The Need for Alternative Routes to ‘Petro’ Chemicals

Roger Lee

Tecnon OrbiChem Marketing Seminar at APIC 2014

Pattaya, 15 May 2014

Source: Atlantismaps.com/Hereford Cathedral

APIC 2014

TRANSFORMATION - A MAP REDRAWN

The Mappa Mundi(c.1300)

APIC 2014

TRANSFORMATION - A MAP REDRAWN

What Each Country Leads The World In:

Source: thedoghousediaries.com

Source: BP Statistical Review 2004 & EIA

APIC 2014

A MAP REDRAWN – OIL RESERVES

Source: WorldMapper.org

APIC 2014

A MAP REDRAWN – CARBON EMISSIONS

Source: The University of Texas

APIC 2014

A MAP REDRAWN – CROPLANDS

APIC 2014

A MAP REDRAWN - SHALE OIL & GAS RESOURCES

Source: EIA/ARI

APIC 2014

SHALE OIL & GAS RESOURCES

Source: EIA/ARI

TOP 10 COUNTRIES WITH TECHNICALLY RECOVERABLESHALE OIL RESOURCES

345World Total

9Canada10

9Pakistan9

13Mexico8

13Venezuela7

18Australia6

26Libya5

27Argentina4

32China3

58USA2

75Russia1

(billion barrels)

CountryRank

TOP 10 COUNTRIES WITH TECHNICALLY RECOVERABLESHALE GAS RESOURCES

7,299World Total

245Brazil10

285Russia9

390South Africa8

437Australia7

545Mexico6

573Canada5

665USA4

707Algeria3

802Argentina2

1,115China1

(trillion cubic feet)

CountryRank

APIC 2014

SHALE OIL & GAS RESOURCES

Source: EIA/ARI

32%10%Shale as percent of total22,8823,357Total15,5833,012Non-shale

7,299345Shale/tight oil and shale gasTotal World

27%26%Shale as percent of total2,431223Total1,766164Non-shale

66558Shale/tight oil and shale gasUnited States

32%9%Shale as percent of total20,4513,134Total13,8172,847Non-shale

6,634287Shale/tight oil and shale gasOutside the United States

Wet Natural Gas

(trillion cubic feet)

Crude Oil

(billion barrels)

Technically Recoverable Resources

Source: Tecnon OrbiChem

APIC 2014

FACTORS DRIVING TRANSFORMATION

• Oil Markets

• Shale Gas in North America

• Competitivity of Naphtha Cracking in Europe & Asia

• Availability of Gas in the Middle East

• Coal and Shale Gas in China

• Climate Change

Source: Tecnon OrbiChem

APIC 2014

FACTORS DRIVING TRANSFORMATION

• Availability

� Reduced or increased feedstock availability changes the map

• Price

� Higher or lower prices for one material make others more or less competitive

• The Environment

� Governments and consumers demand environmental awareness and responsibility

• Performance

� New and alternative materials must perform

• Technology

� Technology is the problem and the solution

APIC 2014

ETHYLENE CRACKER FEEDSTOCK YIELDS

Source: Petrochemicals in Non-Technical Language (Penwell)

FEEDSTOCKS

0.10---Tar

0.180.180.060.010.01Gasoline

0.180.260.310.380.13Fuel Gas

0.040.040.030.010.01Butadiene

0.060.150.050.020.02Butenes

0.140.130.200.180.03Propylene

0.180.230.360.400.80Ethylene

Gas OilNaphthaButanePropaneEthaneTon/Ton

CRA

CK

ER P

RO

DU

CTS

Source: Tecnon OrbiChem

APIC 2014

CHANGING FEEDSTOCKS TRANSFORM MARKETS

• Increased competitivity and availability of US, shale gas-based ethylene & derivatives has made bio-ethylene less attractive

• Shift to lighter cracker feedstocks has reduced availability and increased prices of propylene, butadiene and aromatics

• The combined effects of these two factors have been disruptions in supply and disconnection of previously well-established price relationships

Source: Tecnon OrbiChem

APIC 2014

ALTERNATIVE STRATEGIES IN THE FACE OF TRANSFORMATION

• Alternative Feedstocks

� Select the most appropriate feedstock

• Alternative Technologies

� In the high oil price environment there is a place for both oldand new technologies – as long as they are clean

• Alternative Materials

� New feedstocks and new technologies open the possibility for new materials with enhanced performance – critical for success

Source: Tecnon OrbiChem

APIC 2014

ALTERNATIVE FEEDSTOCKS

• Coal & Natural Gas Based Chemicals

� (Stranded) Coal

� (Stranded) Natural Gas

� Shale Gas

• Bio-Based Chemicals

� Cellulose

� Bio-Ethanol

� Agricultural Products (Sugars, Starches, Oils)

� Agricultural Waste Products / Biomass)

Source: Tecnon OrbiChem

APIC 2014

ALTERNATIVE TECHNOLOGIES

• Coal & Gas Based Chemicals

� Coal-Based Syngas to Methanol

� Natural Gas-Based Syngasto Methanol

� Methane to Methanol toAcetic Acid

� Methanol to Propylene

� Methanol to Olefins

� Calcium Carbide to Acetylene to 1,4-BDO & VCM/PVC

� CO to Oxalate to MEG

• Bio-Based Chemicals

� Bio-Ethanol to MEG

� Bio-Ethylene to MEG and PE

� Corn Syrup to 1,3-PDO

� Corn & Sugars to Succinic Acid

� Sugars to 1,4-BDO

� Biomass to FDCA

� Various routes to Butadiene

� Lysine to 1,5-PD

� Glycerol to MPG

� Glycerol to ECH

Source: Tecnon OrbiChem

APIC 2014

ALTERNATIVE MATERIALS

• Coal & Natural Gas Based Chemicals

Coal and gas are, generally, used to manufacture the building blocks of conventional petrochemicals and polymers

• Bio-Based Chemicals

Bio-based chemicals are opening up the possibilities of new materials, with enhanced performance or environmental benefits. These include:

� Polylactic acid – PLA

� Poly trimethylene terephthalate - PTT

� Polyethylene furanoate – PEF

� Polybutylene succinate - PBS

� Polyamides – PA5,6, PA5,10, PA6,10, PA11

Source: Tecnon OrbiChem

APIC 2014

ALTERNATIVE ROUTES TO ETHYLENE & DERIVATIVES

• Coal or Methanol to Olefins (CTO, MTO)

• Bio-based ethanol dehydrated to ethylene

• Bio-ethylene converted to Bio-MEG or Bio-PE

• Glycerol or Sorbitol to MEG

• Bio-Carbon dioxide to MEG

• Bio-Carbon monoxide MEG

Source: Tecnon OrbiChem

APIC 2014

ALTERNATIVE ROUTES TO PROPYLENE

• Catalytic cracking

• Metathesis

• Propane dehydrogenation (PDH)

• (Gas) Methanol to Olefins/Propylene (MTO, MTP)

• Coal to Olefins/Propylene (CTO, CTP)

• Biomass to propylene

Source: Tecnon OrbiChem

APIC 2014

ALTERNATIVE ROUTES TO BUTADIENE

• Butane dehydrogenation

• CO to ethanol to 2,3 BDO to butadiene

• BioButterfly

• Biomass to butadiene

Source: Tecnon OrbiChem

APIC 2014

ALTERNATIVE ROUTES TO BENZENE

• Coal Distillation

• Naphtha Reforming

• Toluene Hydrodealkylation (HDA)or Disproportionation (TDP)

• Cyclar – LPG to Aromatics

• Biomass to Aromatics/ Catalytic Fast Pyrolysis (BTA/CFP)

Source: Tecnon OrbiChem

APIC 2014

CONCLUSIONS

• Changes in the relative availability and prices of feedstocks are driving transformation in the world petrochemical industry.

• The new global feedstock slate is causing supply and price adjustments – many of them, seemingly, permanent – for the co-products of naphtha cracking: ethylene, propylene, butadiene and benzene.

• In this environment, companies are adopting and adapting new and varied strategies - with technology as the key component.

Source: Tecnon OrbiChem

APIC 2014

CONCLUSIONS

• Old and new production technologies are being developed to exploit alternative sources of hitherto ‘petro’ chemicals – coal, gas and biomass being principal among these.

• Technology is also leading product innovation, bringing new and improved materials to market

• In these fast-moving times, the only certainty is that transformation will continue and the map will, yet again, be re-drawn

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