UOP sees methanol-to-olefins as solution to rising global propylene gap

By Ben DuBose
Online Editor

HOUSTON -- A manager at Honeywell's UOP warns that modern trends in petrochemical and refining production are leaving a potential global propylene gap that may need to be filled by newer technologies such as methanol-to-olefins (MTO).

Dr. Greg Funk, a senior product line manager at UOP, spoke at the Monetizing C1 Methane Feedstocks Summit 2015 conference and explained that new technologies like MTO and propane dehydrogenation (PDH) are becoming commercially viable amid a growing product shortfall.

"The shift to lower cost, lighter feeds such as ethane results in a decrease in propylene and heavier olefins, including butadiene," said Funk, who noted that production of pygas is also falling.

On the refining side, Funk noted that current refinery economics favor diesel production over gasoline.

"The shift toward heavier diesel reduces byproduct light olefins," said Funk. "You have less severe catalytic cracking and more mild hydrocracking, which produces less gasoline and less light byproducts."

Funk noted that even with the recent decline in crude oil dropping prices to near $50/bbl, natural gas feedstocks remain cost advantaged, with a variety of alternatives for monetizing methane.

For example, the current margin on simply selling methane is roughly $150/ton, Funk explained. But the margin can grow to roughly $300/ton for methanol, $650/ton for LNG and gasoline, and $850/ton for ethylene and propylene, which can extend downstream to polyethylene (PE) and polypropylene (PP).

As a result of the latter figure, the hottest investment area continues to be olefins. 

"World demand for ethylene and propylene continues to grow at about 4%/year," Funk said. "More than 100 million tons per year of additional capacity will be needed by 2025, with consumption driven by a growing middle class in developing regions."

But with the lighter feeds leading to more ethylene and less byproducts, other routes will need to be considered to fill the propylene side of the equation.
Funk said he is particularly bullish on MTO because it can connect both natural gas and coal to the largest commodity petrochemicals in ethylene and propylene. The process is done through synthesis gas production, methanol synthesis and ultimately the MTO process that converts the methanol to olefins.

With UOP's advanced MTO technology, the MTO process becomes integrated with the olefin cracking process. Funk says that results in the highest possible olefin yield, high propylene/ethylene (P/E) flexibility and an opportunity to produce other products such as butadiene.

UOP notes that MTO is already a preferred technology in China, where coal is abundant and the government continues to support coal-based technologies as a substitute for oil.

But Funk believes MTO can have a growing role in North America, too, where methane is already more readily available than ethane and propane in many regions and abundant natural gas also remains available at low and steady prices.

"MTO gives strong economic returns and creates more financial value than just methanol," said Funk. "On-purpose light olefins production from methane via MTO is profitable."

UOP says its latest MTO process became fully commercialized in 2013, with two new units expected to be operational by the end of 2015. Funk says the new process offers competitive economics vs. alternate olefin technologies, a high yield of ethylene and propylene (> 89%), a flexible product ratio (P/E range of 1.25 to 1.8), and a single-train capacity of up to 1.8 million tpy.

"There is strong untapped potential with North American methane," Funk told conference attendees. "UOP would love to help evaluate whether MTO can offer value in your situation."

The Monetizing C1 Methane Feedstocks 2015 conference concludes Thursday at the Westin Galleria in Houston.

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