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Syngas – the Flexible Solution in a Volatile Feed-Stock Market Abstract New Technologies and Alternative Feedstocks in Petrochemistry and Refining DGMK Conference October 9 – 11, 2013, Dresden, Germany Syngas – The Flexible Solution in a Volatile Feed-stock Market T. Wurzel Air Liquide Global E&C Solutions c/o Lurgi GmbH, Frankfurt a. M. Germany Abstract The paper presents the versatility of syngas allowing the extended application of new feedstock sources such as shale gas or coal to deliver fuels and chemicals traditionally derived from crude oil. In order to provide a holistic view on this topic of current interest, the syngas market, the pre-dominant production technologies and main economic consideration for selected applications are presented and analyzed. It can be concluded that a broad portfolio of well-mastered and referenced syngas production technologies which are continuously improved to meet actual market requirements (e. g. ability to valorize biomass) will remain key to enable economic solutions in a world characterized by growing dynamics with regards to the supply of (carbonaceous) feedstock. Introduction Today´s refineries and petrochemical producers are confronted with a couple of challenges such as constrained feedstock availability, fluctuating feedstock and product pricing as well as the requirements to “de-carbonize” final products. In short, this industry is far away from “business as usual” but experiences a high pressure to constantly focus on competitiveness. In addition to today´s solutions (e. g. economy of scale, higher level of integration between refinery and petrochemistry) the ability to tap alternative carbonaceous feedstock sources other than crude oil and the ability to arbitrate between those different feedstock sources is deemed to yield a significant competitive advantage to the industry. In order to access these feedstock sources (natural gas, coal or, in future, biomass) production technologies for syngas, mixtures of hydrogen and carbon monoxide, and its respective downstream applications will play an important role. The integration of syngas-based processes into existing refinery and petrochemical production facilities will not only help to enhance the competitiveness of these complexes but it will also decrease the level of dependence from crude oil for the production of fuels and petrochemicals. Today´s syngas market – applications, feed-stock and regions Today´s syngas production serves basically two markets, i. e. supply of hydrogen (mainly 3 refinery and fertiliser consuming approx. 68 Mio. Nm H2/hr) and supply of carbon monoxide containing gases for the production of methanol, Fischer-Tropsch liquids and chemicals from carbon monoxide (in total estimated to be 35 Mio. Nm3 syngas/hr). Looking onto the future market growth, the market for syngas is expected to stay bullish based on following drivers: Hydrogen demand for refinery applications will continue to grow as demand for clean fuels increases while crude oil quality is declining. Main growth regions will be CIS (implementation of clean fuel strategy), Middle East (big integrated refinery complexes) and South America (Utilisation of domestic crude reserves). DGMK-Tagungsbericht 2013-2, ISBN 978-3-941721-32-6 23 New Technologies and Alternative Feedstocks in Petrochemistry and Refining The second driver for an increasing hydrogen demand is the augmenting need for fertilizers driven by a constantly growing world population. Even when the growth of world population is expected to reach an equilibrium level by 2050, the mid-term demand for fertilizer is reported to increase by 5 % per year. In addition to the established markets described above, further growth impulses from hydrogen as energy carrier are expected in the long-term. Syngas, as a flexible carbon source, will continue to be required for the production of pure carbon monoxide (main applications: oxo-synthesis, acetic acid, isocyanates), liquid fuels and methanol. The market for carbon monoxide is to a certain extent a quite mature one offering only limited substitution potential. Due to the small market size following GDP growth, this syngas market segment has only reduced impact on the “overall” syngas market. The demand for methanol (annual production in 2012: 51 Mio tonnes) can be segmented into two groups, i. e. “conventional” and “non-conventional” applications. While the pre-dominant conventional methanol consumers (acetic acid, MTBE, formaldehyde) follow GDP growth, the “unconventional” applications (olefins and aromatic hydrocarbon production, conversion into gasoline) show a rapidly increasing growth of 6 % per annum, in particular, in China. Looking on the various routes to convert methanol into chemicals, the combination of syngas and methanol opens a multitude of opportunities to replace crude oil for the production of base chemicals. After the first references based on advanced catalytic system (Cobalt, low temperature) have been put into operation during the last 10 years, liquid fuel production based on Fischer- Tropsch currently attracts a lot of attention as one route to decrease dependence on fuel import. To conclude, the syngas market can be partitioned into two areas. The first segment addresses those applications in which the syngas constituents, hydrogen and carbon monoxide, are utilised as “utility molecules” to up-grade conventional fuels (hydrogen) or to deliver small volumes of specialty chemicals (carbon monoxide). The second dimension of the “unconventional” syngas market is to provide alternatives to the traditional production of petrochemicals or fuels. While the first market element is governed growth and region-wise by the industry requiring the “utility syngas” (e. g. refineries, integrated chemical complexes), the “unconventional” syngas market follows the (cost-competitive) availability of carbonaceous feedstock material. In this regard, significant activity is particularly observed in two regions: China: Due to abundant coal reserves (summing up to 13.3 % of the world coal reserves, BP, 2013) and a high dependence on crude oil import, the Chinese Coal-to-Chemicals industry based on syngas utilisation has evolved tremendously over the last 10 years. Table 1 indicates the proportion of coal-derived syngas for the production of base chemicals. Table 1 Relevance of coal for the production of base chemicals in China (Plotkin, 2012) Product Proportion of coal as feed-stock Methanol 77 % Ammonia 77 % Benzene 26 % (mainly from coal tar) Ethylene 20 % (projected for 2016) Propylene 17 % (projected for 2016) 24 DGMK-Tagungsbericht 2013-2 New Technologies and Alternative Feedstocks in Petrochemistry and Refining Due to the increasing energy and chemicals demand in China, a further increase of the coal- based “syngas-economy” in China is expected. However, beside the pure economical strategy to increase independency from crude oil, additional factors such as CO2-footprint, environmental aspects and sustainable product economics as well as increasing shale gas reserves are expected to have a long-term bearing on the perspectives of coal-based chemicals as well. North America: Due to the discovery and exploitation of huge “shale gas” reservoirs over the last years, a new cheap carbon-containing feedstock has been made available to the North American market. The economic potential of shale gas is based on the significant price differential between crude oil and natural gas as depicted in Fig. 1. With this attractive feedstock cost a change in the US-based chemical industry has been initiated turning the US into a net-producer of syngas-based chemicals such as methanol and ammonia. At the same time, the US-based petrochemical industry will benefit from the natural gas liquids (a valuable “by-product” of shale gas production) as an alternative cracker feedstock enhancing ethylene production (while shortening the supply of higher olefins such as propylene or butadiene). In addition, GTL as well as Methanol-To-Gasoline projects are mushrooming as well in order to tap this valuable feedstock material for supplementing the US-American transportation fuel pool. Fig. 1 Price differential between crude oil and shale gas (Source: Bloomberg) Against this background, further materialisation of the present potential for gas-based projects in the US is expected to be very likely. First projects under implementation or planning such as new Ethane crackers, new GTL facilities, new or revamped fertiliser or methanol complexes based on shale gas testify impressively that a new syngas market is emerging. Based on these growth opportunities a “syngas boom” in the US is very likely and visible today. Overview of proven syngas production technologies As stated above, there is a strong market pull for syngas as a proven route to convert alternative carbonaceous feedstock material into valuable products. Dependent on which feedstock material is available, the appropriate technologies have to be selected. In case, different feedstock material would be available, a detailed techno-economic analysis applying project-specific evaluation criteria is required in order to yield the most competitive solution (examples are given in this paper). DGMK-Tagungsbericht 2013-2 25 New Technologies and Alternative Feedstocks in Petrochemistry and Refining Fig. 2 summarizes the different routes to produce syngas from different carbonaceous feedstock material from natural gas, LPG or coal. This illustration highlights the unique feature of syngas which is to make carbon in it various forms accessible to the chemical and petrochemical industry, i. e.
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