Oil and Gas


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


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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