technology economics: propylene from methanol

Propylene from Methanol

Copyrights © 2013 by Intratec Solutions LLC. All rights reserved. Printed in the United States of America.

#TEC002B

Technology Economics

Propylene Production from Methanol

2013

Abstract

Propylene has established itself as the second major member of the global olefins business, only after ethylene. Globally, thelargest volume of propylene is generated as by-product in steam crackers and through the fluid catalytic cracking (FCC) process.

With ethane prices falling in the USA, due to the exploration of shale gas reserves, the low price ethylene produced from this rawmaterial has given chemical producers in North America a feedstock advantage. Such change has put naphtha-fed steam crackersat a disadvantageous position, with many of them shutting down or revamping to use ethane as feedstock. Nevertheless, thepropylene output rates from ethane-fed crackers are negligible. The result is a tight propylene market.

For this reason, new and novel lower-cost chemical processes for on-purpose propylene production technologies are of highinterest to the petrochemical marketplace. Such processes include: Metathesis, Propane Dehydrogenation (PDH), Methanol-to-Olefins/Methanol-to-Propylene (MTO/MTP), High Severity FCC, and Olefins Cracking. Among those, MTO/MTP and PDH stand outdue to the use of low-cost raw materials. The main raw material used in the MTP process is methanol that is produced fromsynthesis gas which, in turn, can be obtained in large-scale from natural gas or coal. Natural gas extracted from shale gas hasbecome the fastest-growing source of gas in the USA, while China possesses large reserves of coal, making both countriescompetitive when comparing to others with high-cost feedstock.

In this report, the production of propylene from methanol (MTP) is reviewed. Included in the analysis is an overview of thetechnology and economics of a process similar to the Lurgi MTP® and JGC/Mitsubishi DTP® processes. Both the capital investmentand the operating costs are presented for a plant constructed in the US Gulf Coast and China.

The economic analysis presented in this report is based upon a plant fully integrated with a petrochemical complex and capableof producing 557 kta of polymer-grade propylene. The estimated CAPEX for such a plant in US Gulf Coast is about USD 380 million.China is the most attractive place to start-up a MTP plant, which justifies the fact that the only two existing MTP plants are locatedin China. However, with the advent of shale gas in the USA, natural gas prices are low, favoring the construction of a MTP plantalso in the country. This fact is proved by the calculated internal rate of return of above 25% per year in both regions.

ii

… It was actually an advisoryservice ordered by one of ourclients, now disclosed to ourreadership with his consent.

It results from the innovativeconcept, designed by Intratec for

leading companies in the chemical and alliedsectors who have asked for more affordableand reliable studies to plan their investments.

Intratec’s strategy works by charging clientslower-than-market fees to conduct atechnology advisory service with theunderstanding that such studies may bereleased, after an agreed upon period of time,as publications.

Available through well-known sales channelssuch as Amazon, Google Books and HPMagCloud, our publications can be purchasedby any interested reader.

In short, our clients receivetraditionally expensive studiesfor a fraction of the cost, andour readers get unprecedentedaccess to real professionalpublications at steep discounts.

How Readers Benefit?

From academics to industry executives, ourreaders benefit by gaining access to realconsulting cases, released for the first time tothe market as one-of-a-kind publications ataffordable prices.

Through our university discount policy,students and faculty members will be able tobecome familiar with challenges faced byindustry for a price similar to a usual textbook.

How Clients Benefit?

While traditional consulting firms charge theirclients hundreds of thousands of dollars,Intratec offers, from the convenience of a webbrowser, a much better advisory experiencefor a price 80% lower than market.

What is Technology

Economics?

Advisory services targeting investments onnew chemical units, answering:

What is the process? What equipment isnecessary?

What are the raw materials and utilitiesconsumptions?

What are the operating and capitalexpenses?

In which locations is this technology moreprofitable?

Each new assignment comprises of a studystructured like this publication, valuablespreadsheets and broad support.

This Publication Was Not a Publication…

iii

Reshaping the Advisory Industry

1) Our publications are accessed and attested to by a huge audience . . .

2) . . . including potential clients who like the publication structure . . .

3) . . . and order advisory services based on the same format.

4) If our clients agree, their advisory services are disclosed as publications.

Everyone Benefits from Cost Sharing & Online Experience

1) Readers purchase our publications at steep discounts online . . .

4) . . . because they were actually consulting cases . . .

3) . . . requested online by the initial client . . .

2) . . . who shared the costs with the readers.

For a better understanding of our innovative concept, please visit www.intratec.us.

Consulting as Publications at a Glance

1

Information, analyses and/or models herein presentedare prepared on the basis of publicly availableinformation and non-confidential information disclosedby third parties. Third parties, including, but not limitedto technology licensors, trade associations ormarketplace participants, may have provided some ofthe information on which the analyses or data are based.Intratec Solutions LLC (known as “Intratec”) does notbelieve that such information will contain anyconfidential information but cannot provide anyassurance that any third party may, from time to time,claim a confidential obligation to such information.

The aforesaid information, analyses and models aredeveloped independently by Intratec and, as such, arethe opinion of Intratec and do not represent the point ofview of any third parties nor imply in any way that theyhave been approved or otherwise authorized by thirdparties that are mentioned in this publication.

The application of the solutions presented in thispublication without license from the owners infringes onthe intellectual property rights of the owners, includingpatent rights, trademark rights, and rights to tradesecrets and proprietary information.

Intratec conducts analyses and prepares publicationsand models for readers in conformance with generallyaccepted professional standards. Although thestatements in this publication are derived from or basedon several sources that Intratec believe to be reliable,Intratec does not guarantee their accuracy, reliability, orquality; any such information, or resulting analyses, maybe incomplete, inaccurate or condensed. All estimatesincluded in this publication are subject to changewithout notice. This publication is for informationalpurposes only and is not intended as anyrecommendation of investment.

Reader agrees it will not, without prior written consent ofIntratec, represent, directly or indirectly, that its productshave been approved or endorsed by the other parties.

In no event shall Intratec, its employees, representatives,resellers or distributors be liable to readers or any otherperson or entity for any direct, indirect, special,exemplary, punitive, or consequential damages,including lost profits, based on breach of warranty,contract, negligence, strict liability or otherwise, arisingfrom the use of this publication, whether or not they or ithad any knowledge, actual or constructive, that suchdamages might be incurred.

Reader shall indemnify and hold harmless Intratec and itsresellers, representatives, distributors, and informationproviders against any claim, damages, loss, liability orexpense arising out of reader’s use of the publication inany way contrary to the present terms and conditions.

Intratec publications are the product of extensive workand original research and are protected by internationalcopyright law.

Products supplied as printed reports or books should notbe copied but can be included in schools, universities orcorporate libraries and circulated to colleagues to theextended permitted by copyright law.

Products supplied digitally are licensed, not sold. Thepurchaser is responsible for ensuring that license termsare adhered to at all times. PDF documents may besupplied watermarked with the customer’s name, emailand/or company. Digital documents are supplied withan enterprise license and can be shared by all employeesand on-site contractors of a single organization.Members of the organization may make such copies asare necessary to facilitate this distribution. An enterpriselicense does not permit sharing with externalorganizations.

Reader agrees that Intratec retains all rights, title andinterest, including copyright and other proprietary rights,in this publication and all material, including but notlimited to text, images, and other multimedia data,provided or made available as part of this publication.

Terms & Conditions

2

Contents

About this Study .............................................................................................................................................................. 8

Object of Study.............................................................................................................................................................................................................................8

Analysis Performed ....................................................................................................................................................................................................................8

Construction Scenarios ..............................................................................................................................................................................................................8

Location Basis ...................................................................................................................................................................................................................................9

Design Conditions......................................................................................................................................................................................................................9

Study Background ........................................................................................................................................................ 10

About Propylene ......................................................................................................................................................................................................................10

Introduction.................................................................................................................................................................................................................................... 10

Applications.................................................................................................................................................................................................................................... 10

Manufacturing Alternatives ..............................................................................................................................................................................................11

Licensor(s) & Historical Aspects......................................................................................................................................................................................13

Technical Analysis......................................................................................................................................................... 14

Chemistry.......................................................................................................................................................................................................................................14

Raw Material ................................................................................................................................................................................................................................14

Technology Overview...........................................................................................................................................................................................................16

Detailed Process Description & Conceptual Flow Diagram.......................................................................................................................17

Area 100: Reaction & Regeneration................................................................................................................................................................................ 17

Area 200: Quench & Compression ..................................................................................................................................................................................18

Area 300: Product Fractionation.......................................................................................................................................................................................18

Key Consumptions ..................................................................................................................................................................................................................... 19

Technical Assumptions ........................................................................................................................................................................................................... 19

Labor Requirements.................................................................................................................................................................................................................. 19

ISBL Major Equipment List .................................................................................................................................................................................................23

OSBL Major Equipment List ..............................................................................................................................................................................................26

Other Process Remarks ........................................................................................................................................................................................................27

Technology Comparison........................................................................................................................................................................................................ 27

Integration with FCC & Naphtha Crackers...................................................................................................................................................................27

Economic Analysis ........................................................................................................................................................ 29

General Assumptions............................................................................................................................................................................................................29

3

Project Implementation Schedule...............................................................................................................................................................................30

Capital Expenditures..............................................................................................................................................................................................................30

Fixed Investment......................................................................................................................................................................................................................... 30

Working Capital............................................................................................................................................................................................................................ 33

Other Capital Expenses ........................................................................................................................................................................................................... 34

Total Capital Expenses ............................................................................................................................................................................................................. 34

Operational Expenditures ..................................................................................................................................................................................................34

Manufacturing Costs................................................................................................................................................................................................................. 34

Historical Analysis........................................................................................................................................................................................................................ 35

Economic Datasheet .............................................................................................................................................................................................................35

Regional Comparison & Economic Discussion.................................................................................................... 38

Regional Comparison............................................................................................................................................................................................................38

Capital Expenses.......................................................................................................................................................................................................................... 38

Operational Expenses............................................................................................................................................................................................................... 38

Economic Datasheet................................................................................................................................................................................................................. 38

Economic Discussion ............................................................................................................................................................................................................39

References....................................................................................................................................................................... 41

Acronyms, Legends & Observations....................................................................................................................... 42

Technology Economics Methodology................................................................................................................... 43

Introduction.................................................................................................................................................................................................................................43

Workflow........................................................................................................................................................................................................................................43

Capital & Operating Cost Estimates ............................................................................................................................................................................45

ISBL Investment............................................................................................................................................................................................................................ 45

OSBL Investment ......................................................................................................................................................................................................................... 45

Working Capital............................................................................................................................................................................................................................ 46

Start-up Expenses ....................................................................................................................................................................................................................... 46


Manufacturing Costs................................................................................................................................................................................................................. 47

Contingencies ............................................................................................................................................................................................................................47

Accuracy of Economic Estimates..................................................................................................................................................................................48

Location Factor..........................................................................................................................................................................................................................48

Appendix A. Mass Balance & Streams Properties............................................................................................... 50

Appendix B. Utilities Consumption Breakdown ................................................................................................. 55

Appendix C. Carbon Footprint ................................................................................................................................. 56

4

Appendix D. Equipment Detailed List & Sizing................................................................................................... 57

Appendix E. Detailed Capital Expenses................................................................................................................. 66

Direct Costs Breakdown......................................................................................................................................................................................................66

Indirect Costs Breakdown ..................................................................................................................................................................................................67

Appendix F. Economic Assumptions...................................................................................................................... 68

Capital Expenditures..............................................................................................................................................................................................................68

Construction Location Factors ...........................................................................................................................................................................................68

Working Capital............................................................................................................................................................................................................................ 68


Operational Expenses ...........................................................................................................................................................................................................69

Fixed Costs ...................................................................................................................................................................................................................................... 69

Depreciation................................................................................................................................................................................................................................... 69

Appendix G. Released Publications ........................................................................................................................ 70

Appendix H. Technology Economics Form Submitted by Client ................................................................. 71

5

List of Tables

Table 1 – Construction Scenarios Assumptions (Based on Degree of Integration) ......................................................................................9

Table 2 – Location & Pricing Basis ....................................................................................................................................................................................................9

Table 3 – General Design Assumptions .......................................................................................................................................................................................9

Table 4 – Major Propylene Consumers......................................................................................................................................................................................10

Table 5 - Raw Materials & Utilities Consumption (per ton of product)................................................................................................................19

Table 6 – Design & Simulation Assumptions.........................................................................................................................................................................19

Table 7 – Labor Requirements for a Typical Plant ..............................................................................................................................................................19

Table 8 – Main Streams Operating Conditions and Composition..........................................................................................................................23

Table 9 – Inside Battery Limits Major Equipment List......................................................................................................................................................23

Table 10 - Outside Battery Limits Major Equipment List ...............................................................................................................................................27

Table 11 – Base Case General Assumptions...........................................................................................................................................................................29

Table 12 - Bare Equipment Cost per Area (USD Thousands)......................................................................................................................................30

Table 13 – Total Fixed Investment Breakdown (USD Thousands) ..........................................................................................................................30

Table 14 – Working Capital (USD Million) ................................................................................................................................................................................33

Table 15 – Other Capital Expenses (USD Million) ...............................................................................................................................................................34

Table 16 – CAPEX (USD Million) ......................................................................................................................................................................................................34

Table 17 – Manufacturing Fixed Cost (USD/ton) ................................................................................................................................................................34

Table 18 – Manufacturing Variable Cost (USD/ton)..........................................................................................................................................................35

Table 19 – OPEX (USD/ton)................................................................................................................................................................................................................35

Table 20 – Technology Economics Datasheet: Propylene Production from Methanol on the US Gulf Coast.......................37

Table 21 – Technology Economics Datasheet: Propylene Production from Methanol in China ....................................................40

Table 22 – Project Contingency......................................................................................................................................................................................................47

Table 23 – Criteria Description.........................................................................................................................................................................................................47

Table 24 – Accuracy of Economic Estimates .........................................................................................................................................................................48

Table 25 – Detailed Material Balance & Streams Properties........................................................................................................................................50

Table 26 – Utilities Consumption Breakdown ......................................................................................................................................................................55

Table 27 – Assumptions for CO2e Emissions Calculation.............................................................................................................................................56

Table 28 – CO2e Emissions (ton/ton prod.)............................................................................................................................................................................56

Table 29 – Compressors .......................................................................................................................................................................................................................57

Table 30 – Heat Exchangers ..............................................................................................................................................................................................................57

Table 31 – Pumps......................................................................................................................................................................................................................................61

Table 32 – Columns.................................................................................................................................................................................................................................62

6

Table 33 – Utilities Supply...................................................................................................................................................................................................................63

Table 34 – Vessels & Tanks ..................................................................................................................................................................................................................63

Table 35 – Indirect Costs Breakdown for the Base Case (USD Thousands) ......................................................................................................67

Table 36 – Detailed Construction Location Factor............................................................................................................................................................68

Table 37 – Working Capital Assumptions (Base Case) ....................................................................................................................................................68

Table 38 – Other Capital Expenses Assumptions (Base Case) ...................................................................................................................................68

Table 39 – Other Fixed Cost Assumptions ..............................................................................................................................................................................69

Table 40 – Depreciation Value & Assumptions ....................................................................................................................................................................69

7

List of Figures

Figure 1 – Construction Scenarios Assumptions (Based on Degree of Integrations) ..................................................................................8

Figure 2 – Propylene from Multiple Sources .........................................................................................................................................................................12

Figure 3 – MTP Reaction Diagram.................................................................................................................................................................................................14

Figure 4 – US Natural Gas Production History and Forecast (Trillion Cubic Feet)........................................................................................15

Figure 5 – Process Block Flow Diagram.....................................................................................................................................................................................16

Figure 6 – Inside Battery Limits Conceptual Process Flow Diagram.....................................................................................................................20

Figure 7 – MTP Integrated with FCC/Naphtha Cracker Units ....................................................................................................................................28

Figure 8 – Project Implementation Schedule .......................................................................................................................................................................29

Figure 9 – Total Direct Cost of Different Integration Scenarios (USD Thousands) ......................................................................................32

Figure 10 – Total Fixed Investment of Different Integration Scenarios (USD Thousands) ....................................................................32

Figure 11 – Total Fixed Investment Validation (USD Million) .....................................................................................................................................33

Figure 12 – OPEX and Product Sales History (USD/ton) ................................................................................................................................................36

Figure 13 – EBITDA Margin & IP Indicators History Comparison..............................................................................................................................36

Figure 14 – CAPEX per Location (USD Million).....................................................................................................................................................................38

Figure 15 – Operating Costs Breakdown per Location (USD/ton) .........................................................................................................................39

Figure 16 – Methodology Flowchart...........................................................................................................................................................................................44

Figure 17 – Location Factor Composition ...............................................................................................................................................................................49

Figure 18 – ISBL Direct Costs Breakdown by Equipment Type (Base Case).....................................................................................................66

Figure 19 – OSBL Direct Costs by Equipment Type (Base Case) ..............................................................................................................................66

8

Intr

ate

c | A

bo

ut

this

Stu

dy

This study follows the same pattern as all TechnologyEconomics studies developed by Intratec and is based onthe same rigorous methodology and well-defined structure(chapters, type of tables and charts, flow sheets, etc.).

This chapter summarizes the set of information that servedas input to develop the current technology evaluation. Allrequired data were provided through the filling of theTechnology Economics Form available at Intratec’s website.

You may check the original form in the “Appendix H.Technology Economics Form Submitted by Client”.

Object of Study

This assignment assesses the economic feasibility of anindustrial unit for propylene production from methanol,implementing technology similar to the Lurgi MTP® andJGC/Mitsubishi DTP® processes.

The current assessment is based on economic datagathered on Q3 2011 and a chemical plant’s nominalcapacity of 557 kta (thousand metric tons per year).

Raw MaterialsStorage

ISBL Unit

Products Storage

Raw MaterialsProvider

ISBL Unit

Products Storage


ISBL Unit

ProductsConsumer

Petrochemical Complex


Analysis Performed

Construction Scenarios

The economic analysis is based on the construction of aplant inside a petrochemical complex, in which methanolfeedstock is locally provided and propylene product isconsumed by a nearby polypropylene unit. Therefore, nostorage for product or raw material is required. Additionally,the petrochemical complex supplies most utilities.

Since the Outside Battery Limits (OSBL) requirements–storage and utilities supply facilities – significantly impactthe capital cost estimates for a new venture, they may play adecisive role in the decision as to whether or not to invest.Thus, in this study three distinct OSBL configurations arecompared. Those scenarios are summarized in Figure 1 andTable 1

About this Study

Figure 1 – Construction Scenarios Assumptions (Based on Degree of Integrations)

Non-Integrated



ISBL Unit

Products Consumer


Partially Integrated Fully Integrated


ISBL Unit

Products Consumer


ISBL Unit

Products Storage

Grassroots unit Unit is part of a petrochemical complex Most infrastructure is already installed

Source: Intratec – www.intratec.us

9

Intr

ate

c | A

bo

ut

this

Stu

dy

Location Basis Regional specific conditions influence both constructionand operating costs. This study compares the economicperformance of two identical plants operating in differentlocations: the US Gulf Coast and China.

The assumptions that distinguish the two regions analyzedin this study are provided in Table 2.

Design Conditions

The process analysis is based on rigorous simulation modelsdeveloped on Aspentech Aspen Plus and Hysys, whichsupport the design of the chemical process, equipment andOSBL facilities.

The design assumptions employed are depicted in Table 3.

Cooling water temperature 24 °C

Cooling water range 11 °C

Steam (High Pressure) 28 bar abs

Steam (Medium Pressure) 11 bar abs

Steam (Low Pressure) 7 bar abs

Refrigerant (Propylene) -45 °C

Wet Bulb Air Temperature 25 °C

Table 1 – Construction Scenarios Assumptions (Based on Degree of Integration)

Storage Capacity (Base Case for Evaluation)

Feedstock & Chemicals 20 days of operation 20 days of operation Not included

End-products & By-products 20 days of operation Not included Not included

Utility Facilities Included All All Only refrigeration unit

Support & Auxiliary Facilities

(Area 900)

Control room, labs, gate house,

maintenance shops,

warehouses, offices, change

house, cafeteria, parking lot

Control room, labs,

maintenance shops,

warehouses

Control room and labs


Table 2 – Location & Pricing Basis


Table 3 – General Design Assumptions


10

Intr

ate

c | S

tud

y B

ackg

rou

nd

About Propylene

Introduction

Propylene is an unsaturated organic compound having thechemical formula C3H6. It has one double bond, is thesecond simplest member of the alkene class ofhydrocarbons, and is also second in natural abundance.

Propylene 2D structure

Propylene is produced primarily as a by-product ofpetroleum refining and of ethylene production by steamcracking of hydrocarbon feedstocks. Also, it can beproduced in an on-purpose reaction (for example, inpropane dehydrogenation, metathesis or syngas-to-olefinsplants). It is a major industrial chemical intermediate thatserves as one of the building blocks for an array of chemicaland plastic products, and was also the first petrochemicalemployed on an industrial scale.

Commercial propylene is a colorless, low-boiling,flammable, and highly volatile gas. Propylene is tradedcommercially in three grades:

Polymer Grade (PG): min. 99.5% of purity.

Chemical Grade (CG): 90-96% of purity.

Refinery Grade (RG): 50-70% of purity.

Applications

The three commercial grades of propylene are used fordifferent applications. RG propylene is obtained fromrefinery processes. The main uses of refinery propylene arein liquefied petroleum gas (LPG) for thermal use or as anoctane-enhancing component in motor gasoline. It canalso be used in some chemical syntheses (e.g., cumene orisopropanol). The most significant market for RG propyleneis the conversion to PG or CG propylene for use in theproduction of polypropylene, acrylonitrile, oxo-alcohols andpropylene oxide.

While CG propylene is used extensively for most chemicalderivatives (e.g., oxo-alcohols, acrylonitrile, etc.), PGpropylene is used in polypropylene and propylene oxidemanufacture.

PG propylene contains minimal levels of impurities, such ascarbonyl sulfide, that can poison catalysts.

Thermal & Motor Gasoline Uses

Propylene has a calorific value of 45.813 kJ/kg, and RGpropylene can be used as fuel if more valuable uses areunavailable locally (i.e., propane – propene splitting tochemical-grade purity). RG propylene can also be blendedinto LPG for commercial sale.

Also, propylene is used as a motor gasoline component foroctane enhancement via dimerization – formation ofpolygasoline or alkylation.

Chemical Uses

The principal chemical uses of propylene are in themanufacture of polypropylene, acrylonitrile, oxo-alcohols,propylene oxide, butanal, cumene, and propene oligomers.Other uses include acrylic acid derivatives and ethylene –propene rubbers.

Global propylene demand is dominated by polypropyleneproduction, which accounts for about two-thirds of totalpropylene demand.

Polypropylene Mechanical parts, containers, fibers, films

Acrylonitrile Acrylic fibers, ABS polymers

Propylene oxide Propylene glycol, antifreeze,

polyurethane

Oxo-alcohols Coatings, plasticizers

Cumene Polycarbonates, phenolic resins

Acrylic acid Coatings, adhesives, super absorbent

polymers

Study Background

Table 4 – Major Propylene Consumers


11

Intr

ate

c | S

tud

y B

ackg

rou

nd

Manufacturing Alternatives

Propylene is commercially generated as a co-product, eitherin an olefins plant or a crude oil refinery’s fluid catalyticcracking (FCC) unit, or produced in an on-purpose reaction(for example, in propane dehydrogenation, metathesis orsyngas-to-olefins plants).

Globally, the largest volume of propylene is produced inNGL (Natural Gas Liquids) or naphtha steam crackers, whichgenerates ethylene as well. In fact, the production ofpropylene from such a plant is so important that the name“olefins plant” is often applied to this kind of manufacturingfacility (as opposed to “ethylene plant”). In an olefins plant,propylene is generated by the pyrolysis of the incomingfeed, followed by purification. Except where ethane is usedas the feedstock, propylene is typically produced at levelsranging from 40 to 60 wt% of the ethylene produced. Theexact yield of propylene produced in a pyrolysis furnace is afunction of the feedstock and the operating severity of thepyrolysis.

The pyrolysis furnace operation usually is dictated bycomputer optimization, where an economic optimum forthe plant is based on feedstock price, yield structures,energy considerations, and market conditions for themultitude of products obtained from the furnace. Thus,propylene produced by steam cracking varies according toeconomic conditions.

In an olefins plant purification area, also called separationtrain, propylene is obtained by distillation of a mixed C3stream, i.e., propane, propylene, and minor components, ina C3-splitter tower. It is produced as the overheaddistillation product, and the bottoms are a propane-enriched stream. The size of the C3-splitter depends on thepurity of the propylene product.

The propylene produced in refineries also originates fromother cracking processes. However, these processes can becompared to only a limited extent with the steam crackerfor ethylene production because they use completelydifferent feedstocks and have different productionobjectives.

Refinery cracking processes operate either purely thermallyor thermally – catalytically. By far the most importantprocess for propene production is the fluid- catalyticcracking (FCC) process, in which the powdery catalyst flowsas a fluidized bed through the reaction and regeneration

areas. This process converts heavy gas oil preferentially intogasoline and light gas oil.

The propylene yielded from olefins plants and FCC units istypically considered a co-product in these processes, whichare primarily driven by ethylene and motor gasolineproduction, respectively. Currently, the markets haveevolved to the point where modes of by-productproduction can no longer satisfy the demand for propylene.

A trend toward less severe cracking conditions, and thus toincrease propylene production, has been observed in steamcracker plants using liquid feedstock. As a result, new andnovel lower-cost chemical processes for on-purposepropylene production technologies are of high interest tothe petrochemical marketplace. Such processes include:

Olefin Metathesis. Also known as disproportionation,metathesis is a reversible reaction between ethyleneand butenes in which double bonds are broken andthen reformed to form propylene. Propylene yields ofabout 90 wt% are achieved. This option may also beused when there is no butene feedstock. In this case,part of the ethylene feeds an ethylene-dimerizationunit that converts ethylene into butene.

Propane Dehydrogenation. A catalytic process thatconverts propane into propylene and hydrogen (by-product). The yield of propylene from propane isabout 85 wt%. The reaction by-products (mainlyhydrogen) are usually used as fuel for the propanedehydrogenation reaction. As a result, propylenetends to be the only product, unless local demandexists for the hydrogen by-product.

Methanol-to-Olefins/Methanol-to-Propylene. Agroup of technologies that first converts synthesis gas(syngas) to methanol, and then converts the methanolto ethylene and/or propylene. The process alsoproduces water as by-product. Synthesis gas isproduced from the reformation of natural gas or by thesteam-induced reformation of petroleum productssuch as naphtha, or by gasification of coal. A largeamount of methanol is required to make a world-scaleethylene and/or propylene plant.

High Severity FCC. Refers to a group of technologiesthat use traditional FCC technology under severeconditions (higher catalyst-to-oil ratios, higher steaminjection rates, higher temperatures, etc.) in order tomaximize the amount of propylene and other lightproducts. A high severity FCC unit is usually fed with

12

Intr

ate

c | S

tud

y B

ackg

rou

nd

gas oils (paraffins) and residues, and produces about20-25 wt% propylene on feedstock together withgreater volumes of motor gasoline and distillate by-products.

Olefins Cracking. Includes a broad range oftechnologies that catalytically convert large olefinsmolecules (C4-C8) into mostly propylene and smallamounts of ethylene. This technology will best beemployed as an auxiliary unit to an FCC unit or steamcracker to enhance propylene yields.

These on-purpose methods are becoming increasinglysignificant, as the shift to lighter steam cracker feedstockswith relatively lower propylene yields and reduced motorgasoline demand in certain areas has created an imbalanceof supply and demand for propylene.

Figure 2 – Propylene from Multiple Sources

Steam Cracker

Refinery FCC Unit

PDH

Metathesis

MTO/MTP

High Severity FCC

Olefins Cracking

NaphthaNGL

RG Propylene CG/PG Propylene

Gas Oil

Propane

Ethylene/Butenes

Methanol

C4 to C8Olefins

Gas Oil


13

Intr

ate

c | S

tud

y B

ackg

rou

nd

Licensor(s) & Historical Aspects

The continuous rise in petroleum prices in addition to theincrease in world demand for propylene led to innovationby the chemical industry in the development of productionroutes other than those involving oil. Thus, the economicand environmental benefits arising from the use of naturalgas encouraged an alternative route for olefins productionby using inexpensive methanol, which is deemed to be areadily stored and managed intermediate productgenerated from the natural gas.

Since the 1980s, hydrocarbons production from methanolover a zeolite (especially of the ZSM-5 type) catalyst hasbeen known. It was found that methanol could beconverted into olefins ranging from C2 to C8, depending onthe reaction conditions. However, at that time, thecommercialization of routes such as MTG (methanol-to-gasoline) by Mobil (now ExxonMobil) and the first tests ofmethanol into olefins conversion conducted by Lurgi, werenot possible on a commercial scale due to the high price ofmethanol and the complexity of the required reactorsystems.

Propylene production from methanol started to becometechnically feasible in 1999, when Lurgi made the choice ofa proper zeolite as the catalyst and started a pilot plant foroptimization tests. A demonstration unit was then built inNorway in order to prove that the catalyst life under realisticconditions was long enough to make the processeconomically feasible. The main objective wasaccomplished and PG propylene production throughmethanol-to-propylene (MTP) was also proved.

A similar technology that converts dimethyl-ether intopropylene, named as DTP® (Dominant Technology forPropylene), has been jointly developed by the Japanesecorporations JGC and Mitsubishi Chemicals since 2007. Thistechnology can be considered a Lurgi MTP® competitor. Ademonstration plant was built in Mitsubishi Chemical’sMizushima Plant, Japan, and started the operations inAugust 2010. However, till the present date, there is nocommercial unit in operation of the DTP® technology.

14

Intr

ate

c | T

ech

nic

al A

nal

ysis

Chemistry

The process of converting methanol into propylene can beput in simpler form by splitting it into two reactions. Thefirst reaction, which occurs in a pre-reactor (DME reactor),partially converts methanol into dimethyl-ether (DME) and

following equation shows the reaction:

Methanol DME Water

The reaction is exothermic, and the reaction equilibrium isnearly independent of the operating pressure. The licensorsclaim catalysts with high activity and high selectivity,achieving almost thermodynamic equilibrium.

In the main reactor, dimethyl-ether and unconvertedmethanol mixture from the DME reactor are converted onzeolite-based catalyst (of type ZSM-5) with a high selectivitytoward low-molecular-weight olefins ranging from C2 to C8and with the peak for propylene. The main reactions aresummarized in the following equation:

DME C2-C8 Olefins Water

Relatively high operating temperatures and low operatingpressures favor the high selectivity toward olefins. Also, inMTP processes, olefins are recycled to the main reactor inorder to increase the propylene yield by the conversion ofolefins by-products. A simplified scheme, Figure 3,illustrates the typical reactions that occur in the MTP reactor.The balance between “Generated” and “Consumed”indicates the reaction’s equilibrium and the thickness of thearrow indicates the amount of compound produced.

Raw Material

As previously explained, the raw material for the productionof propylene via MTP is methanol.

Methanol, CH3OH, also termed methyl alcohol or carbinol, isone of the most important chemical raw materials. About85% of the methanol produced is used in the chemicalindustry as a starting material or solvent for synthesis. Theremainder is used in the fuel and energy sector.

Technical Analysis

Figure 3 – MTP Reaction Diagram

Methanol / DME

Paraffins

Aromatics

Saturated Naphthenes

C6+

C4 and C5

C3

C2Consumed

Generated


15

Intr

ate

c | T

ech

nic

al A

nal

ysis

Methanol is currently produced on an industrial scaleexclusively by catalytic conversion of synthesis gas.Processes are classified according to the pressure used:

High-pressure process: 250 – 300 bar abs.

Medium-pressure process: 100 – 250 bar abs.

Low-pressure process: 50 – 100 bar abs.

The main advantages of the low-pressure process are lowerinvestment and production costs, improved operationalreliability and greater flexibility in the choice of plant size.

Industrial methanol production can be subdivided intothree main steps: production of synthesis gas; synthesis ofmethanol; and processing of crude methanol.

All carbonaceous materials such as coal, coke, natural gas,petroleum, and fractions obtained from petroleum (asphalt,gasoline, and gaseous compounds) can be used as startingmaterials for synthesis gas production. Economy is ofprimary importance with regard to choice of raw materials.Long-term availability, energy consumption, andenvironmental aspects must also be considered.

Natural gas is generally used in the large-scale productionof synthesis gas for methanol synthesis. In a few processes(e.g., acetylene production), residual gases are formedwhich have roughly the composition of the synthesis gasrequired for methanol synthesis.

Natural gas extracted from shale gas has become thefastest-growing source of gas in the United States andcould become a significant new global energy source. Thiswill enable the United States to consume a predominantlydomestic supply of gas for many years and produce morenatural gas than it consumes.

According to the forecast from the US Energy InformationAdministration (EIA), in 2035, about half of the natural gasproduction in the US will be from shale gas. Figure 4 showsthe US natural gas production history and forecast.

MTP technology has a favorable outlook for end-users whohave access to cost-advantaged feedstocks.

Figure 4 – US Natural Gas Production History and

Forecast (Trillion Cubic Feet)

Source: US Energy Information Administration (EIA) AOE2012

0

5

10

15

20

25

30

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Non-associated onshore Associated with oil

Coalbed methane Alaska

Non-associated offshore Tight gas

Shale gas

ForecastHistory

16

Intr

ate

c | T

ech

nic

al A

nal

ysis

Technology Overview

The MTP technology is based on the efficient combinationof two main features:

Fixed-bed reactor system, selected as the most suitablereaction system from a technological and economicpoint of view;

Highly selective and stable zeolite-based fixed-bedcatalyst commercially manufactured.

In the process, methanol fed to the MTP plant is firstconverted to DME and water in a DME pre-reactor. Using ahighly active and selective catalyst, thermodynamicequilibrium is achieved, resulting in the methanol-water-DME mixture at appropriate operating conditions.

Hydrocarbon recycle and steam generated from waterrecycle are added to this mixture before it enters the firstMTP reactor of the multi-stage adiabatic reactor system.The methanol/DME conversion rate exceeds 99%, withpropylene as the essential compound. Additional reactionproceeds in the downstream reactor stages.

The product mixture leaving the reactor system consists ofproduct gas, organic liquid and water. This mixture iscooled and compressed.

After product gas compression, traces of water and DME areremoved and the gas is further processed, yielding polymer-grade propylene. Several hydrocarbon-containing streamsare recycled to boost the propylene yield. Propylene is thesingle main product, as shown in the simplified flowdiagram. Gasoline, LPG, fuel gas and water are by-products.

To avoid accumulation of inert materials in the system, asmall purge is required for light- and heavy-ends. Theexcess water resulting from the methanol conversion is alsopurged. It can be used as raw water or for irrigation afterinexpensive standard treatment. It can even be processedto potable water.

Occurrence of coke formed on the active catalyst surfaces isa crucial issue and inherent in catalytic conversion to olefinsdue to inevitable side reactions. The amount of cokeformed is decisive for choosing the most adequate reactoroperation mode and catalyst. For this reason, propylenesynthesis is conducted in a semi-continuous manner, withone or two reactor systems effectively conducting thereactions, while the other or a third one is in regeneration oron stand-by mode.

Regeneration is conducted by burning the coke with anitrogen/air mixture, after a cycle of approximately 500-600hours of operation. The regeneration is carried out attemperatures similar to the reaction itself, hence the catalystparticles do not experience any unusual temperature stressduring the in-situ catalyst regeneration procedure.

Figure 5 – Process Block Flow Diagram

Methanol

Water RecycleGasoline

PG PropyleneArea 100Reaction

Area 200Quench &

Compression

Area 300Fractionation

Olefins Recycle

Water

LPG

Fuel Gas


17

Intr

ate

c | T

ech

nic

al A

nal

ysis

18

Intr

ate

c | T

ech

nic

al A

nal

ysis

19

Intr

ate

c | T

ech

nic

al A

nal

ysis

Key Consumptions

Labor Requirements

Table 5 - Raw Materials & Utilities Consumption (per ton

of product)


Table 7 – Labor Requirements for a Typical Plant


20

Intr

ate

c | T

ech

nic

al A

nal

ysis

Figure 6 – Inside Battery Limits Conceptual Process Flow Diagram


21

Intr

ate

c | T

ech

nic

al A

nal

ysis

Figure 6 – Inside Battery Limits Conceptual Process Flow Diagram (Cont.)


22

Intr

ate

c | T

ech

nic

al A

nal

ysis

Figure 6 – Inside Battery Limits Conceptual Process Flow Diagram (Cont.)


23

Intr

ate

c | T

ech

nic

al A

nal

ysis

Table 8 presents the main streams composition andoperating conditions. For a more complete materialbalance, see the “Appendix A. Mass Balance & StreamsProperties.”

Information regarding utilities flow rates is provided in“Appendix B. Utilities Consumption Breakdown.” For furtherdetails on greenhouse gas emissions caused by this process,see “Appendix C. Carbon Footprint.”

ISBL Major Equipment List

Table 9 shows the equipment list by area. It also presents abrief description and the main materials used.

Find main specifications for each piece of equipment in“Appendix D. Equipment Detailed List & Sizing.”

24

Intr

ate

c | T

ech

nic

al A

nal

ysis

25

Intr

ate

c | T

ech

nic

al A

nal

ysis

26

Intr

ate

c | T

ech

nic

al A

nal

ysis

OSBL Major Equipment List

The OSBL is divided into three main areas: storage (Area700), energy and water facilities (Area 800), and support &auxiliary facilities (Area 900).

Table 10 shows the list of tanks located in the storage areaand the energy facilities required in the construction of anon-integrated unit.

27

Intr

ate

c | T

ech

nic

al A

nal

ysis

28

Intr

ate

c | T

ech

nic

al A

nal

ysis

Figure 7 – MTP Integrated with FCC/Naphtha Cracker Units

HydrogenationReactor

MTP Reactor

C4 and C5Hydrocarbons

from FCC orNaphtha Cracker

Quenching,Compression &Fractionation

DME

Fuel Gas

PG Propylene

LPG

Gasoline

WaterRecycled Olefins


29

Intr

atec

| Ec

on

om

ic A

nal

ysis

General Assumptions

The general assumptions for the base case of this analysisare outlined below.

In Table 11, the IC Index stands for Intratec chemical plantConstruction Index, an indicator, published monthly byIntratec, to scale capital costs from one time period toanother.

This index reconciles prices trends of fundamentalcomponents of a chemical plant construction such as labor,material and energy, providing meaningful historical andforecast data for our readers and clients.

The assumed operating hours per year indicated does notrepresent any technology limitation; rather, it is anassumption based on usual industrial operating rates

Additionally, Table 11 discloses assumptions regarding theproject complexity, technology maturity and data reliability,which are of major importance for attributing reasonablecontingencies for the investment and for evaluating theoverall accuracy of estimates. Definitions and figures forboth contingencies and accuracy of economic estimatescan be found in this publication in the chapter “TechnologyEconomics Methodology.”

Economic Analysis

Table 11 – Base Case General Assumptions


Figure 8 – Project Implementation Schedule


30

Intr

atec

| Ec

on

om

ic A

nal

ysis

Project Implementation

Schedule

The main objective of knowing upfront the projectimplementation schedule is to enhance the estimates forboth capital initial expenses and return on investment.

The implementation phase embraces the period from thedecision to invest to the start of commercial production.This phase can be divided into five major stages: (1) BasicEngineering, (2) Detailed Engineering, (3) Procurement, (4)Construction, and (5) Plant Start-up.

The duration of each phase is detailed in Figure 8.

Capital Expenditures

Fixed Investment

Table 12 shows the bare equipment cost associated witheach area of the project.

Table 13 presents the breakdown of the total fixedinvestment (TFI) per item (direct & indirect costs and projectcontingencies). For further information about thecomponents of the TFI please see the chapter “TechnologyEconomics Methodology”.

Fundamentally, the direct costs are the total direct materialand labor costs associated with the equipment (includinginstallation bulks). The total direct cost represents the totalbare equipment installed cost.

“Appendix E. Detailed Capital Expenses” provides a detailedbreakdown for the direct expenses, outlining the share ofeach type of equipment in total.

After defining the total direct cost, the TFI is established byadding field indirects, engineering costs, overhead, contractfees and contingencies.

Indirect costs are defined by the American Association ofCost Engineers (AACE) Standard Terminology as those"costs which do not become a final part of the installationbut which are required for the orderly completion of theinstallation."

The indirect project expenses are further detailed in“Appendix E. Detailed Capital Expenses”

Table 12 - Bare Equipment Cost per Area (USD

Thousands)


Table 13 – Total Fixed Investment Breakdown (USD

Thousands)


31

Intr

atec

| Ec

on

om

ic A

nal

ysis

Alternative OSBL Configurations

The total fixed investment for the construction of a newchemical plant is greatly impacted by how well it will beable to take advantage of the infrastructure already installedin that location.

For example, if there are nearby facilities consuming a unit’sfinal product or supplying a unit’s feedstock, the need forstorage facilities significantly decreases, along with the totalfixed investment required. This is also true for supportfacilities that can serve more than one plant in the samecomplex, such as a parking lot, gate house, etc.

This study analyzes the total fixed investment for threedistinct scenarios regarding OSBL facilities:

Non-Integrated Plant

Plant Partially Integrated

Plant Fully Integrated

The detailed definition, as well as the assumptions used foreach scenario is presented in the chapter “About this Study”

The influence of the OSBL facilities on the capitalinvestment is depicted in Figure 9 and in Figure 10.

32

Intr

atec

| Ec

on

om

ic A

nal

ysis

Figure 9 – Total Direct Cost of Different Integration Scenarios (USD Thousands)


Figure 10 – Total Fixed Investment of Different Integration Scenarios (USD Thousands)


33

Intr

atec

| Ec

on

om

ic A

nal

ysis

Working Capital

Working capital, described in Table 14, is another significantinvestment requirement. It is needed to meet the costs oflabor; maintenance; purchase, storage, and inventory offield materials; and storage and sales of product(s).

Assumptions for working capital calculations are found in“Appendix F. Economic Assumptions.”

Figure 11 – Total Fixed Investment Validation (USD Million)


Table 14 – Working Capital (USD Million)


34

Intr

atec

| Ec

on

om

ic A

nal

ysis

Other Capital Expenses

Start-up costs should also be considered when determiningthe total capital expenses. During this period, expenses areincurred for employee training, initial commercializationcosts, manufacturing inefficiencies and unscheduled plantmodifications (adjustment of equipment, piping,instruments, etc.).

Initial costs are not addressed in most studies on estimatingbut can become a significant expenditure. For instance, theinitial catalyst load in reactors may be a significant cost and,in that case, should also be included in the capitalestimates.

The purchase of technology through paid-up royalties orlicenses is considered to be part of the capital investment.

Other capital expenses frequently neglected are landacquisition and site development. Although these are smallparts of the total capital expenses, they should be included.

Assumptions used to calculate other capital expenses areprovided in “Appendix F. Economic Assumptions.”

Total Capital Expenses

Table 16 presents a summary of the total CapitalExpenditures (CAPEX) detailed in previous sections.

Operational Expenditures

Manufacturing Costs

The manufacturing costs, also called OperationalExpenditures (OPEX), are composed of two elements: a fixedcost and a variable cost. All figures regarding operationalcosts are presented in USD per ton of product.

Table 17 shows the manufacturing fixed cost.

To learn more about the assumptions for manufacturingfixed costs, see the “Appendix F. Economic Assumptions.”

Table 15 – Other Capital Expenses (USD Million)


Table 16 – CAPEX (USD Million)


Table 17 – Manufacturing Fixed Cost (USD/ton)


35

Intr

atec

| Ec

on

om

ic A

nal

ysis

Table 18 discloses the manufacturing variable costs.

Historical Analysis

Figure 12 depicts Sales and OPEX historic data. Figure 13compares the project EBITDA trends with IntratecProfitability Indicators (IP Indicators). The Basic Chemicals IPIndicator represents basic chemicals sector profitability,based on the weighted average EBITDA margins of majorglobal basic chemicals producers. On the other hand, theChemical Sector IP Indicator reveals the overall chemicalsector profitability through a weighted average of the IPIndicators calculated for three major chemical industryniches: basic, specialties and diversified chemicals.

Economic Datasheet

The Technology Economic Datasheet, presented in Table20, is an overall evaluation of the technology's productioncosts in a US Gulf Coast based plant.

The expected revenues in products sales and initialeconomic indicators are presented for a short-termassessment of its economic competitiveness.

Table 18 – Manufacturing Variable Cost (USD/ton)


Table 19 – OPEX (USD/ton)


36

Intr

atec

| Ec

on

om

ic A

nal

ysis

Figure 12 – OPEX and Product Sales History (USD/ton)


Figure 13 – EBITDA Margin & IP Indicators History Comparison


37

Intr

atec

| Ec

on

om

ic A

nal

ysis

38

Intr

ate

c | R

egio

nal

Co

mp

aris

on

& E

con

om

ic D

iscu

ssio

n

Regional Comparison

Capital Expenses

Variations in productivity, labor costs, local steel prices,equipment imports needs, freight, taxes and duties onimports, regional business environments and localavailability of sparing equipment were considered whencomparing capital expenses for the different regions underconsideration in this report.

Capital costs are adjusted from the base case (a plantconstructed on the US Gulf Coast) to locations of interest byusing location factors calculated according to theaforementioned items. For further information aboutlocation factor calculation, please examine the chapter“Technology Economics Methodology”. In addition, thelocation factors for the regions analyzed are further detailedin “Appendix F. Economic Assumptions.”

Figure 14 summarizes the total Capital Expenditures(CAPEX) for the locations under analysis.

Operational Expenses

Specific regional conditions influence prices for rawmaterials, utilities and products. Such differences are thusreflected in the operating costs. An OPEX breakdownstructure for the different locations approached in this studyis presented in Figure 15.

Economic Datasheet

The Technology Economic Datasheet, presented in Table21, is an overall evaluation of the technology's capitalinvestment and production costs in the alternative locationanalyzed in this study.

Regional Comparison & Economic Discussion

Figure 14 – CAPEX per Location (USD Million)


39

Intr

ate

c | R

egio

nal

Co

mp

aris

on

& E

con

om

ic D

iscu

ssio

n

Figure 15 – Operating Costs Breakdown per Location (USD/ton)


40

Intr

ate

c | R

egio

nal

Co

mp

aris

on

& E

con

om

ic D

iscu

ssio

n

41

Intr

atec

| R

efe

ren

ces

References

42

Intr

ate

c | A

cro

nym

s, L

eg

en

ds

& O

bse

rvat

ion

s

AACE: American Association of Cost Engineers

AOE2012: US Energy Information Administration's AnnualEnergy Outlook 2012

C: Distillation, stripper, scrubber columns (e.g., C-101 woulddenote a column tag)

C2, C3, ... Cn: Hydrocarbons with "n" number of carbonatoms

C2=, C3=, ... Cn=: Alkenes with "n" number of carbon atoms

CAPEX: Capital Expenditures

CC: Distillation column condenser

CG: Chemical grade

CP: Distillation column reflux pump

CR: Distillation column reboiler

CT: Cooling tower (e.g., CT-801 would denote anequipment tag)

CV: Distillation column accumulator drum

CW: Cooling water

DME: Dimethyl-ether

DTP: Dominant Technology for Propylene

E: Heat exchangers, heaters, coolers, condensers, reboilers(e.g., E-101 would denote a heat exchanger tag)

EBIT: Earnings before Interest and Taxes

EBITDA: Earnings before Interests, Taxes, Depreciation andAmortization

F: Furnaces, fired heaters (e.g., F-101 would denote afurnace tag)

FCC: Fluid catalytic cracking

HP ST: High-pressure steam

IC Index: Intratec Chemical Plant Construction Index

IP Indicator: Intratec Chemical Sector Profitability Indicator

IRR: Internal Return Rate

ISBL: Inside battery limits

K: Compressors, blowers, fans (e.g., K-101 would denote acompressor tag)

kta: thousands metric tons per year

LP ST: Low-pressure steam

LPG: Liquefied petroleum gas

MP ST: Medium-pressure steam

MTG: Methanol-to-Gasoline

MTO: Methanol-to-Olefins

MTP: Methanol-to-Propylene

NGL: Natural gas liquids

NPV: Net Present Value

OPEX: Operational Expenditures

OSBL: Outside battery limits

P: Pumps (e.g., P-101 would denote a pump tag)

PDH: Propane Dehydrogenation

PG: Polymer grade

R: Reactors, treaters (e.g., R-101 would denote a reactor tag)

RF: Refrigerant (Flowsheet) or Refrigeration Unit (e.g., RF-801 would denote an equipment tag)

RG: Refinery grade

SB: Steam boiler (e.g., SB-801 would denote an equipmenttag)

ST: Steam

Syn-gas: Synthesis gas

T: Tanks (e.g., T-101 would denote a tank tag)

TFI: Total Fixed Investment

TPC: Total process cost

V: Horizontal or vertical drums, vessels (e.g., V-101 woulddenote a vessel tag)

WD: Demineralized water (Flowsheet) or Demineralizer(e.g., WD-801 would denote an equipment tag)

WP: Process water

X: Special equipment (e.g., X-101 would denote a specialequipment tag)

Obs.: 1 ton = 1 metric ton = 1,000 kg

Acronyms, Legends & Observations

43

Intr

ate

c | T

ech

no

log

y Ec

on

om

ics

Met

ho

do

log

y

Intratec Technology Economics methodologyensures a holistic, coherent and consistenttechno-economic evaluation, ensuring a clearunderstanding of a specific mature chemicalprocess technology.

Introduction

The same general approach is used in the development ofall Technology Economics assignments. To know moreabout Intratec’s methodology, see Figure 16.

While based on the same methodology, all TechnologyEconomics studies present uniform analyses with identicalstructures, containing the same chapters and similar tablesand charts. This provides confidence to everyone interestedin Intratec’s services since they will know upfront what theywill get.

Workflow

Once the scope of the study is fully defined andunderstood, Intratec conducts a comprehensivebibliographical research in order to understand technicalaspects involved with the process analyzed.

Subsequently, the Intratec team simultaneously developsthe process description and the conceptual process flowdiagram based on:

a. Patent and technical literature research

b. Non-confidential information provided by technologylicensors

c. Intratec's in-house database

d. Process design skills

Next, all the data collected are used to build a rigoroussteady state process simulation model in Aspen Hysysand/or Aspen Plus, leading commercial processflowsheeting software tools.

From this simulation, material balance calculations areperformed around the process, key process indicators areidentified and main equipment listed.

Equipment sizing specifications are defined based onIntratec's equipment design capabilities and an extensiveuse of AspenONE Engineering Software Suite that enablesthe integration between the process simulation developedand equipment design tools. Both equipment sizing andprocess design are prepared in conformance with generallyaccepted engineering standards.

Then, a cost analysis is performed targeting ISBL & OSBLfixed capital costs, manufacturing costs, and overall workingcapital associated with the examined process technology.Equipment costs are primarily estimated using AspenProcess Economic Analyzer (formerly Aspen Icarus)customized models and Intratec's in-house database.

Cost correlations and, occasionally, vendor quotes of uniqueand specialized equipment may also be employed. One ofthe overall objectives is to establish Class 3 cost estimates1

with a minimum design engineering effort.

Next, capital and operating costs are assembled in MicrosoftExcel spreadsheets, and an economic analysis of suchtechnology is performed.

Finally, two analyses are completed, examining:

a. The total fixed investment in different constructionscenarios, based on the level of integration of the plantwith nearby facilities

b. The capital and operating costs for a second differentplant location

1 These are estimates that form the basis for budget authorization,appropriation, and/or funding. Accuracy ranges for this class ofestimates are + 10% to + 30% on the high side, and - 10 % to - 20 %on the low side.

Technology Economics Methodology

44

Intr

ate

c | T

ech

no

log

y Ec

on

om

ics

Met

ho

do

log

y

Figure 16 – Methodology Flowchart

Intratec Internal Database

Non-ConfidentialInformation from

Technology Licensors orSuppliers

Aspen Plus, Aspen HysysAspen Exchanger Design &

Rating, KG Tower, Sulcoland Aspen Energy Analyzer

Bibliographical Research

Material & Energy Balances, KeyProcess Indicators, List of

Equipment & Equipment Sizing

Capital Cost (CAPEX)& Operational Cost (OPEX)

Estimation

Patent and TechnicalLiterature Databases

Pricing Data Gathering: RawMaterials, Chemicals,Utilities and Products

Aspen Process EconomicAnalyzer, Aspen Capital

Cost Estimator, Aspen In-Plant Cost Estimator &

Intratec In-House Database

Construction LocationFactor

(http://base.intratec.us)

Project Development Phases

Information Gathering / Tools

Vendor Quotes

Study Understanding -Validation of Project Inputs

Technical Validation –Process Description &

Flow Diagram

Final Review &Adjustments

Economic Analysis

Analyses ofDifferent Construction

Scenarios and Plant Location


45

Intr

ate

c | T

ech

no

log

y Ec

on

om

ics

Met

ho

do

log

y

Capital & Operating Cost

Estimates

The cost estimate presented in the current study considersa process technology based on a standardized designpractice, typical of a major chemical company. The specificdesign standards employed can have a significant impacton capital costs.

The basis for the capital cost estimate is that the plant isconsidered to be built in a clear field with a typical largesingle-line capacity. In comparing the cost estimate herebypresented with an actual project cost or contractor'sestimate, the following must be considered:

Minor differences or details (many times, unnoticed)between similar processes can affect cost noticeably.

The omission of process areas in the design consideredmay invalidate comparisons with the estimated costpresented.

Industrial plants may be overdesigned for particularobjectives and situations.

Rapid fluctuation of equipment or construction costsmay invalidate cost estimate.

Equipment vendors or engineering companies mayprovide goods or services below profit margins duringeconomic downturns.

Specific locations may impose higher taxes and fees,which can impact costs considerably.

In addition, no matter how much time and effort aredevoted to accurately estimating costs, errors may occurdue to the aforementioned factors, as well as cost and laborchanges, construction problems, weather-related issues,strikes, or other unforeseen situations. This is partiallyconsidered in the project contingency. Finally, it mustalways be remembered that an estimated project cost is notan exact number, but rather is a projection of the probablecost.

ISBL Investment

The ISBL investment includes the fixed capital cost of themain processing units of the plant necessary to themanufacturing of products. The ISBL investment includesthe installed cost of the following items:

Process equipment (e.g., reactors and vessels, heatexchangers, pumps, compressors, etc.)

Process equipment spares

Housing for process units

Pipes and supports within the main process units

Instruments, control systems, electrical wires and otherhardware

Foundations, structures and platforms

Insulation, paint and corrosion protection

In addition to the direct material and labor costs, the ISBLaddresses indirect costs, such as construction overheads,including: payroll burdens, field supervision, equipmentrentals, tools, field office expenses, temporary facilities, etc.

OSBL Investment

The OSBL investment accounts for auxiliary items necessaryto the functioning of the production unit (ISBL), but whichperform a supporting and non-plant-specific role. OSBLitems considered may vary from process to process. TheOSBL investment could include the installed cost of thefollowing items:

Storage and packaging (storage, bagging and awarehouse) for products, feedstocks and by-products

Steam units, cooling water and refrigeration systems

Process water treating systems and supply pumps

Boiler feed water and supply pumps

Electrical supply, transformers, and switchgear

Auxiliary buildings, including all services andequipment of: maintenance, stores warehouse,laboratory, garages, fire station, change house,cafeteria, medical/safety, administration, etc.

General utilities including plant air, instrument air, inertgas, stand-by electrical generator, fire water pumps,etc.

Pollution control, organic waste disposal, aqueouswaste treating, incinerator and flare systems

46

Intr

ate

c | T

ech

no

log

y Ec

on

om

ics

Met

ho

do

log

y

Working Capital

For the purposes of this study,2 working capital is defined asthe funds, in addition to the fixed investment, that acompany must contribute to a project. Those funds mustbe adequate to get the plant in operation and to meetsubsequent obligations.

The initial amount of working capital is regarded as aninvestment item. This study uses the followingitems/assumptions for working capital estimation:

Accounts receivable. Products and by-productsshipped but not paid by the customer; it representsthe extended credit given to customers (estimated as acertain period – in days – of manufacturing expensesplus depreciation).

Accounts payable. A credit for accounts payable suchas feedstock, catalysts, chemicals, and packagingmaterials received but not paid to suppliers (estimatedas a certain period – in days – of manufacturingexpenses).

Product inventory. Products and by-products (ifapplicable) in storage tanks. The total amount dependson sales flow for each plant, which is directly related toplant conditions of integration to the manufacturing ofproduct‘s derivatives (estimated as a certain period – indays – of manufacturing expenses plus depreciation,defined by plant integration circumstances).

Raw material inventory. Raw materials in storagetanks. The total amount depends on raw materialavailability, which is directly related to plant conditionsof integration to raw material manufacturing(estimated as a certain period – in days – of rawmaterial delivered costs, defined by plant integrationcircumstances).

In-process inventory. Material contained in pipelinesand vessels, except for the material inside the storagetanks (assumed to be 1 day of manufacturingexpenses).

Supplies and stores. Parts inventory and minor spareequipment (estimated as a percentage of totalmaintenance materials costs for both ISBL and OSBL).

2 The accounting definition of working capital (total current assetsminus total current liabilities) is applied when considering theentire company.

Cash on hand. An adequate amount of cash on handto give plant management the necessary flexibility tocover unexpected expenses (estimated as a certainperiod – in days – of manufacturing expenses).

Start-up Expenses

When a process is brought on stream, there are certain one-time expenses related to this activity. From a timestandpoint, a variable undefined period exists between thenominal end of construction and the production of qualityproduct in the quantity required. This period is commonlyreferred to as start-up.

During the start-up period expenses are incurred foroperator and maintenance employee training, temporaryconstruction, auxiliary services, testing and adjustment ofequipment, piping, and instruments, etc. Our method ofestimating start-up expenses consists of four components:

Labor component. Represents costs of plant crewtraining for plant start-up, estimated as a certainnumber of days of total plant labor costs (operators,supervisors, maintenance personnel and laboratorylabor).

Commercialization cost. Depends on raw materialsand products negotiation, on how integrated the plantis with feedstock suppliers and consumer facilities, andon the maturity of the technology. It ranges from 0.5%to 5% of annual manufacturing expenses.

Start-up inefficiency. Takes into account thoseoperating runs when production cannot bemaintained or there are false starts. The start-upinefficiency varies according to the process maturity:5% for new and unproven processes, 2% for new andproven processes, and 1% for existing licensedprocesses, based on annual manufacturing expenses.

Unscheduled plant modifications. A key fault thatcan happen during the start-up of the plant is the riskthat the product(s) may not meet specificationsrequired by the market. As a result, equipmentmodifications or additions may be required.

47

Intr

ate

c | T

ech

no

log

y Ec

on

om

ics

Met

ho

do

log

y

Other Capital Expenses

Prepaid Royalties. Royalty charges on portions of theplant are usually levied for proprietary processes. Avalue ranging from 0.5 to 1% of the total fixedinvestment (TFI) is generally used.

Site Development. Land acquisition and sitepreparation, including roads and walkways, parking,railroad sidings, lighting, fencing, sanitary and stormsewers, and communications.

Manufacturing Costs

Manufacturing costs do not include post-plant costs, whichare very company specific. These consist of sales, generaland administrative expenses, packaging, research anddevelopment costs, and shipping, etc.

Operating labor and maintenance requirements have beenestimated subjectively on the basis of the number of majorequipment items and similar processes, as noted in theliterature.

Plant overhead includes all other non-maintenance (laborand materials) and non-operating site labor costs forservices associated with the manufacture of the product.Such overheads do not include costs to develop or marketthe product.

G & A expenses represent general and administrative costsincurred during production such as: administrativesalaries/expenses, research & development, productdistribution and sales costs.

Contingencies

Contingency constitutes an addition to capital costestimations, implemented based on previously availabledata or experience to encompass uncertainties that mayincur, to some degree, cost increases. According torecommended practice, two kinds of contingencies areassumed and applied to TPC: process contingency andproject contingency.

Process contingency is utilized in an effort to lessen theimpact of absent technical information or the uncertainty ofthat which is obtained. In that manner, the reliability of theinformation gathered, its amount and the inherentcomplexity of the process are decisive for its evaluation.Errors that occur may be related to:

Uncertainty in process parameters, such as severity ofoperating conditions and quantity of recycles

Addition and integration of new process steps

Estimation of costs through scaling factors

Off-the-shelf equipment

Hence, process contingency is also a function of thematurity of the technology, and is usually a value between5% and 25% of the direct costs.

The project contingency is largely dependent on the plantcomplexity and reflects how far the conducted estimation isfrom the definitive project, which includes, from theengineering point of view, site data, drawings and sketches,suppliers’ quotations and other specifications. In addition,during construction some constraints are verified, such as:

Project errors or incomplete specifications

Strike, labor costs changes and problems caused byweather

Intratec’s definitions in relation to complexity and maturityare the following:

Complexity

SimpleSomewhat simple, widely known

processes

Typical Regular process

Complex

Several unit operations, extreme

temperature or pressure, more

instrumentation

Maturity

New &

ProvenFrom 1 to 2 commercial plants

Licensed 3 or more commercial plants

Table 22 – Project Contingency

Plant Complexity Complex Typical Simple

Project Contingency 25% 20% 15%


Table 23 – Criteria Description


48

Intr

ate

c | T

ech

no

log

y Ec

on

om

ics

Met

ho

do

log

y

Accuracy of Economic Estimates

The accuracy of estimates gives the realized range of plantcost. The reliability of the technical information available isof major importance.

The non-uniform spread of accuracy ranges (+30 to – 20 %,rather than ±25%, e.g.) is justified by the fact that theunavailability of complete technical information usuallyresults in under estimating rather than over estimatingproject costs.

Location Factor

A location factor is an instantaneous, total cost factor usedfor converting a base project cost from one geographiclocation to another.

A properly estimated location factor is a powerful tool, bothfor comparing available investment data and evaluatingwhich region may provide greater economic attractivenessfor a new industrial venture. Considering this, Intratec hasdeveloped a well-structured methodology for calculatingLocation Factors, and the results are presented for specificregions’ capital costs comparison.

Intratec’s Location Factor takes into consideration thedifferences in productivity, labor costs, local steel prices,equipment imports needs, freight, taxes and duties onimported and domestic materials, regional businessenvironments and local availability of sparing equipment.For such analyses, all data were taken from internationalstatistical organizations and from Intratec’s database.Calculations are performed in a comparative manner, takinga US Gulf Coast-based plant as the reference location. Thefinal Location Factor is determined by four major indexes:Business Environment, Infrastructure, Labor, and Material.

The Business Environment Factor and the InfrastructureFactor measure the ease of new plant installation in

different countries, taking into consideration the readinessof bureaucratic procedures and the availability and qualityof ports or roads.

Labor and material, in turn, are the fundamentalcomponents for the construction of a plant and, for thisreason, are intrinsically related to the plant costs. Thisconcept is the basis for the methodology, which aims torepresent the local discrepancies in labor and material.

Productivity of workers and their hourly compensation areimportant for the project but, also, the qualification ofworkers is significant to estimating the need for foreignlabor.

On the other hand, local steel prices are similarly important,since they are largely representative of the costs ofstructures, piping, equipment, etc. Considering thecontribution of labor in these components, workers’qualifications are also indicative of the amount that needsto be imported. For both domestic and imported materials,a Spare Factor is considered, aiming to represent the needfor spare rotors, seals and parts of rotating equipment.

The sum of the corrected TFI distribution reflects the relativecost of the plant, this sum is multiplied by the Infrastructureand the Business Environment Factors, yielding the LocationFactor.

For the purpose of illustrating the conducted methodology,a block flow diagram is presented in Figure 17 in which thefour major indexes are presented, along with some of theircomponents.

Table 24 – Accuracy of Economic Estimates

Reliability Low Moderate High Very

High

Accuracy+ 30%

- 20%

+ 22%

- 18%

+ 18%

- 14%

+ 10%

- 10%


49

Intr

ate

c | T

ech

no

log

y Ec

on

om

ics

Met

ho

do

log

y

Figure 17 – Location Factor Composition

Infrastructure FactorLabor Index

Location Factor

Material Index Business Environment

Factor

Local Labor IndexRelative SalaryProductivity

Expats Labor

Domestic Material IndexRelative Steel PricesLabor IndexTaxes and FreightRatesSpares

Imported MaterialTaxes and FreightRatesSpares

Ports, Roads, Airportsand Rails (Availabilityand Quality)CommunicationTechnologiesWarehouseInfrastructureBorder ClearanceLocal Incentives

Readiness ofBureaucraticProceduresLegal Protection ofInvestorsTaxes


50

Intr

ate

c | A

pp

en

dix

A. M

ass

Bal

ance

& S

tre

ams

Pro

pe

rtie

s

51

Intr

ate

c | A

pp

en

dix

A. M

ass

Bal

ance

& S

tre

ams

Pro

pe

rtie

s

52

Intr

ate

c | A

pp

en

dix

A. M

ass

Bal

ance

& S

tre

ams

Pro

pe

rtie

s

53

Intr

ate

c | A

pp

en

dix

A. M

ass

Bal

ance

& S

tre

ams

Pro

pe

rtie

s

54

Intr

ate

c | A

pp

en

dix

A. M

ass

Bal

ance

& S

tre

ams

Pro

pe

rtie

s

55

Intr

ate

c | A

pp

en

dix

B. U

tilit

ies

Co

nsu

mp

tio

n B

reak

do

wn

56

Intr

atec

| A

pp

end

ix C

. Car

bo

n F

oo

tpri

nt

The process’ carbon footprint can be defined as the totalamount of greenhouse gas (GHG) emissions caused by theprocess operation.

Although it is difficult to precisely account for the totalemissions generated by a process, it is possible to estimatethe major emissions, which can be divided into:

Direct emissions. Emissions caused by process wastestreams combusted in flares.

Indirect emissions. The ones caused by utilitiesgeneration or consumption, such as the emissions dueto using fuel in furnaces for heating process streams.Fuel used in steam boilers, electricity generation, andany other emissions in activities to support processoperation are also considered indirect emissions.

In order to estimate the direct emissions, it is necessary toknow the composition of the streams, as well as theoxidation factor.

Estimation of indirect emissions requires specific data,which depends on the plant location, such as the localelectric power generation profile, and on the plantresources, such as the type of fuel used.

The assumptions for the process carbon footprintcalculation are presented in Table 27 and the results areprovided in Table 28

Equivalent carbon dioxide (CO2e) is a measure thatdescribes the amount of CO2 that would have the sameglobal warming potential of a given greenhouse gas, whenmeasured over a specified timescale.

All values and assumptions used in calculations are basedon data provided by the Environment Protection Agency(EPA) Climate Leaders Program.

Appendix C. Carbon Footprint

Table 27 – Assumptions for CO2e Emissions Calculation


Table 28 – CO2e Emissions (ton/ton prod.)


57

Intr

atec

| A

pp

end

ix D

. Eq

uip

men

t D

etai

led

Lis

t &

Siz

ing

Actual gas flow rate

Inlet (m3/h)5,825 77,898 30,080 6,417 1,679 2,151

2nd DME

Cooler

58

Intr

atec

| A

pp

end

ix D

. Eq

uip

men

t D

etai

led

Lis

t &

Siz

ing

59

Intr

atec

| A

pp

end

ix D

. Eq

uip

men

t D

etai

led

Lis

t &

Siz

ing

60

Intr

atec

| A

pp

end

ix D

. Eq

uip

men

t D

etai

led

Lis

t &

Siz

ing

61

Intr

atec

| A

pp

end

ix D

. Eq

uip

men

t D

etai

led

Lis

t &

Siz

ing

62

Intr

atec

| A

pp

end

ix D

. Eq

uip

men

t D

etai

led

Lis

t &

Siz

ing

Design gauge pressure

(barg)

63

Intr

atec

| A

pp

end

ix D

. Eq

uip

men

t D

etai

led

Lis

t &

Siz

ing

64

Intr

atec

| A

pp

end

ix D

. Eq

uip

men

t D

etai

led

Lis

t &

Siz

ing

65

Intr

atec

| A

pp

end

ix D

. Eq

uip

men

t D

etai

led

Lis

t &

Siz

ing

66

Intr

atec

| A

pp

end

ix E

. De

taile

d C

apit

al E

xpe

nse

s

Direct Costs Breakdown

Appendix E. Detailed Capital Expenses

Figure 18 – ISBL Direct Costs Breakdown by Equipment Type (Base Case)


Figure 19 – OSBL Direct Costs by Equipment Type (Base Case)


67

Intr

atec

| A

pp

end

ix E

. De

taile

d C

apit

al E

xpe

nse

s

68

Intr

ate

c | A

pp

en

dix

F. E

con

om

ic A

ssu

mp

tio

ns

Capital Expenditures

For a better description of working capital and other capitalexpenses components, as well as the location factorsmethodology, see the chapter “Technology EconomicsMethodology.”

Construction Location Factors

Working Capital

Supplies and

Stores

Appendix F. Economic Assumptions

Table 36 – Detailed Construction Location Factor


Table 37 – Working Capital Assumptions (Base Case)


Table 38 – Other Capital Expenses Assumptions (Base

Case)


69

Intr

ate

c | A

pp

en

dix

F. E

con

om

ic A

ssu

mp

tio

ns

Operational Expenses

Fixed Costs

Fixed costs are estimated based on the specificcharacteristics of the process. The fixed costs, like operatingcharges and plant overhead, are typically calculated as apercentage of the industrial labor costs, and G & A expensesare added as a percentage of the operating costs.

The goal of depreciation is to allow a credit againstmanufacturing costs, and hence taxes, for the non-recoverable capital expenses of an investment. Thedepreciable portion of capital expense is the total fixedinvestment.

Table 40 shows the project depreciation value and theassumptions used in its calculation.

Table 39 – Other Fixed Cost Assumptions


Table 40 – Depreciation Value & Assumptions


70

Intr

atec

| A

pp

end

ix G

. Rel

ease

d P

ub

licat

ion

s

The list below is intended to be an easy and quick way toidentify Intratec reports of interest. For a more completeand up-to-date list, please visit the Publications section onour website, www.intratec.us.

TECHNOLOGY ECONOMICS

Propylene Production via Metathesis: Propyleneproduction via metathesis from ethylene and butenes,in a process similar to Lummus OCT.

Propylene Production via Propane

Dehydrogenation: Propane dehydrogenation (PDH)process conducted in moving bed reactors, in aprocess similar to UOP OLEFLEX™.

Propylene Production from Methanol: Propyleneproduction from methanol, in a process is similar toLurgi MTP®.

Polypropylene Production via Gas Phase Process: Agas phase type process similar to the Dow UNIPOL™ PPprocess to produce both polypropylene homopolymerand random copolymer.

Polypropylene Production via Gas Phase Process,

Part 2: A gas phase type process similar to LummusNOVOLEN® for production of both homopolymer andrandom copolymer.

Sodium Hypochlorite Chemical Production: Sodiumhypochlorite (bleach) production, in a widely usedindustrial process, similar to that employed by SolvayChemicals, for example.


Dehydrogenation, Part 2: Propane dehydrogenation(PDH) in fixed bed reactors, in a process is similar toLummus CATOFIN®.


Dehydrogenation, Part 3: Propane dehydrogenation(PDH) by applying oxydehydrogenation, in a processsimilar to the STAR PROCESS® licensed by Uhde.

CONCEPTUAL DESIGN

Membranes on Polyolefins Plants Vent Recovery:

The Report evaluates membrane units for theseparation of monomer and nitrogen in PP plants,similar to the VaporSep® system commercialized byMTR.

Use of Propylene Splitter to Improve Polypropylene

Business: The report assesses the opportunity ofpurchasing the less valued RG propylene to producethe PG propylene raw material used in a PP plant.

Appendix G. Released Publications

Appendix H.

Technology Economics Form

Submitted by Client

Appendix H. Technology Economics FormSubmitted by Client

Chemical Produced by the Technology to be Studied

Define the main chemical product of your interest. Possible choices are presented below.

Choose a Chemical Acetic Acid Acetone Acrylic Acid

Acrylonitrile Adipic Acid Aniline

Benzene Butadiene n-Butanol

Isobutylene Caprolactam Chlorine

Cumene Dimethyl Ether (DME) Ethanol

Ethylene Bio-Ethylene Ethylene Glycol

Ethylene Oxide Formaldehyde HDPE

Isoprene LDPE LLDPE

MDI Methanol Methyl Methacrylate

Phenol Polypropylene (PP) Polybutylene Terephthalate

Polystyrene (PS) Polyurethanes (PU) Polyvinyl Chloride (PVC)

Propylene Propylene Glycol Propylene Oxide (PO)

Terephthalic Acid Vinyl Chloride (VCM)

If the main chemical product of your target technology is not found above, please check the "Technology Economic Form - Specialties".

Chemical Process Technology to be Studied

Identify the mature chemical process technology you would like us to assess. Intratec considers mature technologies the ones already used ona commercial scale plant.

Technology Description

E. g. technology for propylene production from methanol - similar to Lurgi MTP

Commercial Scale Unit. Inform the exact location of one commercial scale plant under operation.

Plant Location: I don't know

I know the location of a commercial plant:

If there is no commercial scale plant based on the technology of your interest, you are referred to Intratec's Research Potential advisory serviceat www.intratec.us/advisory/research-potential/overview

Industrial Unit Description

Plant Nominal Capacity Operating Hours

Inform the plant capacity to be considered in the study. Providethe main product capacity in kta (thousands of metric tons peryear of main chemical product).

Inform the assumption for the number of hours the plantoperates in a year.

Plant Capacity 150 kta

300 kta

Other (kta)

Operating Hours 8,000 h/year

Other (h/year)

Methanol-to-propylene similar to Lurgi MTP

Ningxia, China

557

Analysis Date

Define the date (quarter and year) that will be considered in the analysis. Our databases can provide consolidated values from the year 2000up to the last closed quarter, quarter-to-date values are estimated.

Quarter Year

Storage Facilities

Define the assumptions employed for the storage facilities design.

Products 20 days

Other

By-Products 20 days

Other

Raw Materials 20 days

Other

Utilities Supply Facilities

The construction of supply facilities for the utilities required (e.g. cooling tower, boiler unit, refrigeration unit) impacts the capital investmentfor the construction of the unit.

Consider construction of supply facilities ? Yes No

General Design Conditions

General utilities and environmental conditions that may be relevant to the process simulation are presented below. Provide other assumptions ifyou deem necessary.

Specification Unit Default Value User-specified value

Cooling water temperature ºC 24 DSPEC1

Cooling water range ºC 11 DSPEC2

Steam (Low Pressure) bar abs 7 DSPEC3

Steam (Medium Pressure) bar abs 11 DSPEC4

Steam (High Pressure) bar abs 28 DSPEC5

Refrigerant (Ethylene) ºC -100 DSPEC6

Refrigerant (Propane) ºC -40 DSPEC7

Refrigerant (Propylene) ºC -45 DSPEC8

Dry Bulb Air Temperature ºC 38 DSPEC9

Wet Bulb Air Temperature ºC 25 DS10

Industrial Unit Location

The location of an industrial unit influences in prices for both construction and operation of the unit. In this study, the economicperformances of TWO similar units erected in different locations are compared.

The first plant is located in the United States (US Gulf Coast) and the second location is defined by YOU.

Plant Location I would like to keep the plant location confidential.

Country (or region) to be considered.

E.g. Louisiana (USA), China or Saudi Arabia. Please define only one location.

Plant Location DataProvider

I will use Intratec's Internal Database containing standard chemical prices and location factors(only for Germany, Japan, China or Brazil).

I will provide location specific data. Please fill the Custom Location topic below.

Q3 2011

0 0 0

China

Custom Location Description. Describe both capital investment and prices at your custom location.

A) Capital Investment. Provide the relative capital cost at your custom location in comparison to the United States (U.S. Gulf Coast)

Custom Location Relative Cost (%)

130% means that the capital costs in the custom location are 30% higher than the costs in the United States.

B) Raw Materials Prices. Describe the raw material prices to be considered in the custom location.

Item Description Price Unit Price

Raw1 RU1 RP1

Raw2 RU2 RP2

Raw3 RU3 RP3

E.g. Propane USD/metric ton 420

C) Product Prices. Describe the products prices to be considered in the custom location.


Prod1 PU1 PP1

Prod2 PU2 PP2

Prod3 PU3 PP3

E.g. Polypropylene USD/metric ton 1700

D) Utilities Prices. Describe the utilities prices to be considered in the custom location.


Electricity UP1

Steam (Low Pressure) UP2

Steam (High Pressure) UP3

Fuel UP4

Clarified Water UP5

Util6 UU6 YP6

Util7 UU7 UP7

Util8 UU8 UP8

E) Labor Prices. Describe the labor prices to be considered in the custom location.


Operating Labor USD/operator/hour LP1

Supervision Labor USD/supervisor/hour LP1

F) Others. Describe any other price you deem necessary to be considered in the custom location.


Other1 OU1 OP1

Other2 OU2 OP2

Other3 OU3 OP3

E.g. Catalyst USD/metric ton 5000

Methanol USD/ton

PG Propylene USD/ton

Gasoline USD/ton

USD/kWh

USD/ton

USD/ton

USD/MMBtu

Other Remarks

If you have any other comments, feel free to write them below:

Comments:

Complementary Files

Along with this form, you may also upload any other chemical document deemed relevant for the description of the project, such asarticles, brochures, book sections, patents, etc. Multiple files may be uploaded.

If you are filling this form offline please upload this form and any complementary files at www.intratec.us/advisory/technology-economics/order-commodities

Non-Disclosure Period & Pricing

You can keep your study confidential or get discounts, by allowing Intratec to disclose it to the market as a publication, after anagreed non-disclosure period, starting at the date you place your order.

Choose an Option 6 months 24 months 36 months Never Disclosed

Non-Disclosure Period Price

6 months $8,000 (9 x $899) Save 84% - Payment of our advisory service is conducted

24 months $28,000 (9 x $3,111) Save 44% automatically, in equal and pre-defined installments

36 months $40,000 (11 x $3,636) Save 20% - Every 15 days, an installment will be charged to your

Never Disclosed $50,000 (13 x $3,846) credit card or PayPal account.

Pay Less! Benefit From a 5% Discount

Inform us the email address of the Intratec Agent that introduced you to our advisory services you will benefit from a 5% discount on the totalprice of your service. To know more about Intratec New Business Development Agents, please visit www.intratec.us/be-our-agent.

Intratec Agent Email

Evaluate our Intratec Agent. Your opinion will be kept confidential.

Unsatisfied Neutral Satisfied

Knowledge about Intratecofferings and presentation skills

Kindness and Helpfulness

DOWNLOAD EXAMPLES OF FILLED FORMS HERE.

DOWNLOAD A PDF VERSION OF THIS FORM HERE.

NEED ASSISTANCE ? SEND AN EMAIL TO [email protected].

v.1-mar-13

I provided the main prices I would like to include in my analysis. Please, use Intratec's prices for China in the other fields I havenot filled.

Technology Economics

Standardized advisory services developed under Intratec’s Consulting as Publications pioneer approach. Technology Economics studies answer main questions surrounding process technologies:

- How is the technology? What are the main pieces of equipment required?

- What are the raw materials and utilities consumption rates?

- What are the capital and operating expenses breakdown?

- What are the economic indicators?

- In which regions is this technology more profitable?

technology economics: propylene from methanol

Documents

trillion cubic

regional business

project implementation

fccnaphtha

mass balance

local steel

total capital

regional comparison