Ethylene/Propylene

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TABLE OF CONTENTS
Page I STRATEGIC ISSUES A. DOWNSTREAM (ETHYLENE) INTEGRATION 1. The Issue of Integration 2. The Commodity Pricing Cycle 3. Implications B. UPSTREAM (REFINING) INTEGRATION 1. Logistics 2. Hydrogen 3. Aromatic Integration 4. Fuel System Integration 5. Odd Feedstock Streams CURRENT COMMERCIAL TECHNOLOGY A. ETHYLENE 1. Feedstocks (a) Supply (1) Natural Gas Liquids (2) Liquids (b) Selection & Yield (c) Feedstock Flexibility (1) Flexibility from an Investment Viewpoint (2) Feedstock Flexibility - Operating Issues (3) Feedstock Value Relationships (d) Coproduction from Liquid Crackers (1) Cracking Severity (2) Coproduct Markets and Alternatives 2. Various Flow Schemes (a) Demethanizer-First Sequence (b) Deethanizer-First Sequence (c) Depropanizer-First Sequence (d) Flow Scheme Configuration Conclusions 1 1 1 2 3 4 4 5 5 5 6 7 7 7 7 7 7 8 12 12 16 16 18 18 18 21 22 26 29 31

II

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Page Investment/Construction Schedule Ethylene Technology Licensors (a) Stone & Webster (b) M.W. Kellogg (c) ABB Lummus (d) KTI (e) TPL/Technip (f) Linde AG (g) Brown and Root Braun 5. Economic Analysis (a) Driving Forces for Ethylene Cracker Feedstock Pricing (1) Overall Nature of Cracker Feedstock Markets (2) Specific Drivers for Key Cracker Feedstock Prices (b) Key Cracker Feedstock Sources and Global Trade (1) Global Trade Factors (2) Other Factors (c) Basis for Production Economics (1) Price Basis (2) Investment Basis (3) Production Cost Basis (d) Production Cost (e) Product Price Sensitivity (1) Impact of Propylene/Ethylene Price Ratio (2) Effect of NGL Prices on the Relative Cracking Economics of Light Versus Heavy Feedstocks PROPYLENE 1. Introduction 2. Conventional Steam Cracking 3. Recovery from Refinery Streams 4. Propane Dehydrogenation 3. 4. 32 35 36 36 37 38 38 38 39 39 39 40 42 44 44 46 48 48 50 50 51 62 62 64 66 66 66 69 71

B.

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Page III NEW DEVELOPMENTS A. ADVANCED LOW CAPITAL ETHYLENE TECHNOLOGY (ALCET) B. SELECTIVE OLEFIN RECOVERY (SOR) C. APPLICATION OF CATALYTIC DISTILLATION (CDHydroTM) D. CATALYTIC PYROLYSIS E. METHANOL TO OLEFINS COMMERCIAL STATUS A. ETHYLENE 1. United States (a) Feedstock Availability (1) Ethane/Propane (2) Gas Oil (b) Demand (c) Supply (1) Expansions (2) New Plants (d) Supply/Demand Balance 2. Western Europe (a) Demand (b) Supply (c) Supply/Demand Balance 3. Asia B. PROPYLENE 1. United States (a) Demand (b) Supply (1) Steam Cracker Propylene (2) Refinery Propylene 75 75 81 86 88 90 91 91 91 91 91 92 92 95 95 98 99 99 99 102 106 108 112 112 112 114 114 115

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Page (c) Supply/Demand Balance (d) Capacity Western Europe (a) Consumption (b) Supply (1) Steam Crackers (2) Refineries (3) Propane Dehydrogenation (4) Trade (c) Supply/Demand Balance Asia 116 117 120 120 122 125 125 127 127 128 130 133 135 139

2.

3. REFERENCES APPENDIX

PERP TITLE INDEX

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TABLES
Page Table II.A.1 Table II.A.2 Table II.A.3 Table II.A.4 Table II.A.5 Table II.A.6 Table II.A.7 Table II.A.8 Table II.A.9 Table II.A.10 Table II.A.11 Table II.A.12 Table II.A.13 Table II.A.14 Table II.B.1 Table II.B.2 Table II.B.3 Table II.B.4 Ethylene Yield Impact of Feedstock and Flexibility on Investment Cost ISBL Naphtha Cracker Investment Ethylene Cracker Investment and Construction Schedule, 1st Qtr 1996 Cat Cracker Offgas Components Raw Material, Byproduct, Utility, and Manpower Rates, 1st Qtr 1996 Cost Estimate of Ethylene Production via Ethane Cracker with no Flexibility Cost Estimate of Ethylene Production via Ethane/Propane with no Flexibility Cost Estimate of Ethylene Production via Ethane/Propane Cracker with Flexibility to Handle 50% Naphtha Cost Estimate of Ethylene Production via Naphtha Cracker with No Flexibility Cost Estimate of Ethylene Production via Naphtha Cracker with Flexibility to Handle 50% NGL Cost Estimate of Ethylene via Naphtha Cracker with Flexibility to Handle 80% NGL Cost Estimate of Ethylene Production via Gas Oil Cracker with no Flexibility Cost Estimate of Ethylene Production via NGL Cracker with Flexibility to Handle 50% Naphtha and Catalytic Gas Recovery Chemical Grade Propylene Yield from Representative Cracker Feedstocks Fractionation Column Design Parameters for Chemical and Polymer Grade Propylene, U.S. Gulf Coast, 1st Qtr 1996 Propane Dehydrogenation Material Balance Cost Estimate of Propylene Production via Propane Dehydrogenation Naphtha-to-Ethylene Technology: Asahi Patent Data for Light Naphtha 10 13 32 33 34 49 53 54 55 56 57 58 59 60 66 71 72 74

Table III.D.1

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Page Table IV.A.1 Table IV.A.2 Table IV.A.3 Table IV.A.4 Table IV.A.5 Table IV.A.6 Table IV.A.7 Table IV.A.8 Table IV.A.9 Table IV.A.10 Table IV.A.11 Table IV.B.1 Table IV.B.2 Table IV.B.3 Table IV.B.4 Table IV.B.5 Table IV.B.6 Table IV.B.7 Table IV.B.8 Table IV.B.9 Table IV.B.10 Table IV.B.11 Appendix Table A1 Table A2 Table A3 Historical Production Growth of Ethylene and its Major Derivatives U.S. Ethylene Demand U.S. Ethylene Capacity, 1993-2005 U.S. Ethylene Capacity Summary, 1992-2000 West European Ethylene Demand, 1992-2010 West European Ethylene Capacity, 1994-2001 West European Ethylene Supply/Demand Balance, 1992-2010 East Asian Ethylene Demand, 1992-2005 East Asian Ethylene Capacity, 1993-2005 East Asian Ethylene Supply, 1993-2005 East Asian Ethylene Supply/Demand Balance, 1993-2005 U.S. Propylene Demand by Application, 1993-2005 U.S. Propylene Production by Feedstock, 1993-2010 U.S. Propylene Supply/Demand Balance, 1994-2005 U.S. Propylene Capacity, Year End1996 West European Propylene Demand, 1992-2010 West European Propylene Production and Upgrading, 1995 West European Propylene Supply/Demand Balance, 1992-2010 East Asian Propylene Demand, 1993-2005 East Asian Propylene Capacity, 1993-2005 East Asian Propylene Supply, 1993-2005 East Asian Propylene Supply/Demand Balance, 1992-2005

93 94 96-97 99 101 103-104 107 109 109 111 111 113 115 116 118-119 121 123-124 129 130 131 132 132

Chemical Grade Propylene/Propane Splitter Facility Equipment Specifications and Cost Estimate Polymer Grade Propylene/Propane Splitter Facility Equipment Specifications and Csot Estimate Product Specifications

136 137 138

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FIGURES
Page Figure II.A.1 Figure II.A.2 Figure II.A.3 Figure II.A.4 Figure II.A.5 Figure II.A.6 Figure II.B.1 Figure II.B.2 Figure II.B.3 Figure III.A.1 Figure III.A.2 Figure III.B.1 Figure III.B.2 Figure III.C.1 Simplified Flow Diagram of Demethanizer-First Back End Ethylene Process Simplified Flow Diagram of Deethanizer-First Back End Ethylene Process Simplified Flow Diagram of Depropanizer-First Back End Ethylene Process Production Cost Summary, U.S.G.C. 1st Qtr 1996 Impact of Propylene/Ethylene Price Ratio on Feedstock Competitiveness Effect of NGL Pricing on the Relative Cracking Economics of Light and Heavy Liquid Feedstocks Payout for Propylene Recovery, U.S. Gulf Coast, 1st Qtr 1996 Propylene Upgrading Process Flow Scheme Simplified Flow Diagram of Oleflex Propane Dehydrogenation Simplified Flow Diagram of Advanced Low Capital Ethylene Technology Sensitivity of ALCET Process to Investment and Utility Costs Chemical Grade Propylene via Separation Membrane Process Polymer Grade Propylene via Separation Membrane Process CDHydroTM Catalytic Distillation Hydrogenation System

23 27 30 61 63 65 68 70 73

76 80 84 85 87

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