Petrochemicals from refinery intermediates – beyond polyolefins

Diversifying chemical synthesis routes based on simple olefins can add major value for an integrated refining-petrochemical complex.

Bechtel India

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Article Summary

Economic growth curves indicate plateauing of fossil fuel demand and a significant increase in chemicals and petrochemicals in the coming decades. Oil to chemicals nonetheless directionally results in an increase in refining capacities to cater for increased demand.

Refining configurations are changing as bottoms upgrade and rigorous hydrotreating have become a necessity with a heavier and sourer crude diet coupled with stringent land and marine environmental emission specifications. The addition of bottoms upgrading by cracking, coking or catalytic conversion adds to the value chain but at the cost of significant capital investment. In this way, refining margins are becoming self-limiting if we only focus on producing fossil fuels for the market. The profit and payback values significantly increase if we start looking beyond conventional refining and petrochemicals operating models.

A world scale polymer complex downstream of a fuels refinery, fed by a petro-FCC or a steam cracker, adds significant value to the refining bottom line per barrel of crude. Bottom line can be improved further by valorisation of the refinery and steam cracker products and intermediates like off-gases, C2/C3, and aromatics via fuel to chemicals, deep chemical conversion, and diversion into specialty chemicals.

The petrochemical industry has seen more than 50% growth in this century with 100 million t/y of ethylene production in 2000, rising up to 150 million t/y of ethylene in 2016. The value curve also has been quite encouraging. Apart from strong demand growth there have been other factors which have positively influenced the petrochemicals bottom line. Two major factors that can be attributed as positive economic influencers are feedstock diversity and pricing, and market geography and structure.

Feedstock pricing has been favourable to petrochemical manufacturers because of two major trends over the last few years. On the one hand, discovery of shale gases has supplied the petrochemical industry with an abundant alternative feedstock which has been extremely beneficial for the economics of C1 and C2 derivatives. On the other hand, with the sharp fall in crude oil prices in 2014, oil based feedstocks like naphtha have been preferentially diverted to petrochemicals to cash in on the more promising margins. This means that more naphtha has been available as a petrochemical feedstock at a cheaper price, boosting both scale and margins.

Emerging economies like China and India have shown strong growth over the last decade. For the coming years, India’s petrochemical industry features stronger growth forecast than China’s. These emerging markets have been catered to by domestic growth of petrochemicals production and also have been the destination of export for Middle Eastern and American petrochemical producers, which already had a geographical advantage in accessing shale gases. However, the value created by C2/C3 derivatives has also been subjected to margin erosion due to over-production by new chemical producers in the emerging markets, benzene being a good example. India has been a net importer of many chemicals and petrochemicals, except for benzene for which it is a net exporter. The export rate is likely to further increase in the coming decade.

Configurations and intermediates: a bird’s eye view
Refining and petrochemical producers have been strategising to keep up with the linear growth curve. On the refinery side, heavy end cracking and bottoms upgrade projects have been planned and undertaken to cater to demand for lighter feedstocks downstream. Gas based crackers are being backed up by propane dehydrogenation to boost the C3 value chain. At the midstream, many refiners are revamping their FCCs to petro-FCC to boost propylene production and invest in the C3 value chain. Increasing interest is being demonstrated for diversification or deep chemical conversion. Figure 1 shows a conceptual hybrid refinery which demonstrates the possibilities for integrating its intermediate streams with a petrochemical complex, all of which is not necessarily practical for a single complex.

This configuration explores a petro-FCC alongside a cracker. Petro-FCC uses higher temperatures, less residence time and more catalyst to selectively produce more propylene instead of naphtha. A petro-FCC is a fairly small capital investment when compared to a cracker. Table 1 demonstrates typical FCC vs petro-FCC yields for a light naphtha feedstock. Petro-FCC produces more propylene at a cost to naphtha when compared to conventional FCC yields. Table 2 compares typical steam cracking vs FCC product yields for a light naphtha feedstock. From C3 onwards, petro-FCC has a product slate comparable with that of a steam cracker. C1 and C2 from petro-FCC would be close to negligible to sustain any world scale downstream petrochemical unit.

The configuration also explores the integration of raffinates, reformates, off-gases, and fuel cuts such as naphtha, pygas, and gasoil. These intermediate products are converted to valuable petrochemical building blocks like ethylene, propylene, and C4s which can be further diversified into polyolefins, rubbers, resins, and specialty chemicals, enriching the product value chain but understandably with the premium of increased capital investment.

The primary petrochemical building blocks like ethylene, propylene, C4s, and benzene can be diversified in many ways to derive more value. A chemical product bouquet can be selected from the various routes available via a techno-economic evaluation. Internal rate of return (IRR) for a modern petrochemical complex in Asia can be as high as 15% with right investment strategies. However, the results are often driven by owner-partners’ appetite for risk and their experience in the particular chemical or technology.

Ethylene derivatives
Polyethylene dominates the ethylene derivatives market with a share of approximately 60%. The second largest derivative is ethylene oxide. Figure 2 demonstrates opportunities for ethylene diversification beyond polyethylene, and ideas regarding value improvement.

The following section discusses various ethylene derivatives and chemical reactions leading to end products. The reactions are indicative only.

Ethylene is often diversified via the ethylene oxide route. Ethylene oxide is produced by controlled oxidation of ethylene over silver catalyst. Ethylene oxide can be hydrolysed to form ethylene glycol which has an end use as antifreeze (see Figure 3).

Ethylene oxide can be also converted to ethanol amines by reaction with ammonia. Ethanol amines are used as detergents and agrochemicals.
Ethylene oxide can be converted to ethoxylates by direct reaction of higher alcohols, acids or amines in the presence of an alkaline catalyst. Ethoxylates find their end use in cosmetics, detergents, and intermediates for surfactants, to name but a few.

Ethylene can also be converted to linear alpha olefins which can be converted to fatty alcohols and linear alkyl benzene, both used as detergent components.

Another very popular route for ethylene diversification is via the chloride route. Vinyl chloride monomer (VCM) is produced via thermal decomposition of ethylene dichloride. VCM acts as the monomer of polyvinyl chloride (PVC). PVC finds its usage in packaging, construction, medical equipment, and piping.

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