Petrochemical Technology Renaissance Syngas/Methanol to Olefins R. J. Chang, Global Managing Director IHS Chemical Process Economics Program March 27 & 28, 2014 Houston, TX USA
The Rise of Syngas - the divergence between crude oil vs. natural gas and coal prices has spurt global syngas production Price ($/MMBtu) 16 14 12 10 8 6 4 2 Prices Capacity Crude Oil Syngas Capacity Coal Syngas Capacity (billion scfd) Natural Gas 0 0 1955 1965 1975 1985 1995 2005 2015 Coal Natural Gas Crude Oil Syngas Capacity 25 20 15 10 5 Source: DOE and IHS Chemical 2
Syngas is mainly produced by natural gas reforming and coal gasification Natural Gas Reforming Coal Gasification QUENCH GAS STEAM DRY COAL STEAM BFW GASIFIER BFW SYNGAS FLY ASH SLAG 3
Syngas is a versatile intermediate for many chemicals, synthetic fuels, and Power Clean Syngas H2, CO, CO2 IGCC Clean Electricity Hydrogen Max H2 Methanol (H2 - CO2) / (CO + CO2) =2.05 Fischer-Tropsch Liquid Fuels H2 / CO = 2.0 Substitute Natural Gas H2 / CO = 3 4
U.S. Shale vs. China Coal - competition in C2 & C3 Value Chains - the story of global chemical industry in the next 5-10 years US Shale CH 4 Reforming Syngas Gasification China Coal NGL Ethane Ethylene / PE CTO CTP Naphtha MTO Methanol Propane PDH FCC Propylene / PP MTP MEG 5
Ethylene Capacity Build-up China s rapidly growing coal based capacity vs. US expanding shale based projects KTA 40 35 30 25 20 15 10 5 0 China Ethylene and PEs 2013 Demand 2013 Capacity CTO MTO Others 2023 Capacity 2023 Demand KTA 50 NA Ethylene and PEs 40 30 20 10 0 2013 Demand 2013 Capacity 2023 Capacity 2023 Demand 6
Propylene Capacity Build-up - China s rapidly growing coal based capacity vs. US expanding shale based projects KTA 45 40 35 30 25 20 15 10 5 0 China Propylene and PP KTA 30 25 20 15 10 5 0 NA Propylene and PP 2013 Demand 2013 Capacity PDH Others 2023 Capacity 2023 Demand 7
Major Technology Advances Enabling CTO/CTP Processes High capacity 3th generation entrained flow gasifiers Mega methanol technologies MTO Technologies (producing about ½ C2 and ½ C3) UOP MTO /Total OCP (Olefin Cracking Process) DICP (Dalian Institute of Chemical Physics) DMTO, DMTO-II Sinopec SMTO MTP Technologies (producing mostly C3) Lurgi MTP Tsinghua FMTP Sinopec S-MTP 8
Leading Gasifiers used in China s CTO and CTP projects Shell GE-Texaco Siemens 9
Leading Chinese Operating Plants and their Technology Selections Project Coal Gasifier MTO/MTP Shenhua Baotou Bituminous GE (Texaco) 5 x (2,000TPD) Shenhua Ningxia Bituminous Siemens GSP 5 x (2,000TPD) Datang Duolun Lignite Shell 3 x (4,000TPD) DMTO Lurgi MTP Lurgi MTP Wison Bituminous GE or Shell UOP MTO Sinopec Zhongyuan Puyang -- -- SMTO Ningbo Heyuan -- -- DMTO 10
Critical Factors in China s Coal-Based Projects Driving forces Coal producers seeking higher return Strategic decision for petrochemical companies to divert chemical feedstock from petroleum Close supply gap by eliminating imports Deciding factors Government policy Product quality Environmental Impact CO 2 Emission Water demand Production economics Cash costs ROI 11
Questions to Answer In China Process economics of CTO/CTP vs. MTO/MTP: to integrate or not to integrate from coal? Are coal based processes competitive with naphtha and PDH processes? What are environmental impacts? In North America How does NA ethane based ethylene compete with CTO? How does NA PDH based propylene compete with CTP? Is MTO or MTP viable in the US? 12
Syngas production economics from coal vs. natural gas is the Key 13
Coal Gasification: selection of gasifiers / coal grades and petcoke Natural Gas: choice of reforming technologies / licensors 14
ipep Syngas Process Economics SYNTHESIS GAS FROM SUBBITUMINOUS COAL VIA SHELL(SCGP) GASIFIER (580 PSIA) UNIT COSTS CONSUMPTION PER MSCF /MSCF SUBBITUMINOUS COAL 0.7 /LB 50.388 LB 35.27 AGR SOLVENT 1,000 /LB 0.00075 LB 0.75 SHIFT CATALYST 1,800 /LB 0.001 LB 1.80 OTHER CHEMICALS 3.78 GROSS RAW MATERIALS 41.60 SLAG DISPOSAL -0.5 /LB -2.3814 LB 1.19 SULFUR 7.75 /LB -0.11102 LB -0.86 TOTAL BY-PRODUCTS 0.33 COOLING WATER 15.49 /MGAL 358 GAL 5.54 PROCESS WATER 132 /MGAL 1.6043 GAL 0.21 ELECTRICITY 5.93 /KWH 5.7371 KWH 34.02 NATURAL GAS 412 /MMBTU 1,072 BTU 0.44 STEAM LP 570 /MLB 1.1315 LB 0.64 STEAM MP 760 /MLB 5.1214 LB 3.89 STEAM HP 810 /MLB -- LB 0.00 STEAM LP 570 /MLB -0.17865 LB -0.10 STEAM MP 760 /MLB -14.114 LB -10.73 STEAM HP 810 /MLB -76.523 LB -61.98 TOTAL UTILITIES -28.07 15
ipep Syngas Process Economics SYNTHESIS GAS FROM SUBBITUMINOUS COAL VIA SHELL(SCGP) GASIFIER (580 PSIA) CAPACITY(MILLION MSCF/YR)* 66.20 132.40 264.80 INVESTMENT($ MILLIONS) BATTERY LIMITS (BLI) 910.50 1,449 2,305 OFFSITES 163.50 320.00 609.00 TOTAL FIXED CAPITAL (TFC) 1,074 1,769 2,914 PRODUCTION COSTS( /MSCF) RAW MATERIALS 41.60 41.60 41.60 BY-PRODUCTS 0.33 0.33 0.33 UTILITIES -28.07-28.07-28.07 VARIABLE COSTS 13.86 13.86 13.86 OPERATING LABOR, $46.23/HR 12.23 6.12 3.06 MAINTENANCE LABOR, 1.6%/YR OF BLI 22.01 17.51 13.93 CONTROL LAB LABOR, 20% of OPER LABOR 2.45 1.22 0.61 LABOR COSTS 36.69 24.85 17.60 MAINTENANCE MATERIALS, 2.4%/YR OF BLI 33.01 26.27 20.89 OPERATING SUPPLIES, 10% of OPER LABOR 1.22 0.61 0.31 TOTAL DIRECT COSTS 84.78 65.59 52.66 PLANT OVERHEAD, 80% TOTAL LABOR 29.35 19.88 14.08 TAXES AND INSURANCE, 2%/YR OF TFC 32.45 26.72 22.01 PLANT CASH COSTS 146.58 112.19 88.75 DEPRECIATION, 10%/YR OF TFC 162.24 133.61 110.05 PLANT GATE COST 308.82 245.80 198.80 G&A, SALES, RESEARCH 29.06 23.49 19.15 NET PRODUCTION COST 337.88 269.29 217.95 ROI BEFORE TAXES, 15%/YR OF TFC 243.35 200.42 165.07 PRODUCT VALUE 581.23 469.71 383.02 16
Comparison of Capex and Opex of Syngas Production in USGC and China US $ Million 1,500 1,250 1,000 750 500 250 0 USGC Combined Reforming USGC BATTERY LIMITS (BLI) China SCGP Subbituminous Coal OFFSITES /MSCF 400 350 300 250 200 150 100 50 0 USGC Combined Reforming USGC PRETAX 15% ROI DEPRECIATION OPER & MAINT. China SCGP Subbituminous Coal G&A, SALES, RES. OVERHEAD, TAXES VARIABLE COST 17
Comparison of Environmental Impacts GE quench Shell E-Gas Siemens Toyo Lurgi HT JM/Davy GE quench Shell E-Gas Siemens Toyo Lurgi HT JM/Davy 0.0 0.5 1.0 1.5 2.0 2.5 3.0 CO 2 /Syngas for MeOH (t/t) 0 2 4 6 8 10 12 H 2 O/Syngas for MeOH (t/t) 18
Capex Structure of CTO/CTP and MTO /MTP US$ MM 2,000 PEPCOST INDEX=1164 CHINA LOCATION FACTOR=0.75 MID 2013 1,500 1,000 500 0 CTO CTP Gasification Methanol Plant Olefins Plant 19
CTO/ MTO Opex Comparison in China Production Costs ($/t) 3,500 3,000 2,500 2,000 1,500 1,000 500 0-500 -1,000-1,500 ETHYLENE PRICE $/t 1,280 PEPCOST INDEX=1164 CHINA LOCATION FACTOR=0.75 MID 2013 CTO MTO Naphtha VARIABLE COST OPER & MAINT. OVERHEAD, TAXES DEPRECIATION G&A, SALES, RES. PRETAX 15% ROI ETHYLENE PRICE $/t 20
Olefins Production Costs in North America Production Costs ($/t) 2,000 1,500 1,000 PROPYLENE PRICE $/t 1,473 ETHYLENE PRICE $/t 1,221 PEPCOST INDEX=1164 USGC MID 2013 500 0 Ethane MTO Naphtha PDH MTP VARIABLE COST OPER & MAINT. OVERHEAD, TAXES DEPRECIATION G&A, SALES, RES. PRETAX 15% ROI ETHYLENE PRICE $/t PROPYLENE PRICE $/t 21
Summary Syngas production is a high growth industry, sustained by the divergence of oil vs. coal and natural gas prices Rapid growth of CTO/CTP capacities in China will compete with US shale based projects in next 5-10 years Syngas production economics (opex and capex) and environmental considerations will be the deciding factors An ipep interactive data module allows a quick comparison syngas production economics and the environmental impacts from coal gasification and natural gas reforming on the same basis Applying the ipep module to analyze CTO/CTP processes leads to the following conclusions: 22
Conclusions Coal based projects are very capital intensive and has high carbon and water footprint Compared with naphtha cracking in China, MTO is very competitive in full production costs and has highest ROI. CTO has the lowest cash costs, but will take a long period to recover high capex MTO/MTP it s a viable option with higher ROI in China In North America, MTO and MTP are not competitive NA ethane cracking has lower cash and full production costs than CTO and MTO processes in China 23
Syngas/Methanol to Olefins THANK YOU!