A Chinese coalminer
Over the next week, as well as keeping track of more immediat events, we will be reviewing and analysing what was said in and around last week’s Asia Petrochemical Industry Conference (APIC) in Mumbai.
One of the most-interesting stories to emerge was a clear message from close to Total Petrochemicals, the French producer, that it’s forging ahead with methanol-to-olefins (MTO) see below.
Here’s the story:
By Joseph Chang, John Richardson and Malini Hariharan
Total Petrochemicals aims to fully prove its methanol-to-olefins (MTO) technology this year, leading to a potential $5bn-7bn (€4bn-5.6bn) worldscale project in China in the coming years, a source close to the company said on Friday.
“The economics of our MTO technology will be very competitive. We would look to partner with anyone with access to stranded coal,” said the source on the sidelines of the Asia Petrochemical Industry Conference (APIC) in Mumbai.
“This project would be very capital intensive at a cost of around $5bn-7bn,” he added.
Total Petrochemicals is actively developing its MTO technology, having completed a pilot plant at Feluy in Belgium in October 2008.
The technology, jointly developed with UOP, converts methanol into light olefins (ethylene and propylene) and heavier olefins. The heavy olefins are then converted into light olefins using the UOP/Total Petrochemicals Olefins Cracking Process (OCP).
“It is a combination of UOP’s process and Total’s OCP technology; the olefin yield is higher than other MTO technologies,” the source said.
The company plans to prove commercialisation of its technology this year, said the source.
And Total’s MTO technology could provide an entry into large-scale petrochemical and plastics production in China, as foreign companies must bring more to the table compared with a decade ago, the source said.
“China has less and less need for IOCs [international oil companies] to come in and invest in projects in the conventional way. They have to bring more to the table, whether it’s technology or feedstocks,” said the source.
A big concern over the coal-gasification route to methanol is high water consumption. China’s stranded coal reserves are in western and northern China, where water is in short supply.
Total believes it has a solution to the water issue; it is working to reduce water consumption during coal-gasification of methanol, the step before conversion of methanol to olefins, the source added.
Coal gasification plants also generate more carbon dioxide (CO2) emissions than refining, according to some estimates.
The Total process would employ carbon capture and sequestration technology to minimise CO2 emissions, the source noted.
The economics of MTO plants have been questioned because of high logistics costs.
This is because a large proportion of the polyolefins produced downstream of these facilities would have to be shipped from western or northern China, where demand is weak, to the big consumption markets in eastern and southern China.
“But a study has been done and compared to naphtha crackers it would be economic,” said the source.
As part of Total’s strategy of growing in Asia and the Middle East, “it would be nice to have production in China – nice, but not necessary”, the source said.
Total currently supplies the growing Asian market through major production sites in Ras Laffan, Qatar, and Daesan, South Korea.
The company on 4 May inaugurated its 1.3m tonne/year joint venture Ras Laffan Olefins Cracker (LROC) in Qatar. The facility will supply its Qatofin joint-venture linear low density polyethylene (LLDPE) plant, which was inaugurated in November 2009.
Around 40% of the LLDPE would go to the Asia market, with the rest going to Europe and Africa, said the source.
Total owns 22.2% of LROC through its joint ventures Qapco and Qatofin with partner Qatar Petroleum.