CRE­AT­ING VALUE

Crude Oil-to­chem­i­cals and Other Dis­rup­tive Tech­nolo­gies to have a sig­nif­i­cant im­pact on chem­i­cal in­dus­try

Oil and Gas - - TECHNOLOGY -

The con­ver­gence of two sig­nif­i­cant and revo­lu­tion­ary tech­no­log­i­cal devel­op­ments in the petro­chem­i­cal in­dus­try, crude oil-to-chem­i­cals (COTC) and ox­ida­tive cou­pling of meth­ane (OCM), are poised to have a very sig­nif­i­cant im­pact on the chem­i­cal in­dus­try, ac­cord­ing to new anal­y­sis from IHS Markit (Nas­daq: INFO), the lead­ing global source of crit­i­cal in­for­ma­tion and in­sight.

In the past decade or so, dis­rup­tive tech­nol­ogy de­vel­op­ment and de­ploy­ment has been dom­i­nant on a global ba­sis in the petro­chem­i­cal in­dus­try and largely driven by the ex­treme pric­ing dy­nam­ics of the en­ergy in­dus­try, trans­lat­ing di­rectly to fun­da­men­tal petro­chem­i­cal feed­stocks; where such new tech­nol­ogy has en­abled de­ploy­ers of cap­i­tal and tech­nol­ogy to use low-cost and lo­cally abun­dant feed­stocks.

This anal­y­sis from Don Bari, vice pres­i­dent of chem­i­cal tech­nol­ogy at IHS Markit, fol­lows on an an­nounce­ment made ear­lier by Sil­uria Tech­nolo­gies, which has joined forces with Saudi Aramco Tech­nolo­gies.

One of the most sig­nif­i­cantly dis­rup­tive tech­nolo­gies or cat­e­gories of tech­nolo­gies be­ing de­vel­oped, based on their sheer vol­ume, is crude oilto-chem­i­cals. These projects in ef­fect merge a re­fin­ery and petro­chem­i­cal plant into one, and thus, go well beyond the state-of-the-art re­fin­ery petro­chem­i­cal in­te­gra­tion by the im­ple­men­ta­tion of new/re­con­fig­ur­ing unit op­er­a­tions into a re­fin­ery.

The ob­jec­tive is to shift the prod­uct slate de­rived from a bar­rel of oil to a range of 40 per­cent to 80 per­cent chem­i­cal feed­stocks and non-fuel prod­ucts, up from the tra­di­tional range of 15 per­cent to 25 per­cent, in or­der to sig­nif­i­cantly in­crease the value of crude oil re­serves. For ex­am­ple, Saudi Aramco Tech­nolo­gies Com­pany pub­licly an­nounced- “Max­imis­ing the out­put of high-value chem­i­cals prod­ucts from our fu­ture crude-oil pro­cess­ing projects is one of the key ob­jec­tives in our down­stream tech­nol­ogy strat­egy,” said Ah­mad Al Khowaiter, chief tech­nol­ogy of­fi­cer of Saudi Aramco.

The Sil­uria Tech­nolo­gies process, which pro­duces olefins di­rectly from nat­u­ral gas through ox­ida­tive cou­pling (chem­istry) of meth­ane (OCM), is ex­pected to fur­ther al­low Saudi Aramco’s fu­ture crude oil-to-chem­i­cals fa­cil­i­ties to cre­ate more value by con­vert­ing the very low­value off-gases (largely meth­ane) into higher-value olefins prod­ucts, which im­proves car­bon ef­fi­ciency and in­creases the vol­ume of the bar­rel of oil di­rected to valu­able fun­da­men­tal petro­chem­i­cals.

Com­pet­i­tive and sus­tain­able ad­van­tages of such a fully in­te­grated crude oil-to­chem­i­cal fa­cil­ity: Ÿ Up­grades a lower-value stream into a higher-value prod­uct through greater op­er­a­tional ef­fi­ciency and op­ti­miza­tion of as­sets

Greater cap­i­tal ef­fi­ciency – lever­ages a well-in­te­grated up­stream (re­fin­ery) with the down­stream (chem­i­cals) op­er­a­tions to in­crease ef­fi­ciency of de­ployed cap­i­tal (max­i­mum in­vest­ment-per­ton of pro­duc­tion ca­pac­ity) through scale; and de­creases op­er­at­ing costs through car­bon ef­fi­ciency and low fixed op­er­at­ing costs.

Ÿ Sus­tain­abil­ity gains through the re­duc­tion in the over­all car­bon foot­print of a fa­cil­ity due to in­te­gra­tion and op­ti­mi­sa­tion of as­sets, which be­come more ef­fi­cient

The “dis­rup­tion” to con­ven­tional petro­chem­i­cal pro­duc­ers would likely be the loss of mar­ket po­si­tion due to COTC’s im­mense petro­chem­i­cal vol­ume. For ex­am­ple:

Ÿ The global de­mand for eth­yl­ene and propy­lene are 160 mil­lion met­ric tons (MMT) and 111 MMT per year, re­spec­tively, and at ap­prox­i­mately 4 per­cent an­nual growth rate, the re­quired global an­nual ca­pac­ity ad­di­tions would be 6.4 MMT and

4.4 MMT of eth­yl­ene and propy­lene, re­spec­tively

Ÿ These vol­umes could nearly be sup­plied from two large-scale 200,000 bar­rel-per-day COTC com­plexes (see anal­y­sis be­low and note that mul­ti­ple FCCs, crack­ing fur­naces and cracked gas com­pres­sor/sep­a­ra­tion trains would be re­quired); in­stead of four

con­ven­tional state-of-the-art naph­thacrack­ing light olefins plants

If mul­ti­ple COTC fa­cil­i­ties are even­tu­ally built, the ex­port dy­nam­ics would, over time, change sig­nif­i­cantly and put pres­sure on olefin and feed­stock-re­lated de­riv­a­tive ex­ports from the U.S. Ac­cord­ing to IHS Markit es­ti­mates, U.S. ex­ports of these olefin and feed­stock-re­lated de­riv­a­tives will reach ap­prox­i­mately 14 MMT by 2020.

Sil­uria Tech­nolo­gies: Ad­dress­ing sus­tain­abil­ity through car­bon ef­fi­ciency – A new op­er­a­tional met­ric?

Sil­uria Tech­nolo­gies’ ox­ida­tive cou­pling of meth­ane to eth­yl­ene (and propy­lene) process con­verts meth­ane to olefins in the pres­ence of a cat­a­lyst in an oxy­gen­rich en­vi­ron­ment. The cat­a­lyst re­ac­tion “di­verts” roughly half of the car­bon to the un­de­sir­able co-prod­ucts of car­bon monox­ide (CO) or car­bon diox­ide (CO2), In this highly exother­mic (heat gen­er­at­ing) re­ac­tion. Sil­uria ex­ploits this exotherm by in­ject­ing eth­ane or propane into a sec­ond re­ac­tion cham­ber, where the light alkane is ther­mally cracked to the olefin.

More­over, to en­hance the over­all car­bon ef­fi­ciency of the process, a cat­alytic metha­na­tion step is em­bod­ied in Sil­uria’s process. This re­ac­tion con­verts all gen­er­ated CO and a por­tion of the CO2 ox­ida­tive cou­pling re­ac­tion co-prod­uct back to meth­ane by us­ing the hy­dro­gen gen­er­ated in both the OCM and the eth­ane/propane-crack­ing re­ac­tion in the post-OCM sec­tion of the re­ac­tor.

In fact, the Sil­uria process de­sign phi­los­o­phy is all about less to­tal car­bon (meth­ane) con­sumed per unit of light olefins pro­duced, be­cause the process is “in­dif­fer­ent” to meth­ane as a feed­stock, or as en­ergy (process util­ity). There­fore, one would ex­pect that a de­sign phi­los­o­phy that equates Bri­tish ther­mal units (BTU) of en­ergy sav­ings to a re­ac­tor-con­ver­sion-per-pass per­cent in­crease should drive that most op­ti­mum over­all process de­sign.

Sig­nif­i­cant car­bon re­duc­tion through process de­sign

The Sil­uria OCM process also de­liv­ers sig­nif­i­cant re­duc­tion in car­bon emis­sions over tra­di­tional eth­yl­ene pro­duc­tion pro­cesses. An IHS Markit eval­u­a­tion of to­tal car­bon diox­ide emis­sions to the pro­duc­tion of eth­yl­ene by var­i­ous feed­stock types shows that the Sil­uria OCM tech­nol­ogy is ex­pected to be a net-neg­a­tive CO2 pro­ducer per ton of eth­yl­ene/olefins pro­duced be­cause of the heat gen­er­a­tion for the OCM exotherm, and meth­ane pro­duc­tion (partly) from CO2 is con­sid­ered in our method­ol­ogy as an off­set to CO2 emis­sions.

As noted in the chart be­low, IHS Markit es­ti­mates that the Sil­uria Tech­nolo­gies’ OCM process gen­er­ates neg­a­tive

1 ton of car­bon diox­ide emis­sions equiv­a­lents per ton of eth­yl­ene pro­duced as com­pared to the more con­ven­tional naph­tha-crack­ing process for con­vert­ing crude to olefins, which is es­ti­mated at greater than 1.4 tons of CO2 pro­duced per ton of eth­yl­ene pro­duced. This is

a sig­nif­i­cant im­prove­ment in car­bon emis­sion re­duc­tion, while at the same time cap­tur­ing greater value from the mol­e­cules.

How can Sil­uria Tech­nolo­gies add to the im­pact of crude oil-to-chem­i­cals mega com­plexes?

The IHS Markit in­de­pen­dent and de­tailed tech­ni­cal anal­y­sis of a Saudi Aramco-type COTC ap­proach (as de­scribed in Saudi Aramco’s patent lit­er­a­ture) projects that crude oil feed­stock will be con­verted to chem­i­cals at a higher in­ten­sity than con­ven­tional pro­cesses, in­creas­ing the yields of crude oil feed­stocks con­verted to chem­i­cals to 72 per cent.

With the re­cent co­op­er­a­tion an­nounce­ment by Sil­uria Tech­nolo­gies and Saudi Aramco Tech­nolo­gies Com­pany to work to­gether in the COTC process to max­imise the pro­duc­tion of chem­i­cals from a bar­rel of oil, IHS Markit spec­u­lates that if the meth­ane off-gas and a por­tion of the eth­ane in a hy­dro­c­racked Arab Light crude oil feed­stock (above anal­y­sis) were to be fed to the Sil­uria OCM tech­nol­ogy, then a net in­crease of 300 thou­sand met­ric tons (TMT) to 350 TMT of eth­yl­ene and 200 TMT to 250 TMT per-year of propy­lene, would be gen­er­ated (based on 10 mil­lion met­ric tons (MMT) per year (200,000 bar­rels per day) of crude feed). With meth­ane val­ued at U.S. $1.25 per MMBTU in the Mid­dle East, the Sil­uria OCM tech­nol­ogy ap­pears to be an at­trac­tive ap­proach to en­hance the value of a bar­rel of oil.

Di­rect ox­ida­tive cou­pling of meth­ane to eth­yl­ene has been an elu­sive goal

The ox­ida­tive cou­pling of meth­ane (OCM) to eth­yl­ene has at­tracted sig­nif­i­cant at­ten­tion since its dis­cov­ery in the early 1980’s. Com­pelling ef­forts to pro­duce eth­yl­ene di­rectly from nat­u­ral gas have been made, yet no OCM process has been com­mis­sioned at com­mer­cial scale.

The two ma­jor com­pa­nies that tried to com­mer­cialise OCM, ARCO and Union Car­bide, did ex­ten­sive cat­a­lyst screen­ing stud­ies in the 1980’s and early 1990’s. ARCO re­viewed sev­eral tran­si­tion me­tal ox­ides as ox­ida­tive cou­pling cat­a­lysts. Man­ganese ox­ide cat­a­lysts on sil­ica sup­port where found to be the most at­trac­tive for meth­ane con­ver­sion to eth­yl­ene. How­ever, high-prod­uct yields re­quired op­er­at­ing tem­per­a­tures above 800°C. Higher op­er­at­ing tem­per­a­tures led to methyl rad­i­cals form­ing high­er­car­bon num­ber prod­ucts, and un­de­sir­able prod­ucts (CO, CO2, and coke) formed.

A sim­i­lar con­clu­sion was reached by Union Car­bide. The Union Car­bide re­search showed that the de­vel­op­ment of more ac­tive (and se­lec­tive) cat­a­lysts po­ten­tially op­er­at­ing in the 400°C to 600°C range might per­mit in­dus­trial op­er­a­tion. Although those cat­a­lysts showed promis­ing yield and se­lec­tiv­i­ties, they were sig­nif­i­cantly ham­pered by long-term cat­a­lyst sta­bil­ity is­sues, largely due to the re­quired high-re­ac­tor in­let tem­per­a­tures.

Sil­uria has de­vel­oped and scaledup a pro­pri­etary com­mer­cial, lowtem­per­a­ture OCM cat­a­lyst that can op­er­ate adi­a­bat­i­cally with fewer stages

at sev­eral hun­dred de­grees °C lower in­let tem­per­a­tures, and at higher pres­sures. This cat­a­lyst pro­duces a fa­vor­able yield and has a stan­dard life­time for a com­mer­cial­ized process; and it has a rel­a­tively high-space ve­loc­ity. Ac­cord­ing to U.S. pro­vi­sional patent ap­pli­ca­tions, Sil­uria’s pro­pri­etary cat­a­lyst is based upon mixed-me­tal ox­ide nanowires.

The heart of Sil­uria’s process tech­nol­ogy is a two-stage adi­a­batic re­ac­tor.

Within the re­ac­tor, heat re­cov­ery is a sig­nif­i­cant tech­nol­ogy fea­ture, where the exother­mic heat from OCM is used to ther­mally crack the by-prod­uct and fresh eth­ane and propane to eth­yl­ene and or propy­lene. As pre­vi­ously men­tioned, a metha­na­tion step is em­ployed to con­vert co-prod­uct CO, CO2 and H2 back to meth­ane, and to en­hance over­all car­bon and en­ergy ef­fi­ciency of the process.

To en­hance the over­all car­bon ef­fi­ciency of the process, a cat­alytic metha­na­tion step is in­cluded in Sil­uria’s process. This re­ac­tion con­verts all gen­er­ated

CO, and a por­tion of the CO2 OCM, back to meth­ane by us­ing the hy­dro­gen gen­er­ated in both the OCM and ethane­propane crack­ing-re­ac­tion sec­tions of the post-OCM sec­tion of the re­ac­tor.

The prod­uct gas from the OCM re­ac­tor moves down­stream to the gen­er­ally con­ven­tional olefins crack­ing sep­a­ra­tion, re­cov­ery and frac­tion­a­tion steps. How­ever, Sil­uria has de­vel­oped pro­pri­etary sep­a­ra­tion and re­cov­ery tech­nol­ogy, in­clud­ing op­ti­mis­ing sys­tem hy­draulics, ther­mo­dy­nam­ics (pres­sures and tem­per­a­tures) and heat in­te­gra­tion, to min­imise en­ergy con­sump­tion.

This is es­pe­cially nec­es­sary given that the meth­ane-per-pass-con­ver­sion is rel­a­tively low due to the ther­mo­dy­namic lim­i­ta­tions of the OCM adi­a­bati­cre­ac­tion de­sign. The low methanecon­ver­sion-per-pass means that a large amount of meth­ane must be re­com­pressed and cryo­geni­cally cooled at great cap­i­tal and en­ergy ex­pense, to re­cover the olefin prod­ucts.

In short, the in­ter­sec­tion of a global hy­dro­car­bon re­source pow­er­house such as Saudi Aramco, with Sil­uria Tech­nolo­gies, a small, but in­no­va­tive, pro­cesstech­nol­ogy com­pany, is ex­pected to yield sig­nif­i­cant re­turns for both en­ti­ties, but also drive the in­dus­try for­ward in process im­prove­ments, greater car­bon ef­fi­ciency, cap­i­tal ef­fi­ciency and value creation. While these tech­nolo­gies are cap­i­tally in­ten­sive, the com­mer­cial ap­pli­ca­tion of these two revo­lu­tion­ary tech­nolo­gies not only en­ables greater car­bon ef­fi­ciency, flex­i­bil­ity and value to the petro­chem­i­cal pro­duc­ers, but also a sig­nif­i­cant route to greater car­bon emis­sion re­duc­tion, which has an un­told value to chem­i­cal pro­duc­ers and to the sus­tain­abil­ity of the in­dus­try. This sus­tain­abil­ity value will likely only con­tinue to in­crease as more con­sumers, in­vestors and reg­u­la­tors seek greater en­vi­ron­men­tal stew­ard­ship from petro­chem­i­cal pro­duc­ers.

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