US Ethylene Plant Development; Announcement, Plans, and New Technology

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Appalachian Region

Just over a year ago, in June 2015, Shell Chemical received approval from Pennsylvania’s Department of Environmental Protection to proceed with its plans to build an ethane cracker in Beaver County, Pa. (see my October 2015 blog). After a year of further project evaluation and preliminary site development, Shell announced its go ahead on June 7, 2016 for its 1.5 billion metric ton per year ethylene plant based on ethane from Marcellus and Utica shale gas.

This $6 billion complex, which, in addition to the ethane cracker, will include three polyethylene plants totaling 1.6 billion metric tons per year, is scheduled for completion in 2020. Shell was offered some incentives from the state of Pennsylvania including a 15 year tax amnesty and an additional tax break providing a credit of $2.10/gal for ethane purchased from Pennsylvania-based natural gas drillers.

This is the first ethylene plant to be built outside the US Gulf Coast in the last 20 years. Its location offers a logistical marketing advantage in that more than 70 percent of North American polyethylene customers are closer to the complex’s Western Pennsylvania’s location than US Gulf Coast (USGC) polyethylene producers. This is illustrated in the graphic below which was published on Shell Chemicals’ websites.

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As reported in my earlier blog, the Shell Chemical project was one of three petrochemical complexes based on ethane feedstock from Marcellus and Utica shale gas being considered for the region. The Appalachian Shale Cracker Enterprise (ASCENT) project led by the Brazilian company, Odebrecht, was considering a Parkersburg, West Virginia location. This project is essentially on hold and Odebrecht has withdrawn as lead company, leaving it to its wholly owned subsidiary, Braskem, to decide whether to proceed or not.

The third complex being headed by PTT Thailand’s US subsidiary, PTT Global Chemical (PTTGC America) in conjunction with the Japanese trading company, Marubeni, selected a site in Belmont County, Ohio. Their project plan includes a 1.0 million metric ton per year ethane cracker with the ethylene output used as feedstock for several polyethylene plants including two producing medium density and high density polyethylene with a capacity of 700 million metric tons per year. Technip Stone and Webster technology has been selected to provide the process design package for the ethylene plant. PTTGC America has engaged Fluor and Bechtel to provide Front-End Engineering work with the aim of making a final investment decision for the $5.7 billion complex by the end of 2016 or early 2017.

U.S. Gulf Coast

Meanwhile on the US Gulf Coast, for the past year, a small demonstration plant has been testing a novel ethylene production technology developed by Siluria Technologies known as oxidative coupling of methane (OCM). This technology involves converting methane to ethylene over a catalyst via the following reaction:

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This reaction has been known for years but previous efforts to develop a catalyst to operate at reasonable temperatures and pressures and at a sufficient overall yield and catalyst life has been difficult. The challenge is to make it economically competitive against the traditional methods of producing ethylene via conventional non-catalytic steam cracking of ethane, natural gas liquids and naphtha. Siluria appears to have met the challenge through its development of novel metal oxide nano-wire catalysts.

After a year of testing various conditions and catalysts at its 1.0 ton/day demonstration plant, operated by Braskem Americas at its Laporte, Texas, polypropylene plant site, Siluria is ready to proceed to a commercial plant. By hosting and operating Siluria’s demonstration plant, Braskem is entitled to certain non-exclusive technology options as well as the opportunity to be an ethylene customer of future Siluria OCM plants.

Siluria has partnered with the Linde Group to provide complete engineering packages incorporating Siluria’s OCM front-end technology into Linde’s back-end ethylene recovery and purification expertise. Some of the investors in the technology include Maire Tecnimont, Saudi Aramco, and the Saudi polypropylene producer, National Petrochemical Industrial Co.

Siluria claims that as long as crude oil prices (in $/barrel) are at least 8 times higher that natural gas prices (in $/MMBTU), its technology offers an economical advantage over conventional naphtha cracking. For example with crude oil at $40/bbl as long as natural gas prices are below $5.00/MMBTU then Siluria claims that its OCM technology is more economical. However, competing against conventional ethane cracking may prove more difficult. This is especially true in the US since hydraulic fracking of tight shale deposits has resulted in large supplies of natural gas and associated ethane. Of all the hydrocarbon feedstocks that can be utilized in steam cracking technology, ethane provides the highest overall yield (80-85 wt%) of ethylene.

Successful implementation of OCM technology still faces significant challenges. While Siluria claims that the oxygen required may be provided by air as well as high purity oxygen, it is doubtful whether air would be used as this would impose severe economic penalties on the downstream recovery section in separating ethylene and other streams from the nitrogen carried in with the air. Therefore, high purity oxygen, which avoids the nitrogen issue, would require the additional capital investment of an adjacent air separation plant or an additional feedstock expense for the source of high purity oxygen.

In the OCM reaction some of the carbon in the methane feed is unavoidably oxidized to carbon dioxide and carbon monoxide. To avoid this potential yield loss, the process includes a methanation step employing the following reactions:

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In this process the carbon oxides are reacted with hydrogen, reconverted to methane and then recycled to the OCM reactor. Some if not all of the hydrogen is provided as a by-product of the oxidative coupling reaction since the reaction mechanism involves the formation of ethane which undergoes dehydrogenation to ethylene. If there is not sufficient hydrogen available as a by-product of the oxidative coupling reaction then it will have to be provided from an outside source.

Siluria has also developed a second technology (ETL) for converting ethylene to liquids which involves ethylene oligomerization to distillate fuels such as gasoline and diesel as well as aromatics. More about this technology in a future blog post.

It will be interesting to see when and if Siluria’s OCM technology achieves full commercial status and offers competition to conventional steam cracking for ethylene production.

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Marshall Frank

Marshall E. Frank retired from Chem Systems, where he was President and Managing Director, responsible for international consulting activities in North and South America and Asia Pacific. During his more than thirty years with the company, he had technical and administrative responsibility for a large number of multidisciplinary projects, both single-client and multi-client sponsored. Mr. Frank’s areas of expertise include natural gas utilization and conversion, the petrochemical industry, the refining and petrochemical interface, and alternative fuels. He also directed Chem Systems’ Financial Practice, which provided assistance to lenders in assessing the various risks associated with the financing of major international energy, petrochemical, and polymer projects. Prior to joining Chem Systems, Mr. Frank was involved in process evaluation, process engineering, and the startup of many of Halcon/SD’s proprietary processes at Scientific Design Company. Mr. Frank received a B.S. in Chemical Engineering from Cornell University.

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