Methanol to Olefins A Pillar of Capacity Additions in China, but Does MTO have a Role in India? IOCL Conclave February 7, 2014 UOP LLC Des Plaines, Illinois, USA 2014 UOP LLC. All rights reserved.
Topics 1. UOP MTO Technology 2. MTO Projects in China 3. MTO / GTO / CTO Analysis UOP 5614D-2
Advanced MTO Technology Regen Gas MTO Process Integrated with Olefin Cracking Process (OCP) MTO DME Recovery Light Olefin Recovery Ethylene Propylene Air Water C 4 + OCP Methanol Sep Section By-products
Carbon yield % Light Olefin Carbon Yields, wt-% Yield Benefits from OCP Integration 100 90 80 70 60 50 40 30 20 10 0 Other high value products Ethylene Propylene 100 90 80 2.6 tons of Methanol consumed per ton of light olefin produced 70 1.0 1.2 1.4 1.6 1.8 2.0 Propylene/Ethylene (P/E) Product Ratio, wt. A little more ethylene, a lot more propylene, and a lot less C 4 + by-product OCP integration increases light olefin yields by 20%
Scale-up Progression ~1 kg/day of MeOH feed Multiple grades/sources of feed Reactor and regenerator configuration ~1,000 kg/day (maximum) of MeOH feed Multiple grades/sources of feed Reactor and regenerator configuration ~10,000 kg/day (10t/d) of MeOH feed Fully integrated Advanced MTO Process configuration UOP Pilot Plant Operation INEOS Demo Unit Total Process Demonstration Unit 1988 1995 2009
Wison Nanjing MTO Plant Construction July 2012 Wison Engineering Ltd.
Wison Nanjing MTO Plant Construction July 2013 Wison Engineering Ltd.
Commercialization Status The following projects in China have disclosed the selection of the UOP / HYDRO MTO TM Process: Owner Location Scope LO Capacity MTA On-Stream Wison (Nanjing) Clean Energy Company, Ltd. Nanjing, Jiangsu MTO / OCP 295,000 Sept 2013 Jiutai Energy (Zhungeer) Company, Ltd. Ordos, Inner Mongolia MTO 600,000 Exp 2014 Shandong Yangmei Hengtong Chemicals Company, Ltd. Linyi, Shandong MTO / OCP 295,000 Exp 2014 Jiangsu Sailboat Petrochemical Co. Ltd. Lianyungang, Jiangsu MTO / OCP 833,000 Exp 2015
Topics 1. UOP MTO Technology 2. MTO Projects in China 3. MTO / GTO / CTO Analysis UOP 5614D-9
China Perspective 1) Domestic olefin capacity based on refinery FCC (DCC) and naphtha cracking. Oil price increased from $40/BBL in 2000 to more than $100/BBL in 2008. 2) Oil self-sufficiency ratio fell from 70% in 2000 to less than 40% by 2013. 3) Gas is relatively scarce but coal is abundant. 4) Government support for technology development, demonstration, and pilot projects for conversion of coal into materials that substitute for oil. Coal gasification Direct and indirect CTL Methanol to chemicals (olefins, DME, MEG, etc.)
Ethylene plus Propylene, Million MTA Methanol-Based LO Production 10 8 6 4 Approximately 20 methanol-based light olefin projects in China are in operation, under construction, or in detailed design and procurement as of 1Q 2014 3.8 Ă One MTP and 3 MTO technologies have been commercialized as of 1Q 2014 5.5 Ă 2 0 2009 2010 2011 2012 2013 2014 2015 2016
Two Types of MTO Projects in China Coal Mine Coal Gasification Methanol / MTO LO Derivates Type 1 MTO (CTO) Projects Inland Locations (near mines) Mega-sites / Often State Sector Raw Material Driven Large Capacity Projects Mostly PE / PP Coal Based Methanol Gas Based Methanol Open Market MTO LO Derivates Type 2 MTO Projects Coastal Locations Often Private Sector LO Derivative Driven Wide Range in Capacities Wide Range of Derivatives
Status of MTO in China General Domestic and imported methanol, and more recently imported propane (for propane dehydrogenation projects), are displacing naphtha as the preferred feedstock for domestic light olefin capacity additions. Type-I MTO Projects 1) Coal to chemicals (CTC) projects provide good financial returns to the owners, and significant industrial development and employment benefits to local and provincial governments when compared to electric power projects. 2) The CO 2 footprint for CTO is large. Coal-derived synthesis gas requires H 2 /CO adjustment (more H 2 ) via water-gas shift reaction (additional CO 2 created). 3) China s coal deposits are generally located where water is scarce and the environment is fragile. Every new project is closely scrutinized by all levels of government, and project approvals are difficult to achieve.
Coal Chemicals in China Type-II Projects 1) MTO projects are a good way for private sector companies in China to secure light olefins, and thereby gain access to attractive olefin derivative markets. 2) MTO projects in China have proven to be viable for light olefin capacities as small as 300 KMTA. 3) Merchant methanol markets are volatile, which creates considerable risk for any project based solely on spot market or short-term contract pricing. Chinese companies are securing long-term access to methanol made from lower-cost gas located outside of China.
Topics 1. UOP MTO Technology 2. MTO Projects in China 3. MTO / GTO / CTO Analysis UOP 5614D-15
Project IRR, % MTO Project Returns 35 1.0 MM MTA 600 KMTA 300 KMTA 30 25 20 15 10 5 0 350 375 400 425 450 Methanol, $/MT $1,300/MT transfer price for light olefin products
Project NPV, Billion $ MTO Project NPVs 2.5 1.0 MM MTA 600 KMTA 300 KMTA 2.0 1.5 1.0 0.5 0.0 350 375 400 425 450 Methanol, $/MT $1,300/MT transfer price for light olefin products
$/MT Methanol Price History 1,000 900 800 700 600 500 400 300 200 100 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Source: CMAI Average quarterly prices N America W Europe N Asia S Asia Adjusted to constant 2013 US $
Project IRR, % GTO Project Returns 40 1.0 MM MTA 600 KMTA 300 KMTA 35 30 25 20 15 10 5 0 2 4 6 8 10 12 Natural Gas, $/MM Btu $1,300/MT transfer price for light olefin products
Project NPV, Billion $ GTO Project NPVs 7.0 1.0 MM MTA 600 KMTA 300 KMTA 6.0 5.0 4.0 3.0 2.0 1.0 0.0 2 4 6 8 10 12 Natural Gas, $/MM Btu $1,300/MT transfer price for light olefin products
$ / Million Btu North American Energy Prices Gas and coal valuations have decoupled from oil in North America 24 22 20 18 16 14 12 10 8 6 4 2 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Source: CMAI Average quarterly prices Adjusted to constant 2013 US $ WTI Crude Natural Gas Illinois Coal
Project IRR, % CTO Project Returns 30 1.0 MM MTA 600 KMTA 300 KMTA 25 20 15 10 5 0 20 60 100 140 180 220 Coal, $/MT Coal energy content = 27.9 GJ/MT (26.4 MM Btu/MT)
Project NPV, Billion $ CTO Project NPVs 6.0 1.0 MM MTA 600 KMTA 300 KMTA 5.0 4.0 3.0 2.0 1.0 0.0 20 60 100 140 180 220 Coal, $/MT $1,300/MT transfer price for light olefin products
Capital Budget, Billion $ Capital Cost and CCOP 3.5 1 Million MTA Light Olefin Capacity 1,400 3.0 2.5 2.0 1.5 1.0 0.5 $400/MT Methanol $6 per MM Btu Gas $60/MT Coal 1,200 1,000 800 600 400 200 LO Cash Cost of Production $ 0.0 MTO GTO CTO Capital Budget CCOP 0
Does MTO Have Any Role in India? 1) Domestic oil, gas, and coal reserves / trade balances. 2) Suitability of Indian coal for methanol production. 3) Availability of petcoke as a feedstock. 4) CO 2 emissions / access to water near coal deposits. 5) Offshore gas discoveries / shale gas production. 6) JV projects to access lower-cost gas outside of India.