April 2015

Columns

HP Editorial Comment: Accessing the value of methane and the North American petrochemical revolution

The North American (NA) petrochemical industry is experiencing a renaissance of new project announcements and manufacturing expansions. This wave of activity is supported by abundant, low-cost natural gas supplies. In particular, many ethylene projects are under various stages of development.

Romanow, Stephany, Hydrocarbon Processing Staff

The North American (NA) petrochemical industry is experiencing a renaissance of new project announcements and manufacturing expansions. This wave of activity is supported by abundant, low-cost natural gas supplies. In particular, many ethylene projects are under various stages of development.

This opportunity is not limited to ethylene. Methane holds tremendous value and opportunity as an energy resource for power generation and heating. Once liquefied, it is also a valuable transportation fuel.1

Value in methane

Natural gas is the feedstock for synthesis gas (syngas). Instead of liquefying the natural gas, the alternate route converts the methane into syngas, which is further reacted to methanol, a high-value petrochemical and an intermediate for other petrochemicals including MTBE, formaldehyde, acetic anhydride, formic acid and others. New processes, such as methanol-to-gasoline (MTO) and methanol-to-olefins (MTO), are witnessing renewed interest to produce marine and transportation fuels, as well as olefins.

According to a recent IHS study, global methanol demand will rise significantly—from 60.7 MMt in 2013 to 109 MMt by 2023. More than 50 MMt of new methanol capacity has been announced, with 17 MMt located in NA. China is the main driver for most of the new methanol demand.

Reclaiming value

Methanol is a commodity chemical. The production of methanol shifts to locations with favorable natural gas pricing and secure long-term supplies. When natural gas prices skyrocketed in the 2000s, much of the NA methanol capacity was shut down or mothballed. In some cases, the units were disassembled and sold to offshore companies.

However, present natural gas conditions and pricing have shifted interest in methanol back to NA. Methanex, the world’s largest methanol manufacturer, is investing in new capacity. In 2013, Methanex added 1 metric MMt of methanol capacity in New Zealand and Canada.

Methanex is also taking advantage of US Gulf Coast (USGC) shale gas supplies. The company is in the process of relocating two methanol plants from Chile to Geismar, Louisiana. The first plant, Geismar 1, is now operational, with a production capacity of 1 MMtpy. The second plant, Geismar 2, is under construction and is expected to be operational in the first quarter of 2016. (For more details, see “Methanex focuses on growth and expanding its operations across the globe,” p. 29.)

New player

G2X Energy is a new company actively participating in the NA methanol industry. The Houston-based company has three methanol projects underway that will benefit from NA shale gas. In Pampa, Texas, a mothballed facility will be recommissioned. The plant was originally slated to be sent offshore. It was abandoned on the USGC due to financing problems. G2X Energy purchased the 70-metric-Mtpy plant and moved it to northern Texas. The company is in the process of starting up the unit.

G2X Energy also has a grassroots methanol-to-gasoline (MTG) complex under development at Lake Charles, Louisiana. The Big Lake Fuels project has a nameplate capacity of 580 metric MMtpy. This facility is located near major natural gas pipelines on the USGC. Also, the company is in the early stages of planning a second grassroots methanol plant to be located at Marseilles, Illinois. HP

LITERATURE CITED

1 More information is available in Gas Processing and at GasProcessingNews.com.

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