Updating Technology Development and Economic Evaluation of DME Production

Hubert de-Mestier TOTAL S.A.Yotaro Ohno JFE Holdings, Inc.

GASTECH 2005 Bilbao, 14 – 17 March 2005

2

Total : a major world gas playerIn BcmProved Reserves 31.12.03 Production in 2003

Total631 49

Shell1 272 92

BP1 318 91

Exxon Mobil1 551 115

02468

10

Shell ExxonMobil

Total BP

Mt/y LNG Sales 2003

TotalShell BPExxon Mobil

LNG PlantExisting / ProjectTerminal Existing or under construction / Project

Majors markets

Looking at all means to monetize natural gas reserves

3

ChemicalChemical Conversion Conversion ofof NaturalNatural GasGas: (GTL): (GTL)

Natural Gas

Synthesis Gas

DME

Methanol

Ammonia/Urea

Hydrocarbons(naphtha + gas oil)

LubricantSpecialities

and Gasoline

Reforming

Industrial ProcessUnder R&D

Fisher TropschDirect DME

Conventional DME

Olefins(Propylene)

4

DME DME vsvs LNG / LPGLNG / LPG

DME = CH3-O-CH3 ( b.p. -25°C)

▲ a chemically condensed natural gas▲ handling as easy as LPG▲ clean combustion – no Smoke at all

- can meet extremely stringent control of PM emissionfor diesel engine cars ( <0.013g/kwh in 2010, Japan)

Typical plant Thermal Natural gas reserves size efficiency required

DME is not a direct competitor of LNG

LNGFischer-TropschDME

~ 8 MMt/y ~ 86 % 13 Gm3/y, ~ 9 TCF for 20 years~ 55 %

1 ~ 2 MMT/y ~ 68 % 1.5 ~ 3 Gm3/y, 1 ~ 2 TCF for 20 years~ 4 MMt/y

5

Why TOTAL, a big LNG player, is Why TOTAL, a big LNG player, is interested in DME ?interested in DME ?

▲ An option to diversify and increase natural gas outlets,

▲ Economical for storage and transportation, especially where large investment for LNG is not economically justified,

▲ Future possibility as cleanest Auto-gas (diesel),

▲ Best thermal efficiency among all GTL processes,especially with direct synthesis solution.

TOTAL participation in a Japanese Consortium (JFE group)since 2001 for Direct DME Technology Development and Feasibility Study of a large scale DME production Project

6

Laboratory

scale test

1kg/day

89 90 91 92 93

Bench

scale test

50kg/day

94 95 96

Pilotscale test

5t/day

97 98 99 00 01

Demonstrationtest

100t/day

02 03 04 05 06

Progress of Direct DME Synthesis Technology Development

CatalystDevelopment DME Synthesis Process Development

Syn-gas Process Development

We are here

7

DME 100tons/day Demonstration Plant Project Organization

Partners: 10 companiesJFE HoldingsNippon Sanso CorporationToyota Tsusho CorporationHitachi,Ltd.Marubeni CorporationIdemitsu Kosan Co.,LtdINPEX CorporationLNGJapan Corporation

Total S.A.JAPEX

METI

DME Development Co.,Ltd

-Plant Operation

-Development ( established in 2001)

8

DME 100tons/day Demonstration Plant Project Schedule

2002 2003 2004 2005 2006100T/D Demo Plant

Engineering

Procurement,Construction

Operation

Back-up Testing

Feasibility Study

We are here

9

Natural gas

DME

MeOH

Purge gas

CO,CO2,H2

Oxygen

Steam

CO2absorber

DMEreactor

CO2 column

DME column

Liquid gasseparator

CO2

Process Flow Diagram of 100 tons/day DME Synthesis Plant

DME tank1000T

MeOH column

ASU

water

Unreacted gas

Auto thermal reformer

10

DME 100tons/day Demonstration Plant in Kushiro, Japan (Overview)

DME STRAGE TANKS

LNG STRAGE TANK

SYN-GAS SECTION

DME SYNTHESIS SECTION

AIR SEPARATION UNIT

OFFICE

FLARE

OPERATION ROOM

CHEMICAL- STRAGE TANKS

120 m

300 m

11

DME 100 tons/day Demonstration Plant in Kushiro(DME Synthesis section)

12

First Shipment of DME from 100tons/day plant by a DME Lorry

13

Features of JFE DME Synthesis Process

1. 3-Functional catalyst and reaction at highest DME equilibrium● 3-functional (Methanol synthesis + dehydration + water gas shift) catalyst system

with synthetic gas at H2/CO = 1 achieves highest equilibrium conversion to DME

● Efficient catalyst in slurry phase enables high conversion and high DME selectivity

2. Slurry phase reactor provides excellent heat transfer● Homogeneous temperature distribution without hot spot

● Catalyst can be continuously replaced during operation

3. Efficient Gas – Liquid Separation

● Efficient separation can be achieved at low temperature with small by-produced water

● By-produced CO2 is removed by using DME as solvent

14

Reactions for DME Synthesis

ReactionHeatReaction

(kcal/mol-DME)

(a) Methanolsynthesis 2CO+4H2→ 2CH3 +43.4

(b) Dehydration 2CH3 OH → CH3OCH3 +H 2O + 5.6(c) Water-gas

shift reaction CO+H2O → CO2 + H 2 + 9.8

(d) 2CO+4H2→ CH3OCH3+H2O +49.0(e)

DMEsynthesis 3CO+3H2→ CH3OCH3 +CO2 +58.8

OH

15

0

20

40

60

80

100

0.0 0.5 1.0 1.5 2.0 2.5 3.0

H 2/CO [ - ]

(H2+CO)Conversion [ % ]

3C O +3H 2→D M E+C O 2

2C O +4H 2→D M E+H 2 O

C O +2H 2→C H 3 O H

Equilibrium Conversion (260°C, 5MPa)

16

Slurry Phase Reactor for DME Synthesis

Water

DME, CO2

CO, H2

Slurry gas bubble

1. Homogeneous temperaturedistribution

2. Possibility of changing catalystduring operation

unreacted CO, H2

(Catalyst + Solvent)

Steam

17

Features of JFE Autothermal Reformer[1] CO2 recycle type ATR

・ H2/CO=1・ Utilize CO2 generated from DME synthesis・ 2CH4+O2+CO2→3CO+3H2+H2O↓

[2] Efficient reformer with very low soot and residual methane

・ Burner design and furnace shape- Enhanced mixing of feed- Water cooled burner- Well designed refractory works

・ Catalyst : Decomposition of precursor of soot・ Rapid quench : Prevention of Boudouard reaction

18

Run 100 (Dec. 12, 2003 – Jan. 26, 2004) Operation Time 43 days

Run 200 (Jun. 20, 2004 – July 31, 2004) Operation Time 39 days

Run 300 (Oct. 5, 2004 – Dec. 16, 2004) Operation Time 73 days

• 100% Load Operation with Natural gas feed

• Produce H2/CO=1 Synthesis Gas, with recycled CO2 ,at 2.3Mpa.• m=0.34, S/C=0.10, Exit gas temperature 1,200C• Soot Formation: 0.004g/Nm3 (Target:0.01g/Nm3)• Residual Methane: 0.03%

Results of Test Operations (ATR)

19

Run 100 (Dec. 12, 2003 – Jan. 26, 2004) Operation Time 25 days

Run 200 (Jun. 20, 2004 – July 31, 2004) Operation Time 33 days

Run 300 (Oct. 5, 2004 – Dec.16, 2004) Operation Time 69 days

• Stable slurry temperature control up to 280C• Total Conversion: 96% (target ≧95%)• DME/(DME+MeOH)(Carbon mole ratio): 91% (target≧90%)• Recycled methanol totally converted into DME • Production rate: 109 t/day (target≧100t/day)• Total production: 7,970t

(Run100 1,240t, Run 200 2,500t , Run 300 4,230t) • Purity: 99.8% (target ≧99%

- proposed specification by Japan DME forum)

Results of Test Operations (DME Synthesis)

20

0.06N.DN.D99.8Composition of Product DME (wt%)

1.0 ≦0.01 ≦0.1≦≧99.0Tentative Specification (wt%)

MethanolMethyl formate

CO2DME

Product DME fulfills the requirements of the tentative specification for fuel grade DME proposed by Japan DME forum.

Composition of Product DME

21

Scaling-up of Slurry Phase Reactor

D: 0.55m

H:15m

(Slurry 12m)

(Hs/D=22)

P: 5t/d

D: 2.3m

H: 22m

(15m)

(6.5)

P: 100t/d

D: 8m

H: 44m

(36m)

(4.5)

P: 3000t/d

Pilot plant Demonstration plant5 t/d 100 t/d

Industrial plant3000 t/d

22

0

1

2

3

4

5

6

7

8

9

10

1996

.0119

96.06

1996

.1119

97.04

1997

.0919

98.02

1998

.0719

98.12

1999

.0519

99.10

2000

.0320

00.08

2001

.0120

01.06

2001

.1120

02.04

2002

.0920

03.02

CIF

Pric

e [U

S$/

MM

Btu

]

Crude OilDiesel OilLPGLNG

Import price of various fuels (CIF Japan) Import price of various fuels (CIF Japan)

2003

.0920

04.02

2004

.0820

04.10

TargetDMEPricerange

23

Summary

• 100 tons/day Demonstration plant was designed and constructed by JFE/TaiyoNipponSanso JV, and has been successfully operated by DME Development Company in which TOTAL participated with a consortium of Japanese companies.

• In three long term test runs, process performances targeted for ATR and DME synthesis were achieved under very stable operation.• Results of test operations show reliability of scale-up technology applied from 5 tons/day to 100 tons/day,which could be used for scale up to Commercial scale plant.• Commercialization project has been accelerated with this bench-marked technological advance.

24

BACK UP

25

Regulation on Diesel Car Emission in Japan(>3.5 ton heavy duty cars)

Advisory Committee for the Minister of Environment proposed verystringent emission control from 2009 last week.

Source: Nikkei Newspaper 2/22/2005

0

0.2

0.4

0.7

0.6

' 05' 97' 94 2003 ' 09

0.25

0.7

0.18

0.0270.01

0

1

2

' 05' 97' 94 2003 ' 09

4.55

2.0

0.7

3

4

5

3.38

PM NOx

(g/k

wh)

(g/k

wh)

26

ECONOMICS – an example

Production capacity : 6000 t/day (2MT/y)DME sold on Power generation and LPG markets

DME plant return

0,0%

10,0%

20,0%

5 6DME PRICE CIF JAPAN $/MMBTU HHV

without tax

with a 30% tax rate on plant benefits *

* * exampleexample ofof a a theoriticaltheoritical taxation on plant taxation on plant benefitsbenefits