Increased coal-to-olefins processes in China
Chinas significant domestic supply of coal, combined with a domestic shortage of several key chemical feedstocks, especially ethylene and propylene, are driving increased Chinese demand for more production of chemical feedstocks from coal, according to a new IHS study that assessed the key technologies and economics of coal-to-olefins (CTO) processes employed in China.
The study noted that, in 2011, China had an ethylene capacity of 15.7 MMt and production of 14.4 MMt. On the demand side, Chinas total ethylene equivalent consumption (including imports of first-order derivatives such as polyethylene) far exceeded its domestic ethylene supply. China imported nearly 8 million tons of polyethylene alone in 2011, accounting for 42% of total Chinese demand.
In a new five-year plan covering 20112015, the Chinese set a target that 20% of the countrys ethylene production will come from other diversified sources, which for Chinaa country with abundant coal supplies that is a net-importer of oilpractically means coal.
According to IHS, Chinas domestic demand for oil was 9.4 million bpd in 2011, of which 57% was imported.
Likewise, Chinas propylene production was 13.1 MMt in 2011. On the demand side, Chinas total propylene equivalent consumption, including imports of first-order derivatives such as polypropylene, also far exceeded its domestic propylene supply. China imported nearly 5 MMt of polypropylene alone in 2011, accounting for 30% of total demand. The propylene shortage in China is projected to stay at about 5 MMtpy until 2020.
The processes studied included the gasification of bituminous coal by GE Texaco or Shell gasifiers to produce synthetic gases (syngas), followed by methanol synthesis and methanol-to-olefins (MTO) production. The MTO technologies studied included UOP/Hydro MTO and Lurgi methanol-to-propylene (MTP) technologies. Economic evaluations were based on a US Gulf Coast location. However, since most coal-based olefin projects are occurring in China, the economics in the review were adjusted to reflect production and capital costs for a Chinese location. The adjustment was achieved by examining the variations in technologies deployed in China and accounts for capital investment, raw materials, utility and labor costs relative to the design basis used in the report.
To address the countrys chemical feedstock shortage, China has built or is planning many high-capacity, integrated CTO and coal-to-propylene (CTP) plants. Thirteen plants are in the works, with four of those currently operational.
According to the IHS review, all coal-based processes analyzed in the review showed lower direct costs, but higher indirect costs (due to high capital investments) as compared to competing (petroleum-based) processes for CTO and CTP, respectively. To enable baseline comparisons of chemical engineering processes for this review, return on investment (ROI) was the primary factor considered, and the costs were not weighted for environmental impact.
For olefins production, based on the market price of olefins at the time of analysis, the MTO process based on outsourced methanol offers the highest ROI, followed by the integrated GE/MTO process, and finally, steam-cracking of naphtha, which is a petroleum-based process. In terms of propylene production, based on the market price of propylene at the time of analysis, the MTP process based on outsourced methanol offers the highest ROI, followed by the integrated Shell/MTP process using bituminous coal, the integrated Shell/MTP using lignite, and finally, the integrated Siemens/MTP. HP