Phenol/Acetone/Cumene December 2015 Report Contents

Phenol/Acetone/Cumene Table of Contents A Report by NexantThinking™ Process Evaluation/Research Planning (PERP) Program PERP Report 2015-6 – Published December 2015 www.nexantthinking.com

Section Page

1 Executive Summary ...... 1 1.1 INDUSTRY OVERVIEW AND TECHNOLOGY LICENSORS ...... 1 1.2 BUSINESS AND STRATEGIC ANALYSIS REVIEW ...... 2 1.3 COMMERCIAL PRODUCTION TECHNOLOGIES ...... 4 Cumene Consumption...... 4 Selection of Phenol Technologies by Customers for Grassroots and Retrofitting Projects ...... 6 1.4 ALTERNATIVE AND “DEVELOPING” TECHNOLOGIES ...... 7 SBB to Phenol Process ...... 7 Benzene Oxidation (with Nitrous Oxide) to Phenol Process ...... 7 Green Technology Developments ...... 8 1.5 PROCESS ECONOMICS...... 9 Sensitivity Analyses ...... 10 Concluding Remarks ...... 10 1.6 COMMERCIAL MARKET ANALYSIS ...... 12 Global Cumene Supply, Demand, and Trade ...... 12 Global Phenol Supply, Demand, and Trade ...... 13 2 Introduction ...... 16 2.1 CUMENE ...... 16 Technology Overview of Cumene Production ...... 17 Technology Licensing Status and Major Producers ...... 17 Strategic and Business Considerations ...... 18 Physical and Thermodynamic Properties ...... 19 Specifications ...... 19 Health Hazards ...... 20

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Storage and Transportation ...... 20 2.2 PHENOL ...... 20 Technology Overview of Phenol Production ...... 20 Technology Licensing Status and Major Producers ...... 23 Strategic and Business Considerations ...... 24 Physical and Thermodynamic Properties ...... 25 Specifications ...... 25 Health Hazards ...... 25 Storage and Transportation ...... 26 2.3 ACETONE ...... 27 Technology Overview of Acetone Production ...... 27 Technology Licensing Status and Major Producers ...... 27 Strategic and Business Considerations ...... 28 Physical and Thermodynamic Properties ...... 29 Specifications ...... 29 Health Hazards ...... 30 Storage and Transportation ...... 30 3 Cumene Commercial Technologies ...... 31 3.1 PROCESS CHEMISTRY ...... 31 3.2 CATALYST COMPARISON ...... 34 3.3 COMMERCIAL ZEOLITE CATALYZED PROCESSES ...... 35 Badger Licensing ...... 35 Versalis/CB&I Technology ...... 38 UOP ...... 44 4 Cumene to Phenol Process Chemistry ...... 47 4.1 CUMENE OXIDATION TO CUMENE HYDROPEROXIDE ...... 47 4.2 CUMENE HYDROPEROXIDE CLEAVAGE TO PHENOL AND ACETONE ...... 50 5 Phenol Production - A Generic Description ...... 53 5.1 OXIDATION ...... 53 5.2 CHP CONCENTRATION (CUMENE STRIPPING) ...... 56 5.3 CHP CLEAVAGE ...... 57 5.4 NEUTRALIZATION ...... 58 5.5 PRODUCT RECOVERY AND AMS HYDROGENATION ...... 58 5.6 ECONOMIC BENEFIT ...... 59 Cumene Consumption...... 59

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Selection of Phenol Technologies by Customers for Grassroots and Retrofitting Projects ...... 60 6 Phenol and Acetone Commercial Technologies ...... 62 6.1 ILLA INTERNATIONAL ...... 62 Process Features ...... 63 Process Description ...... 63 6.2 KBR ...... 84 Process Features ...... 85 Process Description ...... 86 6.3 MITSUI CHEMICALS (ACETONE RECYCLE PROCESS) ...... 90 Process Chemistry ...... 91 Process Description ...... 92 6.4 VERSALIS AND CB&I TECHNOLOGY ...... 94 Process Features ...... 94 Process Description ...... 95 6.5 SUNOCO/UOP ...... 99 Process Features ...... 99 Process Description ...... 99 7 Developing Technologies ...... 103 7.1 CUMENE ...... 103 Cumene via Alkylation of Benzene with Isopropanol ...... 103 7.2 SEC-BUTYLBENZENE (SBB)...... 104 Alkylation of Benzene to sec-Butylbenzene ...... 104 Shell Process for Alkylation of Benzene to sec-Butylbenzene (SBB) using trans-2-Butene ...... 107 ExxonMobil Process for Alkylation of Benzene to sec-Butylbenzene (SBB) using Ethylene ...... 107 7.3 PHENOL WITH METHYL ETHYL KETONE (MEK) AND ACETONE CO- PRODUCTS ...... 107 sec-Butylbenzene Oxidation to sec-Butylbenzene Hydroperoxide ...... 107 sec-Butylbenzene Hydroperoxide Cleavage ...... 108 Shell Process for SBB/Cumene to Phenol (with MEK/Acetone Co- Products) ...... 109 ExxonMobil Process for SBB/Cumene to Phenol (with MEK and Acetone Co-Products) ...... 113 7.4 PHENOL VIA BENZENE OXIDATION WITH NITROUS OXIDE (SOLUTIA/BIC PROCESS) ...... 114

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On-Purpose Nitrous Oxide from Ammonia...... 115 Benzene Oxidation to Phenol with Nitrous Oxide ...... 119 7.5 PHENOL VIA OXIDATION OF BENZENE WITH HYDROGEN PEROXIDE OR HYDROGEN/OXYGEN ...... 124 Versalis ...... 124 General Electric ...... 125 7.6 PHENOL VIA HYDROLYSIS OF BROMOBENZENE ...... 125 Microvast Power Systems ...... 126 7.7 GREEN TECHNOLOGY DEVELOPMENTS ...... 126 Bio-derived Cumene and Phenol ...... 126 Bio-derived Acetone ...... 127 7.8 PATENT ANALYSIS ...... 129 8 Process Economics ...... 132 8.1 COSTING BASIS ...... 132 Investment Basis ...... 132 Pricing Basis ...... 132 Cost of Production Basis ...... 134 Cost of Producing Cumene via Propylene Alkylation of Benzene ...... 134 8.2 COST OF PRODUCING PHENOL VIA CONVENTIONAL CUMENE BASED PROCESS ...... 139 8.3 COST OF PRODUCING PHENOL FROM BENZENE AND PROPYLENE WITH ACETONE RECYCLE (MITSUI PROCESS) ...... 145 8.4 SPECULATIVE COST OF PRODUCING PHENOL VIA SEC- BUTYLBENZENE/CUMENE ...... 148 sec-Butylbenzene (SBB) from Benzene and Butenes ...... 148 Phenol from sec Butylbenzene (SBB) and Cumene ...... 148 8.5 SPECULATIVE COST OF PRODUCING PHENOL VIA OXIDATION OF BENZENE WITH NITROUS OXIDE ...... 152 Ammonia Oxidation to Nitrous Oxide (Fluid-Bed Reactor) ...... 152

Benzene Oxidation to Phenol Using N2O Produced at Cash Cost (Moving-Bed Reactor) ...... 152

Benzene Oxidation to Phenol Using Byproduct N2O (Moving-Bed Reactor) ...... 155 8.6 COMPARISON OF COMMERCIAL AND SPECULATIVE PROCESSES TO PRODUCE PHENOL ...... 158 8.7 SENSITIVITY ANALYSES ...... 159 Sensitivity of Production Cost to Historical Variation in Prices of Major Feedstocks and Byproducts ...... 159

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Sensitivity of Production Cost to Plant Scale for Alternative and “Developing” Technologies ...... 160 8.8 CONCLUDING REMARKS ...... 163 9 Commercial Applications ...... 165 9.1 CUMENE ...... 165 9.2 PHENOL ...... 165 Polycarbonate ...... 166 Epoxy Resins ...... 166 9.3 ACETONE ...... 167 10 Market Dynamics ...... 168 Global ...... 168 Global ...... 172 North America ...... 176 Western Europe ...... 180 Asia Pacific ...... 184 Global ...... 192 11 Glossary ...... 196 12 References ...... 199

Appendix Page

A Definitions of Capital Cost Terms used in Process Economics ...... A-1 B Definitions of Operating Cost Terms Used in Process Economics ...... B-1 C PERP Program Title Index (2006 - 2015) ...... C-1

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Figure Page

1.1 Phenol Value Chain ...... 1 1.2 Major Phenol Producers, 2015 ...... 1 1.3 Phenol Production Cost Summary ...... 10 1.4 Global Cumene Supply, Demand, and Trade ...... 13 1.5 Phenol Demand by End-Use, 2015 ...... 14 1.6 Global Phenol Supply, Demand, and Trade ...... 14 2.1 Phenol Value Chain ...... 16 2.2 Major Producers of Cumene, 2015 ...... 18 2.3 Major Producers of Phenol, 2015 ...... 23 2.4 Major Producers of Acetone, 2015 ...... 28 3.1 Overview of Cumene Process Chemistry ...... 31 3.2 Transalkylation Chemistry ...... 32 3.3 Badger Cumene Technology Process ...... 37 3.4 Versalis/Lummus Cumene Process ...... 42 3.5 UOP Q-Max™ Process ...... 46 4.1 Overview of Cumene to Phenol Process Chemistry ...... 48 5.1 Cumene Oxidation and Cleavage ...... 54 5.2 Phenol/Acetone Recovery and AMS Hydrogenation ...... 55 6.1 ILLA Phenol/Acetone Process ...... 65 6.2 ILLA Cumene Oxidation Process ...... 67 6.3 Comparison of Oxidation Technologies ...... 68 6.4 ILLA HP Cleavage Process ...... 73 6.5 Heat Generation and Heat Removal in One-Step Homogeneous CHP Cleavage ...... 76 6.6 ILLA's Off-Gas Adsorptive Treatment ...... 78 6.7 ILLA Two-Step Catalytic Phenol Treatment Process ...... 80 6.8 KBR Improvements in the Phenol Process ...... 86 6.9 KBR Phenol Process ...... 87 6.10 Mitsui Acetone Recycle Chemistry ...... 91 6.11 Mitsui Acetone Recycle Process ...... 93 6.12 Versalis/CB&I Phenol Process ...... 96 6.13 Sunoco/UOP Phenol Process ...... 100 7.1 sec-Butylbenzene Production Process ...... 106 7.2 Cumene/SBB to Phenol Oxidation and Cleavage ...... 110 7.3 Cumene/SBB to Phenol Recovery and Hydrogenation ...... 111

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7.4 On-Purpose Nitrous Oxide Production using Fluid Bed Reactor (Solutia/BIC) Process...... 118 7.5 Benzene to Phenol (Solutia/BIC) Process ...... 123 7.6 ABE Metabolic Pathway ...... 127 7.7 ABE Process Schematic ...... 128 7.8 Regional Patent Activity (2008-2015) ...... 130 7.9 Patent Developments by Topic (2008-2015) ...... 130 8.1 Phenol Production Cost Summary ...... 158 8.2 Cash Cost of Production Sensitivity to Variation in Major Feedstock and Byproduct Prices ...... 160 8.3 Variation in Cost of Production with Plant Scale ...... 160 8.4 Fluctuation of Acetone and Methyl Ethyl Ketone Prices ...... 162 10.1 Global Cumene Demand by Region (2012-2020) ...... 168 10.2 Global Cumene Capacity Share by Marketer in 2015 ...... 170 10.3 Global Cumene Capacity by Region, (2012-2020) ...... 170 10.4 Global Cumene Supply and Demand (2012-2020) ...... 171 10.5 Global Phenol Demand, 2015 ...... 173 10.6 Global Phenol Demand (2012-2020) ...... 173 10.7 Global Phenol Supply, 2015 ...... 174 10.8 Global Phenol Supply (2012-2020) ...... 175 10.9 Global Phenol Supply, Demand, and Trade (2012 -2020) ...... 176 10.10 North America Phenol Supply, Demand, and Trade (2012-2020) ...... 179 10.11 Western Europe Phenol Supply, Demand, and Trade (2012-2020) ...... 184 10.12 Asia Pacific Phenol Supply, Demand, and Trade (2012-2020)...... 191 10.13 Global Acetone Demand, 2015 ...... 192 10.14 Global Acetone Demand by Region (2012-2020) ...... 193 10.15 Global Acetone Supply by Marketer, 2015 ...... 194 10.16 Global Acetone Supply by Region (2012-2020) ...... 194 10.17 Global Acetone Supply, Demand, and Trade...... 195

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Table Page

1.1 Licensors of Phenol ...... 2 1.2 Strategic/Business Considerations – Phenol ...... 3 1.3 Strategic/Business Considerations – Acetone ...... 3 1.4 Existing Global Bio-Acetone Producers ...... 9 1.5 Summary of Economics of Phenol Production Processes ...... 9 1.6 Global Cumene Supply, Demand, and Trade ...... 13 1.7 Global Phenol Supply, Demand, and Trade ...... 15 2.1 Typical Properties of Cumene ...... 17 2.2 Cumene Technology Licensors ...... 18 2.3 Key Physical and Thermodynamic Properties ...... 19 2.4 Commercial Specification ...... 19 2.5 Typical Properties of Phenol ...... 20 2.6 Highlights in the Development of Phenol Production Technology ...... 21 2.7 Phenol Technology Licensors ...... 23 2.8 Strategic/Business Considerations ...... 24 2.9 Key Physical and Thermodynamic Properties ...... 25 2.10 Commercial Specification ...... 25 2.11 Phenol Transport Regulations ...... 26 2.12 Typical Properties of Acetone ...... 27 2.13 Strategic/Business Considerations ...... 29 2.14 Key Physical and Thermodynamic Properties ...... 29 2.15 Commercial Specification ...... 30 3.1 Typical Propylene Feedstock Specifications ...... 33 3.2 Benzene Feedstock Specifications Required for Cumene Production Purposes ...... 33 3.3 Catalyst Comparison - Typical Operating Conditions & Cumene Specifications ...... 35 3.4 Versalis/CB&I Cumene Product Quality ...... 43 3.5 UOP Q-Max™ Cumene Product Quality ...... 45 6.1 Main Characteristics of ILLA’s Two-Step CHP Cleavage Process ...... 70 6.2 ILLA Phenol Product Quality ...... 81 6.3 ILLA Acetone Product Quality ...... 82 6.4 ILLA AMS Product Quality ...... 83 6.5 Grassroots Phenol Plants Employing Licensed KBR Phenol Technology since 2000 ...... 84 6.6 KBR Phenol Product Quality ...... 90 6.7 Propylene Product Quality for Mitsui Acetone Recycle Process ...... 94

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6.8 Versalis/CB&I Phenol Product Quality ...... 99 6.9 Versalis/CB&I Acetone Product Quality ...... 99 7.1 On-Purpose Nitrous Oxide (N2O) Process Scheme Summary ...... 117 7.2 Effect of Catalyst Water Vapor Treatment on Benzene Conversion ...... 121

7.3 Various Operating Conditions for Benzene Oxidation with Nitrous Oxide (N2O) to Phenol ... 121 7.4 Existing Global Bio-Acetone Producers ...... 129 7.5 Key Player Patent Activity (2008-2015) ...... 131 8.1 Prices of Raw Materials, Products, Utilities, and Labor ...... 133 8.2 Cost of Production Estimate for: Cumene Process: Alkylation of Benzene with Propylene using a Zeolite Catalyst; China Basis ...... 136 8.3 Cost of Production Estimate for: Cumene Process: Alkylation of Benzene with Propylene using a Zeolite Catalyst; North-West Europe Basis ...... 137 8.4 Cost of Production Estimate for: Cumene Process: Alkylation of Benzene with Propylene using a Zeolite Catalyst; USGC Basis ...... 138 8.5 Optimal Yields in Phenol Production ...... 139 8.6 Material Balance for Cumene to Phenol Process ...... 139 8.7 Cost of Production Estimate for: Phenol (with Acetone Byproduct) Process: Cumene Oxidation and CHP Cleavage; China Basis ...... 142 8.8 Cost of Production Estimate for: Phenol (with Acetone Byproduct) Process: Cumene Oxidation and CHP Cleavage; North-West Europe Basis ...... 143 8.9 Cost of Production Estimate for: Phenol (with Acetone Byproduct) Process: Cumene Oxidation and CHP Cleavage; USGC Basis ...... 144 8.10 Cost of Production Estimate for: Phenol Process: from Benzene and Propylene with Acetone Recycle (Mitsui); Japan Basis ...... 146 8.11 Cost of Production Estimate for: Phenol Process: from Benzene and Propylene with Acetone Recycle (Mitsui); USGC Basis ...... 147 8.12 Cost of Production Estimate for: sec-Butylbenzene ...... 150 8.13 Cost of Production Estimate for: Phenol (with MEK and Acetone Byproducts) ...... 151 8.14 Cost of Production Estimate for: Nitrous Oxide (100% basis as 46 wt. % solution) ...... 154 8.15 Cost of Production Estimate for: Phenol Process: Benzene Oxidation with Nitrous Oxide at Cash Cost (Moving-Bed Reactor); USGC Basis ...... 156 8.16 Cost of Production Estimate for: Phenol Process: Benzene Oxidation with Nitrous Oxide at Zero Cost (Moving Bed Reactor); USGC Basis ...... 157 8.17 Summary of Economics of Phenol Production Processes ...... 158 10.1 Global Cumene Consumption by Region ...... 169 10.2 Global Cumene Capacity by Region, (2012-2020) ...... 170

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10.3 Global Cumene Supply and Demand (2012-2020) ...... 172 10.4 Global Phenol Demand (2012-2020) ...... 173 10.5 Global Phenol Supply (2012-2020) ...... 175 10.6 Global Phenol Supply, Demand, and Trade (2012 -2020) ...... 176 10.7 North America Phenol Demand (2012-2020) ...... 177 10.8 North America Phenol Capacity, 2015 ...... 178 10.9 North America Phenol Supply, Demand, and Trade (2012-2020) ...... 180 10.10 Western Europe Phenol Demand (2012 -2020) ...... 182 10.11 Western Europe Phenol Capacity, 2015 ...... 183 10.12 Western Europe Phenol Supply, Demand, and Trade (2012-2020) ...... 184 10.13 Asia Pacific Phenol Demand (2012-2020) ...... 188 10.14 Asia Pacific Phenol Capacity, 2015 ...... 190 10.15 Asia Pacific Phenol Supply, Demand, and Trade (2012-2020)...... 192 10.16 Global Acetone Supply, Demand, and Trade...... 195

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Process Evaluation/Research Planning

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