ethylene glycol from ethylene (carbonation with eo by-product) · this report presents a cost...

Ethylene Glycol fromEthylene (Carbonation

with EO By-Product)

ReportMEG E13A

Cost Analysis

United States

ETHYLENE GLYCOL FROM ETHYLENE (CARBONATION WITHEO BY-PRODUCT)REPORT MEG E13A

Published by

www.intratec.usIntratec

All rights reserved. Reproduction of any part of this workby any process whatsoever without written permission ofIntratec is expressly forbidden. See 'Appendix B. Terms &Conditions' and 'Appendix C. Report Sharing Terms'.

The information in this report is given in good faith andbelief in its accuracy, but does not imply the acceptanceof any legal liability or responsibility whatsoever, byIntratec for the consequences of its use or misuse in anyparticular circumstances.

Analysis developed by Intratec

Copyright 2020Intratec Solutions LLC

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ABSTRACT

This report presents a cost analysis of Monoethylene Glycol (MEG) production from ethylene. The processexamined is similar to Shell OMEGA process. In this process, ethylene is first oxidized with oxygen toproduce ethylene oxide. Part of the ethylene oxide generated is sold as a by-product and the remainingpart carbonated to form ethylene carbonate, which is finally hydrolyzed to MEG final product.

The report examines one-time costs associated with the construction of a plant and the continuing costsassociated with the daily operation of such a plant. The analysis assumes a United States-based plantcapable of producing 750 kt of Ethylene Glycol per year and includes:

* Capital Investment, broken down by:

- Total fixed capital required, divided in process unit (ISBL); infrastructure (OSBL), contingency andowner's cost

- Working capital and costs incurred during industrial plant commissioning and start-up

* Operating cost, broken down by:

- Variable operating costs (raw materials, utilities)

- Fixed operating costs (maintenance, operating charges, plant overhead, local taxes and insurance)

- Depreciation

This report was developed based essentially on the following reference(s):

(1) US Patent 8329959, issued to Shell in 2012

(2) US Patent 8217190, issued to Shell in 2012

Keywords: Ethene, Shell, OMEGA, Only MEG Advantage, Oxidation, Catalytic Process

* Raw materials consumption, products generation and labor requirements

* Process block flow diagram and description of industrial site installations (process unit and infrastructure)

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BASIC ANALYSIS

About This Report............................................................................................................................................................ 1

Study Objective..................................................................................................................................................... 1

Report Overview....................................................................................................................................................1

How to Use this Report?.................................................................................................................................... 2

Executive Summary.........................................................................................................................................................3

About Ethylene Glycol.........................................................................................................................................3

Ethylene Glycol Production Process............................................................................................................... 4

Economic Analysis............................................................................................................................................... 5

About Ethylene Glycol.................................................................................................................................................... 6

Introduction............................................................................................................................................................6

Commercial Forms & Applications...................................................................................................................6

Fiber Grade Ethylene Glycol Production Pathways Diagram....................................................................7

Process Overview............................................................................................................................................................ 8

Product(s) Generated..........................................................................................................................................8

Process Inputs.......................................................................................................................................................8

Technology Maturity Assessment....................................................................................................................9

Highlights & Remarks.........................................................................................................................................11

Industrial Site...................................................................................................................................................................12

Introduction.......................................................................................................................................................... 12

Process Unit Description...................................................................................................................................14

Site Infrastructure Description.........................................................................................................................18

Key Process Input and Output Figures........................................................................................................ 22

Labor Requirements..........................................................................................................................................22

Capital Investment.........................................................................................................................................................23

TABLE OF CONTENTS

** Available in 'Advanced' version only

* Available in 'Extended' and 'Advanced' versions only

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Fixed Capital....................................................................................................................................................... 24

Working Capital.................................................................................................................................................. 26

Additional Capital Requirements....................................................................................................................27

Total Capital Investment.................................................................................................................................. 28

Operating Costs.............................................................................................................................................................29

Operating Variable Costs..................................................................................................................................31

Operating Fixed Costs......................................................................................................................................32

Depreciation........................................................................................................................................................ 32

Total Operating Cost.........................................................................................................................................32

Product Value Analysis................................................................................................................................................ 34

Corporate Overhead......................................................................................................................................... 35

Return on Capital Employed (ROCE)............................................................................................................35

Process Economics Summary....................................................................................................................................36

Product Value Composition.............................................................................................................................36

Economic Datasheet.........................................................................................................................................36

Economic Remarks........................................................................................................................................... 38

References......................................................................................................................................................................39

Analysis Methodology...................................................................................................................................................41

Introduction.......................................................................................................................................................... 41

Bibliographical Research.................................................................................................................................. 41

Process Overview...............................................................................................................................................41

Technology Maturity Assessment................................................................................................................. 43

Examining an Industrial Site............................................................................................................................43

Capital Investment Estimating........................................................................................................................ 45

Operating Cost Estimating.............................................................................................................................. 52

Product Value Estimating.................................................................................................................................55

Estimates Limitation..........................................................................................................................................57



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APPENDIX A - ABOUT INTRATEC................................................................................................................................ A.1

APPENDIX B - TERMS & CONDITIONS....................................................................................................................... B.1

APPENDIX C - REPORT SHARING TERMS................................................................................................................ C.1

APPENDIX D - EXTENDED ANALYSIS*.......................................................................................................................D.1

Utilities Consumption Breakdown........................................................................................................................... D-2

Utilities Consumption Figures....................................................................................................................... D-2

Impact of Utilities on Total Operating Cost................................................................................................D-3

Economic Analysis for Different Capacities..........................................................................................................D-4

Introduction........................................................................................................................................................D-4

Capital Investment Comparison................................................................................................................... D-4

Operating Cost & Product Value Comparison..........................................................................................D-5

Project Implementation & Construction Schedule...............................................................................................D-7

Materials & Utilities Pricing Data..............................................................................................................................D-9

Analysis Pricing Basis.....................................................................................................................................D-9

Historical Prices................................................................................................................................................D-9

APPENDIX E - ADVANCED ANALYSIS**.................................................................................................................... E.1

Process Unit (ISBL) Construction Cost by Functional Unit............................................................................... E-2

Infrastructure Construction Cost by Piece of Equipment.................................................................................. E-4

Introduction........................................................................................................................................................E-4

Construction Cost: Area 90 - Storage Installations.................................................................................E-5

Construction Cost: Area 91 - Utilities Facilities......................................................................................... E-7

Construction Cost: Area 92 - Support & Auxiliary Buildings................................................................ E-9

Site Infrastructure Cost Summary...............................................................................................................E-11

Plant Cost Breakdown per Discipline....................................................................................................................E-12

Introduction......................................................................................................................................................E-12

Direct Costs Breakdown...............................................................................................................................E-13

Indirect Costs Breakdown............................................................................................................................E-14



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Plant Cost Breakdown Summary............................................................................................................... E-15

Process Flow Diagrams & Equipment List...........................................................................................................E-16



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Economic Analysis Summary............................................................................................................................................. 5

Process Technology Maturity Scale................................................................................................................................10

Raw Materials Consumption.............................................................................................................................................22

Products Generation.......................................................................................................................................................... 22

Labor Requirements...........................................................................................................................................................22

Plant Cost Estimate Accuracy Range (USD Million)...................................................................................................25

Owner's Cost Summary.....................................................................................................................................................25

Fixed Capital Summary......................................................................................................................................................26

Working Capital Breakdown.............................................................................................................................................26

Additional Capital Requirements Breakdown...............................................................................................................27

Operating Variable Costs Breakdown............................................................................................................................ 31

Operating Fixed Costs Breakdown.................................................................................................................................32

Operating Cost Summary..................................................................................................................................................32

Corporate Overhead Costs Breakdown........................................................................................................................ 35

Ethylene Glycol from Ethylene (Carbonation with EO By-Product) - Datasheet.................................................37

Process Contingency Factor Estimation Methodology..............................................................................................46

Project Contingency Factor Estimation Methodology................................................................................................47

Fixed Capital Estimate Accuracy Range........................................................................................................................51

Maintenance Cost Estimation Methodology.................................................................................................................54

Marketing & Advertising Cost Estimation Methodology............................................................................................56

Research & Development Cost Estimation Methodology......................................................................................... 56

Expected ROCE Factor Estimation Methodology.......................................................................................................57

Net Utility Consumption Rates....................................................................................................................................... D-2

Utilities Share in Total Operating Cost.........................................................................................................................D-3

Capital Investment Analysis for Different Capacities............................................................................................... D-5

LIST OF TABLES



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Operating Cost & Product Value Analysis for Different Capacities......................................................................D-6

Project Phases Schedule.................................................................................................................................................D-7

Materials & Utilities Prices (United States)..................................................................................................................D-9

Process Unit (ISBL) Construction Cost by Functional Unit..................................................................................... E-2

Area 90 - Storage Installations: Scope Description.................................................................................................. E-5

Area 91 - Utilities Facilities: Scope Description.......................................................................................................... E-7

Area 92 - Support & Auxiliary Buildings: Scope Description..................................................................................E-9

Site Infrastructure (OSBL) Construction Cost by Piece of Equipment................................................................E-11

Plant Construction Cost by Discipline.........................................................................................................................E-15



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Fiber Grade Ethylene Glycol Production Pathways Diagram..................................................................................... 7

Industrial Site Configuration.............................................................................................................................................. 13

Ethylene Glycol Production Unit - Block Flow Diagram..............................................................................................15

Plant Cost Summary (USD Million)..................................................................................................................................24

Capital Investment Summary (USD Million).................................................................................................................. 28

Operating Cost Breakdown.............................................................................................................................................. 33

Product Value Composition.............................................................................................................................................. 36

Production Cost Report Development Methodology..................................................................................................42

Cost Contribution of Each Utility................................................................................................................................... D-3

Capital Investment (USD Million) Versus Plant Capacity.........................................................................................D-4

Operating Cost Versus Plant Capacity........................................................................................................................ D-5

Implementation & Construction Schedule...................................................................................................................D-8

Process Unit (ISBL) Construction Cost Breakdown..................................................................................................E-3

Site Infrastructure (OSBL) Construction Cost per Area...........................................................................................E-4

Storage Installations Construction Cost per Piece of Equipment..........................................................................E-5

Utilities Facilities Construction Cost per Piece of Equipment.................................................................................E-7

Support & Auxiliary Buildings Construction Cost per Piece of Equipment......................................................... E-9

Plant Construction Cost Summary.............................................................................................................................. E-12

Direct Construction Costs by Discipline.....................................................................................................................E-13

Indirect Costs Summary.................................................................................................................................................E-14

Process Flow Diagram....................................................................................................................................................E-19

LIST OF FIGURES



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This report presents the economics of Monoethylene Glycol (MEG) production from ethylene. The processexamined is similar to Shell OMEGA process.

The primary objective of this study is to explain the cost structure of the aforementioned process,encompassing capital investment and operating cost figures.

The process design and economics in this report are based on an industrial facility with a capacity of750,000 metric ton per year, a nominal capacity that is globally competitive.

ABOUT THIS REPORT

Study Objective

This report is structured into eight main parts which follow a logical sequence. Each of these parts isdescribed below.

By way of introduction, the first part – the current chapter – briefly explains the report itself, its structureand objective. Readers are encouraged to spend a few minutes reading this chapter, so as to make themost of the study.

In the second part, About Ethylene Glycol, the reader will learn the basics of Ethylene Glycol itself. Thischapter also covers its applications and major production pathways.

The third part, Process Overview, presents basic aspects of the process studied: products generated,process inputs, and physico-chemistry highlights.

The fourth part, Industrial Site, describes an industrial plant based on the process under analysis, in termsof the process unit and infrastructure required. This technical analysis underlies the entire study.

The fifth part, Capital Investment, presents all capital costs associated with the process examined, fromdesign and erection of an industrial site to plant startup.

Operating Costs of the process are examined in the sixth part. Ongoing costs related to the operation of aunit based on the process are studied, including operating fixed costs, operating variable costs anddepreciation.

The seventh part, Product Value, targets to estimate the gate cost of the plant final product, by addingcorporate overhead costs and a parcel that will guarantee an expected Return On Capital Employed(ROCE). It provides an idea of the minimum price at which the product may be sold, and how competitive itis.

The eighth part, Process Economics Summary, summarizes all economic figures presented throughout the

Report Overview

In addition, the economic assessment, developed for the period _________, assumes the construction of aUnited States-based industrial facility that includes the infrastructure typically required for such a project.

report.

Finally, to address any questions or concerns about the methodologies and procedures adopted in thedevelopment of this report, the reader is referred to the eighth part, Analysis Methodology.

How to Use this Report?

The main purpose of this Report is to assist readers in a preliminary economic evaluation of the productionprocess approached. It is a valuable support tool for a myriad of activities and studies, such as screeningand assessment of investment options, preliminary evaluation of the economic potential of emergingproduction processes, rough assessment of the economic feasibility of industrial ventures, cost estimatesdouble-checking, preliminary budget approval, research planning, and so on.

Readers must always bear in mind the nature of this report and the resulting limitations on how to properlyuse it. Limitations that apply to both technical data and economic assessment presented in this study areexplained below.

Technical Data

The preliminary design of the process, presented in the part Industrial Site, is based on fast techniques thatrely on reduced design efforts. The goal of such preliminary design is exclusively to represent the processin sufficient detail for supporting capital and production costs estimation within the accuracy expected:class 4 budgetary estimates. Therefore the technical data presented must not be confused with an actualconceptual process design, and must not be used as such.

Economic Assessment

The economic assessment presented in this report (parts Capital Investment, Operating Cost, ProductValue Analysis and Process Economic Summary), developed for the period , assumes theconstruction of a United States-based industrial facility. This means that capital and production costsestimates presented are based on several general assumptions (e.g. average market figures for rawmaterials, chemicals and utilities prices, labor costs, taxes and duties), believed to suitably portray localconditions for the period of analysis informed, on a country-level basis.

Accordingly, the economic assessment provided in this report is not meant to fit any specific industrialventure, which would involve a wealth of specific data and assumptions not herein considered.

Ethylene Glycol (a.k.a. Monoethylene Glycol, MEG) is an organic compound, more specifically a diol (achemical compound that contains two hydroxyl groups). It is a colorless, practically odorless, with lowviscosity, hygroscopic liquid at room temperature. It is in fact the simplest diol and a major chemicalcommodity that, like other glycols, undergoes reactions common to monohydric alcohols forming esters,acetals, ethers, and similar products.

Anhydrous ethylene glycol is usually transported in tank trucks, railroad cars or tank ships. Most tanks aremade of steel or aluminum, since ethylene glycol is not aggressive towards most plastic and metals.Nitrogen blanketing can be used for protection against oxidation if more meticulous quality is desired. MEGcan’t be stored in phenolic resins containers, since they are not resistant to it.

Ethylene Glycol is mainly employed in the production of PET bottle-grade resins and polyesters fibers,used, in turn, in the manufacture of textiles, tire cords, video tapes, and soft drink and water containers. Forsuch applications, Fiber Grade Ethylene Glycol is used, since high purity feedstock is necessary.

Ethylene Glycol is also used as base compound of antifreeze/coolant formulations. It is employed inautomobile radiators, solar energy units, heat pumps, water heating systems, and industrial coolingsystems.

Other applications of Ethylene Glycol are as humectant, plasticizer, softener, hydraulic fluid, and solvent.

EXECUTIVE SUMMARY

About Ethylene Glycol

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