List Table 11 presents the main streams composition and operating conditions. For a more complete material balance, see the “Appendix A. Mass Balance & Streams Properties.” Table 12 shows the equipment list by area. It also presents a brief description and the construction materials used. Information regarding utilities flow rates is provided in “Appendix B. Utilities Consumptions Breakdown.” For further details on greenhouse gas emissions caused by this process, see “Appendix C. Process Carbon Footprint.” Find main specifications for each piece of equipment in “Appendix D. Equipment Detailed List & Sizing.” Table 12 – Inside Battery Limits Major Equipment List Feed Vaporizer CS F-101 Reactor Feed Heater Cr-Mo Area 100 F-102 Regeneration Gas Heater Cr-Mo Area 100 P-101A/B Ethylene Feed Pumps CS Area 100 P-102A/B Raffinate-2 Feed Pumps CS Area 100 P-103A/B C4 Tank Pumps CS Area 100 20 E-101 Area 100 Intratec | Technical Analysis Area 100 R-102A/B Metathesis Reactor SS Area 100 T-101 Fresh/Recycle C4 Tank CS Area 100 T-102 Ethylene ISBL Storage CS Area 100 V-101A/B Reactor Feed Treaters CS Area 200 C-201 Deethylenizer Column CS Source: Intratec – www.intratec.us FREE SAMPLE
  • Table 12 – Inside Battery Limits Major Equipment List (Cont.) Area 200 C-202 Depropylenizer Column CS Area 200 CC-201 Deethylenizer Condenser CS Area 200 CC-202 Depropylenizer Condenser CS Area 200 CP-201 Deethylen. Reflux Pumps CS Area 200 CP-202 Depropylen. Reflux Pumps CS Area 200 CR-201 Deethylenizer Reboiler CS Area 200 CR-202 Depropylenizer Reboiler CS Area 200 CV-201 Deethylenizer Accumulator CS Area 200 CV-202 Depropylen. Accumulator CS Area 200 E-201 Deethylenizer Feed Cooler CS Area 200 E-202 C4+ Purge Cooler CS Area 200 E-203 Butenes Recycle Cooler CS Area 200 P-201A/B Propylene Pumps CS Area 200 P-202A/B Ethylene Recycle Pumps CS Area 200 P-203A/B C4+ Pumps CS Area 200 T-201 Product ISBL Storage CS Area 200 T-202 C4+ Purge Storage CS Source: Intratec – www.intratec.us OSBL Major Equipment List Table 13 shows the list of tanks located on the storage area and the energy facilities required in the construction of a non-integrated unit. The OSBL is divided into three main areas: storage (Area 700), energy & water facilities (Area 800), and support & auxiliary facilities (Area 900). Table 13 – Outside Battery Limits Major Equipment List T-701 Ethylene Storage CS Area 700 T-702 Raffinate Storage CS Area 700 T-703 Propylene Storage CS Area 700 T-704 Demin. Water Tank CS Area 700 T-705 Clarified Water Tank CS Area 800 U-802 Refrigerator CS Area 800 U-803 Cooling Tower CS Area 800 U-804 Steam boiler CS Area 800 U-805 Water Demineralizer CS Source: Intratec – www.intratec.us FREE SAMPLE Intratec | Technical Analysis Area 700 21
  • steam crackers. The lower energy consumption also improves the operating margin. Other Process Remarks Typical Complete Process Scheme Currently, most of the propylene produced is a by-product from steam cracking units that primarily produce ethylene, or a by-product from FCC units that primarily produce gasoline. With the maturity of olefin plants technology, improvements downstream of the steam cracker are more economically promising than improvements in the cracking technology itself. In this context, the use of a metathesis unit downstream of an olefin plant can bring benefits such as reducing the energy used and the carbon emissions, as well as increasing propylene production. Table 14 – Integration of a Metathesis Unit with a Naphtha Steam Cracker Cracker C3=/C2= ratio 0.67 0.47 Overall C3=/C2= ratio 0.67 0.67 Material balance (1,000 ton/year) Intratec | Technical Analysis Compared to the standalone steam cracker, the integrated case consumes about 2% less fresh feedstock, while producing 50% more benzene and only 60% of the remaining, lower-valued pyrolysis gasoline. In addition, the energy consumption of the integrated case is about 13% lower. The reason for this reduction is that fewer olefins are produced by thermal cracking in the integrated case, thereby lowering the fired duty of the cracking heaters and the energy consumed in the recovery area. 22 In the standalone steam cracker case, 1.67 million ton/year of ethylene and propylene are produced by thermal cracking. In the integrated case, 1.49 million ton/year of ethylene and propylene are produced by thermal cracking, with the remaining propylene (0.18 million ton/year) being produced by the metathesis unit. The 13% reduction in energy consumption results in a 13% reduction in greenhouse gas emissions. This level of reduction is significant and, as such, could be one of the major contributing routes to meeting olefin industry goals of lower greenhouse gas emissions from 3,094 3,047 Net ethylene The impact of a metathesis unit to an olefin plant material balance to achieve a conventional, low severity, propyleneto-ethylene ratio of 0.67 is analyzed in Table 14. Two cases are presented: a standalone steam cracker unit, without metathesis, and a steam cracker integrated with a metathesis unit. As shown in the table, at a constant overall net ethylene and propylene production of 1 million ton/year and 670,000 ton/year respectively, the steam cracker integrated with a metathesis unit considerably improves the overall plant material balance. Naphtha feed 1,000 1,000 Net propylene 670 670 Benzene 207 312 Pyrolysis gasoline 654 396 Energy consumption Base = 100 87 Total investment Base = 100 94 Source: Intratec – www.intratec.us Investment costs are also lower. As shown in Table 14, capital costs are reduced by about 6%. The investment costs associated with the ISBL ethylene plant are reduced due to lower plant throughput (individual ethylene plant system loadings), lower fired duty, and a significant reduction in the size of the propylene fractionator system, which is the single most costly tower system in the ethylene plant. Finally, OSBL costs are reduced due to the minimization in energy consumption. The savings associated with these units more than offset the investment costs associated with the metathesis unit. Figure 5 shows the most typical integration arrangement between a metathesis unit and a naphtha steam cracker. Other Process Scenarios Figure 6 illustrates propylene production alternatives via metathesis using only one feedstock: ethylene or butenes. FREE SAMPLE
  • Ethylene as the Only Feedstock Butene as the Only Feedstock In some cases, there is not enough butene to use in a metathesis unit to achieve the desired propylene production, as in the case when the feedstocks producer is an ethane steam cracker, which, while it makes large volumes of ethylene, makes insufficient butene for the metathesis reaction. Ethane crackers are the most common crackers used in the Middle East. In some regions, the supply of ethylene is tight and/or ethylene is expensive, making the building of a conventional metathesis unit unfeasible without subsidies. Other disadvantages of conventional metathesis are: For such cases an ethylene dimerization unit can be added upstream of the metathesis process as a butene-2 source. Dimerization of ethylene to butenes occurs in a liquid phase loop reactor according to the following reaction: Ethylene 2-Butene Intensive Use of Energy. Conventional metathesis reactions take place with ethylene, which requires an intensive use of energy in the ethylene recirculation loop by using cryogenic refrigeration. Feedstock Loss. Removing butadiene by hydrogenation from the butenes feed before its use in a conventional metathesis results in the hydroisomerization of the butenes to paraffins, representing a feedstock loss of 10%+. Furthermore, removing isobutene by fractionation of the butenes feed before its use in a conventional metathesis results in an additional loss of butenes, since 1-butene is difficult to separate from isobutene without an expensive fractionation tower. Figure 5 – Typical Integration Between Olefin Plant and Metathesis Unit Naphtha PG Ethylene Naphtha Steam Cracker Metathesis Unit Crude C4s Butadiene Extraction PG Propylene C4+ Purge Raffinate-2 Raffinate-1 Butadiene Isobutene Extraction Isobutene Source: Intratec – www.intratec.us FREE SAMPLE Intratec | Technical Analysis PG Propylene 23
  • Although the yield of propylene is high in the conventional metathesis process, the aforementioned disadvantages motivated the development of a different process, in which a metathesis reaction occurs with butenes as the only feedstock. This process is called butenes auto-metathesis, or self-metathesis. In the process, a stream comprised of 1-butene plus 2butene is admixed with recycled butenes and pentenes in the metathesis reactor. The stream leaving the reactor is sent to a separation unit, composed of distillation columns. The stream can contain C4 paraffins, but the amount of isobutene should not exceed 2% of the feed mixture. Table 15 shows the reactions that can occur in the process. The reactions (1) and (2) are the main auto-metathesis reactions. Reactions (3), (4) and (5) occur while the 2pentenes formed through the main reaction are recycled back to the reactor. In 2003, a semi-commercial unit owned by Sinopec in Tianjin (China), was built to demonstrate auto-metathesis and 1-hexene production. This facility maximizes the 1butene/1-butene metathesis reaction to produce 3-hexene, and then isomerizes the 3-hexene to 1-hexene. The plant has the capacity to produce 2 kta of 1-hexene. Table 15 – Butenes Auto-Metathesis Reactions (1) 1-butene + 2-butene propylene + 2-pentene (2) 1-butene + 1-butene ethylene + 3-hexene (3) 2-pentene + 1-butene (4) 2-pentene (5) 1-pentene + 2-butene propylene + 3-hexene 1-pentene (isomerization) propylene + 2-hexene Source: Intratec – www.intratec.us Figure 6 – Metathesis Technology Alternatives Butenes Metathesis Ethylene Dimerization Metathesis Intratec | Technical Analysis Source: Intratec – www.intratec.us 24 FREE SAMPLE CG/PG Propylene
  • Economic Analysis General Assumptions In Table 16, the IC Index stands for Intratec chemical plant Construction Index, an indicator, published monthly by Intratec, to scale capital costs from one time period to another. The general assumptions for the base case of this analysis are outlined below. This index reconciles prices trends of fundamental components of a chemical plant construction such as labor, material and energy, providing meaningful historical and forecast data for our readers and clients. Table 16 – Base Case General Assumptions Engineering & Construction Location US Gulf Analysis Date Q3 2011 IC Index 158.1 OSBL Scenario Partially Integrated Nominal Capacity 350 kta Operating Hours per Year 8,000 Annual Production 320 kta Project Complexity Simple Technology Maturity Licensed Data Reliability High The assumed operating hours per year indicated does not represent any technology limitation; rather, it is an assumption based on usual industrial operating rates Additionally, Table 16 discloses assumptions regarding the project complexity, technology maturity and data reliability, which are of major importance for attributing reasonable contingencies for the investment and for evaluating the overall accuracy of estimates. Definitions and figures for both contingencies and accuracy of economic estimates can be found in this publication in the chapter “Technology Economics Methodology.” Source: Intratec – www.intratec.us Figure 7 – Project Implementation Schedule Basic Engineering Detailed Engineering Procurement Construction Start-up 0 1 2 3 4 Quarters Source: Intratec – www.intratec.us FREE SAMPLE 5 6 7 8 Intratec | Economic Analysis Total EPC Phase 25
  • Project Implementation Schedule “Appendix E. Detailed Capital Expenses” provides a detailed breakdown for the direct expenses, outlining the share of each type of equipment in total. The main objective of knowing upfront the project implementation schedule is to enhance the estimates for both capital initial expenses and return on investment. After defining the total direct cost, the TFI is established by adding field indirects, engineering costs, overhead, contract fees and contingencies. The implementation phase embraces the period from the decision to invest to the start of commercial production. This phase can be divided into five major stages: (1) Basic Engineering, (2) Detailed Engineering, (3) Procurement, (4) Construction, and (5) Plant Start-up. Table 18 – Total Fixed Investment Breakdown (USD Thousands) Bare Equipment 92,990 The duration of each phase is detailed in Figure 7. Equipment Setting 330 Piping 7,060 Civil 3,930 Steel 3,610 Instrumentation & Control 2,590 Electrical 2,140 Insulation 2,360 Paint 670 Engineering & Procurement 5,840 Construction Material & Indirects 18,140 G & A Overheads 4,020 Contract Fee 3,620 Project Contingency 22,095 Capital Expenditures Fixed Investment Table 17 shows the bare equipment cost associated with each area of the project. Table 17 – Bare Equipment Cost per Area (USD Thousands) ISBL Area 100 6,440 Area 200 5,400 OSBL Area 700 67,910 Area 800 8,760 Process Contingency 4,480 Other - Scaling Exponent Up Intratec | Economic Analysis 26 Table 18 presents the breakdown of the total fixed investment (TFI) per item (direct & indirect costs and process contingencies). For further information about the components of the TFI please see the chapter “Technology Economics Methodology”. Fundamentally, the direct costs are the total direct material and labor costs associated with the equipment (including installation bulks). The total direct cost represents the total bare equipment installed cost. 0.87 Down Source: Intratec – www.intratec.us 0.79 Source: Intratec – www.intratec.us Indirect costs are defined by the American Association of Cost Engineers (AACE) Standard Terminology as those "costs which do not become a final part of the installation but which are required for the orderly completion of the installation." FREE SAMPLE
  • The indirect project expenses are further detailed in “Appendix E. Detailed Capital Expenses.” Alternative OSBL Configurations The total fixed investment for the construction of a new chemical plant is greatly impacted by how well it will be able to take advantage of the infrastructure already installed in that location. For example, if there are nearby facilities consuming a unit’s final product or supplying a unit’s feedstock, the need for storage facilities significantly decreases, along with the total fixed investment required. This is also true for support facilities that can serve more than one plant in the same complex, such as a parking lot, gate house, etc. This study analyzes the total fixed investment for three distinct scenarios regarding OSBL facilities: Non-integrated Plant Plant Partially Integrated Plant Fully Integrated The detailed definition, as well as the assumptions used for each scenario is presented in the chapter “About this Study” Intratec | Economic Analysis The influence of the OSBL facilities on the capital investment is depicted in Figure 8 and in Figure 9. FREE SAMPLE 27
  • Figure 8 – Total Direct Cost of Different Integration Scenarios (USD Thousands) Area 100 Area 200 Area 700 Area 800 Area 900 200,000 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 Non-Integrated Partially Integrated Fully Integrated Source: Intratec – www.intratec.us Figure 9 – Total Fixed Investment of Different Integration Scenarios (USD Thousands) Direct Expenses Indirect Expenses Project Contingency 300,000 250,000 200,000 150,000 100,000 50,000 0 Intratec | Economic Analysis Non-Integrated 28 Partially Integrated Source: Intratec – www.intratec.us FREE SAMPLE Fully Integrated
  • Fixed Investment Discussion Working Capital Figure 10 compares and validates the total fixed investment estimated in the previous section. Each point depicted in the chart represents a different plant TFI value announced in the international press during the last few years. All of the total fixed investments announced are adjusted to the same basis (date and location of the analysis) and compared to the TFI curves estimated by Intratec for different OSBL integration scenarios. Working capital, described in Table 19, is another significant investment requirement. It is needed to meet the costs of labor; maintenance; purchase, storage, and inventory of field materials; and storage and sales of product(s). Assumptions for working capital calculations are found in “Appendix F. Economic Assumptions.” TFI differences are primarily driven by how integrated the plant will be with respect to raw material suppliers and product consumers. Table 19 – Working Capital (USD Million) Raw Materials Inventory Products Inventory 30.4 In-process Inventory 1.5 Supplies and Stores 0.3 Cash on Hand 22.1 Accounts Receivable 45.6 Accounts Payable In fact, the metathesis unit is usually constructed near a steam cracker or FCC unit not only because of synergistic economies in their capital costs, but for the easy access to feedstock. 0.7 (44.2) Source: Intratec – www.intratec.us Figure 10 – Total Fixed Investment Validation (USD Million) 500 450 400 350 300 250 200 150 100 50 0 100 200 300 400 500 600 Plant Capacity (kta) TFI (Announced in Press) Fully Integrated Source: Intratec – www.intratec.us FREE SAMPLE Partially Integrated Non-Integrated 700 Intratec | Economic Analysis 0 29
  • Other Capital Expenses Start-up costs should also be considered when determining the total capital expenses. During this period, expenses are incurred for employee training, initial commercialization costs, manufacturing inefficiencies and unscheduled plant modifications (adjustment of equipment, piping, instruments, etc.). Table 21 – CAPEX (USD Million) Total Fixed Investment 169 Working Capital 56 Other Capital Expenses 22 Initial costs are not addressed in most studies on estimating but can become a significant expenditure. For instance, the initial catalyst load in reactors may be a significant cost and, in that case, should also be included in the capital estimates. Source: Intratec – www.intratec.us The purchase of technology through paid-up royalties or licenses is considered to be part of the capital investment. Manufacturing Costs Other capital expenses frequently neglected are land acquisition and site development. Although these are small parts of the total capital expenses, they should be included. Operational Expenditures The manufacturing costs, also called Operational Expenditures (OPEX), are composed of two elements: a fixed cost and a variable cost. All figures regarding operational costs are presented in USD per ton of product. Table 22 shows the manufacturing fixed cost. Table 20 – Other Capital Expenses (USD Million) Initial Catalyst Load To learn more about the assumptions for manufacturing fixed costs, see the “Appendix F. Economic Assumptions.” 0.1 Start-up Expenses Operator Training Commercialization Costs 5.4 Start-up Inefficiencies 5.4 Unscheduled Plant Modifications Table 22 – Manufacturing Fixed Cost (USD/ton) 1.3 3.4 Land & Site Development Supervision Labor Cost 2.3 8.9 G and A Cost Source: Intratec – www.intratec.us 8.5 Operating Charges 4.2 2.1 Maintenance Cost 1.7 7.1 Plant Overhead Prepaid Royalties Operating Labor Cost 30.1 Source: Intratec – www.intratec.us Intratec | Economic Analysis Assumptions used to calculate other capital expenses are provided in “Appendix F. Economic Assumptions.” 30 Total Capital Expenses Table 23 discloses the manufacturing variable cost breakdown. Table 21 presents a summary of the total Capital Expenditures (CAPEX) detailed in previous sections. FREE SAMPLE
  • Economic Datasheet Table 23 – Manufacturing Variable Cost (USD/ton) Raffinate-2 Ethylene The Technology Economic Datasheet, presented in Table 25, is an overall evaluation of the technology's production costs in a US Gulf Coast based plant. 1,015.3 422.2 Cooling Water 0.03 LP Steam 15.6 Inert Gas 0.1 Electricity 20.9 Fuel The expected revenues in products sales and initial economic indicators are presented for a short-term assessment of its economic competitiveness. 2.2 Source: Intratec – www.intratec.us Table 24 shows the OPEX of the presented technology. Table 24 – OPEX (USD/ton) Manufacturing Fixed Cost 59.1 Manufacturing Variable Cost 1,476.2 Source: Intratec – www.intratec.us Figure 11 depictures Sales and OPEX historic data. Figure 12 compares the project EBITDA trends with Intratec Profitability Indicators (IP Indicators). The Basic Chemicals IP Indicator represents basic chemicals sector profitability, based on the weighted average EBITDA margins of major global basic chemicals producers. Alternately, the Chemical Sector IP Indicator reveals the overall chemical sector profitability, through a weighted average of the IP Indicators calculated for three major chemical industry niches: basic, specialties and diversified chemicals. FREE SAMPLE Intratec | Economic Analysis Historical Analysis 31
  • Figure 11 – OPEX and Product Sales History (USD/ton) OPEX (Cash Cost) 2,500 Product Sales 2,000 1,500 1,000 500 0 Q1-07 Q3-07 Q1-08 Q3-08 Q1-09 Q3-09 Q1-10 Q3-10 Q1-11 Q3-11 Source: Intratec – www.intratec.us Figure 12 – EBITDA Margin & IP Indicators History Comparison EBITDA Margin 25% Basic Chemicals IP Indicator Chemical Sector IP Indicator 20% 15% 10% 5% 0% Intratec | Economic Analysis Q1-07 32 Q3-07 Q1-08 Q3-08 Q1-09 Q3-09 Source: Intratec – www.intratec.us FREE SAMPLE Q1-10 Q3-10 Q1-11 Q3-11
  • Table 25 – Technology Economics Datasheet: Propylene via Metathesis at US Gulf 2011 350 kta unit (Production: 320 kta) TFI Working Capital Other Capital Exp. IC Index: 158.1 169 57 22 Raffinate-2 0.97 ton/ton prod. 1,043 USD/ton 324.9 1,015.3 Ethylene 0.32 ton/ton prod. 1,304 USD/ton 135.1 422.2 Cooling Water 68.3 m3/ton prod. 0.0005 USD/m3 0.01 0.03 LP Steam 1.0 ton/ton prod. 15.3 USD/ton 5.0 15.6 Inert Gas 32.1 Nm3/ton prod. 0.004 USD/Nm3 0.04 0.1 Electricity 286 kWh/ton prod. 0.1 USD/kWh 6.7 20.9 Fuel 0.5 MMBtu/ton prod. 4.4 USD/MMBtu 0.7 2.2 Operating Labor Cost 5 operators/shift 56.8 USD/oper./h 2.3 7.1 Supervision Labor Cost 1 supervisors/shift 85.3 USD/sup./h 0.7 2.1 2.7 8.5 Maintenance Cost Operating Charges 25% of Operating Labor Costs 0.7 2.3 Plant Overhead 50% of Operating Labor and Maint. Costs 2.8 8.9 G and A Cost 2% of Operating Costs 9.6 30.1 Depreciation Annual Value 10% of TFI 16.9 52.9 PG Propylene 1 ton/ton prod. 540.8 1,690 Fuel By-Product 13 MMBtu/ton prod. 17.6 54.9 1690 4.29 USD/ton USD/MMBtu 12.0% Chemical Sector IP Indicator 15.5% EBIT Margin 9.0% Source: Intratec – www.intratec.us FREE SAMPLE Intratec | Economic Analysis EBITDA Margin 33
  • Regional Comparison & Economic Discussion Regional Comparison Figure 13 summarizes the total Capital Expenditures (CAPEX) for the locations under analysis. Capital Expenses Operational Expenditures Variations in productivity, labor costs, local steel prices, equipment imports needs, freight, taxes and duties on imports, regional business environments and local availability of sparing equipment were considered when comparing capital expenses for the different regions under consideration in this report. Capital costs are adjusted from the base case (a plant constructed on the US Gulf Coast) to locations of interest by using location factors calculated according to the items aforementioned. For further information about location factor calculation, please examine the chapter “Technology Economics Methodology.” In addition, the location factors for the regions analyzed are further detailed in “Appendix F. Economic Assumptions.” Specific regional conditions influence prices for raw materials, utilities and products. Such differences are thus reflected in the operating costs. An OPEX breakdown structure for the different locations approached in this study is presented in Figure 14. Economic Datasheet The Technology Economic Datasheet, presented in Table 26, is an overall evaluation of the technology's capital investment and production costs in the alternative location analyzed in this study. Figure 13 – CAPEX per Location (USD Million) Total Fixed Investment Other Capital Expenses Working Capital 350 300 250 Intratec | Regional Comparison & Economic Discussion 200 34 150 100 50 0 US Gulf Germany Source: Intratec – www.intratec.us FREE SAMPLE
  • Figure 14 – Operating Costs Breakdown per Location (USD/ton) Net Raw Materials Costs Main Utilities Consumptions Fixed Costs 1,600 1,550 1,500 1,450 1,400 1,350 1,300 1,250 1,200 US Gulf Germany Source: Intratec – www.intratec.us Ethylene costs range from USD 400 to USD 420 per ton of propylene representing about 27% of the total manufacturing expenses both at the US Gulf Coast and in Germany, while butene costs, between USD 937 and 1,015 per ton (as raffinate-2), represent from 62% to 66% of those costs. Together, these raw materials account for more than 90% of the total manufacturing expenses. Historically, the US and Europe have exhibited low EBITDA margins and therefore projects of Lummus OCT units in such regions are less commonplace. However, installing a metathesis unit inside a petrochemical complex requires low capital investment. That, coupled with special market and price conditions can make projects in these, and other, regions more economically appealing. The values at which ethylene and butene feedstocks are acquired will consequently play a decisive role in the economic feasibility of a metathesis unit. While ethylene prices are between USD 1,240 and 1,750 per ton, butene values range from USD 960 to 1,040. Furthermore, the process is fed with a butene-ethylene mass ratio of approximately 3:1 (butene as raffinate-2). As a result, the valuation of butene becomes crucial in the overall economics of the process. Producers that have access to cheap sources of such materials can operate with improved competitiveness. Ethylene feedstocks for metathesis can be supplied from either steam crackers or off-gas extraction from FCC units. Butene feedstocks may be supplied from either steam cracker crude C4 or refinery FCC mixed butenes. FREE SAMPLE Intratec | Regional Comparison & Economic Discussion Economic Discussion 35
  • Table 26 – Technology Economics Datasheet: Propylene via Metathesis in Germany 350 kta unit (Production: 320 kta) TFI Working Capital Other Capital Exp. IC Index: 158.1 223 56 25 Raffinate-2 0.97 ton/ton prod. 962 USD/ton 299.8 936.8 Ethylene 0.32 ton/ton prod. 1,247 USD/ton 129.1 403.4 Cooling Water 68 m3/ton prod. 0.0016 USD/m3 0.04 0.1 LP Steam 1.0 ton/ton prod. 50.2 USD/ton 16.4 51.4 Inert Gas 32.1 Nm3/ton prod. 0.15 USD/Nm3 1.5 4.7 Electricity 286 kWh/ton prod. 0.12 USD/kWh 10.9 34.1 MMBtu/ton prod. 14.4 USD/MMBtu 2.3 7.1 75.8 USD/oper./h 3.0 9.5 113.7 USD/sup./h 0.91 2.8 3.6 11.2 Fuel 0.5 Operating Labor Cost 5 operators/shift Supervision Labor Cost 1 supervisors/shift Maintenance Cost Operating Charges 25% of Operating Labor Costs 1.0 3.1 Plant Overhead 50% of Operating Labor and Maint. Costs 3.8 11.8 of Operating Costs 9.4 29.5 22.3 69.7 414.1 1,294.0 58.9 184.1 G and A Cost Intratec | Regional Comparison & Economic Discussion Depreciation Annual Value 36 PG Propylene Fuel By-Product 2% 10% 1 12.8 of TFI ton/ton prod. MMBtu/ton prod. 1294 14.4 USD/ton USD/MMBtu EBITDA Margin -1.9% Chemical Sector IP Indicator 15.5% EBIT Margin -6.6% Source: Intratec – www.intratec.us FREE SAMPLE
  • References Carter, C. O., 1980. 4,242,531. Lummus Technology, 2010. US, Patent No. s.l.:Provided by Lummus on August, 24th 2010. Carter, C. O., 1985. Lummus Technology, 2010. s.l.:Provided by Lummus on August, 24th, 2010. Chodorge, J. A., Cosyns, J., Commereuc, B. & Torck, B., 1997. Propylene Production from Butenes and Ethylene. , Spring. Delaude, L. & Noels, A. F., 2007. Metathesis Section. In: s.l.:WileyInterscience. Drake, C. A. & Reusser, R. E., 1986. US, Patent No. 4,575,575. Mol, J. C., 2004. Industrial Applications of Olefin Metathesis. 213(1), pp. 39-45. Network China Industrial Information, n.d. [Online] Available at: www.chyxx.com [Accessed 10 March 2012]. Senetar, J. J. & Glover, B. K., 2010. Dwyer, C. L., 2006. Metathesis of Olefins. In: G. P. Chiusoli & P. M. Maitlis, eds. s.l.:Royal Society of Chemistry, pp. 201-217. Stanley, S., 2009. Cover Story – Ethylene Enhancement. , February. Eisele, P. & Killpack, R., 2002. Propene Section. In: s.l.:Wiley-Interscience. Sumner, C., 2009. Gartside, R. J. & Greene, M. I., 2007. No. 7,525,007 B2. US, Patent US, Patent No. 7,214,841 B2. Takai, T. & Kubota, T., 2010. Patent No. 2010/0145126 A1. US, Gartside, R. J., Greene, M. I. & Jones, Q. J., 2004. US, Patent No. 6,777,582 B2. Gartside, R. J. & Ramachandran, B., 2010. Weidert, D. J., 2000. s.l., AIChE 2000 Spring Meeting. Zinger, S., 2005. One-purpose propylene production. , Q3. Hildreth, J. M., Dukandar, K. N. & Venner, R. M., 2009. Hydrocarbon Processing, 2005. s.l.:Gulf Publishing. Intratec | References Lummus Technology, 2009. [Online] Available at: www.cbi.com/images/uploads/tech_sheets/Olefins.pdf [Accessed 20 March 2012]. FREE SAMPLE 37
  • Acronyms, Legends & Observations AACE: American Association of Cost Engineers kta: thousands metric tons per year C: Distillation, stripper, scrubber columns (e.g., C-101 would denote a column tag) LP ST: Low pressure steam LPG: Liquefied petroleum gas C2, C3, ... Cn: Hydrocarbons with "n" number of carbon atoms MP ST: Medium pressure steam C2=, C3=, ... Cn=: Alkenes with "n" number of carbon atoms NGL: Natural gas liquids CAPEX: Capital Expenditures OCT: Olefin Conversion Technology CC: Distillation column condenser OPEX: Operational Expenditures CG: Chemical grade OSBL: Outside battery limits CP: Distillation column reflux pump P: Pumps (e.g., P-101 would denote a pump tag) CR: Distillation column reboiler PG: Polymer grade CV: Distillation column accumulator drum R: Reactors, treaters (e.g., R-101 would denote a reactor tag) CW: Cooling water RF: Refrigerant E: Heat exchangers, heaters, coolers, condensers, reboilers (e.g., E-101 would denote a heat exchanger tag) RG: Refinery grade ST: Steam EBIT: Earnings before Interest and Taxes Syngas: Synthesis gas EBITDA: Earnings before Interests, Taxes, Depreciation and Amortization T: Tanks (e.g., T-101 would denote a tank tag) TFI: Total Fixed Investment F: Furnaces, fired heaters (e.g., F-101 would denote a furnace tag) TPC: Total process cost Intratec | Acronyms, Legends & Observations FCC: Fluid-catalytic cracking 38 HP ST: High pressure steam V: Horizontal or vertical drums, vessels (e.g., V-101 would denote a vessel tag) IC Index: Intratec Chemical Plant Construction Index WD: Demineralized water IP Indicator: Intratec Chemical Sector Profitability Indicator WP: Process water ISBL: Inside battery limits X: Special equipment (e.g., X-101 would denote a special equipment tag) K: Compressors, blowers, fans (e.g., K-101 would denote a compressor tag) Obs.: 1 ton = 1 metric ton = 1,000 kg FREE SAMPLE
  • Technology Economics Methodology Introduction The same general approach is used in the development of all Technology Economics assignments. To know more about Intratec’s methodology, see Figure 15. While based on the same methodology, all Technology Economics studies present uniform analyses with identical structures, containing the same chapters and similar tables and charts. This provides confidence to everyone interested in Intratec’s services since they will know upfront what they will get. Workflow Once the scope of the study is fully defined and understood, Intratec conducts a comprehensive bibliographical research in order to understand technical aspects involved with the process analyzed. Subsequently, the Intratec team simultaneously develops the process description and the conceptual process flow diagram based on: a. Non-confidential information provided by technology licensors c. Process design skills Then, a cost analysis is performed targeting ISBL & OSBL fixed capital costs, manufacturing costs, and overall working capital associated with the examined process technology. Equipment costs are primarily estimated using Aspen Process Economic Analyzer (formerly Aspen Icarus) customized models and Intratec's in-house database. Cost correlations and, occasionally, vendor quotes of unique and specialized equipment may also be employed. One of the overall objectives is to establish Class 3 cost estimates 2 with a minimum design engineering effort. Next, capital and operating costs are assembled in Microsoft Excel spreadsheets, and an economic analysis of such technology is performed. Finally, two analyses are completed, examining: a. The total fixed investment in different construction scenarios, based on the level of integration of the plant with nearby facilities b. The capital and operating costs for a second different plant location Intratec's in-house database d. Equipment sizing specifications are defined based on Intratec's equipment design capabilities and an extensive use of AspenONE Engineering Software Suite that enables the integration between the process simulation developed and equipment design tools. Both equipment sizing and process design are prepared in conformance with generally accepted engineering standards. Patent and technical literature research b. From this simulation, material balance calculations are performed around the process, key process indicators are identified and main equipment listed. Next, all the data collected are used to build a rigorous steady state process simulation model in Aspen Hysys and/or Aspen Plus, leading commercial process flowsheeting software tools. . 2 These are estimates that form the basis for budget authorization, appropriation, and/or funding. Accuracy ranges for this class of estimates are + 10% to + 30% on the high side, and - 10 % to - 20 % on the low side. FREE SAMPLE Intratec | Technology Economics Methodology Intratec Technology Economics methodology ensures a holistic, coherent and consistent techno-economic evaluation, ensuring a clear understanding of a specific mature chemical process technology. 39
  • Figure 15 – Methodology Flowchart Study Understanding Validation of Project Inputs Patent and Technical Literature Databases Intratec Internal Database Non-Confidential Information from Technology Licensors or Suppliers Bibliographical Research Technical Validation – Process Description & Flow Diagram Capital Cost (CAPEX) & Operational Cost (OPEX) Estimation Construction Location Factor (http://base.intratec.us) 40 Material & Energy Balances, Key Process Indicators, List of Equipment & Equipment Sizing Pricing Data Gathering: Raw Materials, Chemicals, Utilities and Products Intratec | Technology Economics Methodology Vendor Quotes Economic Analysis Aspen Plus, Aspen Hysys Aspen Exchanger Design & Rating, KG Tower, Sulcol and Aspen Energy Analyzer Analyses of Different Construction Scenarios and Plant Location Project Development Phases Information Gathering / Tools Final Review & Adjustments Source: Intratec – www.intratec.us FREE SAMPLE Aspen Process Economic Analyzer, Aspen Capital Cost Estimator, Aspen InPlant Cost Estimator & Intratec In-House Database
  • Capital & Operating Cost Estimates Process equipment (e.g., reactors and vessels, heat exchangers, pumps, compressors, etc.) Process equipment spares The cost estimate presented in the current study considers a process technology based on a standardized design practice, typical of a major chemical company. The specific design standards employed can have a significant impact on capital costs. Housing for process units Pipes and supports within the main process units Instruments, control systems, electrical wires and other hardware The basis for the capital cost estimate is that the plant is considered to be built in a clear field with a typical large single-line capacity. In comparing the cost estimate hereby presented with an actual project cost or contractor's estimate, the following must be considered: Minor differences or details (many times, unnoticed) between similar processes can affect cost noticeably. The omission of process areas in the design considered may invalidate comparisons with the estimated cost presented. Industrial plants may be overdesigned for particular objectives and situations. Rapid fluctuation of equipment or construction costs may invalidate cost estimate. Foundations, structures and platforms Insulation, paint and corrosion protection In addition to the direct material and labor costs, the ISBL addresses indirect costs, such as construction overheads, including: payroll burdens, field supervision, equipment rentals, tools, field office expenses, temporary facilities, etc. OSBL Investment The OSBL investment accounts for auxiliary items necessary to the functioning of the production unit (ISBL), but which perform a supporting and non-plant-specific role. OSBL items considered may vary from process to process. The OSBL investment could include the installed cost of the following items: Equipment vendors or engineering companies may provide goods or services below profit margins during economic downturns. Specific locations may impose higher taxes and fees, which can impact costs considerably. Storage and packaging (storage, bagging and a warehouse) for products, feedstocks and by-products Steam units, cooling water and refrigeration systems Process water treating systems and supply pumps ISBL Investment The ISBL investment includes the fixed capital cost of the main processing units of the plant necessary to the manufacturing of products. The ISBL investment includes the installed cost of the following items: FREE SAMPLE Boiler feed water and supply pumps Electrical supply, transformers, and switchgear Auxiliary buildings, including all services and equipment of: maintenance, stores warehouse, laboratory, garages, fire station, change house, cafeteria, medical/safety, administration, etc. General utilities including plant air, instrument air, inert gas, stand-by electrical generator, fire water pumps, etc. Pollution control, organic waste disposal, aqueous waste treating, incinerator and flare systems Intratec | Technology Economics Methodology In addition, no matter how much time and effort are devoted to accurately estimating costs, errors may occur due to the aforementioned factors, as well as cost and labor changes, construction problems, weather-related issues, strikes, or other unforeseen situations. This is partially considered in the project contingency. Finally, it must always be remembered that an estimated project cost is not an exact number, but rather is a projection of the probable cost. 41
  • Working Capital For the purposes of this study, 3 working capital is defined as the funds, in addition to the fixed investment, that a company must contribute to a project. Those funds must be adequate to get the plant in operation and to meet subsequent obligations. The initial amount of working capital is regarded as an investment item. This study uses the following items/assumptions for working capital estimation: Accounts receivable. Products and by-products shipped but not paid by the customer; it represents the extended credit given to customers (estimated as a certain period – in days – of manufacturing expenses plus depreciation). Accounts payable. A credit for accounts payable such as feedstock, catalysts, chemicals, and packaging materials received but not paid to suppliers (estimated as a certain period – in days – of manufacturing expenses). Cash on hand. An adequate amount of cash on hand to give plant management the necessary flexibility to cover unexpected expenses (estimated as a certain period – in days – of manufacturing expenses). Start-up Expenses When a process is brought on stream, there are certain onetime expenses related to this activity. From a time standpoint, a variable undefined period exists between the nominal end of construction and the production of quality product in the quantity required. This period is commonly referred to as start-up. During the start-up period expenses are incurred for operator and maintenance employee training, temporary construction, auxiliary services, testing and adjustment of equipment, piping, and instruments, etc. Our method of estimating start-up expenses consists of four components: Product inventory. Products and by-products (if applicable) in storage tanks. The total amount depends on sales flow for each plant, which is directly related to plant conditions of integration to the manufacturing of product‘s derivatives (estimated as a certain period – in days – of manufacturing expenses plus depreciation, defined by plant integration circumstances). Labor component. Represents costs of plant crew training for plant start-up, estimated as a certain number of days of total plant labor costs (operators, supervisors, maintenance personnel and laboratory labor). Commercialization cost. Depends on raw materials and products negotiation, on how integrated the plant is with feedstock suppliers and consumer facilities, and on the maturity of the technology. It ranges from 0.5% to 5% of annual manufacturing expenses. Intratec | Technology Economics Methodology Raw material inventory. Raw materials in storage tanks. The total amount depends on raw material availability, which is directly related to plant conditions of integration to raw material manufacturing (estimated as a certain period – in days – of raw material delivered costs, defined by plant integration circumstances). 42 Start-up inefficiency. Takes into account those operating runs when production cannot be maintained or there are false starts. The start-up inefficiency varies according to the process maturity: 5% for new and unproven processes, 2% for new and proven processes, and 1% for existing licensed processes, based on annual manufacturing expenses. In-process inventory. Material contained in pipelines and vessels, except for the material inside the storage tanks (assumed to be 1 day of manufacturing expenses). Unscheduled plant modifications. A key fault that can happen during the start-up of the plant is the risk that the product(s) may not meet specifications required by the market. As a result, equipment modifications or additions may be required. Supplies and stores. Parts inventory and minor spare equipment (estimated as a percentage of total maintenance materials costs for both ISBL and OSBL). 3 The accounting definition of working capital (total current assets minus total current liabilities) is applied when considering the entire company. FREE SAMPLE
  • Other Capital Expenses Uncertainty in process parameters, such as severity of operating conditions and quantity of recycles Prepaid Royalties. Royalty charges on portions of the plant are usually levied for proprietary processes. A value ranging from 0.5 to 1% of the total fixed investment (TFI) is generally used. Site Development. Land acquisition and site preparation, including roads and walkways, parking, railroad sidings, lighting, fencing, sanitary and storm sewers, and communications. Manufacturing Costs Manufacturing costs do not include post-plant costs, which are very company specific. These consist of sales, general and administrative expenses, packaging, research and development costs, and shipping, etc. Addition and integration of new process steps Estimation of costs through scaling factors Off-the-shelf equipment Hence, process contingency is also a function of the maturity of the technology, and is usually a value between 5% and 25% of the direct costs. The project contingency is largely dependent on the plant complexity and reflects how far the conducted estimation is from the definitive project, which includes, from the engineering point of view, site data, drawings and sketches, suppliers’ quotations and other specifications. In addition, during construction some constraints are verified, such as: Operating labor and maintenance requirements have been estimated subjectively on the basis of the number of major equipment items and similar processes, as noted in the literature. Plant overhead includes all other non-maintenance (labor and materials) and non-operating site labor costs for services associated with the manufacture of the product. Such overheads do not include costs to develop or market the product. G & A expenses represent general and administrative costs incurred during production such as: administrative salaries/expenses, research & development, product distribution and sales costs. Project errors or incomplete specifications Strike, labor costs changes and problems caused by weather Table 27 – Project Contingency Plant Complexity Complex Typical Simple Project Contingency 25% 20% 15% Source: Intratec – www.intratec.us Intratec’s definitions in relation to complexity and maturity are the following: Contingency constitutes an addition to capital cost estimations, implemented based on previously available data or experience to encompass uncertainties that may incur, to some degree, cost increases. According to recommended practice, two kinds of contingencies are assumed and applied to TPC: process contingency and project contingency. Process contingency is utilized in an effort to lessen the impact of absent technical information or the uncertainty of that which is obtained. In that manner, the reliability of the information gathered, its amount and the inherent complexity of the process are decisive for its evaluation. Errors that occur may be related to: Table 28 – Criteria Description Simple Complexity Typical Somewhat simple, widely known processes Regular process Several unit operations, extreme Complex temperature or pressure, more instrumentation New & Maturity Proven Licensed From 1 to 2 commercial plants 3 or more commercial plants Source: Intratec – www.intratec.us FREE SAMPLE Intratec | Technology Economics Methodology Contingencies 43
  • Accuracy of Economic Estimates The accuracy of estimates gives the realized range of plant cost. The reliability of the technical information available is of major importance. Table 29 – Accuracy of Economic Estimates Reliability Accuracy Very Low Moderate High + 30% + 22% + 18% + 10% - 20% - 18% - 14% - 10% High Source: Intratec – www.intratec.us The non-uniform spread of accuracy ranges (+30 to – 20 %, rather than ±25%, e.g.) is justified by the fact that the unavailability of complete technical information usually results in under estimating rather than over estimating project costs. Location Factor A location factor is an instantaneous, total cost factor used for converting a base project cost from one geographic location to another. A properly estimated location factor is a powerful tool, both for comparing available investment data and evaluating which region may provide greater economic attractiveness for a new industrial venture. Considering this, Intratec has developed a well-structured methodology for calculating Location Factors, and the results are presented for specific regions’ capital costs comparison. Intratec’s Location Factor takes into consideration the differences in productivity, labor costs, local steel prices, equipment imports needs, freight, taxes and duties on imported and domestic materials, regional business environments and local availability of sparing equipment. For such analyses, all data were taken from international statistical organizations and from Intratec’s database. Calculations are performed in a comparative manner, taking a US Gulf Coast-based plant as the reference location. The final Location Factor is determined by four major indexes: Business Environment, Infrastructure, Labor, and Material. The Business Environment Factor and the Infrastructure Factor measure the ease of new plant installation in different countries, taking into consideration the readiness of bureaucratic procedures and the availability and quality of ports or roads. Figure 16 – Location Factor Composition Location Factor Intratec | Technology Economics Methodology Material Index 44 Domestic Material Index Relative Steel Prices Labor Index Taxes and Freight Rates Spares Imported Material Taxes and Freight Rates Spares Labor Index Local Labor Index Relative Salary Productivity Expats Labor Infrastructure Factor Ports, Roads, Airports and Rails (Availability and Quality) Communication Technologies Warehouse Infrastructure Border Clearance Local Incentives Source: Intratec – www.intratec.us FREE SAMPLE Business Environment Factor Readiness of Bureaucratic Procedures Legal Protection of Investors Taxes
  • Labor and material, in turn, are the fundamental components for the construction of a plant and, for this reason, are intrinsically related to the plant costs. This concept is the basis for the methodology, which aims to represent the local discrepancies in labor and material. Productivity of workers and their hourly compensation are important for the project but, also, the qualification of workers is significant to estimating the need for foreign labor. On the other hand, local steel prices are similarly important, since they are largely representative of the costs of structures, piping, equipment, etc. Considering the contribution of labor in these components, workers’ qualifications are also indicative of the amount that needs to be imported. For both domestic and imported materials, a Spare Factor is considered, aiming to represent the need for spare rotors, seals and parts of rotating equipment. The sum of the corrected TFI distribution reflects the relative cost of the plant, this sum is multiplied by the Infrastructure and the Business Environment Factors, yielding the Location Factor. For the purpose of illustrating the conducted methodology, a block flow diagram is presented in Figure 16 in which the four major indexes are presented, along with some of their components. Intratec | Technology Economics Methodology . FREE SAMPLE 45
  • Appendix A. Mass Balance & Streams Properties Table 30 – Detailed Material Balance Stream Properties Phase L L L L L L L G G G Temperature (°C) -29 -28 30 50 52 25 25 260 304 304 Pressure (bar abs) 22 30 6.0 6.0 30 30 30 30 30 30 Mass Flow (kg/h) 12,940 12,940 38,950 114,750 114,750 161,520 161,520 161,520 161,520 161,520 Ethylene (wt%) 99.9 99.9 28.9 28.9 28.9 28.9 21.0 Ethane (wt%) 0.1 0.1 traces traces traces traces traces Propene (wt%) 0.4 0.4 0.3 0.3 0.3 0.3 24.9 Butenes (wt%) 80.0 38.3 38.3 27.2 27.2 27.2 27.2 9.0 Butane (wt%) 20.0 56.4 56.4 40.1 40.1 40.1 40.1 40.1 4.9 4.9 3.5 3.5 3.5 3.5 5.0 C5+ (wt%) Molar Flow (kmol/h) 461 461 689 1,988 1,988 3,654 3,654 3,654 3,654 3,654 MW 28.1 28.1 56.5 57.7 57.7 44.2 44.2 44.2 44.2 44.2 438.9 439.6 588.3 555.1 557.9 510.9 510.9 32.2 29.1 29.2 335 335 -233 -392 -391 -180 -180 13 41 41 29 29 66 207 206 316 316 5,015 5,546 5,538 0.11 0.11 0.09 0.09 0.09 0.09 0.09 0.05 0.05 0.05 3.5 3.4 2.4 2.6 2.5 2.7 2.7 2.6 2.7 2.7 0.06 0.06 0.14 0.12 0.12 0.10 0.10 0.02 0.02 0.02 4.2 4.1 12.3 9.7 9.4 6.9 6.9 0.0 0.0 0.0 11,280 11,280 10,820 10,870 10,870 10,990 10,990 10,990 10,990 10,990 Mass Density (kg/m3) Mass Enthalpy (kcal/kg) Volume Flow (m3/h) Thermal Conductivity (W/m K) Intratec | Appendix A. Mass Balance & Streams Properties Mass Heat Capacity 46 (kJ/kg °C) Viscosity (cP) Surface Tension (dyne/cm) LHV (kcal/kg) Source: Intratec – www.intratec.us FREE SAMPLE
  • Table 31 – Detailed Material Balance Stream Properties Phase L/G L/G L L L L L L G L Temperature (°C) 53 45 89 39 -25 -24 107 60 -25 113 Pressure (bar abs) 30 30 22 16 22 30 17 17 22 17 Mass Flow (kg/h) 161,490 161,490 127,560 40,000 33,820 33,820 75,800 75,800 120 11,760 Ethylene (wt%) 21.0 21.0 traces 0.1 100.0 100.0 100.0 Ethane (wt%) traces traces traces traces traces traces traces Propene (wt%) 24.9 24.9 31.5 99.5 traces traces Butenes (wt%) 9.0 9.0 11.4 Butane (wt%) 39.9 39.9 C5+ (wt%) 5.1 Molar Flow (kmol/h) 0.5 0.5 0.1 0.1 16.9 16.9 14.1 50.6 0.3 75.1 75.1 63.5 5.1 6.5 traces 7.4 7.4 22.4 3,654 3,654 2,444 950 1,205 1,205 1,298 1,298 4 196 MW 44.2 44.2 52.2 42.1 28.1 28.1 58.4 58.4 28.1 60.1 Mass Density (kg/m3) 210.1 332.6 458.7 482.4 428.6 429.4 462.6 541.1 42.6 468.5 Mass Enthalpy (kcal/kg) -152 -163 -285 35 339 340 -441 -474 413 -393 Volume Flow (m3/h) 769 486 278 83 79 79 164 140 3 25 Thermal Conductivity (W/m K) 0.00 0.00 0.07 0.10 0.11 0.10 0.00 0.08 0.02 0.06 Mass Heat Capacity (kJ/kg °C) 2.9 2.9 3.4 3.0 3.7 3.6 3.4 2.6 2.2 3.4 Viscosity (cP) 0.00 0.00 0.07 0.06 0.06 0.06 0.00 0.12 0.01 0.07 Surface Tension (dyne/cm) 5.3 5.6 3.4 5.1 3.7 3.5 3.7 8.5 0.0 3.8 LHV (kcal/kg) 10,990 10,990 10,910 10,950 11,280 11,280 10,900 10,900 11,280 10,870 Intratec | Appendix A. Mass Balance & Streams Properties Source: Intratec – www.intratec.us FREE SAMPLE 47
  • Appendix B. Utilities Consumption Breakdown Table 32 – Utilities Consumption Breakdown Cooling Water Deethylenizer Feed Cooler 144 m3/h Cooling Water C4+ Purge Cooler 47 m3/h Cooling Water Butenes Recycle Cooler 193 m3/h Cooling Water Depropylenizer Condenser 773 m3/h Cooling Water Refrigeration System 1576 m3/h LP Steam Deethylenizer Reboiler 21 ton/h LP Steam Depropylenizer Reboiler 20 ton/h Inert Gas Catalyst Regeneration 1283 Nm3/h Intratec | Appendix B. Utilities Consumption Breakdown Source: Intratec – www.intratec.us 48 FREE SAMPLE
  • Appendix C. Process Carbon Footprint The process’ carbon footprint can be defined as the total amount of greenhouse gas (GHG) emissions caused by the process operation. The assumptions for carbon footprint calculation and the results are provided in Although it is difficult to precisely account for the total emissions generated by a process, it is possible to estimate the major emissions, which can be divided into: Table 34 – CO2e Emissions (ton/ton prod.) Direct emissions. Emissions caused by process waste streams combusted in flares. Stream #24 0.009 Indirect emissions. The ones caused by utilities generation or consumption, such as the emissions due to using fuel in furnaces for heating process streams. Fuel used in steam boilers, electricity generation, and any other emissions in activities to support process operation are also considered indirect emissions. Electricity Generation 0.163 Steam Generation 0.114 Heat Generation 0.031 In order to estimate the direct emissions, it is necessary to know the composition of the streams, as well as the oxidation factor. Estimation of indirect emissions requires specific data, which depends on the plant location, such as the local electric power generation profile, and on the plant resources, such as the type of fuel used. Source: Intratec – www.intratec.us Equivalent carbon dioxide (CO2e) is a measure that describes the amount of CO2 that would have the same global warming potential of a given greenhouse gas, when measured over a specified timescale. All values and assumptions used in calculations are based on data provided by the Environment Protection Agency (EPA) Climate Leaders Program. Table 33 – Assumptions for CO2e Emissions Calculation 100% Waste streams Stream #24 Electric power profile Texas Fuel used in steam boiler Natural Gas Steam boiler efficiency 85% Fuel used in furnaces Natural Gas Furnaces efficiency 85% Intratec | Appendix C. Process Carbon Footprint Oxidation factor Source: Intratec – www.intratec.us FREE SAMPLE 49
  • Appendix D. Equipment Detailed List & Sizing Table 35 – Reactors Description Metathesis Reactor Design gauge pressure (barg) 1.0 Design temperature (deg C) 340 Liquid volume (m3) 68 Shell material SS Source: Intratec – www.intratec.us Table 36 – Heat Exchangers Description Item type Furnace Furnace Material Cr-Mo Shell & Tube Shell & Tube Shell & Tube 16.7 32.4 25.4 125 125 144 CS CS CS 10.8 21.3 16.6 125 125 144 CS CS CS Cr-Mo Shell design gauge pressure (barg) Intratec | Appendix D. Equipment Detailed List & Sizing Shell & Tube 6 Heat transfer area (m2) 50 36 CS 6 158 334 Duty (MW) 1978 334 334 Cooler Feed Vaporizer 32.4 Design temperature (deg C) Feed Cooler 32.4 32.4 Condenser CS Gas Heater C4+ Purge 334 Heater Design gauge pressure (barg) Deethylenizer 32.4 Regeneration Depropylenizer 2175 Reactor Feed Shell design temperature (deg C) Shell material Tube design gauge pressure (barg) Tube design temperature (deg C) Tube material Source: Intratec – www.intratec.us FREE SAMPLE
  • Table 36 – Heat Exchangers (Cont.) Butenes Recycle Deethylenizer Deethylenizer Depropylenizer Cooler Condenser Reboiler Reboiler Heat transfer area (m2) 79 1245 195 270 Item type Shell & Tube Shell & Tube Shell & Tube Shell & Tube Shell design gauge pressure (barg) 17.6 24.4 24.4 17.7 Shell design temperature (deg C) 137 -55 125 143 Shell material CS CS CS CS Tube design gauge pressure (barg) 11.4 16.0 16.0 11.5 Tube design temperature (deg C) 137 -55 194 194 Tube material CS CS CS CS Description Design gauge pressure (barg) Design temperature (deg C) Duty (MW) Material Source: Intratec – www.intratec.us Table 37 – Pumps Raffinate-2 C4 Tank Deethylen. Depropylen. Propylene Feed Pumps Feed Pumps Pumps Reflux Pumps Reflux Pumps Pumps Casing material CS CS CS CS CS CS Design gauge pressure (barg) 32.4 6.7 32.4 24.4 16.7 25.4 Design temperature (deg C) 18 125 125 18 125 125 Liquid flow rate (m3/h) 32 73 227 313 307 91 Source: Intratec – www.intratec.us FREE SAMPLE Intratec | Appendix D. Equipment Detailed List & Sizing Ethylene Description 51
  • Table 37 – Pumps (Cont.) Description Ethylene Recycle Pumps C4+ Pumps Casing material CS CS Design gauge pressure (barg) 32.4 25.4 Design temperature (deg C) 18 144 Liquid flow rate (m3/h) 87 28 Source: Intratec – www.intratec.us Table 38 – Columns Description Deethylenizer Column Depropylenizer Column Design gauge pressure (barg) 24.4 17.7 Design temperature (deg C) 125 140 Number of trays 60 65 Shell material CS CS Tray material CS CS Tray spacing (mm) 610 610 Vessel diameter (m) 2.7 2.6 Source: Intratec – www.intratec.us Intratec | Appendix D. Equipment Detailed List & Sizing Table 39 – Utilities Supply 52 Description Cooling Tower Refrigerator Boiler flow rate (kg/h) Steam boiler Water Demineralizer 47200 Material CS Water flow rate (m3/h) CS 3384 CS CS 6 Source: Intratec – www.intratec.us FREE SAMPLE
  • Table 40 – Vessels & Tanks Specifications Description Reactor Feed Treaters Deethylenize r Accumulator Depropylen. Ethylene ISBL Ethylene Raffinate Accumulator Storage Storage Storage Design gauge pressure (barg) 32.4 24.4 16.7 25.5 25.5 6.7 Design temperature (deg C) 125 18 125 -30 -30 125 Liquid volume (m3) 35.6 30.0 30.0 370 5000 11200 Shell material CS CS CS CS CS CS Source: Intratec – www.intratec.us Table 40 – Vessels & Tanks Specifications (Cont.) Propylene Demin. Water Clarified Product ISBL C4+ Purge Fresh/Recycle Storage Tank Water Tank Storage Storage C4 Tank Design gauge pressure (barg) 26.5 0.004 0.004 26.5 3.5 17.6 Design temperature (deg C) 120 20 20 125 120 125 Liquid volume (m3) 13900 3 1700 1050 260 835 Shell material CS CS CS CS CS CS Description Intratec | Appendix D. Equipment Detailed List & Sizing Source: Intratec – www.intratec.us FREE SAMPLE 53
  • Appendix E. Detailed Capital Expenses Direct Costs Breakdown Figure 17 – ISBL Direct Costs Breakdown by Equipment Type for Base Case Vessels & Tanks Columns Heat Exchangers Pumps, Compressors & Turbines Reactors Furnaces 10% 35% 14% 10% 13% 18% ISBL Total Direct Cost: USD 21.2 Million Source: Intratec – www.intratec.us Figure 18 – OSBL Direct Costs Breakdown by Equipment Type for Base Case Vessels & Tanks Steam Boiler Refrigeration Units Intratec | Appendix E. Detailed Capital Expenses 9.28% 1.11% 54 Cooling Tower Water Treatment Buildings 0.04% 1.42% 0.41% 87.76% OSBL Total Direct Cost: USD 94.5 Million Source: Intratec – www.intratec.us FREE SAMPLE
  • Indirect Costs Breakdown Table 41 – Indirect Costs Breakdown for the Base Case (USD Thousands) 352 Field Const Supv 1,533 Start-up, Commissioning 129 Fringe Benefits 1,209 Burdens 1,381 Consumables, Small Tools 173 Misc (Insurance, Etc) 435 Scaffolding 173 Equipment Rental 1,308 Field Services 439 Temp Const, Utilities 96 Other Freight 4,398 Materials Taxes 6,871 Basic Engineering 1,393 Detail Engineering 3,366 Material Procurement 731 G and A Overheads 4,015 Contract Fee 3,617 FREE SAMPLE Intratec | Appendix E. Detailed Capital Expenses Home Office Const Suppt 55
  • Appendix F. Economic Assumptions Capital Expenditures Working Capital For a better description of working capital and other capital expenses components, as well as the location factors methodology, see the chapter “Technology Economics Methodology.” Table 43 – Working Capital Assumptions for Base Case Raw Materials Construction Location Factors Inventory Products Inventory Table 42 – Detailed Construction Location Factor In-process Inventory Supplies and Labor Index Stores Local Labor Index 1.00 1.34 Cash on Hand % of Local Labor 100% 100% Accounts Expats Labor Index 1.35 1.35 Receivable % of Expats 0% 0% Accounts Payable Material Index Domestic Material Index 1.00 1.30 % of Domestic Material 100% 1.00 1.13 % of Imported Material 0% 1.00 1.02 Material & Labor Weights Labor 70% 15 30 30 day of total oper. cost of total oper. labor and maint. cost days of total oper. cost days of total oper. cost + depreciation days of total oper. cost Source: Intratec – www.intratec.us Other Capital Expenses Table 44 – Other Capital Expenses Assumptions for Base Case Operator Training 1.00 1.00 1 Commercialization Costs 1% 1% 1 Business Environment Factor 150 Start-up Inefficiencies Infrastructure Factor Intratec | Appendix F. Economic Assumptions 5% depreciation 30% Material 56 1 days of raw materials cost + 10% Spare Factor 20 days of raw materials cost 90% Imported Material Index 0.5 Material/Labor Distribution in TFI Labor 30% 30% Material 70% 70% Source: Intratec – www.intratec.us Unscheduled Plant days of all labor costs of annual oper. costs of annual oper. costs 2% of TFI Prepaid Royalties 1% of TFI Land & Site Development 3% of TFI Modifications Source: Intratec – www.intratec.us FREE SAMPLE
  • Operational Expenditures Fixed Costs Fixed costs are estimated based on the specific characteristics of the process. The fixed costs, like operating charges and plant overhead, are typically calculated as a percentage of the industrial labor costs, and G & A expenses are added as a percentage of the operating costs. Table 45 – Other Fixed Cost Assumptions The goal of depreciation is to allow a credit against manufacturing costs, and hence taxes, for the nonrecoverable capital expenses of an investment. The depreciable portion of capital expense is the total fixed investment. Table 46 shows the project depreciation value and the assumptions used in its calculation. Table 46 – Depreciation Value & Assumptions Operating Charges (% of Operating Labor Costs) 25% Depreciation Method Straight Line Plant Overhead (% of Oper. Labor and Maint. Costs) 50% Economic Life of Project 10 years G and A Expenses (% of Subtotal Operating Costs) 2% Depreciation Annual Value 10% of TFI Source: Intratec – www.intratec.us Source: Intratec – www.intratec.us Depreciation EBITDA Margins Comparison Depreciation, while not a true manufacturing cost, is considered to be a manufacturing cost for tax purposes. Figure 19 presents a 5-year analysis, comparing EBITDA margins estimates for the regional scenarios presented in this study. Figure 19 – Historical EBITDA Margins Regional Comparison US Gulf 25% Germany 20% 10% 5% 0% Q4-06 Q2-07 Q4-07 Q2-08 Q4-08 Q2-09 Source: Intratec – www.intratec.us FREE SAMPLE Q4-09 Q2-10 Q4-10 Q2-11 Intratec | Appendix F. Economic Assumptions 15% 57
  • Appendix G. Released Publications The list below is intended to be an easy and quick way to identify Intratec reports of interest. For a more complete and up-to-date list, please visit the Publications section on our website, www.intratec.us. CONCEPTUAL DESIGN TECHNOLOGY ECONOMICS Propylene Production via Metathesis: Propylene production via metathesis from ethylene and butenes, in a process similar to Lummus OCT. Propylene Production via Propane Dehydrogenation: Propane dehydrogenation (PDH) process conducted in moving bed reactors, in a process similar to UOP OLEFLEX™. Propylene Production from Methanol: Propylene production from methanol, in a process is similar to Lurgi MTP®. Polypropylene Production via Gas Phase Process: A gas phase type process similar to the Dow UNIPOL™ PP process to produce both polypropylene homopolymer and random copolymer. Polypropylene Production via Gas Phase Process, Part 2: A gas phase type process similar to Lummus NOVOLEN® for production of both homopolymer and random copolymer. Intratec | Appendix G. Released Publications Sodium Hypochlorite Chemical Production: Sodium hypochlorite (bleach) production, in a widely used industrial process, similar to that employed by Solvay Chemicals, for example. 58 Propylene Production via Propane Dehydrogenation, Part 2: Propane dehydrogenation (PDH) in fixed bed reactors, in a process is similar to Lummus CATOFIN®. Propylene Production via Propane Dehydrogenation, Part 3: Propane dehydrogenation (PDH) by applying oxydehydrogenation, in a process similar to the STAR PROCESS® licensed by Uhde. FREE SAMPLE Membranes on Polypropylene Plants Vent Recovery: The Report evaluates membrane units for the separation of monomer and nitrogen in PP plants, similar to the VaporSep® system commercialized by MTR. Use of Propylene Splitter to Improve Polypropylene Business: The report assesses the opportunity of purchasing the less valued RG propylene to produce the PG propylene raw material used in a PP plant.
  • Appendix H. Technology Economics Form Submitted by Client FREE SAMPLE 59
  • Chemical Produced by the Technology to be Studied Define the main chemical product of your interest. Possible choices are presented below. Choose a Chemical Acetic Acid Acetone Acrylic Acid Acrylonitrile Adipic Acid Aniline Benzene Butadiene n-Butanol Isobutylene Caprolactam Chlorine Cumene Dimethyl Ether (DME) Ethanol Ethylene Bio-Ethylene Ethylene Glycol Ethylene Oxide Formaldehyde HDPE Isoprene LDPE LLDPE MDI Methanol Methyl Methacrylate Phenol Polypropylene (PP) Polybutylene Terephthalate Polystyrene (PS) Polyurethanes (PU) Polyvinyl Chloride (PVC) Propylene Propylene Glycol Propylene Oxide (PO) Terephthalic Acid Vinyl Chloride (VCM) If the main chemical product of your target technology is not found above, please check the "Technology Economic Form - Specialties". Chemical Process Technology to be Studied Identify the mature chemical process technology you would like us to assess. Intratec considers mature technologies the ones already used on a commercial scale plant. Technology Description Technology for propylene production via metathesis similar to CB&I Lummus OCT E. g. technology for propylene production from methanol - similar to Lurgi MTP Commercial Scale Unit. Inform the exact location of one commercial scale plant under operation. Plant Location: I don't know I know the location of a commercial plant: Borouge's Metathesis Unit at Ruwais, Abu Dhabi If there is no commercial scale plant based on the technology of your interest, you are referred to Intratec's Research Potential advisory service at www.intratec.us/advisory/research-potential/overview Industrial Unit Description Plant Nominal Capacity Operating Hours Inform the plant capacity to be considered in the study. Provide the main product capacity in kta (thousands of metric tons per year of main chemical product). Plant Capacity 150 kta Operating Hours 300 kta Other (kta) Inform the assumption for the number of hours the plant operates in a year. 8,000 h/year Other (h/year) 450
  • Analysis Date Define the date (quarter and year) that will be considered in the analysis. Our databases can provide consolidated values from the year 2000 up to the last closed quarter, quarter-to-date values are estimated. Quarter Year Q3 2011 Storage Facilities Define the assumptions employed for the storage facilities design. Products 20 days By-Products 20 days Other Other Raw Materials 20 days Other 0 0 Utilities Supply Facilities The construction of supply facilities for the utilities required (e.g. cooling tower, boiler unit, refrigeration unit) impacts the capital investment for the construction of the unit. Consider construction of supply facilities ? Yes No General Design Conditions General utilities and environmental conditions that may be relevant to the process simulation are presented below. Provide other assumptions if you deem necessary. Specification Unit Default Value User-specified value Cooling water temperature ºC 24 DSPEC1 Cooling water range ºC 11 DSPEC2 Steam (Low Pressure) Bar abs 7 DSPEC3 Steam (Medium Pressure) Bar abs 11 DSPEC4 Steam (High Pressure) Bar abs 35 DSPEC5 Refrigerant (Ethylene) ºC -100 DSPEC6 Refrigerant (Propane) ºC -40 DSPEC7 Refrigerant (Propylene) ºC -45 DSPEC8 Dry Bulb Air Temperature ºC 38 DSPEC9 Wet Bulb Air Temperature ºC 27 DS10 Industrial Unit Location The location of an industrial unit influences in prices for both construction and operation of the unit. In this study, the economic performances of TWO similar units erected in different locations are compared. The first plant is located in the United States (US Gulf Coast) and the second location is defined by YOU. Plant Location I would like to keep the plant location confidential. Country (or region) to be considered. Germany E.g. Louisiana (USA), China or Saudi Arabia. Please define only one location. Plant Location Data Provider I will use Intratec's Internal Database containing standard chemical prices and location factors (only for Germany, Japan, China or Brazil). I will provide location specific data. Please fill the Custom Location topic below.
  • Custom Location Description. Describe both capital investment and prices at your custom location. A) Capital Investment. Provide the relative capital cost at your custom location in comparison to the United States (U.S. Gulf Coast) Custom Location Relative Cost (%) 130% means that the capital costs in the custom location are 30% higher than the costs in the United States. B) Raw Materials Prices. Describe the raw material prices to be considered in the custom location. Item Description Price Unit Price Raw1 RU1 RP1 Raw2 RU2 RP2 Raw3 RU3 RP3 E.g. Propane USD/metric ton 420 C) Product Prices. Describe the products prices to be considered in the custom location. Item Description Price Unit Price Prod1 PU1 PP1 Prod2 PU2 PP2 Prod3 PU3 PP3 E.g. Polypropylene USD/metric ton 1700 D) Utilities Prices. Describe the utilities prices to be considered in the custom location. Item Description Price Unit Price Electricity UP1 Steam (Low Pressure) UP2 Steam (High Pressure) UP3 Fuel UP4 Clarified Water UP5 Util6 UU6 YP6 Util7 UU7 UP7 Util8 UU8 UP8 E) Labor Prices. Describe the labor prices to be considered in the custom location. Item Description Price Unit Price Operating Labor USD/operator/hour LP1 Supervision Labor USD/supervisor/hour LP1 F) Others. Describe any other price you deem necessary to be considered in the custom location. Item Description Price Unit Price Other1 OU1 OP1 Other2 OU2 OP2 Other3 OU3 OP3 E.g. Catalyst USD/metric ton 5000
  • Other Remarks If you have any other comments, feel free to write them below: Co m m en ts: Complementary Files Along with this form, you may also upload any other chemical document deemed relevant for the description of the project, such as articles, brochures, book sections, patents, etc. Multiple files may be uploaded. If you are filling this form offline please upload this form and any complementary files at www.intratec.us/advisory/technology-economics/order-commodities Non-Disclosure Period & Pricing You can keep your study confidential or get discounts, by allowing Intratec to disclose it to the market as a publication, after an agreed non-disclosure period, starting at the date you place your order. Choose an Option 6 months 24 months 36 months Never Disclosed Non-Disclosure Period Price 6 months $8,000 (9 x $899) Save 84% 24 months $28,000 (9 x $3,111) Save 44% automatically, in equal and pre-defined installments 36 months $40,000 (11 x $3,636) Save 20% - Every 15 days, an installment will be charged to your Never Disclosed $50,000 (13 x $3,846) - Payment of our advisory service is conducted credit card or PayPal account. Pay Less! Benefit From a 5% Discount Inform us the email address of the Intratec Agent that introduced you to our advisory services you will benefit from a 5% discount on the total price of your service. To know more about Intratec New Business Development Agents, please visit www.intratec.us/be-our-agent. Intratec Agent Email Evaluate our Intratec Agent. Your opinion will be kept confidential. Unsatisfied Knowledge about Intratec offerings and presentation skills Kindness and Helpfulness DOWNLOAD EXAMPLES OF FILLED FORMS HERE. DOWNLOAD A PDF VERSION OF THIS FORM HERE. NEED ASSISTANCE ? SEND AN EMAIL TO sales@intratec.us. Neutral Satisfied
  • Technology Economics Standardized advisory services developed under Intratec’s Consulting as Publications innovative approach. Technology Economics studies answer main questions surrounding process technologies: - What is the process? What equipment is necessary? - What are the raw materials and utilities consumption rates? - What are the capital and operating expenses breakdown? - What are the economic indicators? - In which regions is this technology more profitable?