SAUDI ETHYLENE PLANTS MOVE TOWARD MORE FEED FLEXIBILITY

A.K.K. Lee, A.M. Aitani
King Fahd University of Petroleum and Minerals
Dhahran, Saudi Arabia

Demand for basic petrochemicals, such as propylene, butenes, and aromatics, is increasing in Saudi Arabia. Increased demand for these materials will require a change to heavier feedstocks, such as butanes, naphtha, and gas oil, for the next generation of Saudi Arabian ethylene plants.

Changing to heavier ethylene plant feedstocks would also take pressure off of limited ethane supplies in the region.

Ethylene production in Saudi Arabia currently has the advantages of low-cost feedstock, cheap energy, and low-cost capital loans. The existing ethylene plants are designed to crack ethane and produce, primarily, ethylene.

Steam cracking of various feeds ranging from ethane to gas oil is the major source of ethylene throughout the world.1 2 The availability and pricing of feedstocks, feedstock flexibility, and plant capacity utilization are the major factors that determine the profitability of ethylene production.

The availability of feedstocks for ethylene production is different in different regions of the world. Ethylene production in Saudi Arabia, Canada, and Mexico, is based on the abundance of ethane derived from natural gas and associated gas.

In the U.S., more than 70% of the ethylene capacity is based on light hydrocarbon feedstocks, such as ethane, ethane/propane mix, natural gas liquids (NGL), and liquefied petroleum gas (LPG). Heavier feedstocks (naphtha and gas oil) are cracked to produce mainly butadiene, aromatics, gasoline, and fuel oil.

In Japan and Europe, ethylene production is based mainly on naphtha feeds from refineries and imports, although increasing quantities of LPG are being used. In South Korea, Taiwan, China, Singapore, India, and other Asian countries planning new ethylene plants, the preferred feed is naphtha, which is readily available from local refineries or from imports. New plants in these countries are also being designed for LPG feed.

World ethylene production capacity, including Eastern Europe, rose to more than 54 million metric tons/year in 1990. Because of new plant start-ups and capacity expansions of existing plants, global ethylene capacity could grow about 25% by 1995, reaching about 68 million metric tons/year.

In Saudi Arabia, existing ethylene capacity is about 1.8 million metric tons/year. By 1995, capacity will grow to about 2.24 million metric tons/year after start-up of the 500,000 metric tons/year Arabian Petrochemical Co. plant in Al-Jubail.

World demand for ethylene is about 52.5 million metric tons/year, resulting in plant operating rates approaching 96%. For a world economic growth of 2.5%/year, 1995 global capacity could reach 60.9 million metric tons/year.

Operating rates will drop to about 90%, and additional new plant starts after 1995 will drop utilization even more. Global ethylene capacity by 2000 could be 85 million metric tons/year, compared to demand at 70 million metric tons/year.

Beyond 1995, high ethylene overcapacities may reduce plant profitability. The expected lower capacity utilization has prompted planners to opt for new plants designed to handle a variety of feedstocks, especially plants to be built in regions where the available feedstock is tight or it has to be imported.

Feedstock flexibility will allow plants to switch partially to oil-based or gas-based feeds. This, of course, depends on the availability and pricing of the feeds, so as to lower feed cost and boost profitability.

Taking feedstock cost and availability into account, a cost analysis was done to determine the capital and operating costs of ethylene plants in Saudi Arabia, based on ethane, NGL, and naphtha feedstocks.

The analysis showed that the product cost of ethylene in Saudi Arabia increases as heavier feeds are used. An ethane-feed plant, because of low-cost ethane, is profitable at ethane prices higher than $266/metric ton of ethylene produced.

In contrast, a naphtha-feed plant is not the most suitable for producing ethylene and associated olefins and heavier products because of a high variable cost.

An NGL-fed plant is the most suitable for producing ethylene, propylene, butenes, and heavier products.

ETHYLENE PLANT COSTS

The costs of ethylene plants depend greatly on the choice of the base feedstock. Once the base feedstock is selected, the need for feedstock flexibility should be considered because feed flexibility affects plant design and operating efficiency.

To achieve a high level of flexibility, the cracking heater must also be flexible and needs to maintain high conversion and selectivity under widely varying feed conditions. The yields of products depend on the feed (Table 1), and significantly affect the design of the cracker and the number and arrangement of processing steps.3-7

Ethane and propane cracking result in large quantities of unconverted feed that must be recovered and recycled to the cracker. Ethane is normally cracked at 830 C. with a steam dilution of 0.4.

Conversion per pass is only 60%. However, ethylene yields approach 80 wt %, and only small quantities of propylene and heavier products are produced.

Propane is normally cracked also at 830 C. and a steam dilution of 0.4. A 90% conversion per pass can be achieved. But ethylene yield is only 50%, even if the propylene produced is recycled.

Normal butane is cracked at 820 C. with a steam dilution of 0.5. Conversion per pass reaches 95%. Butane is not normally mixed with ethylene and propane feeds because butane overcracking occurs at the optimum cracking conditions for ethane and propane.

Naphtha and gas oil cracking produce greater quantities of butadiene, aromatics, and motor fuel. The cracking severity of naphtha can be adjusted to yield 25-35 wt % ethylene, 10-16 wt % propylene, and variable yields of aromatics.

Gas oil can be cracked to produce 25-30 wt % ethylene and 10-15 wt % propylene. The yields from Saudi NGL, for instance, are calculated from the composition of Saudi NGL: 27.7% ethane, 33.4 % propane, 20.4% butane, and 18.5% naphtha.

Total fixed capital costs (battery limits and off-sites costs) for ethylene plants ranging from 100,000 to 680,000 metric tons/year capacity were obtained from various sources.8-10 These costs were reduced to the base case of ethane cracking at a U.S. Gulf Coast location for November 1989 (Fig. 1).

Analysis of the cost data required the following:

Base feedstock cost factor
Feedstock flexibility cost factor
Cost index factor
Location factor.

The base feedstock cost factors are available for various designs.3 11-14 The correlated results are given in Table 2 for ethane, propane, butane, full-range naphtha, and atmospheric gas oil.

The base cost factor for ethane assumes an ethylene yield of 80%. The cost factor for propane assumes 45% ethylene yield and 15% propylene yield.

Butane cracking produces 37% ethylene and 17% propylene. Cracking conditions are milder than for ethane or propane cracking.

The cost factor for naphtha is 1.46 because the cracker design is very different from an ethane cracker, and a full range of processing steps is required to recover components ranging from C3 to gasoline. Similarly, gas oil cracking requires heavier duty crackers and larger equipment to process the heavy products.

Feedstock flexibility cost is the additional cost of cracking different feeds or feed mixtures other than the base feed. Flexibility cost factors have been estimated for various feeds and are summarized in Table 3.

For an ethane-based plant, the cost of flexibility for all feedstocks is 1.67 times the cost of an ethane-only plant. For a naphtha-based plant, the cost of flexibility for all feeds in only 1.11 times the cost of a naphtha-only plant.

The cost index factor can be calculated using the Chemical Engineering Plant Cost Index that is published monthly in the Journal of Chemical Engineering.15 The annual indexes for plant cost are given in Table 4.

The location factors for chemical plants are based on 1978 values and adjusted to January 1990 using cost and price indexes.16 17 these factors are shown in Table 5.

CAPITAL COSTS IN SAUDI ARABIA

For a 500,000 metric tons/year ethylene plant in Saudi Arabia, the total fixed costs for ethane-based and naphtha-based plants with feed flexibility have been determined and are shown in Table 6.

The capital cost for the ethane-based plant at a U.S. Gulf Coast location, from Fig. 1, is about $390 million. The cost of a naphtha-based plant is $570 million and is obtained by multiplying the capital cost for the ethane-based plant by the base feedstock cost factor (1.46).

For Saudi Arabia, with a location factor of 1.2, the capital costs for those plants would be $468 million, ethane based, and $683 million, naphtha based.

The use of alternate feeds would require capital equipment and process modifications, and it would increase the fixed-capital cost by a feedstock flexibility cost factor given in Table 3. The capital costs for feedstock flexibility showed that if light feeds are anticipated, the ethane-based plant should be chosen and flexibility added.

But if feeds are anticipated to be heavy, then the naphtha-based plant design should be chosen and flexibility added. If all types of feeds are anticipated, the naphtha-based plant appears to be the more economical.

Therefore, a totally feedstock-flexible plant would cost $758 million compared to $468 million for an ethane-only plant, and $683 million for a naphtha-only plant. For an NGL-only plant, the feedstock cost factor can be calculated using proportional contributions of the cost factors for ethane, propane, butane, and naphtha (for Saudi Arabia, the previously given NGL composition would apply).

SAUDI ARABIAN PRODUCTION COSTS

Production costs for a 500,000 metric ton/year ethylene plant using three different feeds were determined. The working capital is estimated as 1 month's cost of raw materials, byproducts, and product.

Raw material costs and product prices for Saudi Arabia in January 1990 are given in Table 7. It should be noted that methane, ethane, and nonfractionated NGL (containing ethane) can be available at a fuel price of $0.50/MMBTU in Saudi Arabia.

However, if prorated using costs of individual components, the NGL cost is about $110/metric ton. Utility costs are given in Table 8.

Table 9 shows the production cost components for 1 metric ton of ethylene using ethane, NGL, and naphtha-only feedstocks. The total capital costs are: $484.5 million for ethane feed, $571 million for NGL feed, and $735 million for naphtha feed.

The total operating costs, the indirect costs, and the financial charges all increase as the feed changes from ethane to NGL, and further to naphtha.

The most critical components affecting the product cost of these three types of plants are the raw materials costs and the byproduct credits. The total variable cost (-$98.03/metric ton) is lowest for NGL feed because of the low-cost NGL in Saudi Arabia, and high-value byproducts.

The total variable cost for ethane feed is higher ($28.64/metric ton) because only hydrogen and propylene are recovered, and the other byproducts are credited as fuel. The total variable cost for naphtha feed is the highest ($131.95/metric ton) because naphtha is an expensive feed in Saudi Arabia compared to byproduct credits.

For an ethylene selling price of $330/metric ton in January 1990, the NGL-feed plant is the most profitable with a profit margin of $125.30/metric ton. The ethane-feed plant is also moderately profitable with a profit margin of $64.48/metric ton.

The naphtha-feed plant, however, would operate at a loss because the product value is $474.86/metric ton. If the NGL-feed plant were to use the prorated cost for NGL at $110/metric ton, the product cost would be $347.70/metric ton.

ACKNOWLEDGMENT

The authors wish to acknowledge the support of this work by the Research Institute of King Fahd University of Petroleum and Minerals.

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