vorig menu FEASIBILITY STUDY PROPYLENE PIPELINE NETWORK BENELUX - COLOGNE - GELSENKIRCHEN EXECUTIVE SUMMARY FEASIBILITY STUDY PROPYLENE PIPELINE NETWORK BENELUX - COLOGNE - GELSENKIRCHEN NOVEMBER 1999 COMMISSIONED BY : CHEMVISION (NRW-G) IPOT (NL) FACILITATOR : AETHYLEN-ROHRLEITUNGS- GESELLSCHAFT MBH & CO.KG CONTRACTORS : GASUNIE ENGINEERING (NL) DTM PIPELINES (NL) INFRACOR (G) Page - 2- Feasibility study into propylene pipeline network Benelux-Cologne -Gelsenkirchen 1. Preface 2. Summary 3. Studies Analysis of propylene flows. Analysis of ethylene flows. Preferred routing; quick scan. Conceptual design of preferred route. Determination of solutions. Flow scenarios and options. Business Economic analysis. Social and political analysis. 4. Business plan 5. Recommendations 6. Conclusions Attachments: List of related documents plans and studies List of members ChemVision Initiative Group Interdepartementale Project Organisatie Ondergronds Transport List of the subscribers Feasibility Study by Letter of Intent Page - 3- 1. Preface In Germany and the Netherlands initiatives have been developed by industry and the government to improve these countries’ infrastructure, especially for the petrochemical industry. The objectives are to reduce logistical and production costs and to improve the investment climate of the various industrial regions. The most important initiative groups are “ChemVision”, represented by the North Rhine Westphalian ministry of economic affairs, technology and transport and a number of companies (BASF, Celanese, DEA, DPO, DSM, EC, Elenac, Degussa/Hüls, Veba and Infraserv), and the Interdepartmental Project Group Underground Transport (IPOT) in the Netherlands, represented by the ministries of economic affairs and Transport. ARG has been asked by both initiative groups to carry out a feasibility study into a Common-Carrier Propylene pipeline network in the Benelux and Germany with the explicit objective of taking into consideration all existing propylene pipelines between Rotterdam and Gelsenkirchen. The pipeline grid should be developed for one quality of propylene as determined by the industry representatives. Apart from the two initiative groups, the following companies are subscribers to the feasibility study: BASF/Antwerp, Borealis, BP/Amoco, Dow, Fina, Lyondell, Shell, Exxon, Elf/Atochem. The study should be completed end of 1999 and should give answers to questions relating to Preferred routing, Economic feasibility, Social and Political implications and Public/Private Funding. In the Chem-Vision meeting at Düsseldorf on 5 February, ARG accepted the assignment to operate as the facilitator for this study. Managing Directors of ARG, Werker Brögmann Disclaimer: ARG excludes all liability for any information, data, predictions or recommendations whatsoever given or made in or outside of this feasibility study. Page - 4- 2. Summary The European chemical industry plays an important role in the world markets, generating over 35% of worldwide chemical sales. To be able to maintain and improve this strong position, the industry needs to make major efforts to use the latest technology and to optimise production capacities. NW Europe has a large cluster of petrochemical activities. As it is a high cost area in relation to energy, wages, logistics and responsible care systems, cost control is a key factor in keeping margins at an adequate level. In the field of logistics, transports via integrated pipeline networks are important. By connecting the petrochemical clusters in NW Europe by common-carrier pipeline networks, the petrochemical industry will not only reduce transportation costs, but will also optimise the capacity use of production plants. Once the network is in place the industry will have the option to build world-scale and energy-efficient crackers along the pipeline network. The petrochemical industry already has a lot of experience with pipeline transports, synergy effects and common carrier systems. One well known common carrier is the ARG ethylene grid. National and regional governments also benefit from common-carrier pipeline systems, because these systems strengthen one of their most important industries and so their region’s economic structure. Apart from this, common carriers have a positive effect on modal shift, the environment, safety and the effective use of space. For these reasons, industry and governments should jointly strive to create the right conditions to stimulate the realisation and use of common-carrier pipeline networks. This feasibility study contains a proposal for a propylene pipeline integrated transport system from the North Sea coast, Rotterdam and Antwerp to the Ruhr area in Germany. The proposal consists of an analysis of propylene demand between now and 2010 along different scenarios, route possibilities, cost calculations, a social evaluation and a business plan. Page - 5- The Framework The feasibility study concerns a cross-border pipeline network. In view of the cross-border nature of the project, not only the international petrochemical industry but also three governments (of the Netherlands, Belgium and Germany) were involved in the study. In order to be able to get the appropriate input for the feasibility study it was necessary to establish three Steering committees and three project teams. These teams comprised representatives from the different governments as well as various industry representatives. The petrochemical industry’s commitment is reflected in several Letters of Intent. With the Dutch government and the government of North Rhine Westphalia (NRW) separate agreements were signed for financial and personnel support for this study. The National Pipeline Company (NMP) is reluctant to co-fund this feasibility study because the first impression is, that this study is only in the interest of the Netherlands and Germany. The estimated costs were therefore shared between the commissioners and the subscribers to the study. All parties involved agreed to the role of ARG management as a facilitator of the total study. The main objectives for the Steering committees were to define the scope, to instruct the project teams, to monitor progress and to take responsibility for the deployment of resources. The responsibilities of the project teams concerned the realisation of the study; the monitoring of progress and costs and the drawing up of interim and final reports. The Steering Committees are mandated by one overall Supervisory Committee with representatives from industry and the government. This Supervisory Committee finally approves the results of the study and makes a go/no-go decision about the proposals. This decision will be taken towards the end of 1999. For further details about the organisation, communication plan and LOI, see the project plans. Page - 6- Organisation of C3 Pipeline Initiative Supervisory Committee Mr. Thünker Mr. Kruit Mr. Dixon, Mr. Noerenberg Government - Holland - Belgium - N R W A R G Facilitator Steering Committee Holland Steering Committee N R W Steering Committee Belgium Mr. Hazejager - Shell Mr. Thünker - Veba BASF, Borealis, BP/Amoco, DOW, Fina, Lyonde Mr. Becker - DSM Mr. Noerenberg - EC Shell, Exxon, Elf Atochem Mr. v. Essen - RPM Mr. Reith - DEA, Mr. Schüddemage Infraserv Government Government Government Mr. Muller Mr. Deitmer Mr. Verhagen Mr. Noll Mr. Sonck Mr v. Hauwermeiren Page - 7- 3. Studies Analysis of propylene flows Propylene demand is expected to grow substantially, by 3-4% per year, up to the year 2010. In absolute figures consumption in NW Europe will increase by some 4 million tonnes compared with 1997. The higher demand will be met by expansion of existing cracker units, extension and construction of new conversion units in crackers and refineries, and in the longer term by the construction of world-scale crackers (>1 million tonnes of ethylene) in NW Europe. Any further volumes needed will be imported via propylene terminals along the coast line from Rotterdam to Antwerp or via direct transhipment into inland barges. The expected growth of propylene demand will increase the need for an integrated common-carrier pipeline network. Details of the propylene flows in the years 1997, 2002 and 2010 for three economic scenarios are reported in the study “Analysis of propylene flows”. Analysis of ethylene flows In order to be able to work out the optimal solutions for the propylene grid, it was necessary to carry out an analysis of the ethylene flows in the same area, according to the same three scenarios and regarding the same years 1997, 2002 and 2010. From this analysis it is clear that demand growth for ethylene over the same period will be substantially lower than for propylene, viz. 2%. This implies that there are opportunities to transform some of the existing ethylene pipelines into propylene service. For details see the document “Analysis of Ethylene flows”. Preferred routing (Quick scan) This quick scan investigates the possibilities of four different routes for a propylene pipeline grid within the Benelux and North Rhine Westphalia. The routes considered are: U-line, Betuwe route, RRP route and the PRB route. Page - 8- Alternative routes In order to be able to determine the most favourable routing on the basis of total costs, the following aspects were considered: investment costs, operating costs and town and country planning. The comparison was made on a relative basis, the U-line being assigned a factor of 1. The alternative routes have relative cost factors ranging from 1.48 to 1.72.