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Syngas/Methanol to
Olefins
R. J. Chang, Global Managing Director
IHS Chemical Process Economics Program
March 27 & 28, 2014
Houston, TX USA
Petrochemical Technology Renaissance
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The Rise of Syngas
Coal
Natural Gas
Crude Oil
Syngas Capacity
0
5
10
15
20
25
0
2
4
6
8
10
12
14
16
1955 1965 1975 1985 1995 2005 2015
Syngas Capacity
(billion scfd)
Price ($/MMBtu)
Coal Natural Gas Crude Oil Syngas Capacity
Prices Capacity
- the divergence between crude oil vs. natural gas and coal
prices has spurt global syngas production
Source: DOE and IHS Chemical 2
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Syngas is mainly produced by natural gas
reforming and coal gasification
• Natural Gas Reforming
• Coal Gasification
STEAM
BFWGASIFIER
BFW
FLY ASH
SLAG
SYNGAS
QUENCH GAS
STEAM
DRY COAL
3
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Syngas is a versatile intermediate for many
chemicals , synthetic fuels, and Power
Clean Syngas H2, CO, CO2
IGCC Clean Electricity
Hydrogen
Max H2
Methanol
(H2 - CO2) /
(CO + CO2)
=2.05
Fischer-Tropsch
Liquid Fuels
H2 / CO = 2.0
Substitute
Natural Gas
H2 / CO = 3
4
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Syngas Gasification Reforming
- competition in C2 & C3 Value Chains
- the story of global chemical industry in the next 5-10 years
CH4
Ethylene
/ PE
Methanol
US Shale China
Coal
Propylene
/ PP
MTO
MTP
NGL Ethane
PDH Propane
CTO CTP
Naphtha
FCC
U.S. Shale vs. China Coal
MEG
5
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China’s rapidly growing coal based capacity vs. US’
expanding shale based projects
Ethylene Capacity Build-up
0
5
10
15
20
25
30
35
40
2013Demand
2013Capacity
CTO MTO Others 2023Capacity
2023Demand
KTA
China Ethylene and PEs
0
10
20
30
40
50
2013 Demand 2013 Capacity 2023 Capacity 2023 Demand
KTA
NA Ethylene and PEs
6
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-
China’s rapidly growing coal based capacity vs. US’
expanding shale based projects
Propylene Capacity Build-up
05
1015202530354045
KTA
China Propylene and PP
0
5
10
15
20
25
30
2013Demand
2013Capacity
PDH Others 2023Capacity
2023Demand
KTA NA Propylene and PP
7
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Major Technology Advances Enabling
CTO/CTP Processes
• High capacity 3th generation entrained flow gasifiers
• Mega methanol technologies
• MTO Technologies (producing about ½ C2 and ½ C3)
– UOP MTO /Total OCP (Olefin Cracking Process)
– DICP (Dalian Institute of Chemical Physics) DMTO,
DMTO-II
– Sinopec SMTO
• MTP Technologies (producing mostly C3)
– Lurgi MTP
– Tsinghua FMTP
– Sinopec S-MTP
8
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Leading Gasifiers used in China’s CTO
and CTP projects
Shell
GE-Texaco
Siemens
9
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Leading Chinese Operating Plants
and their Technology Selections
Project Coal Gasifier MTO/MTP
Shenhua Baotou Bituminous GE (Texaco)
5 x (2,000TPD)
DMTO
Shenhua Ningxia Bituminous Siemens GSP
5 x (2,000TPD)
Lurgi MTP
Datang Duolun Lignite Shell
3 x (4,000TPD)
Lurgi MTP
Wison Bituminous GE or Shell UOP MTO
Sinopec Zhongyuan
Puyang
-- -- SMTO
Ningbo Heyuan -- -- DMTO
10
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Critical Factors in China’s Coal-Based
Projects
• Driving forces
– Coal producers
seeking higher return
– Strategic decision for
petrochemical
companies to divert
chemical feedstock
from petroleum
– Close supply gap by
eliminating imports
• Deciding factors
– Government policy
– Product quality
– Environmental Impact
• CO2 Emission
• Water demand
– Production
economics
• Cash costs
• ROI
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Questions to Answer
• In China
– Process economics of CTO/CTP vs. MTO/MTP: to integrate or
not to integrate from coal?
– Are coal based processes competitive with naphtha and PDH
processes?
– What are environmental impacts?
• In North America
– How does NA ethane based ethylene compete with CTO?
– How does NA PDH based propylene compete with CTP?
– Is MTO or MTP viable in the US?
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Syngas production economics from coal vs.
natural gas is the Key
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Coal Gasification: selection of gasifiers / coal grades and
petcoke
Natural Gas: choice of reforming technologies / licensors
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iPEP Syngas Process Economics
UNIT COSTS
CONSUMPTION
PER MSCF ¢/MSCF
SUBBITUMINOUS COAL 0.7 ¢/LB 50.388 LB 35.27
AGR SOLVENT 1,000 ¢/LB 0.00075 LB 0.75
SHIFT CATALYST 1,800 ¢/LB 0.001 LB 1.80
OTHER CHEMICALS 3.78
GROSS RAW MATERIALS 41.60
SLAG DISPOSAL -0.5 ¢/LB -2.3814 LB 1.19
SULFUR 7.75 ¢/LB -0.11102 LB -0.86
TOTAL BY-PRODUCTS 0.33
COOLING WATER 15.49 ¢/MGAL 358 GAL 5.54
PROCESS WATER 132 ¢/MGAL 1.6043 GAL 0.21
ELECTRICITY 5.93 ¢/KWH 5.7371 KWH 34.02
NATURAL GAS 412 ¢/MMBTU 1,072 BTU 0.44
STEAM LP 570 ¢/MLB 1.1315 LB 0.64
STEAM MP 760 ¢/MLB 5.1214 LB 3.89
STEAM HP 810 ¢/MLB -- LB 0.00
STEAM LP 570 ¢/MLB -0.17865 LB -0.10
STEAM MP 760 ¢/MLB -14.114 LB -10.73
STEAM HP 810 ¢/MLB -76.523 LB -61.98
TOTAL UTILITIES -28.07
SYNTHESIS GAS FROM SUBBITUMINOUS COAL VIA SHELL(SCGP) GASIFIER (580 PSIA)
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iPEP Syngas Process Economics
CAPACITY(MILLION MSCF/YR)* 66.20 132.40 264.80
INVESTMENT($ MILLIONS)
BATTERY LIMITS (BLI) 910.50 1,449 2,305
OFFSITES 163.50 320.00 609.00
TOTAL FIXED CAPITAL (TFC) 1,074 1,769 2,914
PRODUCTION COSTS(¢/MSCF)
RAW MATERIALS 41.60 41.60 41.60
BY-PRODUCTS 0.33 0.33 0.33
UTILITIES -28.07 -28.07 -28.07
VARIABLE COSTS 13.86 13.86 13.86
OPERATING LABOR, $46.23/HR 12.23 6.12 3.06
MAINTENANCE LABOR, 1.6%/YR OF BLI 22.01 17.51 13.93
CONTROL LAB LABOR, 20% of OPER LABOR 2.45 1.22 0.61
LABOR COSTS 36.69 24.85 17.60
MAINTENANCE MATERIALS, 2.4%/YR OF BLI 33.01 26.27 20.89
OPERATING SUPPLIES, 10% of OPER LABOR 1.22 0.61 0.31
TOTAL DIRECT COSTS 84.78 65.59 52.66
PLANT OVERHEAD, 80% TOTAL LABOR 29.35 19.88 14.08
TAXES AND INSURANCE, 2%/YR OF TFC 32.45 26.72 22.01
PLANT CASH COSTS 146.58 112.19 88.75
DEPRECIATION, 10%/YR OF TFC 162.24 133.61 110.05
PLANT GATE COST 308.82 245.80 198.80
G&A, SALES, RESEARCH 29.06 23.49 19.15
NET PRODUCTION COST 337.88 269.29 217.95
ROI BEFORE TAXES, 15%/YR OF TFC 243.35 200.42 165.07
PRODUCT VALUE 581.23 469.71 383.02
SYNTHESIS GAS FROM SUBBITUMINOUS COAL VIA SHELL(SCGP) GASIFIER (580 PSIA)
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Comparison of Capex and Opex of Syngas
Production in USGC and China
0
250
500
750
1,000
1,250
1,500
USGC CombinedReforming USGC
China SCGPSubbituminous Coal
BATTERY LIMITS (BLI) OFFSITES
US $ Million
0
50
100
150
200
250
300
350
400
USGC CombinedReforming USGC
China SCGPSubbituminous Coal
¢/MSCF
PRETAX 15% ROI G&A, SALES, RES.
DEPRECIATION OVERHEAD, TAXES
OPER & MAINT. VARIABLE COST
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Comparison of Environmental Impacts
0.0 0.5 1.0 1.5 2.0 2.5 3.0
JM/Davy
HT
Lurgi
Toyo
Siemens
E-Gas
Shell
GE quench
CO2/Syngas for MeOH (t/t)
0 2 4 6 8 10 12
JM/Davy
HT
Lurgi
Toyo
Siemens
E-Gas
Shell
GE quench
H2O/Syngas for MeOH (t/t)
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Capex Structure of CTO/CTP and MTO /MTP
0
500
1,000
1,500
2,000
CTO CTP
US$ MM
Gasification Methanol Plant Olefins Plant
PEPCOST INDEX=1164
CHINA LOCATION FACTOR=0.75
MID 2013
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CTO/ MTO Opex Comparison in China
ETHYLENE PRICE $/t
1,280
-1,500
-1,000
-500
0
500
1,000
1,500
2,000
2,500
3,000
3,500
CTO MTO Naphtha
Production Costs ($/t)
VARIABLE COST OPER & MAINT. OVERHEAD, TAXES
DEPRECIATION G&A, SALES, RES. PRETAX 15% ROI
ETHYLENE PRICE $/t
PEPCOST INDEX=1164
CHINA LOCATION
FACTOR=0.75
MID 2013
20
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Olefins Production Costs in North America
ETHYLENE PRICE $/t
1,221
PROPYLENE PRICE $/t
1,473
0
500
1,000
1,500
2,000
Ethane MTO Naphtha PDH MTP
Production Costs ($/t)
VARIABLE COST OPER & MAINT.OVERHEAD, TAXES DEPRECIATIONG&A, SALES, RES. PRETAX 15% ROIETHYLENE PRICE $/t PROPYLENE PRICE $/t
PEPCOST INDEX=1164
USGC
MID 2013
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Summary • Syngas production is a high growth industry, sustained
by the divergence of oil vs. coal and natural gas prices
• Rapid growth of CTO/CTP capacities in China will
compete with US shale based projects in next 5-10 years
• Syngas production economics (opex and capex) and
environmental considerations will be the deciding factors
• An iPEP interactive data module allows a quick
comparison syngas production economics and the
environmental impacts from coal gasification and natural
gas reforming on the same basis
• Applying the iPEP module to analyze CTO/CTP
processes leads to the following conclusions:
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Conclusions
• Coal based projects are very capital intensive and has
high carbon and water footprint
• Compared with naphtha cracking in China, MTO is
very competitive in full production costs and has
highest ROI. CTO has the lowest cash costs, but will
take a long period to recover high capex
• MTO/MTP it’s a viable option with higher ROI in China
• In North America, MTO and MTP are not competitive
• NA ethane cracking has lower cash and full production
costs than CTO and MTO processes in China
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Syngas/Methanol to
Olefins
THANK YOU!