On-purpose technology can fill up by-product shortages

20 June 2013 15:16  [Source: ICIS news]

HOUSTON (ICIS)--On-purpose technologies could be a solution to filling the supply gap between increased production of ethylene and shortages of by-products such as propylene, butadiene (BD) and aromatics, a consultant said on Wednesday.

Shale-resource development in the US has resulted in producers shifting from more expensive heavy feedstock such as naphtha to cheaper lighter feedstock such as ethane, said John Corrigan, a partner with consulting firm Booz & Company.

As producers announce new ethane cracker projects to take advantage of the cheap feedstock for ethylene production, there has been an emergence of on-purpose technologies to increase propylene, BD as well as aromatic mixtures of benzene, toluene and xylene (BTX), he added.

However, there is still uncertainty about whether such technologies are ready for commercial production, Corrigan said at the ICIS US Aromatics and Derivatives Conference.

There are also concerns over the production economic and expected margins as well as who would execute these technologies and where they would be located, Corrigan said.

Propylene

On-purpose propylene technologies include propane dehydrogenation (PDH), olefin metathesis, methanol-to-propylene as well as biomass-to-propylene.

Many companies, such as Dow Chemical, have announced plans for PHD plants because of the process’s overall attractiveness, Corrigan said. PHD technology has high maturity and scalability as well as a propane-propylene price disconnect, he explained.

Methanol-to-propane is also highly attractive, because it has high stability, while methane and coal prices remain low, he said.

However, the economics of biomass-to-propylene and olefin metathesis are unfavourable, according to Corrigan. Biomass-to-propylene comprises backward integration and has low maturity, while olefin metathesis – which redistributes fragments of olefins and regenerate carbon double-bonds – requires low butane and ethylene prices to make it feasible.

Butadiene

On-purpose BD can be made through butane dehydrogenation or bio-BD production, Corrigan said, and both processes have low overall attractiveness.

The butane dehydrogenation process has poor economics due to low yields and has low scalability. Bio-BD production, on the other hand, has potentially attractive economics, but it has very low maturity, Corrigan said.

Aromatics

Aromatics production can be supplemented with naphtha and liquefied petroleum gas (LPG) technologies, along with coal-to-BTX processes.

Coal-to-aromatics is a highly favourable process that has been demonstrated by “the China’s success story”, Corrigan said. Its economics require low coal tar prices and high metals correlation.

While naphtha and LPG technologies are less favourable, they still have medium overall attractiveness as the processes have moderate economics, scalability and maturity, he said.

“So again, a lot of pieces are moving, but the one thing that’s uncertain is where we’re going to end up,” Corrigan said. “But we know we’re going to end up somewhere different than we are today.”

The ICIS US Aromatics and Derivatives Conference concludes on Thursday.

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By: Tracy Dang
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