AM-13-53 Shale Gas Monetization – How to Get Into the Action€¦ · AM-13-53 Shale Gas...
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American Fuel & Petrochemical Manufacturers
AM-13-53 Shale Gas Monetization
Action
1667 K Street, NW
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202.457.0486
www.afpm.org
Annual Meeting
March 17-19, 2013
Marriott Rivercenter
San Antonio, TX
Shale Gas Monetization – How to Get Into the
Action
Presented By:
David Myers UOP LLC, A Honeywell Company Des Plaines, IL Greg Funk UOP LLC, A Honeywell Company Des Plaines, IL Bipin Vora UOP LLC, A Honeywell Company Des Plaines, IL
202.457.0480 voice
202.457.0486 fax
www.afpm.org
How to Get Into the
This paper has been reproduced for the author or authors as a courtesy by the American Fuel & Petrochemical Manufacturers. Publication of this paper does not signify that the contents necessarily reflect the opinions of the AFPM, its officers, directors, members, or staff. Requests for authorization to quote or use the contents should be addressed directly to the author(s)
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SHALE GAS MONETIZATION –
HOW TO GET INTO THE ACTION
David Myers, Sr. Product Line Manager, Olefins, UOP LLC, A Honeywell Company
Greg Funk, Sr. Product Line Manager, Light Olefins, UOP LLC, A Honeywell Company
Bipin Vora, Consultant, UOP Fellow (Retired), UOP LLC, A Honeywell Company
�
INTRODUCTION
Shale gas in North America is reviving the petrochemical industry while at the same time
lowering energy prices and helping improve overall refinery margins for North American
refiners. Shale gas, specifically the associated cost advantaged methane and natural gas liquids
(NGLs), provides refiners with opportunities for diversification of both feedstock and product
and to capitalize on the associated financial benefits of the operating flexibility this
diversification brings through market cycles. Shale gas also introduces new potential business
models for projects such as joint-ventures between refining and petrochemical companies by
leveraging the unique skill sets of each or joint-ventures between regional independent refiners.
This paper will discuss several shale gas monetization options for the North American refiner
focusing on methane, propane and butane monetization technology solutions.
© 2013 UOP LLC. All rights reserved.
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SHALE GAS ETHANE –
ENABLES EXPANSION OF THE NORTH AMERICAN ETHYLENE INDUSTRY :
Technology innovations and the availability of lower cost raw materials have played a major part
in shaping the petrochemical industry. For example, as has been the case for most modern
petrochemical products, North America, Western Europe and Japan led in the production of
methanol from the 1960s to 1980s. However, due to the increasing discovery of large gas
reserves in places like the Middle East, Trinidad and Tobago, Chile, and Venezuela and resultant
increased natural gas production, methanol production shifted from these industrial-consuming
nations to the source of advantageously priced natural gas. The increased oil and gas production
in the Middle East provided an abundant supply of ethane from the associated gas recovery. As
a result, over the last two decades a large portion of the growth in ethylene production was in the
Middle East via ethane cracking. Because of this there had been very little growth in North
American ethylene production over the same period. In fact, several smaller crackers were shut
down. Now, with the discovery and development of shale gas and abundant cost advantaged
ethane, North America is where we see the greatest potential growth.
Estimates of known natural gas reserves are increasing as the rate of new discovery of
unconventional gas reserves increases. The U.S. in particular, during the past five years, has
increased natural gas production substantially by increasing shale gas development. This
increased production has made natural gas more affordable in the U.S. benefitting the refining,
petrochemical and mid-stream industries through low cost energy. As seen in Figure 1, from
2004 to 2008, natural gas price averaged around $7/MMBtu, with a peak of more than
$12/MMBtu during the summers of 2005 and 2008. By the end of 2008 the production of shale
gas lowered the price to $4/MMBTU, and by the end of 2012 had fallen to between $2-
$3/MMBtu.
Natural gas at $3/MMBtu is roughly equivalent to $150/MT and crude oil at $100/BBL is
roughly equivalent to $800/MT. That is, natural gas in terms of its energy content is significantly
undervalued (Figure-2) relative to crude oil. In the U.S. not only has natural gas production
increased, but the production of natural gas liquids (NGLs) has increased - namely ethane,
propane and butane.
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Figures 1 and 2: Price of Natural Gas in North America and its Comparison
Relative to Crude Oil (WTI) Price
After more than two decades of minimal activity, the availability of ethane and propane from
NGLs at a cost effective price has revived the olefins industry. A number of new ethylene
cracker projects (see Table 1) as well as propane dehydrogenation projects are moving forward.
What does all this mean for the refiners in North America? How can they take advantage of this
natural gas and NGLs boom?
Table 1: Announced Ethylene Capacity Increases – North America
Source: ICIS, June 2012
Company Potential Location
Capacity(kMTA) Est. Start-Up Status
Williams Expansion 300 2013 In Construction
Westlake Multiple Expansions 300 2013/2014 In Construction
Lyondell Basell Multiple 500 2014/15 In Construction
ExxonMobil Baytown, TX 1,500 2016 Permitting
Formosa Point Comfort, TX 800 2016 Planned
Mexichem/OxyChem Ingleside, TX 500 2016 Evaluation
CP ChemCedar Bayou –Baytown, TX
1,500 2017 FEED
Dow Freeport, TX 1,500 2017 Permitting
Sasol Lake Charles, LA 1,500 2017 Feed
0
2
4
6
8
10
12
14
16
North America, US$/MBTU
Natural Gas Price
0%
20%
40%
60%
80%
100%
120%
North America Gas to Oil (WTI) Parity
Source: IHS Chemical
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Opportunities from Shale Gas Monetization - Methane
Abundant methane and associated low natural gas prices are two key factors that make the
perfect environment for a gas-to-olefins (GTO) play in North America based on methanol
conversion to olefins - ethylene and propylene. Methanol-to-olefins, though new to the North
American market, is already a reality in China and has been since 2010. Because of high crude
oil price and high reliance on naphtha-based ethylene cracking for olefins production, China
began an aggressive program for coal-to-chemicals and coal-to-liquids several years ago. In
China four (4) coal-to-olefins (CTO) plants based on methanol for the production of light olefins,
both ethylene and propylene, have come on-stream and more than twenty (20) units are in
various stages of design and construction.
In terms of quantity, petrochemical demand in China is much smaller relative to the energy
demand for the transportation and power sectors. Therefore, the opportunity for additional
utilization of coal can be achieved by converting coal-to-liquid (CTL) for use as transportation
fuels. It is interesting to note that China has given priority to CTO over CTL. However, that is
not the case in North America where several CTL projects (and biomass to liquids, BTL,
projects) with methanol as an intermediate as well as a shale gas-based GTL project have been
announced but there are no announced CTO or GTO projects (see Table 1).
Table 2: Announced CTL, BTL and GTL Projects – North America
Although we can understand that end-products of transportation fuels versus light olefins pose
fewer logistical issues for product distribution or handling for the projects shown in Table 1, we
believe that a pathway from shale gas to olefins (or coal to olefins) provides a route with
significantly higher profitability. Over the past two years, ethylene and propylene prices have
averaged $200/MT and $400/MT higher than regular unleaded gasoline in North America,
respectively. The first step in a CTL, GTL, Methanol-to-Gasoline (MTG) or MTO process is
conversion of coal or natural gas to synthesis gas. For CTL and GTL the second step is
conversion of synthesis gas to liquids via Fischer-Tropsch (FT) technology. For MTG or MTO,
the second step is conversion of synthesis gas to methanol followed by gasoline production in the
Principle Location Process Feed
Capacity,
BPD Status
DKRW Wyoming, US ExxonMobil MTGMethanol
(Coal)10,500 Financing
NuCoalSasktachewan,
Canada
ChiaHuaneng –
XOM
Methanol
(Coal)15,000 Feasibility
TransGas
Development Systems
West Virginia,
USExxonMobil MTG
Methanol
(Coal)18,000 Feasibility
Core BioFuel,Inc. Texas, US CoreMKS BTL 1,280 Feasibility
SASOL Louisiana GTL Primus Shale Gas 94,000 Feasibility
Primus
Green Energy
Pennsylvania,
US--- BTL 230 Development
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MTG process or the production of light olefins via the MTO process. The MTG projects
mentioned in the table are relatively small. Instead of the 10,000 BPD - 25,000 BPD of gasoline
being produced by these projects, the same equivalent capacity synthesis gas project could
produce 400,000 - 1,000,000 MTA of light olefins with a product value of ~$300-330/MT
higher, on a combined olefin product basis, than the gasoline product providing better economics
than the MTG option. In case of a need for a large consumption of feedstock, such as the Sasol
plan for nearly 100,000 BPD GTL plant, one may consider an integrated GTL-GTO plant. An
equivalent portion of the synthesis gas, in the range of 10,000 - 25000 BPD GTL product, is
converted to methanol followed by MTO for high value ethylene plus propylene production in
the range of 400,000 - 1,000,000 MTA.
The average North American price of ethylene and propylene in 2012 was between $1200 and
$1300 per MT [5]. Worldwide, almost half of the ethylene and propylene production comes from
naphtha cracking, a feedstock priced between $900 to $1,000 per MT [5] in 2012. Utilization of
natural gas priced in the range of $100/MT to $300/MT ($2/MMBtu to $6/MMBtu) for the
production of polymers and plastics will be highly profitable.
Methanol-to-Olefins Technology
The conversion of methanol to olefins (MTO) is a means to produce ethylene and propylene
from feedstock derived from sources other than crude oil or condensates. Methanol is widely
produced from natural gas or coal at locations with abundant reserves. By utilizing methanol
derived from these cost advantaged raw materials, MTO enables low costs of production for
ethylene and propylene in a global market with high oil prices. MTO also helps to fill the gap
between propylene demand and supply from steam crackers and refineries by producing olefins
at high ratios of propylene to ethylene.
The conversion of methanol to olefins and other hydrocarbons products has been widely studied.
Initial work in the 1970s and early 1980s focused on conversion of methanol to gasoline range
products and employed ZSM-5 type zeolites. Selectivity of methanol to ethylene and propylene
over ZSM-5 was generally low, with selectivities favoring heavier more highly branched
hydrocarbons and aromatics. This catalyst technology was utilized in the commercial
development of the Mobil MTG Process. During the 1980’s, a group of scientists at Union
Carbide (the group later became part of UOP LLC) discovered a new class of materials,
silicoaluminumphosphates (SAPO) molecular sieves [1,2]. Of these, the discovery of SAPO-34
provided a technology breakthrough. SAPO-34’s unique pore size geometry and acidity of the
material created a more selective route for methanol conversion to ethylene and propylene with
reduced heavy byproducts.
As illustrated in Figure-3, SAPO-34 has a smaller pore size (about 4 Å) compared to that of
ZSM-5 (about 5.5 Å). The smaller pore size for SAPO-34 restricts the diffusion of heavy and
branched hydrocarbons and therefore favors high selectivity to the desired light olefins. The
optimized acidity of SAPO-34 reduces the amount of hydride transfer reactions relative to ZSM-
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5, thereby lowering the yield of paraffinic byproducts. A further advantage of SAPO-34 is that
the majority of the C4-C6 fraction produced is olefinic. As discussed later in this paper, these
olefinic compounds make the heavy byproduct suitable for upgrading by olefin cracking.
Figure 3: Comparison of SAPO – 34 and ZSM-5
Development History of UOP Advanced MTO Process
In the early 1990’s UOP and Norsk Hydro A.S. formed an alliance to develop MTO technology.
This collaboration with Norsk Hydro led to the development of the UOP/HYDRO MTO Process.
In development of the process, UOP built on its in-house FCC experience for fluidized reactor
and regenerator and known steam cracker art. Norsk Hydro’s interest in the MTO technology
alliance with UOP is now a part of INEOS.
Unrelated to MTO at the time, ATOFINA was at work in the 1990’s developing olefin cracking
technology. Shortly after, in 2000, ATOFINA (which later became part of Total Petrochemicals
and nowadays of TOTAL Refining and Chemicals) and UOP formed a joint alliance to further
develop olefin cracking technology. This collaboration led to development of the Total
Petrochemicals/UOP Olefin Cracking Process.
The Total Petrochemicals/UOP Olefin Cracking Process has been integrated with the
UOP/HYDRO MTO Process - this combination of processes is the basis for Advanced MTO.
A major milestone for MTO commercialization was the start-up in 2009 of the semi-commercial,
fully integrated MTO demonstration unit (Figure-4) in Belgium, which successfully
demonstrated the performance of the integrated UOP/Hydro MTO Process with the Total
Petrochemicals/UOP Olefin Cracking Process.
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Figure 4: Total Petrochemical MTO/OCP Demonstration Unit at Feluy, Belgium
Process Description
The UOP/HYDRO MTO Process utilizes a fluidized reactor and regenerator system to convert methanol to olefins using a proprietary, SAPO-34 type catalyst [3].
The UOP/HYDRO MTO Process can be operated on “crude” or undistilled methanol as well as with pure (Grade AA) methanol. The choice of feedstock quality generally depends on project-specific situations because there can be advantages in either case. Figure 5 illustrates a simple flow diagram for the UOPAdvanced MTO Process.
Figure 5: UOP Advanced MTO Process
Regen Gas
Air
Methanol
Water
DMERecovery
Ethylene
C4+
Propylene
By-products
MTO Process Integrated withOlefin Cracking Process (OCP)
Sep Section
OCP
MTO Light Olefin
Recovery
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The methanol feed is preheated and then introduced into the reactor. The conversion of
methanol to olefins requires a selective catalyst that operates at moderate-to-high temperatures.
The reaction is exothermic so heat can be recovered from the reaction. Carbon or coke
accumulates on the catalyst and requires removal to maintain catalyst activity. The coke is
removed by combustion with air in a catalyst regenerator system. A fluidized bed reactor and
regenerator system is ideally suited for the MTO process because it allows for heat removal and
continuous catalyst regeneration. The reactor operates in the vapor phase at temperatures
between 650 to 1000°F and pressures between 15 and 45 psig. A slipstream of catalyst is
circulated to the fluidized bed regenerator to maintain high activity. The operation of the reactor
system is characterized as stable steady-state.
The reactor effluent is cooled and quenched to separate water from the product gas stream. The
product gas is compressed and then unconverted oxygenates are recovered and returned to the
reactor. The reactor provides very high conversion so there is no need for a large recycle stream.
After the oxygenate recovery section, the effluent is further processed in the fractionation and
purification section to remove contaminants and separate the key products from the byproduct
components. Ethylene and propylene are produced as polymer grade products and sent to
storage. The C4-C6 fraction is sent to the OCP reactor where it is selectively converted to light
olefins, the majority of which is propylene. Typically the propylene to ethylene ratio in OCP
reactor effluent is about 4. The OCP product is depropanized, the C3 and lighter fraction is sent
to MTO product recovery section, and residual C4 plus fraction is taken as byproduct fuel.
As shown in Figure 6, the advanced MTO process, which is the integrated MTO-OCP processes,
can produce propylene to ethylene product ratios between 1.2 and 1.8 [4] to help meet the
growing demand for propylene and additional flexibility is achievable with the technologies, if
desired.
Figure 6: Propylene to Ethylene (P/E) ratio in UOP Advanced MTO Process
Monetization of shale gas methane via MTO technology provides North American refiners the
ability to leverage their extensive fluid catalytic cracking (FCC) operational expertise. A joint-
70
80
90
100
1.0 1.2 1.4 1.6 1.8 2.0Light Olefin C
arbon Yields, Wt-%
Propylene/Ethylene (P/E) Product Ratio, Wt.
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venture implementation with a petrochemical producer would bring the expertise associated with
light olefin recovery from the ethylene cracker industry as well as product olefin off-take or
poly-olefin or olefin derivative production expertise. Methane (or methanol) provides a
feedstock diversification play from crude oil for the refiner, and from ethane, for the
petrochemical producer. Additionally, the refiner would be able to upgrade its refinery grade
propylene (RGP) product in the MTO unit allowing the refiner or JV company to keep a margin
lift of ~200-225 $/MT [5] between RGP and chemical grade propylene (CGP) and polymer grade
propylene (PGP), respectively.
A GTO investment can be staged by first constructing and operating the MTO unit based on
purchased methanol then later constructing the gas to methanol section of the complex. At
2012 average natural gas and ethane prices of $3/MMBtu and $300/MT [5], respectively, a GTO
complex provides similar cash cost of production as an ethane based steam cracker.
UOP has licensed four (4) coal-derived methanol to olefins (MTO) units. Three (3) of these
projects have been announced and are located in China.
Opportunities from Shale Gas Monetization - Propane
In 1990 there were two primary sources of propylene world-wide: first, steam crackers for
ethylene production using propane and heavier feedstocks, second, refinery FCC units. It is
worthwhile to note that both primary propylene production sources at that time were from by-
product production and not on-purpose propylene production. With substantial ethane based
ethylene production in North America and the Middle East, the growth in propylene from steam
crackers has not kept pace with propylene demand. While some refiners have decided to operate
their FCC units in a high severity mode to increase the production of propylene, declining
gasoline demand in Europe and North America has limited the overall growth in propylene
production from refineries. These trends have
created a gap between propylene demand and the
supply from conventional sources as shown
in Figure 7.
This gap promises to further widen as steam
cracker feed stocks continue to shift to more
ethane. Recently in North America we have
seen several announcements of cracker
expansion projects based on increased
availability of NGLs. Figure 7 shows that
while demand and corresponding production
of propylene is increasing significantly,
production from conventional naphtha
cracker and refinery sources cannot keep
pace with demand growth, creating a need for
0
20
40
60
80
100
120
140
2001 2006 2011 2016 2021
Million MTA
Supply from Refinery FCCsSupply from Steam CrackersDemand (Polymer/Chemical Gr.)
“Propylene Gap”
Source: IHS Chemical
Figure 7: Propylene Supply-Demand
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technologies for on purpose propylene production, such as methanol to olefins (MTO) and
propane dehydrogenation (PDH) to fill the “propylene gap.”
In 1990 propylene coming from steam crackers represented more than 70% of the world-wide
propylene production. Since that time, it has continuously declined and by 2015 it will represent
just 50% of the world-wide propylene production. By 2015 propylene from on-purpose
propylene sources will account for 18% of the total production. Of the incremental 20 million
MTA of new production from 2010 to 2015, 42% will come from unconventional on-purpose
production, mainly via propane dehydrogenation.
Figure 8 shows the yield of propylene from different processes (steam cracking, FCC, High
Severity FCC, PDH and MTO) using different raw materials. As shown, propane
dehydrogenation (PDH) provides the highest yield of propylene. This, combined with low
capital intensity ($/MT light olefin), has led to wide market interest in PDH over the past several
years. Since 2011, a total of 18 PDH projects were awarded world-wide representing more than
8.0 million MTA (300,000 BPD) of propylene production capacity. Of the PDH projects, UOP’s
OleflexTM Process was selected for 15 of the projects. These Oleflex PDH awards include the
world’s largest single train PDH unit to be built by Dow Chemical in North America with a
propylene production capacity of 750,000 MTA (28,000 BPD).
Figure 8: Yields of Various Propylene Production Processes
0% 20% 40% 60% 80% 100%
Advanced MTO
MTO
Propane Dehydro
HS FCC
FCC
Lt. Nap. Cracking + Metath.
Gas Oil Cracking
Hvy. Nap. Cracking
Lt. Nap. Cracking
Butane Cracking
Propane Crackng
E+P Cracking (70/30)
Ethane Cracking
Wt-%
Ethylene
Propylene
Butadiene
Mixed C4's
Pygas/Gasoline
Fuel Gas
Hydrogen
Fuel Oil
Coke
P/E
0.03
0.14
0.40
0.43
0.53
0.58
0.69
0.63
---
3.76
---
1.00
1.47
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UOP Oleflex Process
The UOP Oleflex process for propane dehydrogenation (PDH) to produce on-purpose propylene
was first commercialized in 1990 [6]. The plant, located in Thailand, was the world’s first PDH
unit. UOP’s Oleflex technology was developed as a result of combining two previously
commercialized UOP technologies from the early 1970’s, UOP’s Continuous Catalyst
Regeneration (CCR) PlatformingTM Process and UOP’s PacolTM Process. UOP’s CCR
Platforming Process is widely used throughout the refining and petrochemical industry to
produce high-octane gasoline and aromatic rich reformate with more than 235 operating CCR
Platforming units in operation today. UOP’s Pacol technology utilizes platinum catalysis for
kerosene range (C10-C14) paraffin dehydrogenation for linear alkyl benzene (LAB) detergent
production. This innovative light paraffin dehydrogenation approach offered the industry a
positive pressure, continuous reaction-regeneration section CCR-based approach with low capital
cost and low energy usage compared with the sub-atmospheric, swing-bed dehydrogenation
systems invented during World War II.
Since 1990, a total of 14 PDH units have been commissioned world-wide. UOP’s Oleflex
Process accounts for nine (9) of the fourteen (14) operating PDH units world-wide today with
more than 2.4 million MTA (90,000 BPD) of propylene production world-wide.
Oleflex Technology
An Oleflex plant as shown in Figure 9 converts a propane-rich liquefied petroleum gas (C3 LPG)
feedstock into a chemical grade or polymer-grade propylene product. Pre-treated C3 LPG
feedstock is introduced to the depropanizer. Any butanes or heavier components in the C3 LPG
are rejected from the bottom of the depropanizer. The depropanizer overhead is sent to the C3
Oleflex unit which produces a propylene-rich liquid product and a hydrogen-rich gas product.
The net hydrogen can be exported directly, upgraded to PSA hydrogen or used as fuel within the
plant if hydrogen is not in demand in the vicinity of the PDH plant.
Liquid product from the Oleflex unit is sent to a selective hydrogenation unit (SHP) to eliminate
diolefins and acetylenes. The SHP unit consists of a single fixed-bed reactor and operates in the
liquid phase. The SHP product is sent to a de-ethanizer to reject any light ends produced within
the Oleflex unit or contained in the fresh C3 LPG. The de-ethanizer net bottoms product is
directed to a propane-propylene (P-P) splitter, where the propylene product is separated from
unconverted propane. The unconverted propane contained in the P-P splitter bottoms is recycled
to the Oleflex unit via the LPG feed depropanizer.
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Figure 9: UOP Oleflex Process Block Flow Diagram
The Oleflex unit box shown in Figure 9 contains the heart of the unit, the reactor-regenerator
section. Most North American refiners will be familiar with the CCR and reactor/fired heater
combination shown in Figure 10. The Oleflex unit looks very similar to a CCR Platforming unit.
One difference, however, is that the reactors are side-by-side versus stacked to maximize
propylene yield. Non-selective thermal cracking reactions are minimized by close coupling the
reactors and fired heaters.
Figure 10: UOP Oleflex Process
Heater Cells
Net Gas
To FracSection
Dryer
Cold Box
Fresh& Recycle
Feed
H2 Recycle
CCR
Rx EffluentCompressor
Regeneration Section
Reactor Section
Product Recovery Section
Catalyst Flow
OleflexUnit
C3 LPG
C4+
Net Gas C2-
Propylene
SHP
P-P Splitter
Deethanizer
Depropanizer
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Increased availability of propane in North America as a result of the NGLs found in shale gas
has created increased interest in Propane Dehydrogenation for on-purpose propylene production.
The first North American PDH unit came on-stream in late 2010 and several new projects have
been announced predominantly by mid-stream and petrochemical players.
Investment in a PDH unit can be an excellent feedstock and end-product diversification play to
increase the operating flexibility of the refinery. Cost advantaged North American propane from
NGL plants can be supplemented with propane produced within the refinery and sent to a PDH
unit. The PDH unit can also be used to upgrade lower purity refinery-grade (RGP) propylene
streams produced by the FCC unit to chemical or polymer grade propylene in the PDH unit
propane-propylene (P-P) splitter to realize an additional product value uplift of $200-225/MT [5]
to CGP or PGP from RGP, respectively (refer to Fig.11). Additionally, the hydrogen produced
within the PDH unit can be used for hydroprocessing needs within the refinery or exported for
sale. The propylene-propane price differential seen in the market supports the investment in
PDH, with the most attractive differentials in North America and the Middle East. Cost
advantaged propane in North America as well as strong propylene prices are responsible for the
high propylene to propane price differentials in the region (see Figure 12).
Figure 11: Example PDH Unit Integration with an Existing Refinery
Figure 12: Historical Propane Price and Propylene-Propane Price Spread
PGP
CGPRefinery PDH
RGP
Propane
Shale Gas Propane
H2
H2
Propane Pricing2001-2012
1200
1000
800
600
400
200
0
US$/Metric Ton
NA (non-TET), Spot Avg, FOB Mont Belvieu, TXSaudi-Arabia, Spot Avg, FOB KSA
NE Asia, Spot Avg, CIF JapanW. Europe, Spot Avg, CIF NW Europe
01 02 03 04 05 06 07 08 09 10 11 12
Source: IHS Chemical
Propylene-Propane Spread2001-2012
1,400
1,200
1,000
800
0
US$/Metric Ton
W. Europe
SE Asia
NE Asia
North America
Saudi Arabia
01 02 03 04 05 06 07 08 09 10 11 12
Source: IHS Chemical
600
400
200
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UOP was awarded the world’s first refinery integrated PDH unit in 2011. This plant will be
located in the Middle East. We believe PDH can be an excellent fit for the North American
refiner as well.
Opportunities from Shale Gas Monetization – Butane
Butanes are also coming onto the market as a result of shale gas development in North America.
Cost-advantaged butanes can provide opportunities for refiners to diversify feedstock while
making similar products to those they make today, namely gasoline blending stocks. UOP’s
Oleflex Process has been commercially practiced for isobutane dehydrogenation to isobutylene
since 1992. Six (6) plants were commissioned for MTBE production world-wide with four (4)
operating plants located in North America. A typical C4 Oleflex MTBE complex is shown in
Figure 13. With the phase-out of MTBE in North America in the late 1990’s, several of the
North American C4 Oleflex MTBE complexes have been revamped to iso-octene production
using indirect alkylation technology.
As shown in Figure 13 the Oleflex dehydrogenation unit can be easily integrated with
downstream conversion processes, such as alkylation to produce high octane alkylate,
etherification to produce MTBE or ETBE for the export market, or dimerization of isobutene
followed by hydrogenation to produce high octane isooctane. The hydrogen from the
dehydrogenation can be used to hydrogenate isooctene to isooctane, a high octane gasoline
blending component. The UOP process for this combination is the UOP InAlkTM Process.
Figure 13: UOP Oleflex MTBE Block Flow Diagram
FreshMethanol
Net Gas
MTBE
C4 LPG
C5+
DIBColumn
ButamerTM
Unit
DeC3
Column
C3-
EthermaxTM
Unit
CSP ORU
OleflexUnit
Alternate End-Product processing options:
� ETBE from Ethanol
� High Purity Isobutylene (HPIB) via MTBE Decomp
� Alkylate from Sulfuric, HF, or UOP InAlk™ Unit
� Others (MMA, Isoprene, etc.)
nC4 → iC4
iC4 → iC4=
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A renewed interest in isobutane dehydrogenation has re-surfaced, over the last two (2) years,
mainly centered in Asia. In addition to gasoline blendstock production, there has been interest in
isobutylene production for high-purity isobutylene via MTBE cracking as well as isoprene
production. UOP licensed three (3) new C4 Oleflex units in Asia in 2012.
Mixed dehydrogenation of propane and isobutane within the same reactor system has also been
of interest in the marketplace. UOP is the only licensor with commercial experience co-feeding
propane and isobutane to a dehydrogenation unit. This Oleflex processing scheme, shown in
Figure 14, can be a potential play for smaller volumes of propane and butanes that may be of
interest for regional or smaller independent refiners. UOP has one operating mixed C3/C4
Oleflex unit in Asia and has licensed two (2) new mixed C3/C4units in 2012 and 2013.
Figure 14: UOP Oleflex Complex for Mixed C3/C4 Feedstock
In 2012, UOP began to see interest in isobutane dehydrogenation again in North America.
Dehydrogenation and subsequent upgrading of stranded butanes to alkylate or ethers for
domestic use or export presents an interesting alternative for stranded butanes. It is of interest to
note the C4 Oleflex reactor effluent isobutylene to isobutane ratio of approximately 1:1 has the
exact stoichiometry needed in an alkylation unit for production of low sulfur, low vapor pressure
alkylate for gasoline blending.
EthermaxUnit
FreshMethanol
Net Gas
MTBE
LPG
DIBColumn
ButamerUnit
C3=
CSP ORU
OleflexUnit
C3/C4 Separation Section
C2-
C5+
AM-13-53
Page 16
SUMMARY
Shale gas in North America is reviving the petrochemical industry due to the abundance of low
cost NGL ethane. After almost two decades of very little activity, a number on new ethylene
projects based on ethane are moving forward.
Similarly, several projects are under consideration for conversion of shale gas methane to
gasoline and other transportation fuels via MTG and GTL. Multiple PDH projects have been
announced in North America predominantly by mid-stream and petrochemical producers.
The time for feedstock and product diversification to enable un-matched operating flexibility in
the North American refining industry is now. Tap into UOP’s 99 years of experience by
considering shale gas methane, propane and butane monetization plays for your refinery assets.
REFERENCES
1. S.W. Kaiser, US Patent 4 499 327, 1985
2. Lewis et al., US Patent 4,873,390 1989
3. B. V. Vora, T. L. Marker, P. T. Barger, H. R. Nilsen, S. Kvisle, T. Fuglerud ”Economic
Route for Natural Gas Conversion to Ethylene and Propylene” in Stud. Surf. Sci. Catal, Vol
107, p. 87-98 (1997), Elsevier, Amsterdam
4. J. H. Gregor, “Maximize Profitability and Olefin Production with UOP’s Advanced MTO
Technology” IHS World Methanol Conference, Madrid, Spain; November 27-29, 2012
5. IHS Chemical
6. J. H, Gregor et al; “Increased Opportunities for Propane Dehydrogenation’ presented at
DeWitt World Petrochemical review, March 23-25, 1999, Houston, Texas, USA
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