CBE 466

Fall 2015
Assignment 1

Phase 1 Evaluation of process alternatives using methanol feedstock

Background
Last semester students designed a process to convert stranded natural gas from the North Dakota
Bakken oilfield into a liquid methanol product that could be shipped out by rail. As a follow-on
study, your group has been requested to search for and conduct a preliminary screening of process
alternatives for utilizing a methanol feedstock. Basis is the ability to process 100 million lbm/year
of methanol feedstock.

Assignment

Your assignment is to provide Phase 1 preliminary screening of process alternatives for this new
plant. Remember that Phase 1 involves a rough technical & economic screening of process &
chemistry alternatives, culminating in a block flow diagram of the proposed process.
Specifically, you are to prepare the following by group meeting time, week of September 28th:

1. Prepare a written memo report that includes the following:

 Literature review summarizing chemistry/process alternatives for value-added methanol

products and their potential advantages and disadvantages.
 Literature review summarizing economic screening of methanol alternatives that have
been done by others in the past, with a discussion of how applicable their results and
conclusions might be to our current assignment.
 Cloud diagram (Input-output diagram, p. 54, Turton 4th) economic screening of at least 3
process/chemistry alternatives where commodity liquid product prices are available.
 After-tax NPV analysis of at least 3 process/chemistry alternatives where commodity
liquid product prices AND overall plant capital costs are available.
 Block flow diagram and process description for the process/chemistry alternative you
would recommend for further detailed analysis at this point. Your recommendation does
not have to be the most economical based on your Phase 1 screening; level of interest,
scope of the design, and ability to find reaction kinetics and physical properties for that
design

2. An appendix should be included with its own table of contents. Page numbering may
continue from the end of the report or it may restart. This appendix should include:

a. Excel spreadsheets for any capital cost estimations (using CAPCOST) and the cash flow
analysis.
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b. a legible, organized set of any calculations needed to justify your recommendations,

including any assumptions made. Appendices should always have an accurate table of
contents to allow the reader to find any particular calculation quickly.

Other Rules
Concepts taken from the literature (journal articles, chemical encyclopedias, patents, etc.) must
be properly cited. Take advantage of our weekly meeting time, but don’t wait till our next meeting
if you are stuck.

Economic Parameters

 Chemical prices: check http://www.platts.com/news-feature/2014/petrochemicals/ for

current prices, http://www.icis.com/chemicals/channel-info-chemicals-a-z/ for ~2008 prices,
or ask the instructor.
 A stream factor of 95% should be used.
 Chemistries/processes can be eliminated on the basis of a negative cloud diagram analysis.
If a process passes the cloud diagram test, try to estimate capital and operating costs
such that an NPV can be estimated.
 The design should be for a new, grass-roots facility.
 The cost of operating labor is $60,000 per operator per year.
 Land costs are negligible.
 Taxation rates are 45% per year.
 MACRS depreciation of capital investment over a period of 5 years may be applied.
 An interest (hurdle) rate for this project is 10% after taxes.
 The project length is 12 years after start up, which occurs at the beginning of year 3.
 There is no salvage value
 Working capital is 3 months supply of raw materials + 3 months of labor costs.
 Construction period is 3 years with a distribution of fixed capital investment as 50%, 30%,
20%, at the ends of years 0, 1, and 2, respectively.