1. Propylene via Metathesis

2. #TEC001B Technology Economics Propylene Production via Metathesis 2013Abstract Propylene is the raw material for a wide variety of products, and has established itself as the second major member of the global olefins business, only after ethylene. Globally, the largest volume of propylene is produced in steam crackers and through the fluid-catalytic cracking (FCC) process. The propylene is typically considered a co-product in these processes, which are primarily driven by ethylene and motor gasoline production respectively. As a result, new and novel lower-cost chemical processes for on-purpose propylene production technologies are of high interest to the petrochemical marketplace. Such processes include: Metathesis, Propane Dehydrogenation, Methanol-toOlefins/Methanol-to-Propylene, High Severity FCC, and Olefins Cracking. In this report, the production of propylene via metathesis from ethylene and butenes is reviewed. Included in the analysis is an overview of the technology and economics of a process similar to the CB&I Lummus OCT process. Both the capital investment and the operating costs are presented for a plant constructed in 2011 in the US Gulf and Germany. Also, alternative ways to produce propylene via butenes-only metathesis, called self-metathesis, as well as via ethylene-only metathesis, through the use of an ethylene dimerization unit together with a metathesis plant, were presented. Discussions regarding the integration of a metathesis unit with an olefin plant are also presented.Copyrights 2013 by Intratec Solutions LLC. All rights reserved. Printed in the United States of America. 3. This Publication Was Not a Publication How Readers Benefit? It was actually an advisory service ordered by one of our clients, now disclosed to our readership with his consent.From academics to industry executives, our readers benefit by gaining access to real consulting cases, released for the first time to the market as one-of-a-kind publications at affordable prices.It results from the innovative concept, designed by Intratec for leading companies in the chemical and allied sectors who have asked for more affordable and reliable studies to plan their investments. Intratecs strategy works by charging clients lower-than-market fees to conduct a technology advisory service with the understanding that such studies may be released, after an agreed upon period of time, as publications. Available through well-known sales channels such as Amazon, Google Books and HP MagCloud, our publications can be purchased by any interested reader.In short, our clients receive traditionally expensive studies for a fraction of the cost, and our readers get unprecedented access to real professional publications at steep discounts.Through our university discount policy, students and faculty members will be able to become familiar with challenges faced by industry for a price similar to a usual textbook.How Clients Benefit? While traditional consulting firms charge their clients hundreds of thousands of dollars, Intratec offers, from the convenience of a web browser, a much better advisory experience for a price 80% lower than market.What is Technology Economics? Advisory services targeting investments on new chemical units, answering: What is the process? What equipment is necessary? What are the raw materials and utilities consumptions? What are the operating and capital expenses? In which locations is this technology more profitable? Each new assignment comprises of a study structured like this publication, valuable spreadsheets and broad support.iiFREE SAMPLE 4. Consulting as Publications at a Glance 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. FREE SAMPLEiii 5. Terms & Conditions Information, analyses and/or models herein presented are prepared on the basis of publicly available information and non-confidential information disclosed by third parties. Third parties, including, but not limited to technology licensors, trade associations or marketplace participants, may have provided some of the information on which the analyses or data are based. Intratec Solutions LLC (known as Intratec) does not believe that such information will contain any confidential information but cannot provide any assurance that any third party may, from time to time, claim a confidential obligation to such information. The aforesaid information, analyses and models are developed independently by Intratec and, as such, are the opinion of Intratec and do not represent the point of view of any third parties nor imply in any way that they have been approved or otherwise authorized by third parties that are mentioned in this publication. The application of the solutions presented in this publication without license from the owners infringes on the intellectual property rights of the owners, including patent rights, trademark rights, and rights to trade secrets and proprietary information. Intratec conducts analyses and prepares publications and models for readers in conformance with generally accepted professional standards. Although the statements in this publication are derived from or based on several sources that Intratec believe to be reliable, Intratec does not guarantee their accuracy, reliability, or quality; any such information, or resulting analyses, may be incomplete, inaccurate or condensed. All estimates included in this publication are subject to change without notice. This publication is for informational purposes only and is not intended as any recommendation of investment. Reader agrees it will not, without prior written consent of Intratec, represent, directly or indirectly, that its products have 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 other person 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, arising from the use of this publication, whether or not they or it had any knowledge, actual or constructive, that such damages might be incurred. Reader shall indemnify and hold harmless Intratec and its resellers, representatives, distributors, and information providers against any claim, damages, loss, liability or expense arising out of readers use of the publication in any way contrary to the present terms and conditions. Intratec publications are the product of extensive work and original research and are protected by international copyright law. Products supplied as printed reports or books should not be copied but can be included in schools, universities or corporate libraries and circulated to colleagues to the extended permitted by copyright law. Products supplied digitally are licensed, not sold. The purchaser is responsible for ensuring that license terms are adhered to at all times. PDF documents may be supplied watermarked with the customers name, email and/or company. Digital documents are supplied with an enterprise license and can be shared by all employees and on-site contractors of a single organization. Members of the organization may make such copies as are necessary to facilitate this distribution. An enterprise license does not permit sharing with external organizations. Reader agrees that Intratec retains all rights, title and interest, including copyright and other proprietary rights, in this publication and all material, including but not limited to text, images, and other multimedia data, provided or made available as part of this publication.1 6. Contents About this Study .............................................................................................................................................................. 8 Object of Study.............................................................................................................................................................................................................................8 Analysis Performed ....................................................................................................................................................................................................................8 Construction Scenarios ..............................................................................................................................................................................................................8 Location Basis ...................................................................................................................................................................................................................................9Design Conditions......................................................................................................................................................................................................................9Study Background ........................................................................................................................................................ 10 About Propylene ......................................................................................................................................................................................................................10 Introduction.................................................................................................................................................................................................................................... 10 Applications.................................................................................................................................................................................................................................... 10Manufacturing Alternatives ..............................................................................................................................................................................................11 Licensor(s) & Historical Aspects......................................................................................................................................................................................13Technical Analysis......................................................................................................................................................... 14 Chemistry.......................................................................................................................................................................................................................................14 Raw Material ................................................................................................................................................................................................................................14 Ethylene ............................................................................................................................................................................................................................................ 15 2-Butenes ......................................................................................................................................................................................................................................... 15Technology Overview...........................................................................................................................................................................................................16 Detailed Process Description & Conceptual Flow Diagram.......................................................................................................................17 Area 100: Purification & Reaction ......................................................................................................................................................................................17 Area 200: Separation ................................................................................................................................................................................................................. 17 Key Consumptions ..................................................................................................................................................................................................................... 18 Technical Assumptions ........................................................................................................................................................................................................... 18 Labor Requirements.................................................................................................................................................................................................................. 18ISBL Major Equipment List.................................................................................................................................................................................................20 OSBL Major Equipment List ..............................................................................................................................................................................................21 Other Process Remarks ........................................................................................................................................................................................................22 Typical Complete Process Scheme..................................................................................................................................................................................22 Other Process Scenarios .........................................................................................................................................................................................................22Economic Analysis........................................................................................................................................................ 25 2FREE SAMPLE 7. General Assumptions............................................................................................................................................................................................................25 Project Implementation Schedule...............................................................................................................................................................................26 Capital Expenditures..............................................................................................................................................................................................................26 Fixed Investment......................................................................................................................................................................................................................... 26 Working Capital............................................................................................................................................................................................................................ 29 Other Capital Expenses ...........................................................................................................................................................................................................30 Total Capital Expenses ............................................................................................................................................................................................................. 30Operational Expenditures ..................................................................................................................................................................................................30 Manufacturing Costs................................................................................................................................................................................................................. 30 Historical Analysis........................................................................................................................................................................................................................ 31Economic Datasheet .............................................................................................................................................................................................................31Regional Comparison & Economic Discussion.................................................................................................... 34 Regional Comparison............................................................................................................................................................................................................34 Capital Expenses.......................................................................................................................................................................................................................... 34 Operational Expenditures......................................................................................................................................................................................................34 Economic Datasheet................................................................................................................................................................................................................. 34Economic Discussion ............................................................................................................................................................................................................35References....................................................................................................................................................................... 37 Acronyms, Legends & Observations....................................................................................................................... 38 Technology Economics Methodology................................................................................................................... 39 Introduction.................................................................................................................................................................................................................................39 Workflow........................................................................................................................................................................................................................................39 Capital & Operating Cost Estimates ............................................................................................................................................................................41 ISBL Investment............................................................................................................................................................................................................................ 41 OSBL Investment ......................................................................................................................................................................................................................... 41 Working Capital............................................................................................................................................................................................................................ 42 Start-up Expenses ....................................................................................................................................................................................................................... 42 Other Capital Expenses ...........................................................................................................................................................................................................43 Manufacturing Costs................................................................................................................................................................................................................. 43Contingencies ............................................................................................................................................................................................................................43 Accuracy of Economic Estimates..................................................................................................................................................................................44 Location Factor..........................................................................................................................................................................................................................44Appendix A. Mass Balance & Streams Properties............................................................................................... 46 Appendix B. Utilities Consumption Breakdown ................................................................................................. 48FREE SAMPLE3 8. Appendix C. Process Carbon Footprint ................................................................................................................. 49 Appendix D. Equipment Detailed List & Sizing................................................................................................... 50 Appendix E. Detailed Capital Expenses................................................................................................................. 54 Direct Costs Breakdown ......................................................................................................................................................................................................54 Indirect Costs Breakdown ..................................................................................................................................................................................................55Appendix F. Economic Assumptions...................................................................................................................... 56 Capital Expenditures..............................................................................................................................................................................................................56 Construction Location Factors ...........................................................................................................................................................................................56 Working Capital............................................................................................................................................................................................................................ 56 Other Capital Expenses ...........................................................................................................................................................................................................56Operational Expenditures ..................................................................................................................................................................................................57 Fixed Costs ...................................................................................................................................................................................................................................... 57 Depreciation................................................................................................................................................................................................................................... 57 EBITDA Margins Comparison...............................................................................................................................................................................................57Appendix G. Released Publications ........................................................................................................................ 58 Appendix H. Technology Economics Form Submitted by Client ................................................................. 594FREE SAMPLE 9. 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 Metathesis Reactions for Propylene......................................................................................................................................................................14 Table 6 Isobutene Side Reactions .............................................................................................................................................................................................14 Table 7 Typical Crude C4 Stream from an Olefins Plant ............................................................................................................................................15 Table 8 Raw Materials & Utilities Consumption (per ton of Product)...............................................................................................................18 Table 9 Design & Simulation Assumptions.........................................................................................................................................................................18 Table 10 Labor Requirements for a Typical Plant ...........................................................................................................................................................18 Table 11 Main Streams Operating Conditions and Composition.......................................................................................................................20 Table 12 Inside Battery Limits Major Equipment List...................................................................................................................................................20 Table 13 Outside Battery Limits Major Equipment List ..............................................................................................................................................21 Table 14 Integration of a Metathesis Unit with a Naphtha Steam Cracker ..................................................................................................22 Table 15 Butenes Auto-Metathesis Reactions ..................................................................................................................................................................24 Table 16 Base Case General Assumptions...........................................................................................................................................................................25 Table 17 Bare Equipment Cost per Area (USD Thousands).....................................................................................................................................26 Table 18 Total Fixed Investment Breakdown (USD Thousands) ..........................................................................................................................26 Table 19 Working Capital (USD Million) ................................................................................................................................................................................29 Table 20 Other Capital Expenses (USD Million) ...............................................................................................................................................................30 Table 21 CAPEX (USD Million)......................................................................................................................................................................................................30 Table 22 Manufacturing Fixed Cost (USD/ton) ................................................................................................................................................................30 Table 23 Manufacturing Variable Cost (USD/ton)..........................................................................................................................................................31 Table 24 OPEX (USD/ton)................................................................................................................................................................................................................31 Table 25 Technology Economics Datasheet: Propylene via Metathesis at US Gulf..............................................................................33 Table 26 Technology Economics Datasheet: Propylene via Metathesis in Germany ...........................................................................36 Table 27 Project Contingency......................................................................................................................................................................................................43 Table 28 Criteria Description.........................................................................................................................................................................................................43 Table 29 Accuracy of Economic Estimates .........................................................................................................................................................................44 Table 30 Detailed Material Balance Stream Properties...............................................................................................................................................46 Table 31 Detailed Material Balance Stream Properties...............................................................................................................................................47 Table 32 Utilities Consumption Breakdown ......................................................................................................................................................................48FREE SAMPLE5 10. Table 33 Assumptions for CO2e Emissions Calculation.............................................................................................................................................49 Table 34 CO2e Emissions (ton/ton prod.)............................................................................................................................................................................49 Table 35 Reactors..................................................................................................................................................................................................................................50 Table 36 Heat Exchangers ..............................................................................................................................................................................................................50 Table 37 Pumps......................................................................................................................................................................................................................................51 Table 38 Columns.................................................................................................................................................................................................................................52 Table 39 Utilities Supply...................................................................................................................................................................................................................52 Table 40 Vessels & Tanks Specifications ................................................................................................................................................................................53 Table 41 Indirect Costs Breakdown for the Base Case (USD Thousands) ......................................................................................................55 Table 42 Detailed Construction Location Factor............................................................................................................................................................56 Table 43 Working Capital Assumptions for Base Case................................................................................................................................................56 Table 44 Other Capital Expenses Assumptions for Base Case...............................................................................................................................56 Table 45 Other Fixed Cost Assumptions ..............................................................................................................................................................................57 Table 46 Depreciation Value & Assumptions ....................................................................................................................................................................576FREE SAMPLE 11. List of Figures Figure 1 OSBL Construction Scenarios .....................................................................................................................................................................................8 Figure 2 Propylene from Multiple Sources .........................................................................................................................................................................12 Figure 3 Process Block Flow Diagram.....................................................................................................................................................................................16 Figure 4 Inside Battery Limits Conceptual Process Flow Diagram.....................................................................................................................19 Figure 5 Typical Integration Between Olefin Plant and Metathesis Unit.......................................................................................................23 Figure 6 Metathesis Technology Alternatives ..................................................................................................................................................................24 Figure 7 Project Implementation Schedule.......................................................................................................................................................................25 Figure 8 Total Direct Cost of Different Integration Scenarios (USD Thousands) ......................................................................................28 Figure 9 Total Fixed Investment of Different Integration Scenarios (USD Thousands) .......................................................................28 Figure 10 Total Fixed Investment Validation (USD Million).....................................................................................................................................29 Figure 11 OPEX and Product Sales History (USD/ton) ................................................................................................................................................32 Figure 12 EBITDA Margin & IP Indicators History Comparison..............................................................................................................................32 Figure 13 CAPEX per Location (USD Million).....................................................................................................................................................................34 Figure 14 Operating Costs Breakdown per Location (USD/ton) .........................................................................................................................35 Figure 15 Methodology Flowchart...........................................................................................................................................................................................40 Figure 16 Location Factor Composition...............................................................................................................................................................................44 Figure 17 ISBL Direct Costs Breakdown by Equipment Type for Base Case ................................................................................................54 Figure 18 OSBL Direct Costs Breakdown by Equipment Type for Base Case..............................................................................................54 Figure 19 Historical EBITDA Margins Regional Comparison ...................................................................................................................................57FREE SAMPLE7 12. About this Study This study follows the same pattern as all Technology Economics studies developed by Intratec and is based on the same rigorous methodology and well-defined structure (chapters, type of tables and charts, flow sheets, etc.).Analysis PerformedThis chapter summarizes the set of information that served as input to develop the current technology evaluation. All required data were provided through the filling of the Technology Economics Form available at Intratecs website.The economic analysis is based on the construction of a plant partially integrated to a petrochemical complex, in which feedstock is locally provided but propylene product must be stored to be sent outside the complex. Therefore, storage is only required for the product. Utilities supply facilities must also be built, since there is no utility supply from the existing petrochemical complex.Construction ScenariosYou may check the original form in the Appendix H. Technology Economics Form Submitted by Client.Since the Outside Battery Limits (OSBL) requirements storage and utilities supply facilities significantly impact the capital cost estimates for a new venture, they may play a decisive role in the decision as to whether or not to invest. Thus, in this study three distinct OSBL configurations are compared. Those scenarios are summarized in Figure 1 and Table 1.Object of Study This assignment assesses the economic feasibility of an industrial unit for propylene production via metathesis from ethylene and butenes implementing technology similar to the CB&I Lummus OCT process. The current assessment is based on economic data gathered on Q3 2011 and a chemical plants nominal capacity of 350 kta (thousand metric tons per year).Figure 1 OSBL Construction Scenarios Non-IntegratedPartially IntegratedFully IntegratedProducts StorageProducts StorageProducts ConsumerISBL UnitISBL UnitISBL UnitRaw Materials StorageRaw Materials ProviderRaw Materials ProviderPetrochemical ComplexPetrochemical ComplexUnit is part of a petrochemical complexMost infrastructure is already installedIntratec | About this StudyGrassroots unit8Source: Intratec www.intratec.usFREE SAMPLE 13. Table 1 Construction Scenarios Assumptions (Based on Degree of Integration)Storage Capacity(Base Case for Evaluation)Feedstock & Chemicals20 days of operationNot includedNot includedEnd-products & By-products20 days of operation20 days of operationNot includedAll requiredAll requiredOnly refrigeration unitsUtility Facilities IncludedControl room, labs, gate house, Support & Auxiliary Facilitiesmaintenance shops,(Area 900)warehouses, offices, change house, cafeteria, parking lotControl room, labs, maintenance shops,Control room and labswarehousesSource: Intratec www.intratec.usLocation Basis The assumptions that distinguish the two regions analyzed in this study are provided in Table 2. Table 2 Location & Pricing BasisDesign ConditionsBasis: Q3-2011US GulfGermanyLocation Factor1.001.32PricingThe process analysis is based on rigorous simulation models developed on Aspentech Aspen Plus and Hysys, which support the design of the chemical process, equipment and OSBL facilities.PG PropyleneUSD/ton16901294Raffinate-2USD/ton1043962EthyleneUSD/ton1304.71246.7Cooling WaterUSD/m30.00050.0016LP SteamUSD/ton15.450.2Inert GasUSD/Nm30.100.15Cooling water temperature24 CElectricityUSD/kWh0.070.12Cooling water range11 CFuelUSD/MMBtu4.414.4Steam (Low Pressure)7 bar absOperator SalariesUSD/man-hour56.875.8Refrigerant (Propylene)-45 CSupervisor SalariesUSD/man-hour85.3113.7Wet Bulb Air Temperature25 CThe design assumptions employed are depicted in Table 3.Source: Intratec www.intratec.usRegional specific conditions influence both construction and operating costs. This study compares the economic performance of two identical plants operating in different locations: the US Gulf Coast and Germany.FREE SAMPLEIntratec | About this StudySource: Intratec www.intratec.usTable 3 General Design Assumptions9 14. Study Background About PropyleneWhile CG propylene is used extensively for most chemical derivatives (e.g., oxo-alcohols, acrylonitrile, etc.), PG propylene is used in polypropylene and propylene oxide manufacture.Introduction Propylene is an unsaturated organic compound having the chemical formula C3H6. It has one double bond, is the second simplest member of the alkene class of hydrocarbons, and is also second in natural abundance.PG propylene contains minimal levels of impurities, such as carbonyl sulfide, that can poison catalysts. Thermal & Motor Gasoline Uses Propylene has a calorific value of 45.813 kJ/kg, and RG propylene can be used as fuel if more valuable uses are unavailable locally (i.e., propane propene splitting to chemical-grade purity). RG propylene can also be blended into LPG for commercial sale.Propylene 2D structure Propylene is produced primarily as a by-product of petroleum refining and of ethylene production by steam cracking of hydrocarbon feedstocks. Also, it can be produced in an on-purpose reaction (for example, in propane dehydrogenation, metathesis or syngas-to-olefins plants). It is a major industrial chemical intermediate that serves as one of the building blocks for an array of chemical and plastic products, and was also the first petrochemical employed on an industrial scale. Commercial propylene is a colorless, low-boiling, flammable, and highly volatile gas. Propylene is traded commercially in three grades:Also, propylene is used as a motor gasoline component for octane enhancement via dimerization formation of polygasoline or alkylation. Chemical Uses The principal chemical uses of propylene are in the manufacture 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 polypropylene production, which accounts for about two-thirds of total propylene demand.Polymer Grade (PG): min. 99.5% of purity. Chemical Grade (CG): 90-96% of purity. Refinery Grade (RG): 50-70% of purity.Table 4 Major Propylene ConsumersIntratec | Study BackgroundApplications10PolypropyleneThe three commercial grades of propylene are used for different applications. RG propylene is obtained from refinery processes. The main uses of refinery propylene are in liquefied petroleum gas (LPG) for thermal use or as an octane-enhancing component in motor gasoline. It can also be used in some chemical syntheses (e.g., cumene or isopropanol). The most significant market for RG propylene is the conversion to PG or CG propylene for use in the production of polypropylene, acrylonitrile, oxo-alcohols and propylene oxide.Mechanical parts, containers, fibers, filmsAcrylonitrileAcrylic fibers, ABS polymersPropylene oxidePropylene glycol, antifreeze, polyurethaneOxo-alcoholsCoatings, plasticizersCumenePolycarbonates, phenolic resinsAcrylic acidCoatings, adhesives, super absorbent polymersSource: Intratec www.intratec.usFREE SAMPLE 15. phases. This process converts heavy gas oil preferentially into gasoline and light gas oil.Propylene is commercially generated as a co-product, either in an olefins plant or a crude oil refinerys fluid catalytic cracking (FCC) unit, or produced in an on-purpose reaction (for example, in propane dehydrogenation, metathesis or syngas-to-olefins plants). Globally, the largest volume of propylene is produced in NGL (Natural Gas Liquids) or naphtha steam crackers, which generates ethylene as well. In fact, the production of propylene from such a plant is so important that the name olefins plant is often applied to this kind of manufacturing facility (as opposed to ethylene plant). In an olefins plant, propylene is generated by the pyrolysis of the incoming feed, followed by purification. Except where ethane is used as the feedstock, propylene is typically produced at levels ranging from 40 to 60 wt% of the ethylene produced. The exact yield of propylene produced in a pyrolysis furnace is a function of the feedstock and the operating severity of the pyrolysis.The propylene yielded from olefins plants and FCC units is typically considered a co-product in these processes, which are primarily driven by ethylene and motor gasoline production, respectively. Currently, the markets have evolved to the point where modes of by-product production can no longer satisfy the demand for propylene. A trend toward less severe cracking conditions, and thus to increase propylene production, has been observed in steam cracker plants using liquid feedstock. As a result, new and novel lower-cost chemical processes for on-purpose propylene production technologies are of high interest to the petrochemical marketplace. Such processes include:The pyrolysis furnace operation usually is dictated by computer optimization, where an economic optimum for the plant is based on feedstock price, yield structures, energy considerations, and market conditions for the multitude of products obtained from the furnace. Thus, propylene produced by steam cracking varies according to economic conditions. In an olefins plant purification area, also called separation train, propylene is obtained by distillation of a mixed C3 stream, i.e., propane, propylene, and minor components, in a C3-splitter tower. It is produced as the overhead distillation product, and the bottoms are a propaneenriched stream. The size of the C3-splitter depends on the purity of the propylene product. The propylene produced in refineries also originates from other cracking processes. However, these processes can be compared to only a limited extent with the steam cracker for ethylene production because they use completely different feedstocks and have different production objectives. Refinery cracking processes operate either purely thermally or thermally catalytically. By far the most important process for propene production is the fluid- catalytic cracking (FCC) process, in which the powdery catalyst flows as a fluidized bed through the reaction and regenerationFREE SAMPLEOlefin Metathesis. Also known as disproportionation, metathesis is a reversible reaction between ethylene and butenes in which double bonds are broken and then reformed to form propylene. Propylene yields of about 90 wt% are achieved. This option may also be used when there is no butene feedstock. In this case, part of the ethylene feeds an ethylene-dimerization unit that converts ethylene into butene. Propane Dehydrogenation. A catalytic process that converts propane into propylene and hydrogen (byproduct). The yield of propylene from propane is about 85 wt%. The reaction by-products (mainly hydrogen) are usually used as fuel for the propane dehydrogenation reaction. As a result, propylene tends to be the only product, unless local demand exists for the hydrogen by-product. Methanol-to-Olefins/Methanol-to-Propylene. A group of technologies that first converts synthesis gas (syngas) to methanol, and then converts the methanol to ethylene and/or propylene. The process also produces water as by-product. Synthesis gas is produced from the reformation of natural gas or by the steam-induced reformation of petroleum products such as naphtha, or by gasification of coal. A large amount of methanol is required to make a world-scale ethylene and/or propylene plant. High Severity FCC. Refers to a group of technologies that use traditional FCC technology under severe conditions (higher catalyst-to-oil ratios, higher steam injection rates, higher temperatures, etc.) in order to maximize the amount of propylene and other light products. A high severity FCC unit is usually fed withIntratec | Study BackgroundManufacturing Alternatives11 16. gas oils (paraffins) and residues, and produces about 20-25 wt% propylene on feedstock together with greater volumes of motor gasoline and distillate byproducts.These on-purpose methods are becoming increasingly significant, as the shift to lighter steam cracker feedstocks with relatively lower propylene yields and reduced motor gasoline demand in certain areas has created an imbalance of supply and demand for propylene.Olefins Cracking. Includes a broad range of technologies that catalytically convert large olefins molecules (C4-C8) into mostly propylene and small amounts of ethylene. This technology will best be employed as an auxiliary unit to an FCC unit or steam cracker to enhance propylene yields.Figure 2 Propylene from Multiple SourcesNaphtha NGLSteam CrackerRefinery FCC UnitGas OilRG PropylenePropanePDHEthylene/ ButenesMetathesisMethanolMTO/MTPIntratec | Study BackgroundGas Oil12High Severity FCCC4 to C8 OlefinsOlefins CrackingSource: Intratec www.intratec.usFREE SAMPLECG/PG Propylene 17. Licensor(s) & Historical Aspects By the 1960s, Phillips Petroleum developed the first commercial process of olefin metathesis. The focus, at that time, was to convert propylene into ethylene and 2-butene. This technology was developed in an effort to increase ethylene and butene production from low value crackerderived propylene to meet the growing market demand for polyethylene and polybutadiene. A plant based on the Phillips Triolefin technology was operational from 1965 to 1972 by Shawinigan Chemicals, in Canada, until its shutdown due to economic reasons. The plant had the capacity to process 50 thousand tons of propylene per year (kta), that was obtained from a naphtha steam cracker, producing 15 kta of ethylene and 30 kta of butenes. The fact that metathesis is a reversible reaction, and that the demand for polymer grade (PG) propylene grew from the 1970s on, led to the use of the Phillips Triolefin process in a reverse way. This reverse process is known as Olefin Conversion Technology (OCT), and is now offered for license by Lummus Technology, a CB&I Company. Lummus OCT was first used in 1985 by Equistar (now a wholly owned subsidiary of LyondellBasell industries), in the United States, to produce propylene by using ethylene and butenes. The unit's capacity was expanded in 1992.Intratec | Study BackgroundThe Institut Franais du Ptrole (IFP) and the Chinese Petroleum Corporation (CPC) have jointly worked to develop a process for the production of propylene, called Meta-4. This technology is currently being developed by Frances Axens, a subsidiary of IFP, formed in 2001 through the merger of IFPs licensing division with Procatalyse Catalysis & Adsorbents; however, until April 2012 Meta-4 was not commercialized.FREE SAMPLE13 18. Technical Analysis Chemistry Metathesis is a general term for a reversible reaction between two olefins, in which the double bonds are broken and then reformed to form new olefin products. In order to produce propylene by metathesis, a molecule of 2-butene and a molecule of ethylene are combined in the presence of a tungsten oxide catalyst to form two molecules of propylene.Table 6 Isobutene Side ReactionsIsobutene + 2-butenepropylene + 2-methyl 2-butene Isobutene + 1-buteneethylene + 2-methyl 2-penteneFastSlowSource: Intratec www.intratec.usEthylene2-ButenePropyleneThe following table summarizes the reactions that occur in the metathesis reactor. All reactions are essentially isothermal.The reaction of isobutene with ethylene is also nonproductive. If neglected, the concentration of this nonreactive species in the metathesis unit builds up, due to process recycles, reducing capacity.Raw Material Table 5 Metathesis Reactions for Propylene As previously explained, the raw materials for the production of propylene via metathesis reaction are ethylene and 2-butenes. Both components are mainly supplied from steam cracker units (olefins plants). FCC units can also be used as a source of such olefins.2-butene + ethylene2 propyleneFast1-butene + 2-butenepropylene + 2-penteneFast1-butene + 1-buteneethylene + 3-hexeneSlowSource: Intratec www.intratec.usIntratec | Technical AnalysisThe reaction of 1-butene with ethylene is non-productive, occupying catalyst sites but producing no product. So a magnesium oxide co-catalyst is added to the metathesis reactor to induce double bond isomerization reaction causing the shift from 1-butene to 2-butene and allows continued reaction.14When isobutene is present in the metathesis reactor, side reactions occur, as presented in Table 6 Isobutene Side Reactions.Steam cracker units are facilities in which a feedstock such as naphtha, liquefied petroleum gas (LPG), ethane, propane or butane is thermally cracked through the use of steam in a bank of pyrolysis furnaces to produce lighter hydrocarbons. The products obtained depend on the composition of the feed, the hydrocarbon-to-steam ratio, and on the cracking temperature and furnace residence time. Light hydrocarbon feeds such as ethane, LPGs, or light naphtha produce lighter products, mainly ethylene, propylene, and butadiene, with smaller amounts of heavier by-products. Heavier hydrocarbon feeds such as naphtha produce these lighter products, but also produce aromatic hydrocarbons, and hydrocarbons suitable for inclusion in gasoline or fuel oil.FREE SAMPLE 19. The higher cracking temperature (also referred to as severity) favors the production of ethylene and benzene, whereas lower severity produces higher amounts of propylene, C4-hydrocarbons and liquid products.Table 7 Typical Crude C4 Stream from an Olefins PlantAfter the pyrolysis process, the olefins are separated from the other by-products by distillation.C4 acetylenesTracesButadiene33Ethylene1-butene152-butenes9Isobutene30Iso-/normal- butanes13Besides steam crackers, other common sources of ethylene are FCC off-gas and vents from polyethylene units. FCC offgas is an inexpensive source of ethylene, because this stream is usually valued at fuel gas cost. Pretreatment, fractionation and refrigeration are necessary for recovery of the ethylene product; however, an FCC off-gas recovery system typically has an attractive internal rate of return (IRR). Polyethylene unit vents may not normally provide the quantity of ethylene necessary to supply metathesis units; consequently, other sources of ethylene would supplement any deficit. These vents must be treated to remove water and oxygen and a compressor is usually required to boost the vent streams to a metathesis processing pressure.2-Butenes The 2-butenes used as feedstock for the metathesis process are obtained from the crude C4 stream produced in olefins plants. This C4 stream consists of C4 acetylenes, butadiene, iso-/n-butenes, and iso-/n-butane. A typical composition is provided in Table 7. The desired C4 stream in a metathesis process consists of nbutenes (mainly 2-butenes), low amounts of isobutene (to avoid excess capacity due to excess recycling) and is almost devoid of butadiene (to avoid rapid catalyst fouling) and acetylenes. Iso-/n-butanes are inert to the metathesis process.Source: Intratec www.intratec.usBefore feeding a metathesis process, the C4 stream from olefins plants must be treated. Usually, the butadiene and C4 acetylenes are removed first to produce the designated raffinate-1. Such removal can be accomplished through either hydrogenation or extractive distillation. The components remaining in the mixture consist of 1butene, 2-butene, isobutene, and iso-/n-butanes from the original feed, in addition to what was produced in the hydrogenation steps, as well as a small quantity of unconverted or unrecovered butadiene. Isobutene can be removed through fractionation of raffinate-1, reaction with methanol, reaction with water, or reaction with itself. In all cases, the resulting mixture may contain both normal and iso-paraffins. The product from isobutene removal is designated raffinate-2, and it consists primarily of normal olefins and paraffins and minimal iso-olefins and iso-paraffins. Raffinate-2 is the most common source of butenes used in metathesis reactions. The paraffin components present in raffinate-2 are essentially inert and do not react in the metathesis process. Such paraffins are typically removed from the process via a purge stream in the separation system that follows the metathesis reactor.1 The components in a refinery or FCC based C4 cut are similar, with the exception that the percentage of paraffins is considerably greater.FREE SAMPLEIntratec | Technical AnalysisHigh-purity ethylene (min. 99.5 wt% purity) can be obtained from olefins plants. The use of PG ethylene in metathesis processes is desired because it requires minimal pretreatment for trace components, while other sources of ethylene typically require more rigorous pretreatment. Although PG ethylene prices are higher, capital expenditure for the metathesis unit is lower because no investment in pretreatment is required.15 20. Technology Overview The reactor product is cooled and fractionated to remove ethylene for recycle. A small portion of this recycle stream is purged to remove methane, ethane, and other light impurities from the process. The ethylene column bottom is fed to the propylene column where butenes are separated for recycle to the reactor, and some is purged to remove butanes, isobutylenes, and heavies from the process. The propylene column overhead is high-purity, PG propylene product.The Lummus OCT process for propylene consists of two main areas: purification & reaction, and separation. The simplified block flow diagram in Figure 3 summarizes the process. Ethylene feed plus recycled ethylene are mixed with the butenes feed plus recycled butenes and heated prior toThe catalyst promotes the reaction of ethylene and butene2 to form propylene, and simultaneously isomerizes butene1 to butene-2. A small amount of coke is formed on the catalyst, so the beds are periodically regenerated using nitrogen-diluted air. The ethylene-to-butene feed ratio toThis process description is for a stand-alone metathesis unit complex. The utility requirements which include cooling water, steam, electricity, fuel gas, nitrogen, and air are typically integrated with the existing complex.and maintain the per-pass butene conversion above 60%. Typical butene conversions range between 60 to 75%, with about 90% selectivity to propylene.Figure 3 Process Block Flow DiagramEthylene RecycleEthylene FeedButene FeedArea 100 Purification & ReactionArea 200 SeparationButene RecycleIntratec | Technical AnalysisSource: Intratec www.intratec.us16Light Ends Fuel GasFREE SAMPLEPG PropyleneHeavy Ends Fuel Gas 21. Detailed Process Description & Conceptual Flow Diagram(WO3/SiO2). Also, the co-catalyst magnesium oxide (MgO) is used to perform a double bond isomerization of 1-butene to 2-butene.This section describes the process for production of propylene via metathesis in detail. This description refers to a process similar to Lummus OCT process; however, some differences may be found, as all of the information herein presented is based on publicly available information.The raffinate-2 stream used in the metathesis unit is typically free of butadiene and has low isobutene content. Butadiene is typically removed below 50 wt ppm level and it is done to minimize fouling of the catalyst. Isobutene is removed to reduce the size of the metathesis unit. Isobutene is not a poison to the catalyst, but it reacts in the metathesis reactor at low conversion, which results in buildup of this molecule in the internal butenes recycle stream and increases hydraulic requirement and sizes of the equipment. Commercial units are in operation with about 7 wt% isobutene in the raffinate-2 feed stream.For a better understanding of the process, please refer to the Inside Battery Limits Conceptual Process Flow Diagram; the Main Streams Operating Conditions and Composition; and the Inside Battery Limits Major Equipment List, presented in the next pages.Area 100: Purification & Reaction First, fresh ethylene from ISBL storage tank and recycled ethylene are mixed with fresh and recycled butenes, and are fed through reactor feed treaters. The treaters consist of guard beds to remove potential catalyst poisons for the metathesis reaction, such as oxygenates, sulfur, alcohols, carbonyls, and water. The guard beds have a cyclic operation. One is normally in operation, while the other is regenerating. After treating, the stream is vaporized in a heat exchanger and superheated in a fired heater to the reaction temperature, typically between 280-320C. The reactor feed contains ethylene and n-butenes, mainly 2butenes, at the desired reaction ratio. Although the theoretical molar ratio between ethylene and butenes is 1:1, it is common to employ significantly greater ethylene/butene ratios to minimize undesirable side reactions, and to minimize C5+ olefin formation. The perpass butene conversion is between 60 and 75%. The metathesis reaction occurs in a fixed bed catalytic reactor. The main reaction that occurs is between ethylene and 2-butenes, to produce propylene. Side reactions also occur, producing by-products, primarily C5-C8 olefins. The reactor exit stream is cooled prior to the separation area. The process selectivity to propylene is typically about 90%. The catalyst used is tungsten oxide supported on silicaCoke, a by-product of the reaction, is deposited on the catalyst throughout the process. During regeneration the coke is burned in a controlled atmosphere. Systems required for regeneration include a fired regeneration gas heater and a supply of inert gas (usually nitrogen), compressed air, and hydrogen. Each reactor can run for about 30 days before requiring regeneration.Area 200: Separation The reactor exit stream contains a mixture of propylene, unconverted ethylene and butenes, butane, and some C5+ components from side reactions. Propylene purification is carried out in two columns. The first column separates unreacted ethylene for reuse in the reactor. The second column produces PG propylene as an overhead product and a bottom heavies stream. The stream leaving the reactor is first cooled against the reactor feed stream in an exchanger, and then cooled against cooling water before being sent to the deethylenizer column. The column is re-boiled by low pressure (LP) steam, and uses propylene refrigeration in the top condenser. Cryogenic temperatures exist due to the presence of unconverted ethylene in the top of the column. Pressure of the column is dependent upon the available refrigeration. The deethylenizer column overhead (unconverted ethylene) is recycled back to the reaction area through the column reflux pumps. The recycled ethylene stream is mixed with fresh ethylene, fresh butenes (raffinate-2) stream and recycled butenes stream. A small vent stream containing light paraffins and a small amount ofFREE SAMPLEIntratec | Technical AnalysisFor the purpose of this report, n-butenes, with a purity of 80%, will be considered raffinate-2. The process is divided into two main areas: purification & reaction, and separation.17 22. unconverted ethylene leaves the overhead of the deethylenizer reflux vessel as a lights purge stream. This stream can be returned to the ethylene cracker for recovery.Table 9 Design & Simulation AssumptionsThe bottom stream of the deethylenizer column is sent to the depropylenizer column for propylene recovery. The depropylenizer column separates PG propylene in the overhead from a heavies product stream (C4+) in the bottoms. PG propylene and heavies streams are sent to the product ISBL storage tank and C4+ purge storage tank respectively. LP steam is used in the reboiler and cooling water in the top condenser.Simulation Software Thermodynamic Model99.9 wt%Butenes on C4 stream80 wt%Temperature304 oCPressure30 bar absConversion (of Butenes)67%Selectivity (Butenes to Propylene)90%Ethylene: Butene Molar Feed RatioKey ConsumptionsPeng-RobinsonEthyleneA side-stream from the bottoms of the column is sent back as butenes recycled stream to the fresh/recycle C4 tank. This rate is set to maintain a high overall n-butenes conversion in the metathesis reactors. The columns bottoms can be sent to another column for recovery of gasoline and fuel oil.Aspen Hysys2 MgO andCatalystWO3/SiO2Source: Intratec www.intratec.usTable 8 Raw Materials & Utilities Consumption (per ton of Product)Labor Requirements Raffinate-20.97tonEthylene0.32tonCooling Water68.3m3LP Steam1.0tonInert Gas32.1Nm3Electricity286kWhFuel0.5MMBtuFuel By-Product12.8MMBtuTable 10 Labor Requirements for a Typical PlantNon-Integrated Plant51Partially Integrated Plant51Fully Integrated Plant31Source: Intratec www.intratec.usSource: Intratec www.intratec.usIntratec | Technical AnalysisTechnical Assumptions18All process design and economics are based on world-class capacity units that are competitive globally. Assumptions regarding the thermodynamic model used, reactor design basis and the raw materials composition are shown in Table 9. All data used to develop the process flow diagram was based on publicly available information.FREE SAMPLE 23. Figure 4 Inside Battery Limits Conceptual Process Flow DiagramEthylene from OSBL T-102 Butenes (Raffinate-2) from OSBL191For Disposal 1172 P-101A/B10V-101BP-102A/B6F-101V-101AE-10184R-102BR-102A9Fuel 5Nitrogen, Hydrogen, AirP-103A/B T-101F-102 Fuel13 23 Butenes RecycleEthylene Recycle CWCWE-201E-20314 RF (C3=)Lights PurgeCR-201CWCR-20224 CV-201CV-202 CP-201A/BCP-202A/B#118P-202A/BC-201#1C-202#30PG Propylene to OSBLT-201#62#60 LP ST16 P-201A/B#34 #65 LP STCC-201CC-20215 2125CWT-202E-202Heavies PurgeIntratec | Technical AnalysisP-203A/BSource: Intratec www.intratec.usFREE SAMPLE19 24. Table 11 Main Streams Operating Conditions and CompositionPhaseLLGL/GLLGLTemperature (C)-293030453-25107-25113Pressure (bar abs)226.0303022172217Mass Flow (kg/h)12,94038,950161,520161,49033,82075,80012011,760Ethylene (wt%)99.921.021.0100.0100.0Ethane (wt%)0.1tracestracestracestraces24.924.9traces40.1 5.0Propene (wt%) Butane (wt%)20.0C5+ (wt%)0.50.139.975.163.55.17.422.4Source: Intratec www.intratec.usISBL Major Equipment ListTable 11 presents the main streams composition and operating conditions. For a more complete material balance, see the Appendix A. Mass Balance & Streams Properties.Table 12 shows the equipment list by area. It also presents a brief description and the construction materials used.Information regarding utilities flow rates is provided in Appendix B. Utilities Consumptions Breakdown. For further details on greenhouse gas emissions caused by this process, see Appendix C. Process Carbon Footprint.Find main specifications for each piece of equipment in Appendix D. Equipment Detailed List & Sizing.Table 12 Inside Battery Limits Major Equipment ListFeed VaporizerCSF-101Reactor Feed HeaterCr-MoArea 100F-102Regeneration Gas HeaterCr-MoArea 100P-101A/BEthylene Feed PumpsCSArea 100P-102A/BRaffinate-2 Feed PumpsCSArea 100P-103A/BC4 Tank PumpsCSArea 10020E-101Area 100Intratec | Technical AnalysisArea 100R-102A/BMetathesis ReactorSSArea 100T-101Fresh/Recycle C4 TankCSArea 100T-102Ethylene ISBL StorageCSArea 100V-101A/BReactor Feed TreatersCSArea 200C-201Deethylenizer ColumnCSSource: Intratec www.intratec.usFREE SAMPLE 25. Table 12 Inside Battery Limits Major Equipment List (Cont.) Area 200C-202Depropylenizer ColumnCSArea 200CC-201Deethylenizer CondenserCSArea 200CC-202Depropylenizer CondenserCSArea 200CP-201Deethylen. Reflux PumpsCSArea 200CP-202Depropylen. Reflux PumpsCSArea 200CR-201Deethylenizer ReboilerCSArea 200CR-202Depropylenizer ReboilerCSArea 200CV-201Deethylenizer AccumulatorCSArea 200CV-202Depropylen. AccumulatorCSArea 200E-201Deethylenizer Feed CoolerCSArea 200E-202C4+ Purge CoolerCSArea 200E-203Butenes Recycle CoolerCSArea 200P-201A/BPropylene PumpsCSArea 200P-202A/BEthylene Recycle PumpsCSArea 200P-203A/BC4+ PumpsCSArea 200T-201Product ISBL StorageCSArea 200T-202C4+ Purge StorageCSSource: Intratec www.intratec.usOSBL Major Equipment ListTable 13 shows the list of tanks located on the storage area and the energy facilities required in the construction of a non-integrated unit.The OSBL is divided into three main areas: storage (Area 700), energy & water facilities (Area 800), and support & auxiliary facilities (Area 900).Table 13 Outside Battery Limits Major Equipment ListT-701Ethylene StorageCSArea 700T-702Raffinate StorageCSArea 700T-703Propylene StorageCSArea 700T-704Demin. Water TankCSArea 700T-705Clarified Water TankCSArea 800U-802RefrigeratorCSArea 800U-803Cooling TowerCSArea 800U-804Steam boilerCSArea 800U-805Water DemineralizerCSSource: Intratec www.intratec.usFREE SAMPLEIntratec | Technical AnalysisArea 70021 26. steam crackers. The lower energy consumption also improves the operating margin.Other Process Remarks Typical Complete Process Scheme Currently, most of the propylene produced is a by-product from steam cracking units that primarily produce ethylene, or a by-product from FCC units that primarily produce gasoline. With the maturity of olefin plants technology, improvements downstream of the steam cracker are more economically promising than improvements in the cracking technology itself. In this context, the use of a metathesis unit downstream of an olefin plant can bring benefits such as reducing the energy used and the carbon emissions, as well as increasing propylene production.Table 14 Integration of a Metathesis Unit with a Naphtha Steam CrackerCracker C3=/C2= ratio0.670.47Overall C3=/C2= ratio0.670.67Material balance (1,000 ton/year)Intratec | Technical AnalysisCompared to the standalone steam cracker, the integrated case consumes about 2% less fresh feedstock, while producing 50% more benzene and only 60% of the remaining, lower-valued pyrolysis gasoline. In addition, the energy consumption of the integrated case is about 13% lower. The reason for this reduction is that fewer olefins are produced by thermal cracking in the integrated case, thereby lowering the fired duty of the cracking heaters and the energy consumed in the recovery area.22In the standalone steam cracker case, 1.67 million ton/year of ethylene and propylene are produced by thermal cracking. In the integrated case, 1.49 million ton/year of ethylene and propylene are produced by thermal cracking, with the remaining propylene (0.18 million ton/year) being produced by the metathesis unit. The 13% reduction in energy consumption results in a 13% reduction in greenhouse gas emissions. This level of reduction is significant and, as such, could be one of the major contributing routes to meeting olefin industry goals of lower greenhouse gas emissions from3,0943,047Net ethyleneThe impact of a metathesis unit to an olefin plant material balance to achieve a conventional, low severity, propyleneto-ethylene ratio of 0.67 is analyzed in Table 14. Two cases are presented: a standalone steam cracker unit, without metathesis, and a steam cracker integrated with a metathesis unit. As shown in the table, at a constant overall net ethylene and propylene production of 1 million ton/year and 670,000 ton/year respectively, the steam cracker integrated with a metathesis unit considerably improves the overall plant material balance.Naphtha feed1,0001,000Net propylene670670Benzene207312Pyrolysis gasoline654396Energy consumptionBase = 10087Total investmentBase = 10094Source: Intratec www.intratec.usInvestment costs are also lower. As shown in Table 14, capital costs are reduced by about 6%. The investment costs associated with the ISBL ethylene plant are reduced due to lower plant throughput (individual ethylene plant system loadings), lower fired duty, and a significant reduction in the size of the propylene fractionator system, which is the single most costly tower system in the ethylene plant. Finally, OSBL costs are reduced due to the minimization in energy consumption. The savings associated with these units more than offset the investment costs associated with the metathesis unit. Figure 5 shows the most typical integration arrangement between a metathesis unit and a naphtha steam cracker.Other Process Scenarios Figure 6 illustrates propylene production alternatives via metathesis using only one feedstock: ethylene or butenes.FREE SAMPLE 27. Ethylene as the Only FeedstockButene as the Only FeedstockIn some cases, there is not enough butene to use in a metathesis unit to achieve the desired propylene production, as in the case when the feedstocks producer is an ethane steam cracker, which, while it makes large volumes of ethylene, makes insufficient butene for the metathesis reaction. Ethane crackers are the most common crackers used in the Middle East.In some regions, the supply of ethylene is tight and/or ethylene is expensive, making the building of a conventional metathesis unit unfeasible without subsidies. Other disadvantages of conventional metathesis are:For such cases an ethylene dimerization unit can be added upstream of the metathesis process as a butene-2 source. Dimerization of ethylene to butenes occurs in a liquid phase loop reactor according to the following reaction:Ethylene2-ButeneIntensive Use of Energy. Conventional metathesis reactions take place with ethylene, which requires an intensive use of energy in the ethylene recirculation loop by using cryogenic refrigeration. Feedstock Loss. Removing butadiene by hydrogenation from the butenes feed before its use in a conventional metathesis results in the hydroisomerization of the butenes to paraffins, representing a feedstock loss of 10%+. Furthermore, removing isobutene by fractionation of the butenes feed before its use in a conventional metathesis results in an additional loss of butenes, since 1-butene is difficult to separate from isobutene without an expensive fractionation tower.Figure 5 Typical Integration Between Olefin Plant and Metathesis UnitNaphthaPG EthyleneNaphtha Steam CrackerMetathesis UnitCrude C4sButadiene ExtractionPG PropyleneC4+ PurgeRaffinate-2Raffinate-1ButadieneIsobutene ExtractionIsobuteneSource: Intratec www.intratec.usFREE SAMPLEIntratec | Technical AnalysisPG Propylene23 28. Although the yield of propylene is high in the conventional metathesis process, the aforementioned disadvantages motivated the development of a different process, in which a metathesis reaction occurs with butenes as the only feedstock. This process is called butenes auto-metathesis, or self-metathesis. In the process, a stream comprised of 1-butene plus 2butene is admixed with recycled butenes and pentenes in the metathesis reactor. The stream leaving the reactor is sent to a separation unit, composed of distillation columns. The stream can contain C4 paraffins, but the amount of isobutene should not exceed 2% of the feed mixture. Table 15 shows the reactions that can occur in the process. The reactions (1) and (2) are the main auto-metathesis reactions. Reactions (3), (4) and (5) occur while the 2pentenes formed through the main reaction are recycled back to the reactor.In 2003, a semi-commercial unit owned by Sinopec in Tianjin (China), was built to demonstrate auto-metathesis and 1-hexene production. This facility maximizes the 1butene/1-butene metathesis reaction to produce 3-hexene, and then isomerizes the 3-hexene to 1-hexene. The plant has the capacity to produce 2 kta of 1-hexene.Table 15 Butenes Auto-Metathesis Reactions (1)1-butene + 2-butenepropylene + 2-pentene(2)1-butene + 1-buteneethylene + 3-hexene(3)2-pentene + 1-butene(4)2-pentene(5)1-pentene + 2-butenepropylene + 3-hexene1-pentene (isomerization) propylene + 2-hexeneSource: Intratec www.intratec.usFigure 6 Metathesis Technology AlternativesButenesMetathesisEthyleneDimerizationMetathesisIntratec | Technical AnalysisSource: Intratec www.intratec.us24FREE SAMPLECG/PG Propylene 29. Economic Analysis General AssumptionsIn Table 16, the IC Index stands for Intratec chemical plant Construction Index, an indicator, published monthly by Intratec, to scale capital costs from one time period to another.The general assumptions for the base case of this analysis are outlined below.This index reconciles prices trends of fundamental components of a chemical plant construction such as labor, material and energy, providing meaningful historical and forecast data for our readers and clients.Table 16 Base Case General Assumptions Engineering & Construction LocationUS GulfAnalysis DateQ3 2011IC Index158.1OSBL ScenarioPartially IntegratedNominal Capacity350 ktaOperating Hours per Year8,000Annual Production320 ktaProject ComplexitySimpleTechnology MaturityLicensedData ReliabilityHighThe assumed operating hours per year indicated does not represent any technology limitation; rather, it is an assumption based on usual industrial operating rates Additionally, Table 16 discloses assumptions regarding the project complexity, technology maturity and data reliability, which are of major importance for attributing reasonable contingencies for the investment and for evaluating the overall accuracy of estimates. Definitions and figures for both contingencies and accuracy of economic estimates can be found in this publication in the chapter Technology Economics Methodology.Source: Intratec www.intratec.usFigure 7 Project Implementation ScheduleBasic Engineering Detailed Engineering Procurement ConstructionStart-up 01234 QuartersSource: Intratec www.intratec.usFREE SAMPLE5678Intratec | Economic AnalysisTotal EPC Phase25 30. Project Implementation ScheduleAppendix E. Detailed Capital Expenses provides a detailed breakdown for the direct expenses, outlining the share of each type of equipment in total.The main objective of knowing upfront the project implementation schedule is to enhance the estimates for both capital initial expenses and return on investment.After defining the total direct cost, the TFI is established by adding field indirects, engineering costs, overhead, contract fees and contingencies.The implementation phase embraces the period from the decision to invest to the start of commercial production. This phase can be divided into five major stages: (1) Basic Engineering, (2) Detailed Engineering, (3) Procurement, (4) Construction, and (5) Plant Start-up.Table 18 Total Fixed Investment Breakdown (USD Thousands) Bare Equipment92,990The duration of each phase is detailed in Figure 7.Equipment Setting330Piping7,060Civil3,930Steel3,610Instrumentation & Control2,590Electrical2,140Insulation2,360Paint670Engineering & Procurement5,840Construction Material & Indirects18,140G & A Overheads4,020Contract Fee3,620Project Contingency22,095Capital Expenditures Fixed Investment Table 17 shows the bare equipment cost associated with each area of the project.Table 17 Bare Equipment Cost per Area (USD Thousands) ISBL Area 1006,440Area 2005,400OSBL Area 70067,910Area 8008,760Process Contingency4,480 Other - Scaling Exponent UpIntratec | Economic Analysis 26Table 18 presents the breakdown of the total fixed investment (TFI) per item (direct & indirect costs and process contingencies). For further information about the components of the TFI please see the chapter Technology Economics Methodology. Fundamentally, the direct costs are the total direct material and labor costs associated with the equipment (including installation bulks). The total direct cost represents the total bare equipment installed cost.0.87DownSource: Intratec www.intratec.us0.79Source: Intratec www.intratec.usIndirect costs are defined by the American Association of Cost Engineers (AACE) Standard Terminology as those "costs which do not become a final part of the installation but which are required for the orderly completion of the installation."FREE SAMPLE 31. The indirect project expenses are further detailed in Appendix E. Detailed Capital Expenses. Alternative OSBL Configurations The total fixed investment for the construction of a new chemical plant is greatly impacted by how well it will be able to take advantage of the infrastructure already installed in that location. For example, if there are nearby facilities consuming a units final product or supplying a units feedstock, the need for storage facilities significantly decreases, along with the total fixed investment required. This is also true for support facilities that can serve more than one plant in the same complex, such as a parking lot, gate house, etc. This study analyzes the total fixed investment for three distinct scenarios regarding OSBL facilities: Non-integrated Plant Plant Partially Integrated Plant Fully Integrated The detailed definition, as well as the assumptions used for each scenario is presented in the chapter About this StudyIntratec | Economic AnalysisThe influence of the OSBL facilities on the capital investment is depicted in Figure 8 and in Figure 9.FREE SAMPLE27 32. Figure 8 Total Direct Cost of Different Integration Scenarios (USD Thousands)Area 100Area 200Area 700Area 800Area 900200,000 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 Non-IntegratedPartially IntegratedFully IntegratedSource: Intratec www.intratec.usFigure 9 Total Fixed Investment of Different Integration Scenarios (USD Thousands)Direct ExpensesIndirect ExpensesProject Contingency300,000 250,000 200,000 150,000 100,000 50,000 0 Intratec | Economic AnalysisNon-Integrated28Partially IntegratedSource: Intratec www.intratec.usFREE SAMPLEFully Integrated 33. Fixed Investment DiscussionWorking CapitalFigure 10 compares and validates the total fixed investment estimated in the previous section. Each point depicted in the chart represents a different plant TFI value announced in the international press during the last few years. All of the total fixed investments announced are adjusted to the same basis (date and location of the analysis) and compared to the TFI curves estimated by Intratec for different OSBL integration scenarios.Working capital, described in Table 19, is another significant investment requirement. It is needed to meet the costs of labor; maintenance; purchase, storage, and inventory of field materials; and storage and sales of product(s). Assumptions for working capital calculations are found in Appendix F. Economic Assumptions.TFI differences are primarily driven by how integrated the plant will be with respect to raw material suppliers and product consumers.Table 19 Working Capital (USD Million) Raw Materials Inventory Products Inventory30.4In-process Inventory1.5Supplies and Stores0.3Cash on Hand22.1Accounts Receivable45.6Accounts PayableIn fact, the metathesis unit is usually constructed near a steam cracker or FCC unit not only because of synergistic economies in their capital costs, but for the easy access to feedstock.0.7(44.2)Source: Intratec www.intratec.usFigure 10 Total Fixed Investment Validation (USD Million)500 450 400 350 300 250 200 150 100 50 0 100200300400500600Plant Capacity (kta) TFI (Announced in Press)Fully IntegratedSource: Intratec www.intratec.usFREE SAMPLEPartially IntegratedNon-Integrated700 Intratec | Economic Analysis029 34. Other Capital Expenses Start-up costs should also be considered when determining the total capital expenses. During this period, expenses are incurred for employee training, initial commercialization costs, manufacturing inefficiencies and unscheduled plant modifications (adjustment of equipment, piping, instruments, etc.).Table 21 CAPEX (USD Million) Total Fixed Investment169Working Capital56Other Capital Expenses22Initial costs are not addressed in most studies on estimating but can become a significant expenditure. For instance, the initial catalyst load in reactors may be a significant cost and, in that case, should also be included in the capital estimates.Source: Intratec www.intratec.usThe purchase of technology through paid-up royalties or licenses is considered to be part of the capital investment.Manufacturing CostsOther capital expenses frequently neglected are land acquisition and site development. Although these are small parts of the total capital expenses, they should be included.Operational ExpendituresThe manufacturing costs, also called Operational Expenditures (OPEX), are composed of two elements: a fixed cost and a variable cost. All figures regarding operational costs are presented in USD per ton of product. Table 22 shows the manufacturing fixed cost.Table 20 Other Capital Expenses (USD Million) Initial Catalyst LoadTo learn more about the assumptions for manufacturing fixed costs, see the Appendix F. Economic Assumptions.0.1Start-up Expenses Operator Training Commercialization Costs5.4Start-up Inefficiencies5.4Unscheduled Plant ModificationsTable 22 Manufacturing Fixed Cost (USD/ton)1.33.4Land & Site DevelopmentSupervision Labor Cost2.3 8.9G and A CostSource: Intratec www.intratec.us8.5Operating Charges4.22.1Maintenance Cost1.77.1Plant OverheadPrepaid RoyaltiesOperating Labor Cost30.1Source: Intratec www.intratec.usIntratec | Economic AnalysisAssumptions used to calculate other capital expenses are provided in Appendix F. Economic Assumptions.30Total Capital ExpensesTable 23 discloses the manufacturing variable cost breakdown.Table 21 presents a summary of the total Capital Expenditures (CAPEX) detailed in previous sections.FREE SAMPLE 35. Economic Datasheet Table 23 Manufacturing Variable Cost (USD/ton) Raffinate-2 EthyleneThe Technology Economic Datasheet, presented in Table 25, is an overall evaluation of the technology's production costs in a US Gulf Coast based plant.1,015.3 422.2Cooling Water0.03LP Steam15.6Inert Gas0.1Electricity20.9FuelThe expected revenues in products sales and initial economic indicators are presented for a short-term assessment of its economic competitiveness.2.2Source: Intratec www.intratec.usTable 24 shows the OPEX of the presented technology.Table 24 OPEX (USD/ton) Manufacturing Fixed Cost59.1Manufacturing Variable Cost1,476.2Source: Intratec www.intratec.usFigure 11 depictures Sales and OPEX historic data. Figure 12 compares the project EBITDA trends with Intratec Profitability Indicators (IP Indicators). The Basic Chemicals IP Indicator represents basic chemicals sector profitability, based on the weighted average EBITDA margins of major global basic chemicals producers. Alternately, the Chemical Sector IP Indicator reveals the overall chemical sector profitability, through a weighted average of the IP Indicators calculated for three major chemical industry niches: basic, specialties and diversified chemicals.FREE SAMPLEIntratec | Economic AnalysisHistorical Analysis31 36. Figure 11 OPEX and Product Sales History (USD/ton)OPEX (Cash Cost)2,500Product Sales2,0001,5001,0005000 Q1-07Q3-07Q1-08Q3-08Q1-09Q3-09Q1-10Q3-10Q1-11Q3-11Source: Intratec www.intratec.usFigure 12 EBITDA Margin & IP Indicators History ComparisonEBITDA Margin25%Basic Chemicals IP IndicatorChemical Sector IP Indicator20%15%10%5%0% Intratec | Economic AnalysisQ1-0732Q3-07Q1-08Q