A piece of the action

06 September 1997 00:00  [Source: ACN]

Competition to offer PX technologies is intensifying. High growth prospects have drawn key technology players to make an entry. Mary Heathcote reports

INTENSE competition to invest in Asian paraxylene (PX) and purified terephthalic acid (PTA) markets is more than matched by the determination of technology licensors to gain a slice of the action.

Established PX technologies are pushing to build their position. New technologies are emerging so fast that it has become impossible to predict with any confidence the development of markets in Asia and worldwide into the next century.

The stakes in the PX technology game were lifted by an order of magnitude in 1995 when Mobil Chemical announced its toluene-to-paraxylene (MTPX) process. The technology is claimed to reduce capital and operating costs by 10-15% over the best competing technologies including Mobil's selective toluene disproportionation process (MSTDP) (ACN 11 Sept 1995, p12). On the strength of this technology edge, Mobil announced plans to build four new plants over five years, lifting it to the world-leading merchant PX position by 2000.

Two years on, crowded markets and the prospect of dismal returns have dampened corporate enthusiasm. Mobil has already delayed its second 350 000 tonne/year Singapore facility to 2000. And plans to implement the MTPX process in the project have not been confirmed. A decision will depend on the market outlook, Mobil sources have told ACN.

The change in Mobil's mood reflects a broader apprehension in PX and PTA markets worldwide. Shortly after the Mobil announcement, Glitsch Technology Corp (GTC) made ripples in the sector with the news it was on the verge of unveiling an integrated naphtha-to-polyester-intermediate process that could halve the costs of polyester production (ACN 18/25 Dec 1995, p10).

Eighteen months on, the GTC development continues behind closed doors at a pilot scale plant (ACN 9 June p20). But indications of a commercial announcement have receded into the future - in parallel with the profitability of the industry.

Mobil and GTC seized the headlines two years ago. But they are far from being the only contestants in an increasingly crowded licensing market.

Other faces long familiar in technology licensing have made their debut on the aromatics stage in the last couple of years. Entrants in the PX sector include Institut Francais du Petrole (IFP) with the Chevron Chemical Eluxyl PX separation process, and UOP with the PX-Plus route. Their determination to secure a position is clear.

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'With the early technical and commercial success of the Eluxyl process, IFP is well on its way to becoming a major player in the aromatics process-licensing business,' IFP proposals manager Christian Dupraz said at the recent DeWitt Petrochemical Review conference in Houston. 'Commercialisation of the Eluxyl process clearly signals IFP's intention of being a major player in the PX licensing business.'

UOP's senior manager of aromatics processing technology James Johnson has a similar message. 'Although the PX-Plus process represents UOP's first commercial entry into para-selective catalysis, UOP has a proven record of continuous process improvement and innovation so that the industry can always be assured that it will have access to the best options.'

IFP expects PX demand to grow at an average 7%/year for the next decade. However, recent capacity announcements due onstream before the turn of the century have dampened prices, Dupraz recognises.

'The current PX prices will undoubtedly deter some companies from committing to adding capacity,' he says. 'Others will find this an opportune time to decide on new grassroots investments for two reasons. Firstly, it will make other companies decide not to add capacity. Secondly, it will provide them added capacity in time to catch the next wave of price increases.'

UOP points out that worldwide PX demand has been growing at about 8.5%/year. This is projected 'to continue at rates significantly above GNP (gross national product) for many years to come', Johnson says.

'An additional 14m tonne/year of new PX capacity is projected to be required over the next ten years,' he says. 'Although this growing market has been attracting much interest, it will suffer through a phase of overcapacity for the next several years. Those who succeed in the long run will do so by leveraging new technology to add capacity in the most cost-effective manner.'

The first IFP Eluxyl licensees will start operations later this year. Chevron Chemicals will start up a 450 000 tonne/year facility in Pascagoula, US. A 500 000 tonne/year Asian facility is also due onstream in Q3. A 180 000 tonne/year Middle-Eastern plant is due to start in Q4 1998. And a 650 000 tonne/year facility is planned to start operations in Asia in 1999. The 500 000 tonne/year Asian PX unit due this year will be the largest single train, standalone PX separation unit in the world, Dupraz says.

The Eluxyl process comes in a standalone version and a hybrid variant which permits expansion of existing PX facilities. Most of the additional capacity will come from grassroots units. However, PX expansions at existing facilities are a means of getting the most out of an existing complex, Dupraz says.

Initial evaluations of the process have been carried by IFP and Chevron at a demonstration unit in Pascagoula Refinery, Texas, US. Started up in January 1995, the facility is designed for a feed rate of 40 000 tonne/year and PX production of 8000-10 000 tonne/year - the minimum size that can easily be extrapolated to large commercial-size units. 'Results in both hybrid mode and standalone mode greatly exceeded our expectations based on pilot-plant results, particularly with respect to adsorption capacity,' Dupraz says.

After first operating in hybrid mode through the summer of 1995, the demonstration plant was shut down and reconfigured for standalone, high-purity operation. 'It was restarted in the beginning of January 1996 and rapidly achieved 99.7% purity in less than one month,' he reports. 'After obtaining correlation data, optimising and fine tuning, product purity was increased to 99.9%.'

IFP has evaluated the investment and operating costs of a 400 000 tonne/year PX production unit with typical mixed-reformer xylenes as feedstock and its Octafining isomerisation technology. Both Eluxyl and Hybrid Eluxyl PX separation routes were assessed.

The capital investment for grassroots units was found to be similar for both. For retrofit of the hybrid version, the investment cost could be as low as half that of a grassroots unit, depending on the existing crystallisation technology, Dupraz says. The investment cost, including molecular-sieve catalysts and chemicals inventories, is estimated to be US$106m assuming a Q2 1996 US Gulf Coast basis. Utility costs for both cases are approximately US$32/tonne of PX.

The Hybrid Eluxyl technology offers a more economically attractive option for crystalliser operators to expand than the three existing alternatives, Dupraz says.

'The capital investment requirement for retrofitting an existing crystallisation unit is estimated to be 52% of that required for a grassroots complex,' he says. This assumes a Q2 1996 US Gulf Coast basis for a 400 000 tonne/year PX plant.

PX-Plus expansion economics
	Base case A	Case B	Case C	Case D
Feed ('000 tonne/year)
Reformate	622	675	622	622
Toluene	-	-	160	333
Chemical hydrogen	0.7	1.4	2.2	3.2
Products ('000 tonne/year)
Paraxylene	200	275	328	408
Benzene	5	61	127	250
Toluene	114	-	-	-
Heavy aromatics	239	262	245	249
Raffinate	60	65	60	60
Light products	5	14	24	36
Economics (US$m)
Investment	-	18.18	31.13	43.41
Incremental gross profit/year	-	13.1	24.1	36.2
Simple return on investment (%)	-	72	77	83
Paraxylene cash cost of production (US$/tonne)	335	327	323	323
Source: UOP

UOP's PX-Plus process can be used for 'large-scale grassroots facilities where significant quantities of benzene are desired along with PX production,' Johnson says.

'Such applications are limited because of the large amount of toluene feedstock required and the low demand for additional benzene. However, capacity-expansion scenarios where existing toluene or supplemental toluene can be fed to the PX-Plus process will have extremely attractive economics and can take advantage of incremental capacity in the existing process units.'

The process provides PX-rich xylenes. Work with a pilot plant produced 90% PX concentration with a 30% toluene conversion per pass. The high concentration of PX compared with metaxylene allows a recovery rate of PX that is higher than 80%, compared with the 65% typical of a conventional equilibrium mixed-xylenes stream.

UOP has evaluated the economics for three expansion scenarios. The base case (A) represents an existing facility that produces PX, toluene and a small amount of benzene from a C7+ reformate. Production of PX is 200 000 tonne/year, toluene is 113 800 tonne/year, and benzene output is 5370 tonne/year. The cash cost of production of PX is US$335/tonne.

The second case (B) adds a PX-Plus unit to increase PX production by a minimum 35% to 274 741 tonne/year without necessitating toluene purchases. The cash cost of production of PX is US$327/tonne.

The third case (c) includes PX-Plus to lift capacity further to 327 595 tonne/year of PX. It is now necessary to purchase 160 000 tonne/year of toluene. The resulting cash cost of production of PX is US$323/tonne.

The fourth case (D) lifts PX capacity to 408 264 tonne/year, necessitating the purchase of 333 200 tonne/year of toluene. Benzene production is now up to 249 236 tonne/year from the 5370 tonne/year of the base case. The cash cost of production of PX in this scenario is again US$323/tonne.

'In all the expansion cases, the cash cost of production for the incremental PX from the PX-Plus process ranges from US$304/tonne to US$311/tonne, which is significantly lower than that for the PX produced in the base case,' Johnson says.

By: Mary Heathcote, Asian Chemical News
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