HYDROCARBON ENGINEERING

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03 Comment 47 on a mission Paul Shields, Chart Energy and Chemicals Inc., USA, discusses the development of brazed aluminium heat exchanger technology for 05 World News gas processing applications Contract awards, project updates, industry latest, news digest, diary dates, mergers and acquisitions 52 the unstoppable advance Riccardo Martini, Fabio Podestà and Carmelo Bongiorno, ABB, 12 Looking forward Italy and Mario Abela, Dario Giannobile, Enrico Majuri, Isab Energy Steven Kantorowicz, KBC, USA, assesses the future of the Services, Italy, talk about advanced process control for integrated petrochemical industry of the key countries in Asia gasification and combined cycle plants

24 honed for purpose 59 packed for optimal performance In the second article in Hydrocarbon Engineering’s Izak Nieuwoudt, Koch-Glitsch, USA, discusses the ways in Recruitment and Employment series, Bill Glasscock, Solomon which the microscopic and macroscopic geometric variables Associates, USA, argues that cutting costs at all costs is not of structured packing can be used to design a packing with the a helpful strategy; streamlining staff to achieve sustainable desired efficiency and capacity performance is a much more constructive tactic 63 mini valve, big efficiency Mark Pilling, Sulzer Chemtech USA Inc., USA and Giuseppe Mosca, Sulzer Chemtech AG, Switzerland, discuss the design of a new tray valve that provides high performance

68 end to end solutions Hans-Georg Pohle, Sandvik, Germany, looks at how the company plans to meet future demand for end to end solutions as global sulfur output continues to rise

73 getting a handle on sulfur Les Lang, Brimrock Group Inc., Canada and Gordon J. Johnson, WorleyParsons, delve into the considerations behind successfully handling, forming and storing sulfur

24 79 Sulfur review SRSR20132013 Hydrocarbon Engineering provides a comprehensive overview of the key sulfur technologies available to plant/refinery operations 29 responsible spending James F. McGehee, Merichem Company, USA, talks about the company's latest generation of low cost spent caustic 104 15 Facts on china treatments

37 foul play Berthold Otzisk, Kurita, Germany, discusses the chemical treatment programmes that can be applied to ethylene production in order to avoid fouling, corrossion and the formation of unwanted emulsions

42 the cutting edge of additive development on this month’s cover Bettina Siggelkow and Werner Reimann, Clariant Refinery Services, Germany and Michael Feustel, Process Chemicals at Clariant, Germany present the ways in which new additives can help refiners to stay ahead of environmental regulations Merichem Company provides a diversified portfolio of products and services to a wide range of operations, including the refining and petrochemicals industries. Merichem is a global leader in licensing patented process technologies and supplying proprietary equipment to provide Member of ABC Audit Bureau of Circulations hydrocarbon treating solutions and byproduct management Copyright© Palladian Publications Ltd 2013. All rights reserved. services that remove sulfur No part of this publication may be reproduced, stored in a and other impurities from retrieval system, or transmitted in any form or by any means, hydrocarbon liquids and gases. electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the copyright owner. All views expressed in this journal are those of the respective contributors and are not necessarily the opinions of the www.energyglobal.com publisher, neither do the publishers endorse any of the claims made in the articles or the advertisements. Printed in the UK. Uncaptioned images courtesy of www.bigstockphoto.com. 1211_e www.engineering-solutions.airliquide.com ZWLJPÄ HZKP]LYZL;OH[»Z^O`VɈ The optionsfortreatment are almost JVU[HPUZHKPɈ tremendously: almosteverysource The compositionofnaturalgasvaries JHYIVUKPV_PKLTLYJHW[HUZVYTVYL& +VLZ`V\YYH^UH[\YHSNHZJVU[HPUO`KYVNLUZ\SÄKL has therighttreatment. Whatever theimpurity, whateverthecomposition, AirLiquideGlobalE&CSolutions JHSS`KLZPNULKMVY`V\YNHZÄ LYLU[ISLUKVMPTW\YP[PLZ LYPUNHZVS\[PVU LSK HUKLɉ NHZMYVTHZPUNSLZV\YJL*\Z[VTPZLK including associatedandunconventional provide solutionsforalltypesofnaturalgas, PZJY\JPHS>LHZ`V\YWHY[ULYVMJOVPJL JPLU[ comment Claira Lloyd Editor

S energy self suffi ciency has been a topic of The above question can possibly be answered pretty discussion for a long time, and now that shale quickly. Yes, heavy crudes will of course still be needed, oil and gas are on the scene, it appears that this however, there has been a drop in imports from over scenario could become reality. Advancements in seas, especially Nigeria and Angola. The supply has horizontal drilling and hydraulic fracturing have been coming from the Canadian oilsands due to the Uunlocked vast reserves of previously unattainable oil and gas. increase in pipeline and rail infrastructure volumes in Shale oil is a light sweet crude, which can be very light, and the US (as mentioned above) and the fact that oilsands the US oil industry is taking full advantage from infrastructure projects such as Saskatchewan have reached the point to refi ning. Both rail and pipeline infrastructure is being of production. Even though the majority of heavy crude utilised to the max in order to ship this crude to the major being supplied to the US is imported from Canada, it is refi ning hubs. However, when it does in fact get to its fi nal an immediate neighbour so does contribute to the self refi nery destination, is there the capacity to process such vast suffi ciency of North America as an entire continent. quantities? Whilst I have voiced some reservations about the The age of light sweet crude was thought to be drawing refi ning industry and the fast paced increase in sweet to an end in the 2000s, so many refi neries increased their crude as a feedstock, an article in the Financial Times complexity and spent vast sums of money on upgrading has said that ‘the US refi ning industry has been infrastructure to include hydrocracking and coking facilities. enjoying a remarkable revival’, due to the cheaper As a result, many plants are no longer confi gured to process price of domestic sweet crude and the fact that, ‘up such light crude and this can result in lower effi ciency levels until recently, oil was imported, refi ned on the coast and processing capacity, as well as making some units at certain and then transported inland. Now the crude is being facilities completely redundant. Also, shipping so much light produced inland and sent to the coasts and it’s a gold sweet crude to US refi neries for processing creates a problem mine for the refi neries that have access to it.’ Of course, for distillate production levels. With such an abundance of this is not something to disregard, however, there is light crude available, refi neries are likely to blend it with heavier always the fact that the refi ning industry is cyclical due crudes, therefore creating a gap in demand and supply levels to fossil fuels being a fi nite resource and ‘even if the for distillates. Does this mean that there is still room in the US shale boom persists, the boost it gives to refi ners may downstream industry for foreign imports? not last too much longer.’

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Malaysia | TURBO COMPRESSOR CONTRACT Saudi Arabia | CABINET

iemens Energy has been awarded a procurement and construction TECHNOLOGY Scontract for supplying turbo management is contracted to Munich compressors and mechanical drive gas based Linde Engineering. These companies ntertec has won a contract for turbines for a major LNG project in are thus pioneering world scale BOG Ienvironmental protection cabinets Malaysia. The project will help to liquefaction within LNG plants and are and shelters that will protect the fi eld improve overall plant effi ciency and implementing technology from Siemens based process analysers at the new minimise gas fl aring at the Petronas to improve effi ciency and help to reach Sadara petrochemical complex in the Bintulu LNG plant in Sarawak, East international emissions standards. Kingdom of Saudi Arabia. The outdoor Malaysia. The scope of supply covers the cabinets will be constructed from high The target of the multimillion dollar engineering, manufacturing and testing performance grades of glass reinforced LNG project is to reliquefy excessive of one tandem casing, cryogenic polyester (GRP). This will provide boil off gas (BOG) evaporating out of temperature BOG turbo compressor proven long term protection against the the LNG storage tanks, and currently and one single casing LNG refrigerant region's extreme climactic conditions, fl ared. It will deploy the world's fi rst gas turbo compressor. Both compressors which include very high temperatures turbine driven cryogenic temperature will be direct driven by Siemens and UV levels, as well as the corrosion BOG turbo compressor from Siemens. SGT-700 mechanical drive gas turbines. threats posed by the process media and The LNG project in Sarawak is Project completion is expected in April salty sea air. implemented by Malaysia LNG (MLNG), a 2014, the plant will start operation in The Sadara complex will have 26 subsidiary of Petronas. Engineering, October 2014. world scale manufacturing plants and will be the world's largest petrochemical facility ever built in a Russia | FIRST PHASE COMPLETE single phase. Intertec is expecting that cabinets to protect approximately 1000 nvensys Operations Management has agreement, Invensys supplied complete fi eld based analysers will be needed for Isuccessfully completed the fi rst phase control and safety solutions. this project. The key technical reasons of a main automation contractor The agreement also included fi eld behind the selection of Intertec's project at the new Yaysky oil refi nery in instrumentation, process analytics and encolsure technology are the Kemerovo, a city in Russia's Kuzpass valves. Onsite training services will also performance of the GRP based region. Under the multimillion dollar be provided by Invensys. construction materials used, which have been proven in previous applications Australia | CONTRACT FOR THREE with the joint venture partners behind Sadara, and the company's turnkey subsidiary of Foster Wheeler's quarter 2013 bookings. Delivery of the manufacturing capability. A Global Power Group has been new steam generators is scheduled for The enclosures required range in awarded a contract by the joint fourth quarter 2014. size from small cabinets suitable for venture comprised of CH2M HILL Foster Wheeler will design and housing a single analyser, to shelters as Australia Pty Ltd. and UGL Engineering supply the package steam generators large as 11 x 3 m, which can accomodate Pty Ltd. for the design and supply of plus auxiliary equipment for the project, 10 or more analysers. The cabinets are three utility package steam generators which will be designed to burn low being designed and manufacured at two located at the Ichthys project onshore pressure natural gas and liquid in to of Intertec's global facilities, in Sarnia, LNG facilities at Blaydin Point, near pentane while meeting applicable Canada and Neustadt, Germany. Darwin, Northern Territory, Australia. environmental regulatory requirements. Deliveries to the instrumentation OEMs Foster Wheeler has received a full The three steam generators will be involved in the Sadara project started in notice to proceed on this contract. The designed to generate a total of 278 tph Q1, 2013. terms of the agreement were not of reliable, high pressure superheated Sadara is a joint venture between disclosed and the contract value will steam which will be fed to the Saudi Aramco and The Dow Chemical be included in the company's fi rst customer's steam header. Company.

HYDROCARBON 5 ENGINEERING April 2013 w rld news

| INBRIEF Ghana | NATURAL GAS SUPPLY

asol plc, the West African energy Under the MoU, AfGen and Ghana USA Gdevelopment company, was Gas propose amongst others to explore CB&I has announced that it was awarded pleased to announce that its affi liate, the establishment of various joint a storage contract valued in excess of African Power Generation Limited venture arrangements for the supply of US$ 110 million for a project in the US. (AfGen), has signed a Memorandum of imported natural gas, into Ghana as well The scope of the work includes a storage Understanding (MoU) with Ghana as the downstream sale and marketing tank, refrigeration system and ship National Gas Company Ltd (Ghana Gas) of gas to power generators and loading facilities. in relation to the development of industrial/mineral processing enterprises specifi c projects. The projects are in Ghana. Gasol has already previously Belgium aimed at providing additional gas to entered into similar arrangements for Ghana as well as supporting, in a the marketing of natural gas in other Magnetrol International NV is expanding complementary manner, the longer West African countries, including Benin its production and office facilities in term security of gas supply needed to and Togo, and will work with AfGen to Zele, Belgium by more than 5000 m2. address the nation's power generation create a strategic and mutually Completion of the building is forseen defi cit. supportive partnership with Ghana Gas. for May 2014. The building expansion is designed and constructed in accordance with BREEAM, the world's leading design Ebara | LNG TECH CONTRACTS and assessment method for sustainable buildings. he Cryodynamics Division of Ebara fl oating LNG. The company are not only TInternational Corporation has excited about this project but current Rotork announced the recent award of 10 upcoming projects such as BW Gas. Rotork Gears reports that international cryogenic pumps for BW's fi rst LNG Ebara International was also markets have reacted positively to the fl oating storage regasifi cation unit recently awarded a contract by Black introduction of its range of 242 Series (FSRU) (4ea hull/feed pumps, 6ea and Veatch Ltd. for three sendout LNG manual gear operators and orders have booster pumps). This vessel will be the pumps for the upcoming South been received. Significant activity in latest addition to BW's fl eet of 16 LNG American LNG barge project. It will be a China includes an important order from carriers, building on and increasing its non-propelled barge moored to a jetty, the valve manufacturer China Valves existing LNG expertise. supplied with gas by pipeline from the Hanwei for a natural gas project. This FSRU is another signifi cant onshore La Creciente fi eld, located in milestone in Ebara International's the Lower Magdalena Valley Basin in Azerbaijan progression within the exciting world of Colombia. KBR has been awarded a contract by the State Oil Company of the Azerbaijan China | LNG VALVES Republic (SOCAR) to provide PMC services for the FEED phase of the gas mpo Poyam Valves will supply a 621 cryogenic top entry ball valves processing plant within the new Oil-Gas Aseries of cryogenic valves to the made of austenitic stainless steel. Sizes Processing and Petrochemical complex Chinese state run company Sinopec for will vary from 2 in. to 14 in. and pressure (OGPC) in Azerbaijan. This award marks the Qingdao LNG project. The LNG ranges from 150 lbs to 900 lbs. the first direct engagement between terminal in Shandong province, which is The LNG project, an investment of SOCAR and KBR on a large world scale now under construction, will become US$ 1.4 billion, includes three LNG capital project. KBR will build upon Sinopec's fi rst receiving terminal in China. storage tanks with a capacity of 160 m3 its long term project experience in The fi rst phase of the project has a each, one berth able to dock LNG Azerbaijan to perform services for project designed capacity of 3 million tpy and carriers, receiving facilities and 440 km management and work with established is expected to be completed in of gas pipelines that branches out from offices. September 2013, becoming operational Dongjiakou to reach the rest of the by November 2013. AMPO will supply Shandong region.

6 HYDROCARBON April 2013 ENGINEERING

w rld news

| INBRIEF Australia | ASSET PROTECTION

sset Guardian Solutions Ltd. Programmable Systems Management china A(AGSL), which specialises in critical (PSM) tool set to provide enhanced Cameron has announced the control software asset protection for management of the critical software commencement of operations of its the process and manufacturing industry, assets that is uses across the centrifugl compression business at the announced that it has secured a company to operate the Karratha Gaomi manufacturing and repair centre signifi cant contract with Woodside. The gas plant, Pluto onshore and in the Shandong province of China. The company is one of Australia's leading oil offshore facilities, as well as six new facility is equipped with state of the and gas producers, and one of the additional facilities. art balancing machines, numeric control world's largest suppliers of LNG. Currently, Woodside employs a machine tools and testing capabilities up As a result of this contract award, variety of applications to manage to 3500 hp. AGSL is providing Woodside with a these programmable systems.

USA ExxonMobil | 2017 PREDICTIONS Wison Offshore & Marine Ltd., a subsidiary of the Wison Group, has xxonMobil Corporation anticipates Major achievements in 2012 and announced an agreement with EDF Emajor project startups will deliver plans for ExxonMobil's future Trading and Exmar NV to support their 1 million bbls of oil equivalent over the include; new downstream facilities collective endeavours to pursue LNG next fi ve years, Rex W. Tillerson, in Singapore, China and Finland to export opportunites in North America. chairman and chief executive offi cer, capture growth in markets like These opportunities will use offshore, said at the New York Stock Exchange in China and Russia; ExxonMobil barge mounted natural gas liquefaction early March. Chemical has fi led permit facilities developed by Exmar, Wison and Production of crude oil and other applications for a multi billion Black & Veatch. liquids is expected to increase by an dollar petrochemical expansion at average of 4% /y between 2013 and 2016 the company's integrated Baytown BASF as the company starts production at 28 complex in Texas. The project BASF and Shell have entered into a three major oil and gas projects, 24 of which would include a new ethane cracker year agreement that will position BASF are liquids or liquids linked projects. 22 and premium product facilities to as a supplier of FCC catalysts to Shell's major projects will start production over capitalise on abundant supplies of global refining network. This enhanced the next three years, including an US natural gas and in 2012 a major relationship agreement also includes expansion of the kearl oilsands project expansion at the company's collaborative activities designed to in Alberta, Canada, and a LNG export Singapore chemicals facilities was accelerate the introduction of new FCC project in Papua New Guinea. completed. catalyst technologies. Worldwide | 140 YEARS OF INNOVATION Germany n 22nd February Atlas Copco Other events include the inaguration Verfahrenstechnik und Automatisierung celebrated 140 years of excellence of a new compressor manufacturing GmbH (VTA), an engineering, procurement O with celebrations in more than 90 plant in India and the donation of 140 and construction provider and 100% countires. At its sites in the UK and cycle helmets to schools and colleges subsidiary of BP Europa SE, has purchased Ireland, Atlas Copco had a special throughout the UK. Intergraph® SmartPlant® Enterprise celebration. Also, the French Atlas Copco engineering and schematics suite and To highlight the company's 1873 subsidiary Exlair SAS has acquired Air et SmartPlant Foundation software and foundation, Atlas Copco's President and Techniques Energies Provence (ATEP), a services. VTA sought intelligent solutions CEO Ronnie Letsen rang the opening distributor of industrial compressors and for process engineering, instrumentation bell at the NASDAQ stock exchange in related products based in Aix-en- and design. New York, USA. Provence, France.

8 HYDROCARBON April 2013 ENGINEERING Pipeline integrity. Secured.

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www.fmctechnologies.com w rld news news digest | DIARYDATES AFPM | IMPACT OF US CARBON TAX

7 - 10 April he American Fuel & Petrochemical US$ 1000 /t. Both models demonstrate 92nd Annual GPA Convention TManufacturers (AFPM) has reacted to that the net impact on the US economy Marriott Rivercenter the recently released study Economic would be negative. San Antonio, Texas, USA Outcomes of a US Carbon Tax, conducted 'The damaging effects of a carbon tax Tel: +1 918 493 3872 by the National Association of to US consumers and the economy would Email: [email protected] Manufacturers (NAM), detailing the be signifi cant and could lead to lower harmful impact of a carbon tax on the US employee wages, higher company costs 9 - 10 April economy. and reduced labour productivity. Over LARTC 2nd Annual Meeting In this study, NAM conducted time, workers' incomes could be expected Caesar Park Rio De Janeiro Ipanema Hotel extensive research into the impact of two to decline signifi cantly, while seeing an Rio de Janeiro, Brazil scenarios that have been publicly debated. increase in energy, electricity, gasoline and Tel : +1 646 736 1839 The fi rst would establish a carbon tax that other costs. The study also indicates that Email: [email protected] begins at US$ 20 /t and increases 4% /y. either scheme would result in reduced The other tracks a US$ 20/t scenario until consumption, investment, labour market 16 - 19 April 2018 and then sets an emissions tragectory decisions and lower federal revenue from LNG 17 to reach an 80% carbon reductions by taxes on capital and labour,' said AFPM George R. Brown Convention Center 2053, with a maximum carbon price of President Charles T. Drevna. Houston, Texas, USA Tel: +44 20 7978 0775 API | ACTION ON E15 DECISION Email: [email protected] PI Downstream Group Director Bob voiding their warranties by using E15. EPA 17 - 18 April AGreco welcomed legislation approved E15 before vehicle testing was Russia & CIS Bottom of the Barrel introduced in to the US House of complete, and we now know the fuel th Technology Conference and Exhibition Representatives on 27 February by may cause signifi cant mechanical Moscow, Russia Congressman Jim Sensenbrenner (R-WI) problems in millions of cars on the road Tel: +359 884 102 468 that would stop EPA's premature today. Moreover, EPA approved E15 even Email: [email protected] approval of higher levels of ethanol in though government research showed gasoline, known as E15. potential infrastructure concerns to our 22 - 24 April 'This legislation is an important fi rst nation's gas stations that could lead to step toward protecting consumers from serious safety and environmental Sulphur World Symposium 2013 unknowingly damaging their vehicles and problems.' Kerry Hotel Beijing, China Tel: +1 202 331 9660 IHS CERA | UK CARBON TAX Email: [email protected] he UK's carbon tax is set to almost at £ 1.94 /t next month. It is 26 - 28 June Tdouble again in its third year of calculated annually for the implementation after prices within the fi nancial year two years ahead and China International Sulphur & Sulphuric EU emissions trading system plummeted has been set at £ 9.55 /t for next Acid 2013 to an all time low. The tax, known as year. The government has said it Grand Hyatt carbon price support, may be set as calculates the tax using the Shanghai, China £ 18.29 /t for the fi nancial year 2015 - 16, average price of EU allowance Tel: +44 (0)20 7903 2444 according to an estimate by IHS CERA futures in the 12 months through Email: [email protected] on the basis of the Treasury's to the end of February. UK methodology and their December emitters must pay the levy on top infl ation rate assumptions. of any EU allowances they have to The CPS was fi rst announced in the buy in order to comply with the 2011 UK Budget and will come into force EU ETS.

10 HYDROCARBON April 2013 ENGINEERING

NG OKI LO 12 Steven Kantorowicz, KBC, USA, assesses the future of the petrochemical industry of the key countries in Asia.

his article will discuss the current status and future of the petrochemical industry in the key countries of Asia, a region that, in total, represents over half Tof the world’s population. One can sum up the present dichotomy of the Asian Petrochemical landscape with the set of perspectives shown in Table 1. For the purposes of this article though, let us look at the current and future GDPs of key Asian countries, as seen in Table 2. These totals and averages are also compared to the US to get a feeling of the relative growths and ultimate future positioning of the countries. For a clearer picture, one must also consider the Asian ethylene and propylene supply/demand balances which are shown in Table 3. Filling the total ethylene capacity gap of 10 million tpy from 2015 to 2020 will require roughly one new mega cracker per year above those already firm plus the normal capacity expansion projects. The 8.5 million tpy propylene gap from 2015 to 2020 will come from a combination of new crackers, expansions and on

D AR RW FO

13 Table 1. The Asian petrochemical landscape purpose production from metathesis and propane Asian petrochemical industry Overviews and comments dehydrogenation. perspectives The next portion of this article will look at each listed Production and consumption of • Both ethylene and propylene country in turn to see where they are coming from and ethylene from steam cracking are expected to continue growing where they may be heading. and propylene from steam faster than GDP cracking, metathesis, FCC and • Propylene price is expected to PDH are proxies for overall average higher than ethylene China petrochemicals • New end uses are being invented; China will continue to focus on retaining its status as the 3D Printing will rise world’s most populous country and appointed growth Petrochemical industry • The next peak in the cycle is engine; the petrochemicals market is expected to follow profitability to remain robust, forecast for 2015 GDP growth rates rather than the stronger rates in previous albeit with hiccups • Higher than refining profitability years. The country has been following successive 5 year over the cycle plans that focussed on domestic petrochemical self Petrochemical demand will • Mature regions will remain under sufficiency. The plan is to raise ethylene equivalent self remain intimately tied to GDP import/margin pressure sufficiency from 48% in 2010 to 64% in 2015. Its target for growth • Troughs in Asia will not be as low propylene is 77% by 2015 from 63% in 2010. as in other regions Opportunities for multinationals may still be available in • China will continue to dominate the specialty chemicals industry where base production the landscape levels are low. Competition in all areas is high with Sinopec Asian petrochemicals demand • Cools periodically due to sharing the market with Petrochina, CNOOC, Sinochem, and growth drives everything; 'seasonality': weather; holidays ChemChina among other major players including supply growth will come from • Chinese policy changes to reduce multinationals via joint ventures. worldwide sources inflation and increase consumption seem to have been successful Chinese companies have embraced the ‘on purpose’ production of ethylene and propylene with the Capacity rationalisation will • No region is immune: old, small announcement of numerous methanol to olefins and continue as grassroots mega and inefficient plants propane dehydrogenation to propylene projects. Several petrochemical projects, linked • Recent announcement of conventional cracker complexes are also progressing based with adjacent refineries, are built Sumitomo cracker closure in Japan • PETRONAS Project RAPID in on liquid feedstocks. Ethane crackers based on shale gas Malaysia onstream in 2016 derived feed are still years away due to uncertainly of supply. Grassroots Asian projects for on • Methanol to olefins in China; China is now two years into the 12th 5 year plan, which purpose ethylene and propylene based on coal (MTO and PDH) will be prevalent • Propane dehydrogenation to emphasises higher quality growth, sustainability, R&D, and propylene based on imported LPG the development of high technology in all industries. One • Propylene production via ethylene can see these plans coming into being in the following areas: and butenes metathesis

Geopolitical factors influence • Can be stable, then issues arise Sustainability investments and hence price essentially overnight! A key element of the plan since the initiatives will affect levels • Who is next in line for turmoil and both the demand side (water treatment chemicals, more production disruption? efficient catalysts and energy reduction) and the process Middle East cost structures will • The industry so far is absorbing side. Enforcement of existing and new environmental move closer to those of other new Middle East additions regulations will result in industry reorganisation by forcing regions due to ethane limitations • Asian profitability has remained on smaller and less efficient capacity to close. and reduced subsidies average healthy China’s goal is to cut energy consumption and • US additions might become consequent CO emissions by approximately 16% from 2010 problematic for others 2 to 2015. This is consistent with China’s plan to cut carbon Average global olefins feedstock • Refinery/petrochemical intensity by up to 45% by 2020 relative to 2005 levels. slate will become heavier despite integration improves margins Due to the negative environmental impacts, China has US move to shale gas sourced • Grassroots crackers and revamps put an end to projects designed to produce petroleum via ethane feed will focus on feed flexibility • Upcoming US ethane crackers are coal liquefaction and has moved towards coal as a a dynamic to be dealt with feedstock for chemicals production.

Russia is finally developing mega • Advantaged ethane feed for PE petrochemical complexes with production is readily available Higher quality growth export capability • Easy access to Eastern European China desires to increase its share in high technology and Chinese markets intensive industries. This has resulted in some commodity manufacturers relocating to even lower labour cost Biomass and coal conversion • Being studied in China and SE Asia countries such as Vietnam, Thailand and Cambodia. The to petrochemicals are local where feeds are abundant opportunities that will increase • These have not yet made change is reducing the bulk polymer and resin manufacturers substantially in the coming years significant penetration associated with the clothing industry while increasing • Chinese coal is abundant but electronics, specialty materials and performance plastics difficult to process and composites.

14 HYDROCARBON April 2013 ENGINEERING NEW AND EXCLUSIVE TO www.energyglobal.com CADWorx® Bringing you the power of information

CELLULOSIC RVO WITHDRAWN 2013 American Fuel and Petrochemical Manufacturers President Charles T. Plant Professional Drevna issued a statement after the withdrawal of its Petition for Waiver of the 2012 Cellulosic Biofuels Volumetric Requirements. For further information go to www.energyglobal.com

PURSUING SENSIBLE ENERGY POLICIES The US's new Cabinet appointees can help the country's energy revolution produce jobs, energy and economic growth by encouraging sensible energy policies, according to API President and CEO Jack Gerard. For further information go to www.energyglobal.com

MORE US OIL AND NATURAL GAS DEVELOPMENT The American Petroleum Institute has said that according to a new poll, 75% of Connecticut voters are in favour of increased access to domestic sources of oil and natural gas. For further information go to www.energyglobal.com

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Intergraph, the Intergraph logo, and CADWorx are registered trademarks of Intergraph Corporation. AutoCAD is a registered trademark of Autodesk, Inc. ©2012 Intergraph Corporation. 4/12 www.energyglobal.com R&D to achieve a GDP growth rate of 9%/y which required China surpassed Japan in terms of R&D spending in 2010, and industrial growth to average an annual rate of 9.8%. its goal is to increase expenditures from 1.4% of GDP in 2010 up Unfortunately, neither goal was achieved. to 2.2% in 2015. In many sectors, there is no longer a gap The chemical industry is an important constituent of the between local producers and foreign owners. Indian economy with a turnover of 1.5% of the global total. Investment in the sector is over US$ 60 billion and Development of high technology employment is approximately 1.5 million. It accounts for An example is in the construction chemicals industry where 13 – 14% of total exports and 8 – 9% of total imports of the concrete formulations, asphalt additives, protective coatings, country. Gujarat dominates, with 51% of the total share of adhesives and sealants are being used. China is the leading major chemicals produced. The industry expectation was for market for construction chemicals, with approximately 30% of the sector to grow in the range of 5 – 8% during the 11th plan. the world market, and will continue to see a nearly 10%/y The major hindrances to double digit growth of the Indian growth rate in the next few years. Majors realise they must chemical industry are economy of scale, higher input costs develop China specific products rather than employing (raw materials, power, fuel, etc.), lack of world class technologies already in use elsewhere. Multinationals such as infrastructure (roads, ports, and power supply), lack of Ticona Engineering Polymers, Dupont, BASF, Dow and DSM competitiveness and tough labour laws. India has yet to Engineering Plastics have all opened development centres in address these issues despite many attempts to do so. Shanghai with this goal in mind. Reliance Industries Ltd (RIL) projects the need for at least In the area of coal conversion, new technologies are being one new world scale cracker every year to satisfy domestic developed by Chinese Research Institutes. demand for polymers. Companies undertaking petrochemical „ Coal to olefins via methanol, first carried out by Mobil in projects are RIL, OPaL, and GAIL while new grassroots projects the 1980s to produce gasoline, was enhanced by the are being contemplated by HPCL, Essar and IOCL. It should be Dalian Institute of Chemical Physics (DICP) and noted that the Indian petrochemical industry has a history of commercialised by Shenhua in 2011. Over 10 additional project failures and lengthy delays caused by lack of feedstock coal to olefins plants are in various stages of access, political controversies over land acquisition and development; if they all come onstream by 2016, they will mechanical and technical problems. Imported feedstock costs produce 20% of China’s ethylene and 17% of propylene. have increased as a result of rising global energy prices „ Chinese technology for coal conversion to monoethylene combined with significant currency depreciation. glycol (MEG) has been developed by the Fujian Institute of Research on Structure of Matter in partnership with

Danyank Chemical Technology and Shanghai Jinmei Indonesia Chemical Technology, and commercialised in 2010 by With a population of 270 million and GDP growth averaging Tongliao Jinmei. over 6%, the Indonesian Olefin and Plastics Industry Association estimates demand growth in the polymers market India at 7.5%. India has not reached its potential in terms of economic The government is seeking to increase its investment in the leadership, though progress is being made. India also follows a petrochemicals industry to reduce reliance on imported series of 5 year plans that include petrochemicals and feedstock, which accounts for 50% of the market, and cost the associated industries. The 11th plan, which ended in 2012, was country over US$ 5 billion in 2011. Ethylene capacity is

Table 2. Current and projected GDP of Asian countries and USA (Source: United States Central Intelligence Agency World Factbook 2012. Asian 2012 2020 GDP, actual 2020 expected GDP, 2012 per 2020 GDP increase country population, expected exchange rate, US$ actual exchange capita GDP, expected per 2012 – million/% population, billion/% of total/ rate, US$ Billion/% US$ capita GDP, 2020, US$ annual million annual growth of total kUS$ billion/% of growth increase China 1342/0.48 1394 8250/41.8/7.8 15 045/50.0 6100 10 800 6,795/65.9 India 1205/1.31 1,337 1947/9.9/5.4 2965/9.9 1600 2200 1018/9.9 Indonesia 249/1.03 270 895/4.5/6.0 1426/4.7 3600 5300 531/5.1 Japan 127/-0.08 127 5,984/30.3/2.2 7,121/23.7 47 000 56 300 1138/11.0 Philippines 103/1.87 120 241/1.2/4.8 350/1.2 2300 2900 110/1.1 Vietnam 92/1.05 100 138/0.7/5.1 205/0.7 1500 2100 67/0.6 Thailand 67/0.54 70 377/1.9/5.6 583/1.9 5600 8300 206/2.0 S. Korea 49/0.20 50 1151/5.8/2.7 1424/4.7 23 500 28 700 273/2.6 Malaysia 29/1.54 33 307/1.6/4.4 433/1.4 10 500 13 100 126/1.2 Taiwan 23/0.29 24 466/2.4/1.3 517/1.7 20 300 22 500 51/0.5 Totals 3286 3525 19 755/5.5 30 069 5 900 8500 10 315 US 314 348 15 650 18 336 49 800 52 700 2686

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