Technology Economics: Ethylene via Ethanol Dehydration

Ethylene
via Ethanol
Dehydration

#TEC009A

Technology Economics
Ethylene via Ethanol Dehydration
2013

Abstract
One of the most important petroleum-derived products, ethylene is known as a key building block for the petrochemical industry.
Ethylene is most frequently produced via steam cracking of petroleum-based feedstock. However, rising oil prices coupled with
global concerns about sustainability and global warming have motivated research into ethylene manufacture from renewable
sources.
In this context, green alternatives are the world’s focus of attention. Among them, fermentation-derived ethanol has become a
successful commodity that has been largely used as fuel and as raw material for renewable ethylene production, presenting the
primary advantage of being made from CO2 removed from the atmosphere, reducing greenhouse gas lifetime emissions from the
ethylene manufacture process. In Brazil, Braskem SA already produces ethylene from bioethanol
This study provides a review of the production of ethylene via ethanol dehydration. Included in the analysis is an overview of the
technology and economics of a method similar to the Chematur and Petron processes. Both the capital investment and the
operating costs are presented for plants constructed on the US Gulf Coast and in Brazil.
The economic analysis presented in this report is based on a plant that is partially integrated with a green polyethylene complex
and capable of producing 300 kta of polymer-grade ethylene. The estimated CAPEX for such a plant on the US Gulf Coast is about
USD 260 million, while in Brazil, it is about USD 345 million. Additionally, in order to have a profitable venture, this analysis
considered a premium for green ethylene of 30% over conventional ethylene leading to ethylene sales prices of about USD 1,580
and 2,030 per ton in US and Brazil, respectively.

Copyrights © 2013 by Intratec Solutions LLC. All rights reserved. Printed in the United States of America.

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Check Intratec’s Related Study Opportunities
Clearly identify the economics behind leading companies’ technology development
efforts and the feasibility of emerging and commercial chemical processes is the first step
for major investment decisions and planning activities.
Keep you and your organization well informed by understanding in an unbiased manner:
1) The Research Economics potential behind BP Chemical Bets on Reactive
Distillation to Reduce Ethanol Dehydration Plants Capital Costs,
2) The Improvement Economics proposed by IFP and Total Chemical to Save
Energy on Traditional Ethylene-to-Ethanol Dehydration Units,
3) The Technology Economics of Braskem’s Green Ethylene Production from Ethanol,
4) The Research Economics behind Dow Chemical’s possible Ethanol Dehydration
Technology,
5) The Technology Economics hidden on Scientific Design Approach to Produce
Ethylene Glycol from Bio-Ethanol,
Or any other topic of your interest. The last appendix of this study presents in more details
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1

Contents
About this Study...................................................................................................................................................................8
Object of Study.....................................................................................................................................................................................................................8
Analyses Performed ...........................................................................................................................................................................................................8
Construction Scenarios ..............................................................................................................................................................................................................8
Location Basis ...................................................................................................................................................................................................................................9

Design Conditions ..............................................................................................................................................................................................................9

Study Background ............................................................................................................................................................ 10
About Ethylene..................................................................................................................................................................................................................10
Introduction.................................................................................................................................................................................................................................... 10
Applications.................................................................................................................................................................................................................................... 10

Manufacturing Alternatives .......................................................................................................................................................................................10
Licensor(s) & Historical Aspects ...............................................................................................................................................................................12

Technical Analysis ............................................................................................................................................................. 13
Chemistry ..............................................................................................................................................................................................................................13
Raw Material ........................................................................................................................................................................................................................13
Technology Overview ...................................................................................................................................................................................................14
Detailed Process Description & Conceptual Flow Diagram...................................................................................................................15
Area 100: Reaction...................................................................................................................................................................................................................... 15
Area 200: Quench, Compression, Caustic Washing & Drying .........................................................................................................................15
Area 300: Purification................................................................................................................................................................................................................ 15
Key Consumptions ..................................................................................................................................................................................................................... 16
Technical Assumptions ...........................................................................................................................................................................................................16
Labor Requirements.................................................................................................................................................................................................................. 16

ISBL Major Equipment List ..........................................................................................................................................................................................19
OSBL Major Equipment List .......................................................................................................................................................................................21
Other Process Remarks .................................................................................................................................................................................................21
Technology Comparison........................................................................................................................................................................................................ 21

Economic Analysis ............................................................................................................................................................ 23
Project Implementation Schedule.........................................................................................................................................................................24
Capital Expenditures.......................................................................................................................................................................................................24
2

Fixed Investment......................................................................................................................................................................................................................... 24
Working Capital............................................................................................................................................................................................................................ 27
Other Capital Expenses ........................................................................................................................................................................................................... 27
Total Capital Expenses ............................................................................................................................................................................................................. 27

Operational Expenditures ...........................................................................................................................................................................................27
Manufacturing Costs................................................................................................................................................................................................................. 27
Historical Analysis........................................................................................................................................................................................................................ 28

Economic Datasheet ......................................................................................................................................................................................................28

Regional Comparison & Economic Discussion....................................................................................................... 31
Regional Comparison ....................................................................................................................................................................................................31
Capital Expenses.......................................................................................................................................................................................................................... 31
Operational Expenditures......................................................................................................................................................................................................31
Economic Datasheet................................................................................................................................................................................................................. 31

Economic Discussion .....................................................................................................................................................................................................32

References............................................................................................................................................................................ 35
Acronyms, Legends & Observations .......................................................................................................................... 36
Technology Economics Methodology ...................................................................................................................... 37
Introduction.........................................................................................................................................................................................................................37
Workflow................................................................................................................................................................................................................................37
Capital & Operating Cost Estimates......................................................................................................................................................................39
ISBL Investment............................................................................................................................................................................................................................ 39
OSBL Investment......................................................................................................................................................................................................................... 39
Working Capital............................................................................................................................................................................................................................ 40
Start-up Expenses ....................................................................................................................................................................................................................... 40
Manufacturing Costs................................................................................................................................................................................................................. 41

Contingencies ....................................................................................................................................................................................................................41
Accuracy of Economic Estimates............................................................................................................................................................................42
Location Factor..................................................................................................................................................................................................................42

Appendix A. Mass Balance & Streams Properties.................................................................................................. 44
Appendix B. Utilities Consumption Breakdown .................................................................................................... 49
Appendix C. Process Carbon Footprint..................................................................................................................... 50
Appendix D. Equipment Detailed List & Sizing...................................................................................................... 51
Appendix E. Detailed Capital Expenses .................................................................................................................... 58
3

Direct Costs Breakdown ...............................................................................................................................................................................................58
Indirect Costs Breakdown ...........................................................................................................................................................................................59

Appendix F. Economic Assumptions ......................................................................................................................... 60
Capital Expenditures.......................................................................................................................................................................................................60
Construction Location Factors............................................................................................................................................................................................60
Working Capital............................................................................................................................................................................................................................ 60

Operational Expenditures ...........................................................................................................................................................................................61
Fixed Costs ...................................................................................................................................................................................................................................... 61
Depreciation................................................................................................................................................................................................................................... 61
EBITDA Margins Comparison...............................................................................................................................................................................................61

Appendix G. Released Publications............................................................................................................................ 62
Appendix H. Technology Economics Form Submitted by Client.................................................................... 63
Appendix I. Related Study Opportunities ................................................................................................................ 68

4

List of Tables
Table 1 – Construction Scenarios Assumptions (Based on Degree of Integration) ...................................................................................9
Table 2 – Location & Pricing Basis..............................................................................................................................................................................................9
Table 3 – General Design Assumptions.................................................................................................................................................................................9
Table 4 – Major Ethylene Consumers...................................................................................................................................................................................10
Table 5 – Raw Materials & Utilities Consumption (per ton of Product)...........................................................................................................16
Table 6 – Design & Simulation Assumptions...................................................................................................................................................................16
Table 7 – Labor Requirements for a Typical Plant ........................................................................................................................................................16
Table 8 – Main Streams Operating Conditions and Composition .....................................................................................................................19
Table 9 – Inside Battery Limits Major Equipment List ................................................................................................................................................19
Table 10 – Outside Battery Limits Major Equipment List .........................................................................................................................................22
Table 11 – Base Case General Assumptions.....................................................................................................................................................................23
Table 12 – Bare Equipment Cost per Area (USD Thousands)................................................................................................................................24
Table 13 – Total Fixed Investment Breakdown (USD Thousands)......................................................................................................................24
Table 14 – Working Capital (USD Million)..........................................................................................................................................................................27
Table 15 – Other Capital Expenses (USD Million)..........................................................................................................................................................27
Table 16 – CAPEX (USD Million)...............................................................................................................................................................................................27
Table 17 – Manufacturing Fixed Cost (USD/ton) ..........................................................................................................................................................28
Table 18 – Manufacturing Variable Cost (USD/ton) ....................................................................................................................................................28
Table 19 – OPEX (USD/ton).........................................................................................................................................................................................................28
Table 20 – Technology Economics Datasheet: Ethylene via Ethanol Dehydration at US Gulf .........................................................30
Table 21 – Technology Economics Datasheet: Ethylene via Ethanol Dehydration in Brazil ..............................................................34
Table 22 – Project Contingency...............................................................................................................................................................................................41
Table 23 – Criteria Description..................................................................................................................................................................................................41
Table 24 – Accuracy of Economic Estimates ...................................................................................................................................................................42
Table 25 – Detailed Material Balance and Stream Properties................................................................................................................................44
Table 26 – Utilities Consumption Breakdown.................................................................................................................................................................49
Table 27 – Assumptions for CO2e Emissions Calculation........................................................................................................................................50
Table 28 – CO2e Emissions (ton/ton prod.)......................................................................................................................................................................50
Table 29 – Agitators.........................................................................................................................................................................................................................51
Table 30 – Compressors................................................................................................................................................................................................................51
Table 31 – Heat Exchangers .......................................................................................................................................................................................................52
Table 32 – Pumps .............................................................................................................................................................................................................................55
5

Table 33 – Columns.........................................................................................................................................................................................................................56
Table 34 – Utilities Supply ...........................................................................................................................................................................................................56
Table 35 – Vessels & Tanks...........................................................................................................................................................................................................56
Table 36 – Indirect Costs Breakdown for the Base Case (USD Thousands)...................................................................................................59
Table 37 – Detailed Construction Location Factor ......................................................................................................................................................60
Table 38 – Working Capital Assumptions for Base Case...........................................................................................................................................60
Table 39 – Other Capital Expenses Assumptions for Base Case ..........................................................................................................................60
Table 40 – Other Fixed Cost Assumptions ........................................................................................................................................................................61
Table 41 – Depreciation Value & Assumptions ..............................................................................................................................................................61

6

List of Figures
Figure 1 – Construction Scenarios Assumptions (Based on Degree of Integrations) ...............................................................................8
Figure 2 – Ethylene from Multiple Sources.......................................................................................................................................................................11
Figure 3 – Ethanol Dehydration Reaction Network....................................................................................................................................................13
Figure 4 – Process Block Flow Diagram ..............................................................................................................................................................................14
Figure 5 – Inside Battery Limits Conceptual Process Flow Diagram.................................................................................................................17
Figure 6 – Project Implementation Schedule .................................................................................................................................................................23
Figure 7 – Total Direct Cost of Different Integration Scenarios (USD Thousands)...................................................................................26
Figure 8 – Total Fixed Investment of Different Integration Scenarios (USD Thousands).....................................................................26
Figure 9 – OPEX and Product Sales History (USD/ton)..............................................................................................................................................29
Figure 10 – EBITDA Margin & IP Indicators History Comparison .........................................................................................................................29
Figure 11 – CAPEX per Location (USD Million)...............................................................................................................................................................31
Figure 12 – Operating Costs Breakdown per Location (USD/ton).....................................................................................................................32
Figure 13 – Methodology Flowchart....................................................................................................................................................................................38
Figure 14 – Location Factor Composition.........................................................................................................................................................................42
Figure 15 – ISBL Direct Costs Breakdown by Equipment Type for Base Case.............................................................................................58
Figure 16 – OSBL Direct Costs Breakdown by Equipment Type for Base Case ..........................................................................................58
Figure 17 – Historical EBITDA Margins Regional Comparison ..............................................................................................................................61

7

About this Study
This study follows the same pattern as all Technology
Economics studies developed by Intratec and is based on
the same rigorous methodology and well-defined structure
(chapters, type of tables and charts, flow sheets, etc.).

Analyses Performed

This chapter summarizes the set of information that served
as input to develop the current technology evaluation. All
required data were provided through the filling of the
Technology Economics Form available at Intratec’s website.

The economic analysis is based on the construction of a
plant partially integrated with a green polyethylene
complex, in which ethanol feedstock is externally provided
and ethylene product is consumed by the nearby
polyethylene unit. Therefore, no storage for product is
required. Additionally, all utilities are supplied from within
the new plant.

Construction Scenarios

You may check the original form in the “Appendix H.
Technology Economics Form Submitted by Client”.

However, since the Outside Battery Limits (OSBL)
requirements– storage and utilities supply facilities –
significantly impact the capital cost estimates for a new
venture, they may play a decisive role in the decision as to
whether or not to invest. Thus, this study also performs an
analysis of the OSBL facilities impact on the capital costs.
Three distinct OSBL configurations are compared. Those
scenarios are summarized in Figure 1and Table 1.

Object of Study
This assignment assesses the economic feasibility of an
industrial unit for ethylene production via ethanol
dehydration implementing technology similar to that of
Chematur and Petron processes.
The current assessment is based on economic data
gathered on Q4 2012 and a chemical plant’s nominal
capacity of 300 kta (thousand metric tons per year).

Figure 1 – Construction Scenarios Assumptions (Based on Degree of Integrations)
Fully Integrated
Petrochemical Complex

Products Storage

Products Consumer

Products Consumer

ISBL Unit

ISBL Unit

ISBL Unit

Raw Materials
Storage

Raw Materials
Storage

Raw Materials
Provider

Grassroots unit

8

Partially Integrated
Petrochemical Complex

Intratec | About this Study

Non-Integrated

Unit is part of a Petrochemical Complex

Most infrastructure is already installed

Source: Intratec – www.intratec.us

Table 1 – Construction Scenarios Assumptions (Based on Degree of Integration)

Storage Capacity

(Base Case for Evaluation)

Feedstock & Chemicals

20 days of operation


Not included

End-products & By-products


Not included

Not included

All

All

Only refrigeration units

Utility Facilities Included

Control room, labs, gate house,
Support & Auxiliary Facilities

maintenance shops,
warehouses, offices, change
house, cafeteria, parking lot

Control room, labs,
maintenance shops,

Control room and labs

warehouses


Location Basis

Table 2 – Location & Pricing Basis

Regional specific conditions influence both construction
and operating costs. This study compares the economic
performance of two identical plants operating in different
locations: the US Gulf Coast and Brazil.
The assumptions that distinguish the two regions analyzed
in this study are provided in Table 2.

Design Conditions
The process analysis is based on rigorous simulation models
developed on Aspentech Aspen Plus and Hysys, which
support the design of the chemical process, equipment and
OSBL facilities.
The design assumptions employed are depicted in Table 3.

Table 3 – General Design Assumptions
Cooling water temperature

24 °C

Cooling water range

11 °C

Steam (Low Pressure)

7 Bar abs

Refrigerant (Propylene)

-45 °C

Intratec | About this Study


9

Study Background
About Ethylene
Introduction
Ethylene is an unsaturated organic compound with the
chemical formula C2H4. It has one double bond and is the
simplest member of the alkene class of hydrocarbons.

Other important products derived from ethylene are
ethylene oxide, an intermediate to ethylene glycol
synthesis, ethylene dichloride, styrene, and vinyl acetate.
With such a diverse range of derivative products, ethylene
demand is very sensitive to economic cycles. Therefore, it is
often used as a reference in the performance evaluation of
the petrochemical industry.

Table 4 – Major Ethylene Consumers
Ethylene 2D structure
Ethylene is primarily produced by the pyrolysis of
hydrocarbons and by recovery from some refinery products.
It can also be produced in other reactions, for example, in
ethanol dehydration or methanol-to-olefins plants.
Ethylene is one of the largest volume petrochemicals
worldwide and the first in natural abundance, being a
leading industrial chemical intermediate that serves as one
of the building blocks for an array of chemical and plastic
products.

Polyethylene
Ethylene oxide

Ethylene glycol
Ethylene
dichloride
Styrene

Vinyl acetate

Commercial ethylene is a colorless, low-boiling, flammable
gas with a sweet odor. It is commercially traded in polymer
grade (min. 99.9% of purity).

Adhesives, packaging, bags, piping
Ethylene glycol, ethoxylates (non-ionic
surfactants)
Polyester, polyethylene terephthalate,
automotive antifreeze
Vinyl chloride (monomer for PVC)
Polystyrene, ABS, rubbers, plastics,
fiberglass, pipes
Polyvinyl acetate, emulsion polymers,
resins


10

Manufacturing Alternatives

Commercial ethylene major application in the chemical
industry is as a raw material for the production of
polyethylene and other organic chemicals that are mainly
utilized in consumable end uses, especially in packaging.

Intratec | Study Background

Applications

Ethylene is mainly produced by steam cracking of oil
fractions, as NGL, and LPG, but, mainly as naphtha.
Additionally, research efforts have been made to create
alternatives to manufacture less energy-consuming oilindependent ethylene. However, researchers have not yet
found better options to the cracking process.

The principal use of ethylene is in the manufacture of
plastics such as polyethylene, which accounts for about
60% of the global ethylene demand. The main class of
polyethylene produced in the world is high density
polyethylene (HDPE), which is responsible for the
consumption of a third of the available ethylene, followed
by low density (LDPE) and linear low density (LLDPE)
varieties.

In steam cracking, the oil fraction diluted with steam is fed
into a radiant tube reactor, where fire is externally provided
in order to supply the energy required for the reaction
completion. This process enables the utilization of different
types of coils, radiation tubes, and furnaces.
The main difference between thermal and steam cracking is
that the latter uses high temperatures and low pressures,
favoring olefins production. In this sense, dilution of the

feed stream with steam reduces the partial pressure of
reactants and helps to avoid coke formation in the reaction
system, which is also prevented by slow residence times.
As the reaction occurs within this furnace, various
mechanisms are assumed to represent the process. In the
very beginning (with a low conversion rate), a free-radical
decomposition is assumed for the system. Once the
conversion increases, the more acceptable mechanism
includes condensation reactions to form cyclic
components.

Another technique is also being employed:
Methanol-to-Olefins. A group of technologies that
first converts synthesis gas (syngas) to methanol, and
then converts the methanol to ethylene and/or
propylene. The process also produces water as a byproduct. Synthesis gas is produced from the
reformation of natural gas or by the steam-induced
reformation of petroleum products such as naphtha, or
by gasification of coal. A large amount of methanol is
required to make a world-scale ethylene and/or
propylene plant.

Figure 2 – Ethylene from Multiple Sources

Naphtha
NGL
LPG

Steam Cracker

(Green)
Ethanol

Ethanol
Dehydration

Methanol

PG Ethylene

MTO/MTP



11

Licensor(s) & Historical Aspects
The continuous rise in petroleum prices, in addition to the
increase in global concerns about sustainability and global
warming, has led the chemical industry to innovate in the
development of production routes utilizing sources other
than oil.
The thermal cracking of oil fractions, which was further
improved to the steam cracking, has been practiced since
the beginning of the 20th century. Currently, the recent
discoveries of the shale gas and its exploitation in the US
and other countries are playing a key role in the shift of
natural gas as a feed resource to olefins production.
Also, the recent demands of the market for renewable
chemicals have led to several initiatives towards the
production of green ethylene.
In this context of environmentally friendly production, the
recent advances of biotechnology in developing new,
genetically modified microorganisms capable of fermenting
sugar (from sugarcane, corn starch, sugar-beet, and
agricultural residues) have enabled the production of green
ethanol in large quantities at low cost.
Therefore, green ethylene has become an option in
countries where there is a lack of oil resources or an
overabundance of fermentable renewable sugars. Brazil is
an example of country that presents favorable conditions
for culturing sugarcane and producing fermentationderived ethanol.
Not for coincidence, the first commercial scale green
ethylene plant in the world was erected in the country by
Braskem SA. It is capable of producing 200,000 metric tons
of ethylene per year. A joint venture formed by Dow &
Mitsui has plans to construct a unit in the near future.
The main ethanol dehydration technologies were
developed by the following companies:


Braskem

12

Chematur Technologies
Petron Scientech
Scientific Design

However, Braskem does not license its technology to third
parties. Dow Chemicals has also been researching the
ethylene production by ethanol dehydration.
The main differences between those technologies center
on the reactor and furnaces design, the catalysts’ type and
the purification method (e.g., CO removal through stripping
or selective oxidation).

Technical Analysis
country must have substantial agricultural production and a
raw material surplus (e.g., sugar or starch).

Chemistry
Ethanol dehydration equilibrium reaction is carried out in
the presence of a metallic catalyst such as activated
aluminum or zinc. The following equation shows the
reaction:

Ethanol

Ethylene

Water

About 99 wt% of ethanol is converted to ethylene. The
ethylene conversion is favored by high temperatures and
low pressures.

However by relying on the sugar and starch content of food
crops, ethanol production competes with food production.
Therefore, recent research focus on the use of low-value
biomass, often deemed “waste”, to produce ethanol. That
low-value biomass is lignocellulosic material found in wood,
sugarcane bagasse or grain crop stubbles.
Lignocellulosic biomass could represent a new fermentable
raw material if hydrolysis of this material is performed.
Technological advances in this reaction still need to be
achieved in order to make it economically feasible and
render this usage of the agricultural residues competitive
with respect to others, such as heat generation by burn.

Since the dehydration reaction is endothermic, temperature
control plays a key role in ethylene yields since both high or
low operating temperatures can provoke side reactions that
generate undesirable by-products, such as aldehydes at
high temperatures and ethers at low temperatures, leading
to an increase on purification costs.

Being one of the world major ethanol producers, the US
bases their fermentation process on corn starch, which
requires a previous hydrolysis step. Other tropical countries,
as Brazil and India, use sugarcane juice and molasses
respectively as raw material for the fermentation. As a
result, their processes tend to be less expensive as no
hydrolysis step is necessary.

In order to avoid by-products formation and maximize
ethylene formation, reaction operating temperatures must
range from 300°C to 500°C, while absolute pressures should
range from 5 to 8 bar. Therefore, the process is based on
four reaction steps which operate with a partial conversion
rate to avoid high temperature drops in each pass. Thus,
the completion of the reaction is only reached at the last
reactor.

Further, since the 1970’s, the Brazilian governmental
program Pro-Alcohol has promoted the production of
ethanol. This mandate has given Brazilian researchers the
opportunity to develop new technologies and dominate
the ethanol fermentation process. In this context, Brazilian
ethanol has established itself as one of the major players on
the ethanol market.

Ethanol, CH3CH2OH, also known as ethyl alcohol, performs
several functions. It may work as a solvent, a germicide, a
fuel, and as a chemical intermediate for other organic
chemicals. Currently, ethanol is mostly produced via
fermentation of sugars, which can be obtained from crops,
such as sugarcane and starch.
Although the availability of green ethanol depends on
seasonal resources, tropical countries with access to
farmable land during the entire year may have regular
production. In order to produce huge quantities of it, a

Ethanol prices are somewhat related to fuel and crops
production. While Brazilian and Indian sugarcane-derived
ethanol are less affected due to the ability to adjust the
production of ethanol/sugar according to market demands,
corn starch alcohol is much more sensitive to external
factors, while corn is the principal American feed grain.
Intratec | Technical Analysis

Raw Material

13

Technology Overview
The ethanol-to-ethylene process comprises three different
areas: the reaction area; the quench, compression, caustic
washing and drying area; and the purification area. The
process block flow diagram presented in Figure 4
summarizes the process.

In the purification area, the gas stream is submitted to two
cryogenic columns that share a single condenser. In the
first, heavy impurities are removed, in the second column,
the remaining CO is removed. The resulting bottom stream
corresponds to the PG ethylene product.

In this process, ethanol from feedstock is vaporized and fed
to the furnace, where it is heated. This stream is then fed
into the first reactor, where ethanol is partially converted.
The resulting stream is fed back to the furnace, where it is
reheated and sent directly to the next reactor. This
continues until the fourth reactor, where ethanol reaches
99% of conversion. Then, the product stream is cooled,
generating steam, before being sent to the subsequent
area.
In the second area, the cooled stream is fed into a quench
column, where most of the water is condensed. Next, the
product passes by a three-stage compression and is
submitted to a caustic washing column to reduce the CO2
content. The bottom product is sent to waste treatment
while the overhead product goes to the ethylene drying
system and then follows to purification.

Figure 3 – Process Block Flow Diagram

Fuel Gas


Ethanol

14

Area 100:
Reaction &
Quenching


Area 200:
Compression, Caustic
Washing & Drying

Area 300:
Purification

PG Ethylene

15


Key Consumptions
Table 6 – Design & Simulation Assumptions
Table 5 – Raw Materials & Utilities Consumption (per
ton of Product)

Simulation Software



Labor Requirements

Table 7 – Labor Requirements for a Typical Plant



16



Figure 4 – Inside Battery Limits Conceptual Process Flow Diagram

17


Figure 5 – Inside Battery Limits Conceptual Process Flow Diagram (Cont.)

18


Detailed information regarding utilities flow rates is
provided in “Appendix B. Utilities Consumptions
Breakdown”. For further details on greenhouse gas
emissions caused by this process, see “Appendix C. Process
Carbon Footprint”.

ISBL Major Equipment List
Table 9 shows the equipment list by area. It also presents a
brief description and the construction materials used.
Find main specifications for each piece of equipment in
“Appendix D. Equipment Detailed List & Sizing”.


Table 8 presents the main streams composition and
operating conditions. For a more complete material
balance, see the “Appendix A. Mass Balance & Streams
Properties”

19

20


OSBL Major Equipment List
The OSBL is divided into three main areas: storage (Area
700), energy & water facilities (Area 800), and support &
auxiliary facilities (Area 900).


Table 10 shows the list of tanks located on the storage area
and the energy facilities required in the construction of a
partially integrated unit.

21

22


Economic Analysis
The general assumptions for the base case of this study are
outlined below.

Table 11 – Base Case General Assumptions

In Table 11, the IC Index stands for Intratec chemical plant
Construction Index, an indicator, published monthly by
Intratec, to scale capital costs from one time period to
another.
This index reconciles price trends of the fundamental
components of a chemical plant construction such as labor,
material and energy, providing meaningful historical and
forecast data for our readers and clients.
The assumed operating hours per year indicated does not
represent any technology limitation; rather, it is an
assumption based on usual industrial operating rates.


Additionally, Table 11 discloses assumptions regarding the
project complexity, technology maturity and data reliability,
which are of major importance for attributing reasonable
contingencies for the investment and for evaluating the
overall accuracy of estimates. Definitions and figures for
both contingencies and accuracy of economic estimates
can be found in this publication in the chapter “Technology
Economics Methodology.”

Figure 5 – Project Implementation Schedule

Basic Engineering
Detailed Engineering
Procurement
Construction

Start-up


Intratec | Economic Analysis

Total EPC Phase

23

Project Implementation
Schedule
The main objective of knowing upfront the project
implementation schedule is to enhance the estimates for
both capital initial expenses and return on investment.
The implementation phase embraces the period from the
decision to invest to the start of commercial production.
This phase can be divided into five major stages: (1) Basic
Engineering, (2) Detailed Engineering, (3) Procurement, (4)
Construction, and (5) Plant Start-up.
The duration of each phase is detailed in Figure 6.

installation bulks). In other words, the total direct expenses
represent the total equipment installed cost.
“Appendix E. Detailed Capital Expenses” provides a detailed
breakdown for the direct expenses, outlining the share of
each type of equipment in total.
After defining the total direct cost, the TFI is established by
adding field indirect costs, engineering costs, overhead,
contract fees and contingencies.

Table 13 – Total Fixed Investment Breakdown (USD
Thousands)

Capital Expenditures
Fixed Investment
Table 12 shows the bare equipment cost associated with
each area of the project.

Table 12 – Bare Equipment Cost per Area (USD
Thousands)



24

Table 13 presents the breakdown of the total fixed
investment (TFI) per item (direct & indirect costs and
process contingencies). For further information about the
components of the TFI, please see the chapter “Technology
Economics Methodology.”
Fundamentally, the direct costs are the total direct material
and labor costs associated with the equipment (including


Indirect costs are defined by the American Association of
Cost Engineers (AACE) Standard Terminology as those
"costs which do not become a final part of the installation
but which are required for the orderly completion of the
installation."
The indirect project expenses are further detailed in
“Appendix E. Detailed Capital Expenses”
Alternative OSBL Configurations
The total fixed investment for the construction of a new
chemical plant is greatly impacted by how well it will be
able to take advantage of the infrastructure already installed
in that location.
For example, if there are nearby facilities consuming a unit’s
final product or supplying a unit’s feedstock, the need for
storage facilities significantly decreases, along with the total
fixed investment required. This is also true for support
facilities that can serve more than one plant in the same
complex, such as a parking lot, gate house, etc.
This study analyzes the total fixed investment for three
distinct scenarios regarding OSBL facilities:
Non-Integrated Plant
Plant Partially Integrated
Plant Fully Integrated
The detailed definition, as well as the assumptions used for
each scenario is presented in the chapter “About this
Study.”


The influence of the OSBL facilities on the capital
investment is depicted in Figure 7 and in Figure 8.

25

Figure 6 – Total Direct Cost of Different Integration Scenarios (USD Thousands)



Figure 7 – Total Fixed Investment of Different Integration Scenarios (USD Thousands)

26


Working Capital
Working capital, described in Table 14, is another significant
investment requirement. It is needed to meet the costs of
labor; maintenance; purchase, storage, and inventory of
field materials; and storage and sales of product(s).

Table 15 – Other Capital Expenses (USD Million)

Assumptions for working capital calculations are found in
“Appendix F. Economic Assumptions”.

Table 14 – Working Capital (USD Million)


Assumptions used to calculate other capital expenses are
provided in “Appendix F. Economic Assumptions.”

Total Capital Expenses

Other Capital Expenses

Table 16 presents a summary of the total Capital
Expenditures (CAPEX) detailed in this section.

Table 16 – CAPEX (USD Million)

Start-up costs should also be considered when determining
the total capital expenses. During this period, expenses are
incurred for employee training, initial commercialization
costs, manufacturing inefficiencies and unscheduled plant
modifications (adjustment of equipment, piping,
instruments, etc.).

The purchase of technology through paid-up royalties or
licenses is considered to be part of the capital investment.
Other capital expenses frequently neglected are land
acquisition and site development. Although these are small
parts of the total capital expenses, they should be included.


Operational Expenditures
Manufacturing Costs
The manufacturing costs, also called Operational
Expenditures (OPEX), are composed of two elements: a fixed
cost and a variable cost. All figures regarding operational
costs are presented in USD per ton of product.


Initial costs are not addressed in most studies on estimating
but can become a significant expenditure. For instance, the
initial catalyst load in reactors may be a significant cost and,
in that case, should also be included in the capital
estimates.

27

Table 17 shows the manufacturing fixed cost. To learn more
about the assumptions for manufacturing fixed costs, see
the “Appendix F. Economic Assumptions”

Table 19 shows the OPEX of the presented technology.

Table 19 – OPEX (USD/ton)
Table 17 – Manufacturing Fixed Cost (USD/ton)


Historical Analysis


Table 18 discloses the manufacturing variable cost
breakdown.

Table 18 – Manufacturing Variable Cost (USD/ton)

Figure 9 depictures Sales and OPEX historic data, with the
sales history based on 30% premium ethylene prices.
Figure 10 compares the project EBITDA trends with Intratec
Profitability Indicators (IP Indicators). The Basic Chemicals IP
Indicator represents basic chemicals sector profitability,
based on the weighted average EBITDA margins of major
global basic chemicals producers. Alternately, the Chemical
Sector IP Indicator reveals the overall chemical sector
profitability, through a weighted average of the IP Indicators
calculated for three major chemical industry niches: basic,
specialties and diversified chemicals.

Economic Datasheet
The Technology Economic Datasheet, presented in Table
20, is an overall evaluation of the technology's production
costs in a US Gulf Coast based plant.


The expected revenues in products sales and initial
economic indicators are presented for a short-term
assessment of its economic competitiveness.

28


Figure 8 – OPEX and Product Sales History (USD/ton)




Figure 9 – EBITDA Margin & IP Indicators History Comparison

29

30


Regional Comparison & Economic Discussion
Regional Comparison
Capital Expenses
Variations in productivity, labor costs, local steel prices,
equipment imports needs, freight, taxes and duties on
imports, regional business environments and local
availability of sparing equipment were considered when
comparing capital expenses for the different regions under
consideration in this report.
Capital costs are adjusted from the base case (a plant
constructed on the US Gulf Coast) to locations of interest by
using location factors calculated according to the items
aforementioned. For further information about location
factor calculation, please examine the chapter “Technology
Economics Methodology.” In addition, the location factors
for the regions analyzed are further detailed in “Appendix F.
Economic Assumptions.”

Figure 11 summarizes the total Capital Expenditures
(CAPEX) for two locations.

Specific regional conditions influence prices for raw
materials, utilities and products. Such differences are thus
reflected in the operating costs. An OPEX breakdown
structure for the different locations approached in this study
is presented in Figure 12.

Economic Datasheet
The Technology Economic Datasheet, presented in Table
21, is an overall evaluation of the technology's capital
investment and production costs in the alternative location
analyzed in this study.


Intratec | Regional Comparison & Economic Discussion

Figure 10 – CAPEX per Location (USD Million)

31

Figure 11 – Operating Costs Breakdown per Location (USD/ton)



32

33


34


Intratec | References

References

35

Acronyms, Legends & Observations
AACE: American Association of Cost Engineers

LPG: Liquefied petroleum gas

ABS: Acrylonitrile butadiene styrene

MTO: Methanol-to-Olefins

B: Boiler

MTP: Methanol-to-Propylene

C: Distillation, stripper, scrubber columns (e.g., C-101 would
denote a column tag)

NGL: Natural gas liquids
OPEX: Operational Expenditures

C2, C3, ... Cn: Hydrocarbons with "n" number of carbon
atoms

OSBL: Outside battery limits

C2=, C3=, ... Cn=: Alkenes with "n" number of carbon atoms

P: Pumps (e.g., P-101 would denote a pump tag)

CAPEX: Capital expenditures

PG: Polymer grade

CR: Distillation column reboiler

PVC: Polyvinyl Chloride

CT: Cooling tower

R: Reactors, treaters (e.g., R-101 would denote a reactor tag)

E: Heat exchangers, heaters, coolers, condensers, reboilers
(e.g., E-101 would denote a heat exchanger tag)

RF: Refrigerant

EBIT: Earnings before Interest and Taxes
EBITDA: Earnings before Interests, Taxes, Depreciation and
Amortization
F: Furnaces, fired heaters (e.g., F-101 would denote a
furnace tag)

RG: Refinery grade
STAR: Steam Active Reforming
Syngas: Synthesis gas
T: Tanks (e.g., T-101 would denote a tank tag)
TFI: Total Fixed Investment

FBD: Fluidized Bed Dehydration

TPC: Total process cost

HDPE: High Density Polyethylene

V: Horizontal or vertical drums, vessels (e.g., V-101 would
denote a vessel tag)

IC Index: Intratec Chemical Plant Construction Index
IP Indicator: Intratec Chemical Sector Profitability Indicator

Intratec | Acronyms, Legends & Observations

ISBL: Inside battery limits

36

K: Compressors, blowers, fans (e.g., K-101 would denote a
compressor tag)
KPI:
kta: thousands metric tons per year
LDPE: Light Density Polyethylene
LLDPE: Linear Light Density Polyethylene
LP: Low Pressure (for steam)

WD: Demineralized water
Obs.: 1 ton = 1 metric ton = 1,000 kg

Technology Economics Methodology

Introduction
The same general approach is used in the development of
all Technology Economics assignments. To know more
about Intratec’s methodology, see Figure 13.
While based on the same methodology, all Technology
Economics studies present uniform analyses with identical
structures, containing the same chapters and similar tables
and charts. This provides confidence to everyone interested
in Intratec’s services since they will know upfront what they
will get.

Workflow
Once the scope of the study is fully defined and
understood, Intratec conducts a comprehensive
bibliographical research in order to understand technical
aspects involved with the process analyzed.
Subsequently, the Intratec team simultaneously develops
the process description and the conceptual process flow
diagram based on:
a.

Non-confidential information provided by technology
licensors

c.

Then, a cost analysis is performed targeting ISBL & OSBL
fixed capital costs, manufacturing costs, and overall working
capital associated with the examined process technology.
Equipment costs are primarily estimated using Aspen
Process Economic Analyzer (formerly Aspen Icarus)
customized models and Intratec's in-house database.
Cost correlations and, occasionally, vendor quotes of unique
and specialized equipment may also be employed. One of
the overall objectives is to establish Class 3 cost estimates1
with a minimum design engineering effort.
Next, capital and operating costs are assembled in Microsoft
Excel spreadsheets, and an economic analysis of such
technology is performed.
Finally, two analyses are completed, examining:
a.

The total fixed investment in different construction
scenarios, based on the level of integration of the plant
with nearby facilities

b.

The capital and operating costs for a second different
plant location

Intratec's in-house database

d.

Equipment sizing specifications are defined based on
Intratec's equipment design capabilities and an extensive
use of AspenONE Engineering Software Suite that enables
the integration between the process simulation developed
and equipment design tools. Both equipment sizing and
process design are prepared in conformance with generally
accepted engineering standards.

Patent and technical literature research

b.

From this simulation, material balance calculations are
performed around the process, key process indicators are
identified and main equipment listed.

Process design skills

Next, all the data collected are used to build a rigorous
steady state process simulation model in Aspen Hysys
and/or Aspen Plus, leading commercial process
flowsheeting software tools.

1

These are estimates that form the basis for budget authorization,
appropriation, and/or funding. Accuracy ranges for this class of
estimates are + 10% to + 30% on the high side, and - 10 % to - 20 %
on the low side.

Intratec | Technology Economics Methodology

Intratec Technology Economics methodology
ensures a holistic, coherent and consistent
techno-economic evaluation, ensuring a clear
understanding of a specific mature chemical
process technology.

37

Figure 123 – Methodology Flowchart

Study Understanding Validation of Project Inputs
Patent and Technical
Literature Databases

Intratec Internal Database

Non-Confidential
Information from
Technology Licensors or
Suppliers

Bibliographical Research

Technical Validation –
Process Description &
Flow Diagram

Capital Cost (CAPEX)
& Operational Cost (OPEX)
Estimation

Construction Location
Factor
(http://base.intratec.us)

38

Material & Energy Balances, Key
Process Indicators, List of
Equipment & Equipment Sizing

Pricing Data Gathering: Raw
Materials, Chemicals,
Utilities and Products


Vendor Quotes

Economic Analysis

Aspen Plus, Aspen Hysys
Aspen Exchanger Design &
Rating, KG Tower, Sulcol
and Aspen Energy Analyzer

Analyses of
Different Construction
Scenarios and Plant Location

Project Development Phases
Information Gathering / Tools


Final Review &
Adjustments

Aspen Process Economic
Analyzer, Aspen Capital
Cost Estimator, Aspen InPlant Cost Estimator &
Intratec In-House Database

Capital & Operating Cost
Estimates

Process equipment (e.g., reactors and vessels, heat
exchangers, pumps, compressors, etc.)
Process equipment spares

The cost estimate presented in the current study considers
a process technology based on a standardized design
practice, typical of a major chemical company. The specific
design standards employed can have a significant impact
on capital costs.
The basis for the capital cost estimate is that the plant is
considered to be built in a clear field with a typical large
single-line capacity. In comparing the cost estimate hereby
presented with an actual project cost or contractor's
estimate, the following must be considered:
Minor differences or details (many times, unnoticed)
between similar processes can affect cost noticeably.
The omission of process areas in the design considered
may invalidate comparisons with the estimated cost
presented.
Industrial plants may be overdesigned for particular
objectives and situations.
Rapid fluctuation of equipment or construction costs
may invalidate cost estimate.
Equipment vendors or engineering companies may
provide goods or services below profit margins during
economic downturns.
Specific locations may impose higher taxes and fees,
which can impact costs considerably.

Housing for process units
Pipes and supports within the main process units
Instruments, control systems, electrical wires and other
hardware
Foundations, structures and platforms
Insulation, paint and corrosion protection
In addition to the direct material and labor costs, the ISBL
addresses indirect costs, such as construction overheads,
including: payroll burdens, field supervision, equipment
rentals, tools, field office expenses, temporary facilities, etc.

OSBL Investment
The OSBL investment accounts for auxiliary items necessary
to the functioning of the production unit (ISBL), but which
perform a supporting and non-plant-specific role. OSBL
items considered may vary from process to process. The
OSBL investment could include the installed cost of the
following items:
Storage and packaging (storage, bagging and a
warehouse) for products, feedstocks and by-products
Steam units, cooling water and refrigeration systems
Process water treating systems and supply pumps

ISBL Investment
The ISBL investment includes the fixed capital cost of the
main processing units of the plant necessary to the
manufacturing of products. The ISBL investment includes
the installed cost of the following items:

Boiler feed water and supply pumps
Electrical supply, transformers, and switchgear
Auxiliary buildings, including all services and
equipment of: maintenance, stores warehouse,
laboratory, garages, fire station, change house,
cafeteria, medical/safety, administration, etc.
General utilities including plant air, instrument air, inert
gas, stand-by electrical generator, fire water pumps,
etc.
Pollution control, organic waste disposal, aqueous
waste treating, incinerator and flare systems


In addition, no matter how much time and effort are
devoted to accurately estimating costs, errors may occur
due to the aforementioned factors, as well as cost and labor
changes, construction problems, weather-related issues,
strikes, or other unforeseen situations. This is partially
considered in the project contingency. Finally, it must
always be remembered that an estimated project cost is not
an exact number, but rather is a projection of the probable
cost.

39

Working Capital
For the purposes of this study,2 working capital is defined as
the funds, in addition to the fixed investment, that a
company must contribute to a project. Those funds must
be adequate to get the plant in operation and to meet
subsequent obligations.
The initial amount of working capital is regarded as an
investment item. This study uses the following
items/assumptions for working capital estimation:
Accounts receivable. Products and by-products
shipped but not paid by the customer; it represents
the extended credit given to customers (estimated as a
certain period – in days – of manufacturing expenses
plus depreciation).
Accounts payable. A credit for accounts payable such
as feedstock, catalysts, chemicals, and packaging
materials received but not paid to suppliers (estimated
as a certain period – in days – of manufacturing
expenses).
Product inventory. Products and by-products (if
applicable) in storage tanks. The total amount depends
on sales flow for each plant, which is directly related to
plant conditions of integration to the manufacturing of
product‘s derivatives (estimated as a certain period – in
days – of manufacturing expenses plus depreciation,
defined by plant integration circumstances).

Cash on hand. An adequate amount of cash on hand
to give plant management the necessary flexibility to
cover unexpected expenses (estimated as a certain
period – in days – of manufacturing expenses).

Start-up Expenses
When a process is brought on stream, there are certain onetime expenses related to this activity. From a time
standpoint, a variable undefined period exists between the
nominal end of construction and the production of quality
product in the quantity required. This period is commonly
referred to as start-up.
During the start-up period expenses are incurred for
operator and maintenance employee training, temporary
construction, auxiliary services, testing and adjustment of
equipment, piping, and instruments, etc. Our method of
estimating start-up expenses consists of four components:
Labor component. Represents costs of plant crew
training for plant start-up, estimated as a certain
number of days of total plant labor costs (operators,
supervisors, maintenance personnel and laboratory
labor).
Commercialization cost. Depends on raw materials
and products negotiation, on how integrated the plant
is with feedstock suppliers and consumer facilities, and
on the maturity of the technology. It ranges from 0.5%
to 5% of annual manufacturing expenses.


Raw material inventory. Raw materials in storage
tanks. The total amount depends on raw material
availability, which is directly related to plant conditions
of integration to raw material manufacturing
(estimated as a certain period – in days – of raw
material delivered costs, defined by plant integration
circumstances).

40

Start-up inefficiency. Takes into account those
operating runs when production cannot be
maintained or there are false starts. The start-up
inefficiency varies according to the process maturity:
5% for new and unproven processes, 2% for new and
proven processes, and 1% for existing licensed
processes, based on annual manufacturing expenses.

In-process inventory. Material contained in pipelines
and vessels, except for the material inside the storage
tanks (assumed to be 1 day of manufacturing
expenses).

Unscheduled plant modifications. A key fault that
can happen during the start-up of the plant is the risk
that the product(s) may not meet specifications
required by the market. As a result, equipment
modifications or additions may be required.

Supplies and stores. Parts inventory and minor spare
equipment (estimated as a percentage of total
maintenance materials costs for both ISBL and OSBL).

2
The accounting definition of working capital (total current assets
minus total current liabilities) is applied when considering the
entire company.

Prepaid Royalties. Royalty charges on portions of the
plant are usually levied for proprietary processes. A
value ranging from 0.5 to 1% of the total fixed
investment (TFI) is generally used.
Site Development. Land acquisition and site
preparation, including roads and walkways, parking,
railroad sidings, lighting, fencing, sanitary and storm
sewers, and communications.

Manufacturing Costs
Manufacturing costs do not include post-plant costs, which
are very company specific. These consist of sales, general
and administrative expenses, packaging, research and
development costs, and shipping, etc.
Operating labor and maintenance requirements have been
estimated subjectively on the basis of the number of major
equipment items and similar processes, as noted in the
literature.
Plant overhead includes all other non-maintenance (labor
and materials) and non-operating site labor costs for
services associated with the manufacture of the product.
Such overheads do not include costs to develop or market
the product.
G & A expenses represent general and administrative costs
incurred during production such as: administrative
salaries/expenses, research & development, product
distribution and sales costs.

Contingencies
Contingency constitutes an addition to capital cost
estimations, implemented based on previously available
data or experience to encompass uncertainties that may
incur, to some degree, cost increases. According to
recommended practice, two kinds of contingencies are
assumed and applied to TPC: process contingency and
project contingency.
Process contingency is utilized in an effort to lessen the
impact of absent technical information or the uncertainty of
that which is obtained. In that manner, the reliability of the
information gathered, its amount and the inherent
complexity of the process are decisive for its evaluation.
Errors that occur may be related to:

Uncertainty in process parameters, such as severity of
operating conditions and quantity of recycles
Addition and integration of new process steps
Estimation of costs through scaling factors
Off-the-shelf equipment
Hence, process contingency is also a function of the
maturity of the technology, and is usually a value between
5% and 25% of the direct costs.
The project contingency is largely dependent on the plant
complexity and reflects how far the conducted estimation is
from the definitive project, which includes, from the
engineering point of view, site data, drawings and sketches,
suppliers’ quotations and other specifications. In addition,
during construction some constraints are verified, such as:
Project errors or incomplete specifications
Strike, labor costs changes and problems caused by
weather

Table 22 – Project Contingency
Plant Complexity

Complex

Typical

Simple

Project Contingency

25%

20%

15%


Intratec’s definitions in relation to complexity and maturity
are the following:

Table 23 – Criteria Description

Simple

Complexity

Typical

Somewhat simple, widely
known processes
Regular process
Several unit operations, extreme

Complex

temperature or pressure, more
instrumentation

New &
Maturity

Proven
Licensed

From 1 to 2 commercial plants
3 or more commercial plants



Other Capital Expenses

41

Accuracy of Economic Estimates
The accuracy of estimates gives the realized range of plant
cost. The reliability of the technical information available is
of major importance.

Table 24 – Accuracy of Economic Estimates

Reliability

Accuracy

Very

Low

Moderate

High

+ 30%

+ 22%

+ 18%

+ 10%

- 20%

- 18%

- 14%

- 10%

High


The non-uniform spread of accuracy ranges (+50 to – 30 %,
rather than ±40%, e.g.) is justified by the fact that the
unavailability of complete technical information usually
results in under estimating rather than over estimating
project costs.

Location Factor

A properly estimated location factor is a powerful tool, both
for comparing available investment data and evaluating
which region may provide greater economic attractiveness
for a new industrial venture. Considering this, Intratec has
developed a well-structured methodology for calculating
Location Factors, and the results are presented for specific
regions’ capital costs comparison.
Intratec’s Location Factor takes into consideration the
differences in productivity, labor costs, local steel prices,
equipment imports needs, freight, taxes and duties on
imported and domestic materials, regional business
environments and local availability of sparing equipment.
For such analyses, all data were taken from international
statistical organizations and from Intratec’s database.
Calculations are performed in a comparative manner, taking
a US Gulf Coast-based plant as the reference location. The
final Location Factor is determined by four major indexes:
Business Environment, Infrastructure, Labor, and Material.
The Business Environment Factor and the Infrastructure
Factor measure the ease of new plant installation in
different countries, taking into consideration the readiness
of bureaucratic procedures and the availability and quality
of ports or roads.

A location factor is an instantaneous, total cost factor used
for converting a base project cost from one geographic
location to another.

Figure 13 – Location Factor Composition

Location Factor


Material Index

42

Domestic Material Index
Relative Steel Prices
Labor Index
Taxes and Freight
Rates
Spares
Imported Material
Taxes and Freight
Rates
Spares


Labor Index
Local Labor Index
Relative Salary
Productivity
Expats Labor

Infrastructure Factor
Ports, Roads, Airports
and Rails (Availability
and Quality)
Communication
Technologies
Warehouse
Infrastructure
Border Clearance
Local Incentives

Business Environment
Factor
Readiness of
Bureaucratic
Procedures
Legal Protection of
Investors
Taxes

Labor and material, in turn, are the fundamental
components for the construction of a plant and, for this
reason, are intrinsically related to the plant costs. This
concept is the basis for the methodology, which aims to
represent the local discrepancies in labor and material.
Productivity of workers and their hourly compensation are
important for the project but, also, the qualification of
workers is significant to estimating the need for foreign
labor.
On the other hand, local steel prices are similarly important,
since they are largely representative of the costs of
structures, piping, equipment, etc. Considering the
contribution of labor in these components, workers’
qualifications are also indicative of the amount that needs
to be imported. For both domestic and imported materials,
a Spare Factor is considered, aiming to represent the need
for spare rotors, seals and parts of rotating equipment.
The sum of the corrected TFI distribution reflects the relative
cost of the plant, this sum is multiplied by the Infrastructure
and the Business Environment Factors, yielding the Location
Factor.
For the purpose of illustrating the conducted methodology,
a block flow diagram is presented in Figure 14 in which the
four major indexes are presented, along with some of their
components.


.

43

44

Intratec | Appendix A. Mass Balance & Streams Properties

45


46


47


48


49

Intratec | Appendix B. Utilities Consumption Breakdown

Appendix C. Process Carbon Footprint
The process’ carbon footprint can be defined as the total
amount of greenhouse gas (GHG) emissions caused by the
process operation.

The assumptions for carbon footprint calculation and the
results are provided in Table 27 and Table 28.

Although it is difficult to precisely account for the total
emissions generated by a process, it is possible to estimate
the major emissions, which can be divided into:

Table 28 – CO2e Emissions (ton/ton prod.)

Direct emissions. Emissions caused by process waste
streams combusted in flares.
Indirect emissions. The ones caused by utilities
generation or consumption, such as the emissions due
to using fuel in furnaces for heating process streams.
Fuel used in steam boilers, electricity generation, and
any other emissions in activities to support process
operation are also considered indirect emissions.
In order to estimate the direct emissions, it is necessary to
know the composition of the streams, as well as the
oxidation factor.
Estimation of indirect emissions requires specific data,
which depends on the plant location, such as the local
electric power generation profile, and on the plant
resources, such as the type of fuel used.

Intratec | Appendix C. Process Carbon Footprint

Table 27 – Assumptions for CO2e Emissions Calculation

50



Equivalent carbon dioxide (CO2e) is a measure that
describes the amount of CO2 that would have the same
global warming potential of a given greenhouse gas, when
measured over a specified timescale.
All values and assumptions used in calculations are based
on data provided by the Environment Protection Agency
(EPA) Climate Leaders Program.

Actual gas flow rate Inlet
(m3/h)
Casing material
Design gauge pressure

Intratec | Appendix D. Equipment Detailed List & Sizing

Outlet (barg)

51

Table 31 – Heat Exchangers

(barg)
Design temperature (deg
C)

Shell design temperature
(deg C)
Shell material
Tube design gauge
pressure (barg)
Tube design temperature


(deg C)

52

Shell design temperature
(deg C)
Shell material
Tube design gauge
pressure (barg)
Tube design temperature


(deg C)

53

Shell design
temperature (deg C)
Shell material
Tube design gauge
pressure (barg)
Tube design


temperature (deg C)

54

temperature (deg
C)
Liquid flow rate
(m3/h)


Design

55

56


Design gauge

pressure (barg)

Design temperature

(deg C)

Table 35 – Vessels & Tanks (Cont.)

Design gauge
pressure (barg)
Design
temperature (deg
C)

(barg)
Design temperature (deg


C)

57

Appendix E. Detailed Capital Expenses
Direct Costs Breakdown
Figure 14 – ISBL Direct Costs Breakdown by Equipment Type for Base Case


Intratec | Appendix E. Detailed Capital Expenses

Figure 15 – OSBL Direct Costs Breakdown by Equipment Type for Base Case

58


59

Intratec | Appendix E. Detailed Capital Expenses

Appendix F. Economic Assumptions
Capital Expenditures
For a better description of working capital and other capital
expenses components, as well as the location factors
methodology, see the chapter “Technology Economics
Methodology”

Working Capital

Table 38 – Working Capital Assumptions for Base Case
Raw Materials

Construction Location Factors

Inventory
days of raw materials cost +
depreciation

Table 37 – Detailed Construction Location Factor

In-process
Inventory
Supplies and
Stores


Intratec | Appendix F. Economic Assumptions

Table 39 – Other Capital Expenses Assumptions for
Base Case

60



Fixed Costs
Fixed costs are estimated based on the specific
characteristics of the process. The fixed costs, like operating
charges and plant overhead, are typically calculated as a
percentage of the industrial labor costs, and G & A expenses
are added as a percentage of the operating costs.

The goal of depreciation is to allow a credit against
manufacturing costs, and hence taxes, for the nonrecoverable capital expenses of an investment. The
depreciable portion of capital expense is the total fixed
investment.
Table 41 shows the project depreciation value and the
assumptions used in its calculation.

Table 41 – Depreciation Value & Assumptions
Table 40 – Other Fixed Cost Assumptions



Intratec | Appendix F. Economic Assumptions

Figure 16 – Historical EBITDA Margins Regional Comparison

61

Appendix G. Released Publications
The list below is intended to be an easy and quick way to
identify Intratec reports of interest. For a more complete
and up-to-date list, please visit the Publications section on
our website, www.intratec.us.

Ethylene via Ethanol Dehydration: Ethylene
production via ethanol dehydration, in a process similar
to that used by Chematur and Petron.

TECHNOLOGY ECONOMICS
IMPROVEMENT ECONOMICS
Propylene Production via Metathesis: Propylene
production via metathesis from ethylene and butenes,
in a process similar to Lummus OCT.
Propylene Production via Propane
Dehydrogenation: Propane dehydrogenation (PDH)
process conducted in moving bed reactors, in a
process similar to UOP OLEFLEX™.
Propylene Production from Methanol: Propylene
production from methanol, in a process is similar to
Lurgi MTP®.

Membranes on Polypropylene Plants Vent Recovery:
The Report evaluates membrane units for the
separation of monomer and nitrogen in PP plants,
similar to the VaporSep® system commercialized by
MTR.
Use of Propylene Splitter to Improve Polypropylene
Business: The report assesses the opportunity of
purchasing the less valued RG propylene to produce
the PG propylene raw material used in a PP plant.
RESEARCH ECONOMICS

Polypropylene Production via Gas Phase Process: A
gas phase type process similar to the Dow UNIPOL™ PP
process to produce both polypropylene homopolymer
and random copolymer.
Polypropylene Production via Gas Phase Process,
Part 2: A gas phase type process similar to Lummus
NOVOLEN® for production of both homopolymer and
random copolymer.

Intratec | Appendix G. Released Publications

Sodium Hypochlorite Chemical Production: Sodium
hypochlorite (bleach) production, in a widely used
industrial process, similar to that employed by Solvay
Chemicals, for example.

62

Dehydrogenation, Part 2: Propane dehydrogenation
(PDH) in fixed bed reactors, in a process is similar to
Lummus CATOFIN®.
Dehydrogenation, Part 3: Propane dehydrogenation
(PDH) by applying oxydehydrogenation, in a process
similar to the STAR PROCESS® licensed by Uhde.

Green Ethylene from Ethanol: The report evaluates
the ethylene production via ethanol dehydration in a
process based in a patent published by BP Chemicals.

Appendix H. Technology Economics Form
Submitted by Client

Appendix H.
Technology Economics Form
Submitted by Client

Technology Economics Request Form

Process Technology of Interest
Is it a commercial process technology?

Yes

No

Industry Sector

Chemicals Production

Specify Chemical Produced:

Ethylene

Technology Description

Ethanol catalytic dehydration ( similar to Petron’s ETE Process )

Study Assumptions
Please provide the assumptions that will support the techno-economic evaluation of your target mature technology.

Change inputs

Analysis Date
Quarter / Year

Q4

/

2012

Change inputs

Plant Nominal Capacity
Plant Capacity

300 kta (661.4 million lb/yr)

Change inputs

Operating Hours
Operating Hours

8,000 h/year (91.3% of the year)

Change inputs

Storage Facilities Requirements
Products

0

days of operation

By-Products (if applicable)

Not Applicable

days of operation

Raw Materials

20

days of operation

Change inputs

Utilities Supply Facilities
Account for the Erection of Utilities Facilities?

Yes

Add another location

Plant Location

Capital and operating costs estimation will be based on Intratec's Internal Database default prices for:
1) United States (US Gulf Coast)

Add comments

2) Second Location:

Choose among countries available on Intratec's Database.

Select a Country

Brazil

Economic Assumptions

Change inputs

Income Tax

37 %

Sales Tax

7%

Value Added Tax (VAT)

0%

Depreciation Method

Straight Line (10 years)

Perpetuity (EBITDA Multiple)

5 times the EBITDA value in the last year of the economic cycle

Prices Escalation

1 % per year

General Design Conditions

Check process design assumptions used by Intratec
Change inputs

Attach Files
Attach any other documents deemed relevant for the project description. Multiple files may be uploaded:
-

Articles
Brochures
Book sections
Patents
Block flow diagrams

Assess any Process with Technology Economics
The list below presents many examples of processes eligible for technology economics studies, to know more about this service
and request your own custom study please access www.intratec.us/tec.

Production Processes for
ABS Resins

High Density Polyethylene (HDPE)

Phenol

Acetic Acid

Hydrogen

Phosphoric Acid

Acetone

Hydrogen Peroxide

Phthalic Anhydride (PAN)

Acrylic Acid

Isobutanol

Polyacrylamide

Acrylonitrile

Isobutylene

Polyacrylate

Adipic Acid

Isooctane

Polybutadiene Rubber (PBR)

Ammonia

Isoprene

Polybutylene Terephthalate (PBT)

Aniline

Isopropanol

Polycarbonate

Benzene

Lactic Acid

Polyethylene Terephthalate (PET)

Biodiesel

Linear Alkylbenzene

Polypropylene (PP)

Bisphenol A

Liquefied Natural Gas (LNG)

Polystyrene (PS)

Butadiene

Linear Low Density Polyethylene (LLDPE)

Polyvinyl Acetate (PVA)

Butylene

Low Density Polyethylene (LDPE)

Polyvinyl Chloride (PVC)

Butyraldehyde

Maleic Acid

Propylene

Caprolactam

Maleic Anhydride (MAN)

Propylene Glycol

Carbon Dioxide

Melamine

Propylene Oxide

Chlorine

Methanol

Sodium Hydroxide

Cumene

Methyl Ethyl Ketone (MEK)

Styrene

Dimethyl Ether

Methyl Isobutyl Ketone (MIBK)

Succinic Acid

Diphenylmethane Diamine

Methyl Methacrylate (MMA)

Succinic Anhydride

Ethanol

Methyl Tert-Butyl Ether (MTBE)

Sulfur

Ethanolamine

Methylamine (MA)

Sulfuric Acid

Ethyl Acetate

Methylene Diphenyl Diisocyanate (MDI)

Synthesis Gas (Syngas)

Ethylbenzene

Naphtalene

Terephthalic Acid (PTA)

Ethylene

Nitrobenzene

Toluene

Ethylene Dichloride (EDC)

n-Butanol

Urea

Ethylene Glycol

Nitrogen / Oxygen

Vinyl Acetate Monomer (VAM)

Ethyleneamine

Nylon 6

Vinyl Chloride Monomer (VCM)

Formaldehyde

Nylon 6,6

Glycerin

P-xylene

Oil Refining Processes
Alkylation

Hydrotreating

Visbreaking

Crude Distillation

Hydrocracking

Vacuum Distillation

Catalytic Cracking

Isomerization

Catalytic Refining

Sulfur Recovery

Gas Treatment Processes
Dehydration

NGL Recovery

Sulfur Recovery

Appendix I. Related Study Opportunities

Appendix I.
Related Study Opportunities

Technology Economics: Ethylene via Ethanol Dehydration

Technology Economics: Ethylene via Ethanol Dehydration

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