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Utilisation of Coal in India: Opportunities for Petrochemicals
Coal is an important source that can play a vital role in boosting any countries economy. India is one of the countries that have plentiful of coal reserves. Utilising the source in the best possible manner can be proved to be highly signifi cant of country’s petrochemical sector. Bipin V Vora, Consultant, UOP Fellow (Retired), UOP LLC; Mark Turowicz, MD, UOP Asia Ltd; Mike Cleveland, Director, Petrochemicals, UOP LLC; and Joseph Gregor, Business Director, UOP LLC, A Honeywell Company, share their perspective.

It is becoming increasingly evident that countries with large reserves of coal will need to explore utilisation of coal not simply for power generation but also as a feed stock for valuable petrochemicals. Four countries - the USA, Russia, China and India1 account for nearly 70 per cent of the worldÊs total known coal reserves.

Of these, the USA and Russia also have vast oil and gas reserves. Thus although the USA and Russia use significant amounts of coal for power generation, they have limited incentive for pursuing Coal to Liquids (CTL) and Coal to Chemicals (CTC) options. CTL or CTC plants require significant capital investments as well as a high level of environmental scrutiny. China is the worldÊs 4th largest oil producer, nevertheless imports more than half of its current needs and will likely continue to have significant short fall in the future. India has very limited gas and oil reserves: of India's fossil fuel reserves, 93 per cent is coal, with crude oil and natural gas representing only 3 and 4 per cent, respectively2. For these two countries which represent the two largest population centres, the utilisation of coal is justifiably gaining greater attention. Figure 1 compares the cost of these three fossil fuels and it clearly makes a case for broader utilisation of coal2. Currently coal is primarily used for power generation. To utilise coal as a petrochemical feed stock, the first step is gasification of coal to synthesis gas. Technologies for converting synthesis gas to petrochemicals, as shown in Figure 2, are well developed and have been in use for a long time.

Of these, methanol has great potential, since it can be directly utilised as in fuel, or relatively easily converted to dimethylether (DME), which can be a substitute for LPG. Also it can be converted to light olefins, ethylene and propylene3, 4.
Historically the availability of crude oil at low prices discouraged utilisation of coal gasification for CTC. Naphtha and ethane are the primary feed stocks for the production of ethylene and propylene. As shown in figure 3 naphtha prices closely track the crude oil price. However, methanol prices (Figure 4) are decoupled from the price of crude oil4. On an USD/MT basis, the price of methanol relative to crude oil has declined from a multiple of 1.5 down to 0.5. Thus, today at a crude oil price 700-800 USD/MT, gasification and hence CTC has become an attractive option. In this respect China has made great strides. World production of methanol will increase from 60 million metric tons per year (MMMTA) in 2012 to 110 MMMTA in 2017. Over 70 per cent of this expansion is slated for Methanol to Olefins (MTO) production, and all of that capacity is in China. China also has built significant capacity for coal to dimethylether (DME) which is utilised as a substitute for LPG. It is expected that by 2020, China will be producing nearly 15 MMMTA of ethylene plus propylene via coal gasification, methanol, and conversion of methanol to olefins.

The conversion of methanol to olefins and other hydrocarbon products has been widely studied. Initial work in the 1970s and early 1980s focused on conversion of methanol to gasoline range products and employed ZSM-5 type zeolites. Selectivity of methanol to ethylene and propylene over ZSM-5 was generally low, with selectivities favoring heavier more highly branched hydrocarbons and aromatics. This catalyst technology was utilised in the commercial development of the Mobil MTG Process. During the 1980s a group of scientists at Union Carbide (the group later became part of UOP LLC) discovered new class of materials, Silico Aluminum Phosphates (SAPO) molecular sieves. Of these, the discovery of SAPO-34 provided a technology breakthrough. SAPO-34's unique pore size geometry and acidity of the material created a more selective route for methanol conversion to ethylene and propylene with reduced heavy byproducts5.

As illustrated in the Figure 5 SAPO-34 has a smaller pore size (about 4 Å) compared to that of ZSM-5 (about 5.5 Å). The smaller pore size for SAPO-34 restricts the diffusion of heavy and branched hydrocarbons and therefore favors high selectivity to the desired light olefins. The optimised acidity of SAPO-34 reduces the amount of hydride transfer reactions relative to ZSM-5, thereby lowering the yield of paraffinic byproducts.

A further advantage of SAPO-34 is that the majority of the C4-C6 fraction produced is olefinic, which can be converted to primarily propylene with the Olefins Cracking Process (OCP). The Advanced MTO technology is integration of MTO technology with the OCP process. A major milestone for MTO commercialisation was the start-up in 2009 of the semi-commercial scale, fully integrated MTO demonstration unit in Belgium using SAPO-34 by Total Petrochemicals (Figure 6) utilising technology jointly developed by Honeywell's UOP, Ineos and Total Petrochemicals.

UOP has licensed three MTO projects in China, and the first commercial unit employing UOP technology is expected to be in operation in the summer of 2013. Another advantage of MTO technology is that, in a typical MTO plant, the quantity of ethylene and propylene produced is nearly equal. That is, an MTO based ethylene plant produces twice as much propylene compared to the naphtha based ethylene plant. Propylene is highly valuable and its growth rate is higher than that of ethylene.

For petrochemicals production, ethylene and propylene are the No 1 and No 2 largest volume raw materials, with combined world production over 200 MMMTA6. In India, demand for these olefins is growing at more than 10 per cent per annum. The cost of methanol feed is ranges from 300 to 400 USD/MT while that of naphtha is at

800 USD/MT. In round figures, one needs 2.0 tons of naphtha per ton of light olefins (ethylene plus propylene), and for MTO one needs 2.6 ton of methanol per ton of light olefins. Thus, at a methanol price of 400 USD/MT the MTO based light olefins plant will have a feedstock cost advantage of 560 USD/MT of light olefins production. This advantage increases to 820 USD/MT of light olefins at a methanol price of 300 USD/MT. The capital investment for an MTO-based 1 MM MTA light olefins plant is estimated at USD 1 billion. The capital investment for a similar capacity light olefins plant based on naphtha is estimated over USD 2 billion.

This includes the investments required for the recovery of major by products. Methanol to olefins is an exothermic reaction, and this heat of reaction is utilised to generate a significant quantity of high pressure steam. Thus, the overall utilities requirement for the MTO based olefins plant is significantly lower than that for the naphtha cracker. Of course, the naphtha based olefins plant will have greater byproduct credit from hydrogen, butadiene, butenes and pygas byproducts, however, these are not large enough to overcome the sum of high feedstock cost, low operating cost and capital cost advantage of the MTO-based olefins plant. Thus in most scenarios, the MTO-based light olefins plant will have better economics than that for the naphtha cracker.

Ethylene plants that are based on advantageously priced ethane, such as in the Middle East and in more recently in the USA due to significant growth in the production of Natural Gas Liquids (NGL), will always enjoy an economic advantage. This is followed by ethylene production from MTO, while the naphtha-based ethylene plants will have highest cost of ethylene production. For the sustainable development and continued growth of the olefins and polyolefins industry in India, it is becoming imperative that Coal To Chemicals projects be developed.

Another option to consider is to partner with one or more countries having large gas reserves. This would mean building one or more mega methanol plants at those locations and shipping methanol to India's East and West coasts the where large infrastructure for the petrochemical industry exists.