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Fri 19 Feb 2010 04:00 AM

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Cracking molecules

Licensed technology and cheap feedstock are pushing Middle East petrochemicals producers to new highs.

Cracking molecules
Kaspar Evertz, global licensing business, LyondellBasel.
Cracking molecules
Technology owners license their technologies only under partnership agreement as it is more beneficial for them.
Cracking molecules
Massive potential of the petrochemicals industry in the Middle East led major technology licensors to look of joint venture opportunities with local petrochemical companies.
Cracking molecules
Kelvin Halliwell, licensing manager, Shell.

Licensed technology and cheap feedstock are pushing Middle East petrochemicals producers to new highs.

Technology licensing for downstream companies is prospering in the Middle East region, as the newly established petrochemical plants include advanced process units, which require cutting edge process technologies.

All local producers have access to low cost feedstock, but licensed technology in essence is commercialising the know-how which is the main ingredient for petrochemical producers to be prominent on the world scale.

Various market changes, ranging from increased product demand to alterations in product legislation and emission standards, can trigger project opportunities. "We can offer technologies to upgrade the capacity and performance of operating plants, integrate new process units into existing refineries and petrochemical complexes, incorporate advanced catalyst systems and reactor internals and build grass-roots refineries," says Kelvin Halliwell, licensing manager at Shell projects and technology.

A technology license agreement grants the user the right to use specific technologies, patents, software, and product designs. In a typical agreement, a running royalty fee based on licensed product sales revenue is paid to the licensor on a periodic basis.

Though the majority of licenses are available for open licensing, some of technology owners license their technologies only under partnership agreement. "LyondellBasell's propylene oxide and metathesis technologies are only licensed in joint venture partnerships," says Kaspar Evertz, responsible for global licensing business, at LyondellBasel Industries. "But all our polyolefin technologies are available for open licensing," he adds.

Moreover, due to the magnitude of the investment required, as well as the financing constraints, often owners are reluctant to commercialise the new cutting edge technologies. "Lummus has tried to meet this challenge by forming partner relationships with major producers. For the industry challenges to be continually met, these relationships must continue to expand," says Stephen Stanley, vice president of olefins technology business group at Lummus Technology.

CBI Lummus is one of five major players that provide technology to develop ethane facilities. The list also includes Linde, Technip, Stone & Webster and KBR.

Major technology licensors offer support to their clients throughout the different phases of the projects. "With every license, we can offer a process design package (as opposed to basic design package), detailed support to engineering, procurement and construction (EPC) contractors, and extended training and start-up services," says Halliwell. "We also offer a differentiated technical assistance and optimisation during the first and subsequent cycles; and decision-making support," he adds.

However, each licensed technology has specific features that differentiate it from the competitors. "Lummus have a leading market share in the majority of the technologies we license. In general, this position is the result of superior process performance and minimum capital costs, leading to the best internal rate of return (IRR) for each project," explains Stanley.

Olefins Technology

"The production of olefins (which includes ethylene and propylene) by steam cracking is a fairly mature technology. While improvements in the configuration of the pyrolysis module and the product recovery sections continue to increase the efficiency of the process, the process chemistry and fundamental flow sheet configuration has remained relatively unchanged," says Stanley.

With rising global warming concerns, olefins producers face a number of challenges. "One is to reduce greenhouse gas emissions by reducing the fuel fired in the thermal cracking of feedstocks and by lowering the energy consumption of the product recovery section," says Stanley. "Another challenge is to lower the significant level of investment associated with new steam cracking facilities.

A third challenge is to improve the IRR on these investments by enhancing the product slate produced from thermal cracking, thereby improving the operating margins," he adds.

To help meet these challenges, technology providers have invested in research and development programmes that focused on changing the process chemistry downstream of the pyrolysis module (i.e., the ethylene plant reactor system) and on a fundamental reconfiguration of the steam cracker flow sheet. "Our programme has led to 16 improvements that represent the first fundamental changes in ethylene technology in more than 25 years," explains Stanley

"These innovations include several in the pyrolysis module that lower NOx (oxides of nitrogen), reduce greenhouse gas emissions, and extend the time between heater decokings. One key innovation is providing the combustion air by using a gas turbine exhaust. "This integration reduces the overall energy consumption 25% by improving the cycle efficiency," he explains.Moreover, for the ethylene process technology, the ethylene flow sheet innovations include the replacement of the three separate refrigeration systems used in the conventional flow sheet with a single system. "This reduces the number of rotating equipment casings by half, thereby lowering investment while reducing maintenance costs and increasing reliability," observes Stanley.

Technology Shift

As downstream product demand shifts, the product mix from the petrochemical complex will need to also shift. As the amount of ethylene produced from ethane and propane is expected to increase, the co- production of propylene will drop. This drop, coupled with a higher growth rate for propylene derivatives, will increase the demand for on-purpose propylene production.

"This on-purpose demand will be met in part by technologies licensed by Lummus, including Olefins Conversion Technology (OCT) and Ethylene Dimerisation), as well as CATOFIN propane dehydrogenation  and Methanol-to-olefins (MTO)," explains Stanley.

One approach to minimise the capital investment associated with a petrochemical complex is to increase economies of scale. Ethylene plants today can produce 1.5 to 1.6 million tonnes per annum in a single train. Developments under way will increase the single-train capacity to over 2million t/y in the foreseeable future. "We have demonstrated single-train propane dehydrogenation units with capacities up to 650 000 t/y and single train OCT units with capacities up to 800 000t/y. The capacities   of these units will also be increasing to meet this investment minimisation challenge," Stanley reveals.

Feedstock issue

The are some differences in the process coming from the type of feedstock used. "Ethane-feed crackers can be less complex than propane and heavier feed crackers due to the production of fewer by-products. That is, the ethane cracker produces 80% ethylene with the other two principal by-products being hydrogen and methane," says Heinz Zimmermann, vice president of business development at Linde Engineering.

"Generally, the C3 and heavier products are not produced in sufficient quantities to justify product recovery. On larger scale ethane crackers, the recovery of propylene is typically justified; however, all other by-products are used as fuel. This can significantly simplify the recovery section of the cracker," he adds.

With oxymoron of ethane feedstock, feed flexibility is becoming increasingly important. "If more than 10-15% propane or heavier feed is added to the cracker, by-product recovery is usually justified and the flow scheme becomes similar to the naphtha-feed plant. While the equipment is smaller, the process configuration remains the same," explains Stanley.

Local Technology

Recently, SABIC has entered the arena of technology providers, announced the successful commercialising of the Linear Alpha Olefins (LAO).using its α-SABLIN technology developed jointly by Linde.

"This first commercialisation of LAOs at Jubail is very much in keeping with SABIC's continuous search for innovative technologies that can be employed to bring new and better product solutions to the marketplace," said Dr Abdulrahman Al-Ubaid, SABIC's vice-president technology and innovation.

"The commercialisation of this technology is a big success for SABIC and Linde, by using this technology in new commercial solutions and applications in global markets. The SABLIN process is the first and only commercially proven LAO technology which is available for licensing to third parties," said Dr Markus Raab, managing director of Linde's engineering division.

In the looming future, regional producers are expected to focus on technology research and development programmes. Now its SABIC who entered the domain, but in the future more companies may come.