20 August 2012 12:46 [Source: ICIS news]
By John Richardson
PERTH (ICIS)--The ?xml:namespace>
But perhaps less well known is that
In this process, coal is first converted in to synthesis gas (syngas) in a gasification plant. The next step is to convert the syngas into methanol and then the methanol into olefins (ethylene and propylene) - or MTO - in separate facilities. Methanol can also be made into only propylene.
But it is, of course, very important to have a competitive cash cost of ethylene to make polyolefins production viable.
When oil prices are high, the MTO industry enjoys a cash cost advantage in
High oil prices give MTO an advantage because coal becomes a comparatively cheaper feedstock.
However, MTO producers integrated all the way back to coal mines remain in a strong position even in a low oil-price environment, said MMSA managing director Mark Berggren.
Existing producers include Baotou Shenhua Coal Chemicals, located in
Also back-integrated to captive coal supply is the 460,000 tonne/year methanol-to-propylene producer Datang Inner Mongolia Duolun Coal Chemical, which is again located in
“One of the advantages from a coal producers’ perspective is that you are taking coal, which sells at around $100/tonne and converting it into polyolefins that sell at well over $1,000/tonne,” said Berggren.
Berggren believes that a considerable amount of planned new MTO capacity will go ahead because of sound economics, and for strategic and political reasons.
“By 2030, our base case, to which we attach a 65% probability, is that 28m tonnes/year of methanol will be converted into olefins in
Other estimates are that this amount of capacity will be on-stream by 2020, but Berggren argues that there are insufficient engineering and procurement contractors in
China MTO/MTP Projects:
But he stresses that the government is committed to MTO because it represents a demonstration of national pride, and is part of the drive to raise self-sufficiency in basic raw materials.
“Coal-to-olefins projects are also big in scale which fits in with another government objective - improving the economies of scale of its industries,” Berggren said.
“In addition, realising MTO projects will involve the successful implementation of technologies that have ostensibly been developed domestically.”
But he said that environmental issues would remain a background concern for MTO. Question marks have been raised over the sustainability of the industry as a result of high levels of carbon dioxide (CO2) emissions and heavy water consumption. Existing and proposed plants are located in w
“The coal gasification step is where large amounts of water are consumed,” he added.
“But this water can be recycled following treatment. And when you make olefins, which involves converting methanol via dimethyl ether over catalysts, water is left over from the process which again can be treated and re-used.
“On the issue of CO2 emissions, which are again high during the gasification step, the coal companies argue that you need to compare life-cycle emissions between coal and oil.
“More energy is required to get oil out of the ground than is the case with coal, especially in the case of deep-sea oil drilling, the companies point out.
“You can also sequester the CO2, and, if it has the right purity, it has a commercial value for re-injecting into oil wells to advance oil recovery.”
Berggren said that not all MTO projects are based on domestically-produced methanol, via coal. Some project proponents are instead planning to import methanol.
This latter category includes Skyford Chemical. The company is due to start-up 600,000 tonnes/year of MTO capacity (200,000 tonnes/year of ethylene and 400,000 tonnes/year of propylene) at
“The problem with this approach is that the gas resources, for the moment at least, are under separate ownership to that of the MTO players in
“As a result, there is an issue for MTO players in that the owners of the gas reserves often see a stronger value into other uses for their hydrocarbons, such as liquefied natural gas.
“But I wouldn’t be surprised that at some point, the Chinese go overseas and acquire their own natural gas reserves to make methanol in, say, the Middle East to ship the methanol back to China to make olefins.”
Read John Richardson and Malini Hariharan's Asian Chemical Connections blog
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