Technology Economics: Propylene via Metathesis

#TEC001B
Technology Economics
Propylene Production via Metathesis
2013

Abstract
Propylene is the raw material for a wide variety of products, and has established itself as the second major member of the global
olefins business, only after ethylene.
Globally, the largest volume of propylene is produced in steam crackers and through the fluid-catalytic cracking (FCC) process.
The propylene is typically considered a co-product in these processes, which are primarily driven by ethylene and motor gasoline
production respectively.
As a result, new and novel lower-cost chemical processes for on-purpose propylene production technologies are of high interest
to the petrochemical marketplace. Such processes include: Metathesis, Propane Dehydrogenation, Methanol-toOlefins/Methanol-to-Propylene, High Severity FCC, and Olefins Cracking.
In this report, the production of propylene via metathesis from ethylene and butenes is reviewed. Included in the analysis is an
overview of the technology and economics of a process similar to the CB&I Lummus OCT process. Both the capital investment
and the operating costs are presented for a plant constructed in 2011 in the US Gulf and Germany.
Also, alternative ways to produce propylene via butenes-only metathesis, called self-metathesis, as well as via ethylene-only
metathesis, through the use of an ethylene dimerization unit together with a metathesis plant, were presented. Discussions
regarding the integration of a metathesis unit with an olefin plant are also presented.

Copyrights © 2013 by Intratec Solutions LLC. All rights reserved. Printed in the United States of America.

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1

Contents
About this Study .............................................................................................................................................................. 8
Object of Study.............................................................................................................................................................................................................................8
Analysis Performed ....................................................................................................................................................................................................................8
Construction Scenarios ..............................................................................................................................................................................................................8
Location Basis ...................................................................................................................................................................................................................................9

Design Conditions......................................................................................................................................................................................................................9

Study Background ........................................................................................................................................................ 10
About Propylene ......................................................................................................................................................................................................................10
Introduction.................................................................................................................................................................................................................................... 10
Applications.................................................................................................................................................................................................................................... 10

Manufacturing Alternatives ..............................................................................................................................................................................................11
Licensor(s) & Historical Aspects......................................................................................................................................................................................13

Technical Analysis......................................................................................................................................................... 14
Chemistry.......................................................................................................................................................................................................................................14
Raw Material ................................................................................................................................................................................................................................14
Ethylene ............................................................................................................................................................................................................................................ 15
2-Butenes ......................................................................................................................................................................................................................................... 15

Technology Overview...........................................................................................................................................................................................................16
Detailed Process Description & Conceptual Flow Diagram.......................................................................................................................17
Area 100: Purification & Reaction ......................................................................................................................................................................................17
Area 200: Separation ................................................................................................................................................................................................................. 17
Key Consumptions ..................................................................................................................................................................................................................... 18
Technical Assumptions ........................................................................................................................................................................................................... 18
Labor Requirements.................................................................................................................................................................................................................. 18

ISBL Major Equipment List.................................................................................................................................................................................................20
OSBL Major Equipment List ..............................................................................................................................................................................................21
Other Process Remarks ........................................................................................................................................................................................................22
Typical Complete Process Scheme..................................................................................................................................................................................22
Other Process Scenarios .........................................................................................................................................................................................................22

Economic Analysis........................................................................................................................................................ 25
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General Assumptions............................................................................................................................................................................................................25
Project Implementation Schedule...............................................................................................................................................................................26
Capital Expenditures..............................................................................................................................................................................................................26
Fixed Investment......................................................................................................................................................................................................................... 26
Working Capital............................................................................................................................................................................................................................ 29
Other Capital Expenses ...........................................................................................................................................................................................................30
Total Capital Expenses ............................................................................................................................................................................................................. 30

Operational Expenditures ..................................................................................................................................................................................................30
Manufacturing Costs................................................................................................................................................................................................................. 30
Historical Analysis........................................................................................................................................................................................................................ 31

Economic Datasheet .............................................................................................................................................................................................................31

Regional Comparison & Economic Discussion.................................................................................................... 34
Regional Comparison............................................................................................................................................................................................................34
Capital Expenses.......................................................................................................................................................................................................................... 34
Operational Expenditures......................................................................................................................................................................................................34
Economic Datasheet................................................................................................................................................................................................................. 34

Economic Discussion ............................................................................................................................................................................................................35

References....................................................................................................................................................................... 37
Acronyms, Legends & Observations....................................................................................................................... 38
Technology Economics Methodology................................................................................................................... 39
Introduction.................................................................................................................................................................................................................................39
Workflow........................................................................................................................................................................................................................................39
Capital & Operating Cost Estimates ............................................................................................................................................................................41
ISBL Investment............................................................................................................................................................................................................................ 41
OSBL Investment ......................................................................................................................................................................................................................... 41
Working Capital............................................................................................................................................................................................................................ 42
Start-up Expenses ....................................................................................................................................................................................................................... 42
Manufacturing Costs................................................................................................................................................................................................................. 43

Contingencies ............................................................................................................................................................................................................................43
Accuracy of Economic Estimates..................................................................................................................................................................................44
Location Factor..........................................................................................................................................................................................................................44

Appendix A. Mass Balance & Streams Properties............................................................................................... 46
Appendix B. Utilities Consumption Breakdown ................................................................................................. 48

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Appendix C. Process Carbon Footprint ................................................................................................................. 49
Appendix D. Equipment Detailed List & Sizing................................................................................................... 50
Appendix E. Detailed Capital Expenses................................................................................................................. 54
Direct Costs Breakdown ......................................................................................................................................................................................................54
Indirect Costs Breakdown ..................................................................................................................................................................................................55

Appendix F. Economic Assumptions...................................................................................................................... 56
Capital Expenditures..............................................................................................................................................................................................................56
Construction Location Factors ...........................................................................................................................................................................................56
Working Capital............................................................................................................................................................................................................................ 56

Operational Expenditures ..................................................................................................................................................................................................57
Fixed Costs ...................................................................................................................................................................................................................................... 57
Depreciation................................................................................................................................................................................................................................... 57
EBITDA Margins Comparison...............................................................................................................................................................................................57

Appendix G. Released Publications ........................................................................................................................ 58
Appendix H. Technology Economics Form Submitted by Client ................................................................. 59

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List of Tables
Table 1 – Construction Scenarios Assumptions (Based on Degree of Integration) ......................................................................................9
Table 2 – Location & Pricing Basis ....................................................................................................................................................................................................9
Table 3 – General Design Assumptions .......................................................................................................................................................................................9
Table 4 – Major Propylene Consumers......................................................................................................................................................................................10
Table 5 – Metathesis Reactions for Propylene......................................................................................................................................................................14
Table 6 – Isobutene Side Reactions .............................................................................................................................................................................................14
Table 7 – Typical Crude C4 Stream from an Olefins Plant ............................................................................................................................................15
Table 8 – Raw Materials & Utilities Consumption (per ton of Product)...............................................................................................................18
Table 9 – Design & Simulation Assumptions.........................................................................................................................................................................18
Table 10 – Labor Requirements for a Typical Plant ...........................................................................................................................................................18
Table 11 – Main Streams Operating Conditions and Composition.......................................................................................................................20
Table 12 – Inside Battery Limits Major Equipment List...................................................................................................................................................20
Table 13 – Outside Battery Limits Major Equipment List ..............................................................................................................................................21
Table 14 – Integration of a Metathesis Unit with a Naphtha Steam Cracker ..................................................................................................22
Table 15 – Butenes Auto-Metathesis Reactions ..................................................................................................................................................................24
Table 16 – Base Case General Assumptions...........................................................................................................................................................................25
Table 17 – Bare Equipment Cost per Area (USD Thousands).....................................................................................................................................26
Table 18 – Total Fixed Investment Breakdown (USD Thousands) ..........................................................................................................................26
Table 19 – Working Capital (USD Million) ................................................................................................................................................................................29
Table 20 – Other Capital Expenses (USD Million) ...............................................................................................................................................................30
Table 21 – CAPEX (USD Million)......................................................................................................................................................................................................30
Table 22 – Manufacturing Fixed Cost (USD/ton) ................................................................................................................................................................30
Table 23 – Manufacturing Variable Cost (USD/ton)..........................................................................................................................................................31
Table 24 – OPEX (USD/ton)................................................................................................................................................................................................................31
Table 25 – Technology Economics Datasheet: Propylene via Metathesis at US Gulf..............................................................................33
Table 26 – Technology Economics Datasheet: Propylene via Metathesis in Germany ...........................................................................36
Table 27 – Project Contingency......................................................................................................................................................................................................43
Table 28 – Criteria Description.........................................................................................................................................................................................................43
Table 29 – Accuracy of Economic Estimates .........................................................................................................................................................................44
Table 30 – Detailed Material Balance Stream Properties...............................................................................................................................................46
Table 31 – Detailed Material Balance Stream Properties...............................................................................................................................................47
Table 32 – Utilities Consumption Breakdown ......................................................................................................................................................................48

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Table 33 – Assumptions for CO2e Emissions Calculation.............................................................................................................................................49
Table 34 – CO2e Emissions (ton/ton prod.)............................................................................................................................................................................49
Table 35 – Reactors..................................................................................................................................................................................................................................50
Table 36 – Heat Exchangers ..............................................................................................................................................................................................................50
Table 37 – Pumps......................................................................................................................................................................................................................................51
Table 38 – Columns.................................................................................................................................................................................................................................52
Table 39 – Utilities Supply...................................................................................................................................................................................................................52
Table 40 – Vessels & Tanks Specifications ................................................................................................................................................................................53
Table 41 – Indirect Costs Breakdown for the Base Case (USD Thousands) ......................................................................................................55
Table 42 – Detailed Construction Location Factor............................................................................................................................................................56
Table 43 – Working Capital Assumptions for Base Case................................................................................................................................................56
Table 44 – Other Capital Expenses Assumptions for Base Case...............................................................................................................................56
Table 45 – Other Fixed Cost Assumptions ..............................................................................................................................................................................57
Table 46 – Depreciation Value & Assumptions ....................................................................................................................................................................57

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List of Figures
Figure 1 – OSBL Construction Scenarios .....................................................................................................................................................................................8
Figure 2 – Propylene from Multiple Sources .........................................................................................................................................................................12
Figure 3 – Process Block Flow Diagram.....................................................................................................................................................................................16
Figure 4 – Inside Battery Limits Conceptual Process Flow Diagram.....................................................................................................................19
Figure 5 – Typical Integration Between Olefin Plant and Metathesis Unit.......................................................................................................23
Figure 6 – Metathesis Technology Alternatives ..................................................................................................................................................................24
Figure 7 – Project Implementation Schedule.......................................................................................................................................................................25
Figure 8 – Total Direct Cost of Different Integration Scenarios (USD Thousands) ......................................................................................28
Figure 9 – Total Fixed Investment of Different Integration Scenarios (USD Thousands) .......................................................................28
Figure 10 – Total Fixed Investment Validation (USD Million).....................................................................................................................................29
Figure 11 – OPEX and Product Sales History (USD/ton) ................................................................................................................................................32
Figure 12 – EBITDA Margin & IP Indicators History Comparison..............................................................................................................................32
Figure 13 – CAPEX per Location (USD Million).....................................................................................................................................................................34
Figure 14 – Operating Costs Breakdown per Location (USD/ton) .........................................................................................................................35
Figure 15 – Methodology Flowchart...........................................................................................................................................................................................40
Figure 16 – Location Factor Composition...............................................................................................................................................................................44
Figure 17 – ISBL Direct Costs Breakdown by Equipment Type for Base Case ................................................................................................54
Figure 18 – OSBL Direct Costs Breakdown by Equipment Type for Base Case..............................................................................................54
Figure 19 – Historical EBITDA Margins Regional Comparison ...................................................................................................................................57

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7

About this Study
This study follows the same pattern as all Technology
Economics studies developed by Intratec and is based on
the same rigorous methodology and well-defined structure
(chapters, type of tables and charts, flow sheets, etc.).

Analysis Performed

This chapter summarizes the set of information that served
as input to develop the current technology evaluation. All
required data were provided through the filling of the
Technology Economics Form available at Intratec’s website.

The economic analysis is based on the construction of a
plant partially integrated to a petrochemical complex, in
which feedstock is locally provided but propylene product
must be stored to be sent outside the complex. Therefore,
storage is only required for the product. Utilities supply
facilities must also be built, since there is no utility supply
from the existing petrochemical complex.

Construction Scenarios

You may check the original form in the “Appendix H.
Technology Economics Form Submitted by Client”.

Since the Outside Battery Limits (OSBL) requirements–
storage and utilities supply facilities – significantly impact
the capital cost estimates for a new venture, they may play a
decisive role in the decision as to whether or not to invest.
Thus, in this study three distinct OSBL configurations are
compared. Those scenarios are summarized in Figure 1 and
Table 1.

Object of Study
This assignment assesses the economic feasibility of an
industrial unit for propylene production via metathesis from
ethylene and butenes implementing technology similar to
the CB&I Lummus OCT process.
The current assessment is based on economic data
gathered on Q3 2011 and a chemical plant’s nominal
capacity of 350 kta (thousand metric tons per year).

Figure 1 – OSBL Construction Scenarios
Non-Integrated

Partially Integrated

Fully Integrated

Products Storage

Products Storage

Products Consumer

ISBL Unit

ISBL Unit

ISBL Unit

Raw Materials
Storage

Raw Materials
Provider

Raw Materials
Provider

Petrochemical Complex

Petrochemical Complex

Unit is part of a petrochemical complex

Most infrastructure is already installed

Intratec | About this Study

Grassroots unit

8

Source: Intratec – www.intratec.us

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Table 1 – Construction Scenarios Assumptions (Based on Degree of Integration)

Storage Capacity

(Base Case for Evaluation)

Feedstock & Chemicals

20 days of operation

Not included

Not included

End-products & By-products



Not included

All required

All required

Only refrigeration units

Utility Facilities Included

Control room, labs, gate house,
Support & Auxiliary Facilities

maintenance shops,

(Area 900)

warehouses, offices, change
house, cafeteria, parking lot

Control room, labs,
maintenance shops,

Control room and labs

warehouses


Location Basis
The assumptions that distinguish the two regions analyzed
in this study are provided in Table 2.
Table 2 – Location & Pricing Basis

Design Conditions

Basis: Q3-2011

US Gulf

Germany

Location Factor

1.00

1.32

Pricing

The process analysis is based on rigorous simulation models
developed on Aspentech Aspen Plus and Hysys, which
support the design of the chemical process, equipment and
OSBL facilities.

PG Propylene

USD/ton

1690

1294

Raffinate-2

USD/ton

1043

962

Ethylene

USD/ton

1304.7

1246.7

Cooling Water

USD/m3

0.0005

0.0016

LP Steam

USD/ton

15.4

50.2

Inert Gas

USD/Nm3

0.10

0.15

Cooling water temperature

24 °C

Electricity

USD/kWh

0.07

0.12

Cooling water range

11 °C

Fuel

USD/MMBtu

4.4

14.4

Steam (Low Pressure)

7 bar abs

Operator Salaries

USD/man-hour

56.8

75.8

Refrigerant (Propylene)

-45 °C

Supervisor Salaries

USD/man-hour

85.3

113.7

Wet Bulb Air Temperature

25 °C

The design assumptions employed are depicted in Table 3.


Regional specific conditions influence both construction
and operating costs. This study compares the economic
performance of two identical plants operating in different
locations: the US Gulf Coast and Germany.

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Intratec | About this Study


Table 3 – General Design Assumptions

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Study Background
About Propylene

While CG propylene is used extensively for most chemical
derivatives (e.g., oxo-alcohols, acrylonitrile, etc.), PG
propylene is used in polypropylene and propylene oxide
manufacture.

Introduction
Propylene is an unsaturated organic compound having the
chemical formula C3H6. It has one double bond, is the
second simplest member of the alkene class of
hydrocarbons, and is also second in natural abundance.

PG propylene contains minimal levels of impurities, such as
carbonyl sulfide, that can poison catalysts.
Thermal & Motor Gasoline Uses
Propylene has a calorific value of 45.813 kJ/kg, and RG
propylene can be used as fuel if more valuable uses are
unavailable locally (i.e., propane – propene splitting to
chemical-grade purity). RG propylene can also be blended
into LPG for commercial sale.

Propylene 2D structure
Propylene is produced primarily as a by-product of
petroleum refining and of ethylene production by steam
cracking of hydrocarbon feedstocks. Also, it can be
produced in an on-purpose reaction (for example, in
propane dehydrogenation, metathesis or syngas-to-olefins
plants). It is a major industrial chemical intermediate that
serves as one of the building blocks for an array of chemical
and plastic products, and was also the first petrochemical
employed on an industrial scale.
Commercial propylene is a colorless, low-boiling,
flammable, and highly volatile gas. Propylene is traded
commercially in three grades:

Also, propylene is used as a motor gasoline component for
octane enhancement via dimerization – formation of
polygasoline or alkylation.
Chemical Uses
The principal chemical uses of propylene are in the
manufacture of polypropylene, acrylonitrile, oxo-alcohols,
propylene oxide, butanal, cumene, and propene oligomers.
Other uses include acrylic acid derivatives and ethylene –
propene rubbers.
Global propylene demand is dominated by polypropylene
production, which accounts for about two-thirds of total
propylene demand.

Polymer Grade (PG): min. 99.5% of purity.
Chemical Grade (CG): 90-96% of purity.
Refinery Grade (RG): 50-70% of purity.

Table 4 – Major Propylene Consumers

Intratec | Study Background

Applications

10

Polypropylene

The three commercial grades of propylene are used for
different applications. RG propylene is obtained from
refinery processes. The main uses of refinery propylene are
in liquefied petroleum gas (LPG) for thermal use or as an
octane-enhancing component in motor gasoline. It can
also be used in some chemical syntheses (e.g., cumene or
isopropanol). The most significant market for RG propylene
is the conversion to PG or CG propylene for use in the
production of polypropylene, acrylonitrile, oxo-alcohols and
propylene oxide.

Mechanical parts, containers, fibers, films

Acrylonitrile

Acrylic fibers, ABS polymers

Propylene oxide

Propylene glycol, antifreeze,
polyurethane

Oxo-alcohols

Coatings, plasticizers

Cumene

Polycarbonates, phenolic resins

Acrylic acid

Coatings, adhesives, super absorbent
polymers


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phases. This process converts heavy gas oil preferentially
into gasoline and light gas oil.

Propylene is commercially generated as a co-product, either
in an olefins plant or a crude oil refinery’s fluid catalytic
cracking (FCC) unit, or produced in an on-purpose reaction
(for example, in propane dehydrogenation, metathesis or
syngas-to-olefins plants).
Globally, the largest volume of propylene is produced in
NGL (Natural Gas Liquids) or naphtha steam crackers, which
generates ethylene as well. In fact, the production of
propylene from such a plant is so important that the name
“olefins plant” is often applied to this kind of manufacturing
facility (as opposed to “ethylene plant”). In an olefins plant,
propylene is generated by the pyrolysis of the incoming
feed, followed by purification. Except where ethane is used
as the feedstock, propylene is typically produced at levels
ranging from 40 to 60 wt% of the ethylene produced. The
exact yield of propylene produced in a pyrolysis furnace is a
function of the feedstock and the operating severity of the
pyrolysis.

The propylene yielded from olefins plants and FCC units is
typically considered a co-product in these processes, which
are primarily driven by ethylene and motor gasoline
production, respectively. Currently, the markets have
evolved to the point where modes of by-product
production can no longer satisfy the demand for propylene.
A trend toward less severe cracking conditions, and thus to
increase propylene production, has been observed in steam
cracker plants using liquid feedstock. As a result, new and
novel lower-cost chemical processes for on-purpose
propylene production technologies are of high interest to
the petrochemical marketplace. Such processes include:

The pyrolysis furnace operation usually is dictated by
computer optimization, where an economic optimum for
the plant is based on feedstock price, yield structures,
energy considerations, and market conditions for the
multitude of products obtained from the furnace. Thus,
propylene produced by steam cracking varies according to
economic conditions.
In an olefins plant purification area, also called separation
train, propylene is obtained by distillation of a mixed C3
stream, i.e., propane, propylene, and minor components, in
a C3-splitter tower. It is produced as the overhead
distillation product, and the bottoms are a propaneenriched stream. The size of the C3-splitter depends on the
purity of the propylene product.
The propylene produced in refineries also originates from
other cracking processes. However, these processes can be
compared to only a limited extent with the steam cracker
for ethylene production because they use completely
different feedstocks and have different production
objectives.
Refinery cracking processes operate either purely thermally
or thermally – catalytically. By far the most important
process for propene production is the fluid- catalytic
cracking (FCC) process, in which the powdery catalyst flows
as a fluidized bed through the reaction and regeneration

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Olefin Metathesis. Also known as disproportionation,
metathesis is a reversible reaction between ethylene
and butenes in which double bonds are broken and
then reformed to form propylene. Propylene yields of
about 90 wt% are achieved. This option may also be
used when there is no butene feedstock. In this case,
part of the ethylene feeds an ethylene-dimerization
unit that converts ethylene into butene.
Propane Dehydrogenation. A catalytic process that
converts propane into propylene and hydrogen (byproduct). The yield of propylene from propane is
about 85 wt%. The reaction by-products (mainly
hydrogen) are usually used as fuel for the propane
dehydrogenation reaction. As a result, propylene
tends to be the only product, unless local demand
exists for the hydrogen by-product.
Methanol-to-Olefins/Methanol-to-Propylene. A
group of technologies that first converts synthesis gas
(syngas) to methanol, and then converts the methanol
to ethylene and/or propylene. The process also
produces water as by-product. Synthesis gas is
produced from the reformation of natural gas or by the
steam-induced reformation of petroleum products
such as naphtha, or by gasification of coal. A large
amount of methanol is required to make a world-scale
ethylene and/or propylene plant.
High Severity FCC. Refers to a group of technologies
that use traditional FCC technology under severe
conditions (higher catalyst-to-oil ratios, higher steam
injection rates, higher temperatures, etc.) in order to
maximize the amount of propylene and other light
products. A high severity FCC unit is usually fed with


Manufacturing Alternatives

11

gas oils (paraffins) and residues, and produces about
20-25 wt% propylene on feedstock together with
greater volumes of motor gasoline and distillate byproducts.

These on-purpose methods are becoming increasingly
significant, as the shift to lighter steam cracker feedstocks
with relatively lower propylene yields and reduced motor
gasoline demand in certain areas has created an imbalance
of supply and demand for propylene.

Olefins Cracking. Includes a broad range of
technologies that catalytically convert large olefins
molecules (C4-C8) into mostly propylene and small
amounts of ethylene. This technology will best be
employed as an auxiliary unit to an FCC unit or steam
cracker to enhance propylene yields.

Figure 2 – Propylene from Multiple Sources

Naphtha
NGL

Steam Cracker

Refinery FCC Unit

Gas Oil

RG Propylene

Propane

PDH

Ethylene/
Butenes

Metathesis

Methanol

MTO/MTP


Gas Oil

12

High Severity FCC

C4 to C8
Olefins

Olefins Cracking


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CG/PG Propylene

Licensor(s) & Historical Aspects
By the 1960s, Phillips Petroleum developed the first
commercial process of olefin metathesis. The focus, at that
time, was to convert propylene into ethylene and 2-butene.
This technology was developed in an effort to increase
ethylene and butene production from “low value” crackerderived propylene to meet the growing market demand for
polyethylene and polybutadiene. A plant based on the
Phillips Triolefin technology was operational from 1965 to
1972 by Shawinigan Chemicals, in Canada, until its
shutdown due to economic reasons. The plant had the
capacity to process 50 thousand tons of propylene per year
(kta), that was obtained from a naphtha steam cracker,
producing 15 kta of ethylene and 30 kta of butenes.
The fact that metathesis is a reversible reaction, and that the
demand for polymer grade (PG) propylene grew from the
1970s on, led to the use of the Phillips Triolefin process in a
reverse way. This reverse process is known as Olefin
Conversion Technology (OCT), and is now offered for
license by Lummus Technology, a CB&I Company. Lummus
OCT was first used in 1985 by Equistar (now a wholly owned
subsidiary of LyondellBasell industries), in the United States,
to produce propylene by using ethylene and butenes. The
unit's capacity was expanded in 1992.


The Institut Français du Pétrole (IFP) and the Chinese
Petroleum Corporation (CPC) have jointly worked to
develop a process for the production of propylene, called
Meta-4. This technology is currently being developed by
France’s Axens, a subsidiary of IFP, formed in 2001 through
the merger of IFP’s licensing division with Procatalyse
Catalysis & Adsorbents; however, until April 2012 Meta-4
was not commercialized.

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13

Technical Analysis
Chemistry
Metathesis is a general term for a reversible reaction
between two olefins, in which the double bonds are broken
and then reformed to form new olefin products. In order to
produce propylene by metathesis, a molecule of 2-butene
and a molecule of ethylene are combined in the presence
of a tungsten oxide catalyst to form two molecules of
propylene.

Table 6 – Isobutene Side Reactions

Isobutene + 2-butene

propylene + 2-methyl 2-

butene
Isobutene + 1-butene

ethylene + 2-methyl 2-

pentene

Fast

Slow


Ethylene

2-Butene

Propylene

The following table summarizes the reactions that occur in
the metathesis reactor. All reactions are essentially
isothermal.

The reaction of isobutene with ethylene is also nonproductive. If neglected, the concentration of this nonreactive species in the metathesis unit builds up, due to
process recycles, reducing capacity.

Raw Material
Table 5 – Metathesis Reactions for Propylene
As previously explained, the raw materials for the
production of propylene via metathesis reaction are
ethylene and 2-butenes. Both components are mainly
supplied from steam cracker units (olefins plants). FCC units
can also be used as a source of such olefins.

2-butene + ethylene

2 propylene

Fast

1-butene + 2-butene

propylene + 2-pentene

Fast

1-butene + 1-butene

ethylene + 3-hexene

Slow


Intratec | Technical Analysis

The reaction of 1-butene with ethylene is non-productive,
occupying catalyst sites but producing no product. So a
magnesium oxide co-catalyst is added to the metathesis
reactor to induce double bond isomerization reaction
causing the shift from 1-butene to 2-butene and allows
continued reaction.

14

When isobutene is present in the metathesis reactor, side
reactions occur, as presented in Table 6 – Isobutene Side
Reactions.

Steam cracker units are facilities in which a feedstock such
as naphtha, liquefied petroleum gas (LPG), ethane, propane
or butane is thermally cracked through the use of steam in a
bank of pyrolysis furnaces to produce lighter hydrocarbons.
The products obtained depend on the composition of the
feed, the hydrocarbon-to-steam ratio, and on the cracking
temperature and furnace residence time.
Light hydrocarbon feeds such as ethane, LPGs, or light
naphtha produce lighter products, mainly ethylene,
propylene, and butadiene, with smaller amounts of heavier
by-products. Heavier hydrocarbon feeds such as naphtha
produce these lighter products, but also produce aromatic
hydrocarbons, and hydrocarbons suitable for inclusion in
gasoline or fuel oil.

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The higher cracking temperature (also referred to as
severity) favors the production of ethylene and benzene,
whereas lower severity produces higher amounts of
propylene, C4-hydrocarbons and liquid products.

Table 7 – Typical Crude C4 Stream from an Olefins Plant

After the pyrolysis process, the olefins are separated from
the other by-products by distillation.

C4 acetylenes

Traces

Butadiene

33

Ethylene

1-butene

15

2-butenes

9

Isobutene

30

Iso-/normal- butanes

13

Besides steam crackers, other common sources of ethylene
are FCC off-gas and vents from polyethylene units. FCC offgas is an inexpensive source of ethylene, because this
stream is usually valued at fuel gas cost. Pretreatment,
fractionation and refrigeration are necessary for recovery of
the ethylene product; however, an FCC off-gas recovery
system typically has an attractive internal rate of return (IRR).
Polyethylene unit vents may not normally provide the
quantity of ethylene necessary to supply metathesis units;
consequently, other sources of ethylene would supplement
any deficit. These vents must be treated to remove water
and oxygen and a compressor is usually required to boost
the vent streams to a metathesis processing pressure.

2-Butenes
The 2-butenes used as feedstock for the metathesis process
are obtained from the crude C4 stream produced in olefins
plants. This C4 stream consists of C4 acetylenes, butadiene,
iso-/n-butenes, and iso-/n-butane. A typical composition is
provided in Table 7.
The desired C4 stream in a metathesis process consists of nbutenes (mainly 2-butenes), low amounts of isobutene (to
avoid excess capacity due to excess recycling) and is almost
devoid of butadiene (to avoid rapid catalyst fouling) and
acetylenes. Iso-/n-butanes are inert to the metathesis
process.


Before feeding a metathesis process, the C4 stream from
olefins plants must be treated.
Usually, the butadiene and C4 acetylenes are removed first
to produce the designated raffinate-1. Such removal can be
accomplished through either hydrogenation or extractive
distillation.
The components remaining in the mixture consist of 1butene, 2-butene, isobutene, and iso-/n-butanes from the
original feed, in addition to what was produced in the
hydrogenation steps, as well as a small quantity of
unconverted or unrecovered butadiene.
Isobutene can be removed through fractionation of
raffinate-1, reaction with methanol, reaction with water, or
reaction with itself. In all cases, the resulting mixture may
contain both normal and iso-paraffins.
The product from isobutene removal is designated
raffinate-2, and it consists primarily of normal olefins and
paraffins and minimal iso-olefins and iso-paraffins.
Raffinate-2 is the most common source of butenes used in
metathesis reactions.
The paraffin components present in raffinate-2 are
essentially inert and do not react in the metathesis process.
Such paraffins are typically removed from the process via a
purge stream in the separation system that follows the
metathesis reactor.

1
The components in a refinery or FCC based C4 cut are similar,
with the exception that the percentage of paraffins is considerably
greater.

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High-purity ethylene (min. 99.5 wt% purity) can be obtained
from olefins plants. The use of PG ethylene in metathesis
processes is desired because it requires minimal
pretreatment for trace components, while other sources of
ethylene typically require more rigorous pretreatment.
Although PG ethylene prices are higher, capital expenditure
for the metathesis unit is lower because no investment in
pretreatment is required.

15

Technology Overview
The reactor product is cooled and fractionated to remove
ethylene for recycle. A small portion of this recycle stream is
purged to remove methane, ethane, and other light
impurities from the process. The ethylene column bottom
is fed to the propylene column where butenes are
separated for recycle to the reactor, and some is purged to
remove butanes, isobutylenes, and heavies from the
process. The propylene column overhead is high-purity, PG
propylene product.

The Lummus OCT process for propylene consists of two
main areas: purification & reaction, and separation. The
simplified block flow diagram in Figure 3 summarizes the
process.
Ethylene feed plus recycled ethylene are mixed with the
butenes feed plus recycled butenes and heated prior to

The catalyst promotes the reaction of ethylene and butene2 to form propylene, and simultaneously isomerizes butene1 to butene-2. A small amount of coke is formed on the
catalyst, so the beds are periodically regenerated using
nitrogen-diluted air. The ethylene-to-butene feed ratio to

This process description is for a stand-alone metathesis unit
complex. The utility requirements – which include cooling
water, steam, electricity, fuel gas, nitrogen, and air – are
typically integrated with the existing complex.

and maintain the per-pass butene conversion above 60%.
Typical butene conversions range between 60 to 75%, with
about 90% selectivity to propylene.

Figure 3 – Process Block Flow Diagram

Ethylene Recycle

Ethylene Feed

Butene Feed

Area 100
Purification &
Reaction

Area 200
Separation

Butene Recycle



16

Light Ends Fuel Gas

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PG Propylene

Heavy Ends Fuel Gas

Detailed Process Description &
Conceptual Flow Diagram

(WO3/SiO2). Also, the co-catalyst magnesium oxide (MgO)
is used to perform a double bond isomerization of 1-butene
to 2-butene.

This section describes the process for production of
propylene via metathesis in detail. This description refers to
a process similar to Lummus OCT process; however, some
differences may be found, as all of the information herein
presented is based on publicly available information.

The raffinate-2 stream used in the metathesis unit is
typically free of butadiene and has low isobutene content.
Butadiene is typically removed below 50 wt ppm level and
it is done to minimize fouling of the catalyst. Isobutene is
removed to reduce the size of the metathesis unit.
Isobutene is not a poison to the catalyst, but it reacts in the
metathesis reactor at low conversion, which results in buildup of this molecule in the internal butenes recycle stream
and increases hydraulic requirement and sizes of the
equipment. Commercial units are in operation with about 7
wt% isobutene in the raffinate-2 feed stream.

For a better understanding of the process, please refer to
the Inside Battery Limits Conceptual Process Flow Diagram;
the Main Streams Operating Conditions and Composition;
and the Inside Battery Limits Major Equipment List,
presented in the next pages.

Area 100: Purification & Reaction
First, fresh ethylene from ISBL storage tank and recycled
ethylene are mixed with fresh and recycled butenes, and
are fed through reactor feed treaters. The treaters consist of
guard beds to remove potential catalyst poisons for the
metathesis reaction, such as oxygenates, sulfur, alcohols,
carbonyls, and water. The guard beds have a cyclic
operation. One is normally in operation, while the other is
regenerating.
After treating, the stream is vaporized in a heat exchanger
and superheated in a fired heater to the reaction
temperature, typically between 280-320°C.
The reactor feed contains ethylene and n-butenes, mainly 2butenes, at the desired reaction ratio.
Although the theoretical molar ratio between ethylene and
butenes is 1:1, it is common to employ significantly greater
ethylene/butene ratios to minimize undesirable side
reactions, and to minimize C5+ olefin formation. The perpass butene conversion is between 60 and 75%.
The metathesis reaction occurs in a fixed bed catalytic
reactor. The main reaction that occurs is between ethylene
and 2-butenes, to produce propylene. Side reactions also
occur, producing by-products, primarily C5-C8 olefins. The
reactor exit stream is cooled prior to the separation area.
The process selectivity to propylene is typically about 90%.
The catalyst used is tungsten oxide supported on silica

Coke, a by-product of the reaction, is deposited on the
catalyst throughout the process. During regeneration the
coke is burned in a controlled atmosphere. Systems
required for regeneration include a fired regeneration gas
heater and a supply of inert gas (usually nitrogen),
compressed air, and hydrogen. Each reactor can run for
about 30 days before requiring regeneration.

Area 200: Separation
The reactor exit stream contains a mixture of propylene,
unconverted ethylene and butenes, butane, and some C5+
components from side reactions.
Propylene purification is carried out in two columns. The
first column separates unreacted ethylene for reuse in the
reactor. The second column produces PG propylene as an
overhead product and a bottom heavies stream.
The stream leaving the reactor is first cooled against the
reactor feed stream in an exchanger, and then cooled
against cooling water before being sent to the
deethylenizer column.
The column is re-boiled by low pressure (LP) steam, and
uses propylene refrigeration in the top condenser.
Cryogenic temperatures exist due to the presence of
unconverted ethylene in the top of the column. Pressure of
the column is dependent upon the available refrigeration.
The deethylenizer column overhead (unconverted
ethylene) is recycled back to the reaction area through the
column reflux pumps. The recycled ethylene stream is
mixed with fresh ethylene, fresh butenes (raffinate-2) stream
and recycled butenes stream. A small vent stream
containing light paraffins and a small amount of

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For the purpose of this report, n-butenes, with a purity of
80%, will be considered raffinate-2. The process is divided
into two main areas: purification & reaction, and separation.

17

unconverted ethylene leaves the overhead of the
deethylenizer reflux vessel as a lights purge stream. This
stream can be returned to the ethylene cracker for recovery.

Table 9 – Design & Simulation Assumptions

The bottom stream of the deethylenizer column is sent to
the depropylenizer column for propylene recovery. The
depropylenizer column separates PG propylene in the
overhead from a heavies product stream (C4+) in the
bottoms. PG propylene and heavies streams are sent to the
product ISBL storage tank and C4+ purge storage tank
respectively. LP steam is used in the reboiler and cooling
water in the top condenser.

Simulation Software
Thermodynamic Model

99.9 wt%

Butenes on C4 stream

80 wt%

Temperature

304 oC

Pressure

30 bar abs

Conversion (of Butenes)

67%

Selectivity (Butenes to Propylene)

90%

Ethylene: Butene Molar Feed Ratio

Key Consumptions

Peng-Robinson

Ethylene

A side-stream from the bottoms of the column is sent back
as butenes recycled stream to the fresh/recycle C4 tank.
This rate is set to maintain a high overall n-butenes
conversion in the metathesis reactors. The column’s
bottoms can be sent to another column for recovery of
gasoline and fuel oil.

Aspen Hysys

2
MgO and

Catalyst

WO3/SiO2


Table 8 – Raw Materials & Utilities Consumption (per
ton of Product)

Labor Requirements
Raffinate-2

0.97

ton

Ethylene

0.32

ton

Cooling Water

68.3

m3

LP Steam

1.0

ton

Inert Gas

32.1

Nm3

Electricity

286

kWh

Fuel

0.5

MMBtu

Fuel By-Product

12.8

MMBtu

Table 10 – Labor Requirements for a Typical Plant

Non-Integrated Plant

5

1

Partially Integrated Plant

5

1

Fully Integrated Plant

3

1




Technical Assumptions

18

All process design and economics are based on world-class
capacity units that are competitive globally. Assumptions
regarding the thermodynamic model used, reactor design
basis and the raw materials composition are shown in Table
9. All data used to develop the process flow diagram was
based on publicly available information.

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Figure 4 – Inside Battery Limits Conceptual Process Flow Diagram

Ethylene
from OSBL
T-102
Butenes
(Raffinate-2)
from OSBL

19

1

For Disposal
11

7

2
P-101A/B

10

V-101B

P-102A/B

6

F-101

V-101A

E-101

8

4

R-102B

R-102A

9

Fuel
5

Nitrogen,
Hydrogen,
Air

P-103A/B
T-101

F-102
Fuel

13
23
Butenes
Recycle

Ethylene
Recycle
CW

CW

E-201

E-203

14
RF (C3=)

Lights
Purge

CR-201

CW

CR-202

24
CV-201

CV-202
CP-201A/B

CP-202A/B

#1

18

P-202A/B

C-201

#1

C-202

#30

PG Propylene
to OSBL

T-201

#62

#60
LP ST

16
P-201A/B

#34
#65
LP ST

CC-201

CC-202

15
21

25

CW

T-202

E-202

Heavies
Purge


P-203A/B


FREE SAMPLE

19

Table 11 – Main Streams Operating Conditions and Composition

Phase

L

L

G

L/G

L

L

G

L

Temperature (°C)

-29

30

304

53

-25

107

-25

113

Pressure (bar abs)

22

6.0

30

30

22

17

22

17

Mass Flow (kg/h)

12,940

38,950

161,520

161,490

33,820

75,800

120

11,760

Ethylene (wt%)

99.9

21.0

21.0

100.0

100.0

Ethane (wt%)

0.1

traces

traces

traces

traces

24.9

24.9

traces

40.1
5.0

Propene (wt%)
Butane (wt%)

20.0

C5+ (wt%)

0.5

0.1

39.9

75.1

63.5

5.1

7.4

22.4


ISBL Major Equipment List

Table 11 presents the main streams composition and
operating conditions. For a more complete material
balance, see the “Appendix A. Mass Balance & Streams
Properties.”

Table 12 shows the equipment list by area. It also presents
a brief description and the construction materials used.

Information regarding utilities flow rates is provided in
“Appendix B. Utilities Consumptions Breakdown.” For
further details on greenhouse gas emissions caused by this
process, see “Appendix C. Process Carbon Footprint.”

Find main specifications for each piece of equipment in
“Appendix D. Equipment Detailed List & Sizing.”

Table 12 – Inside Battery Limits Major Equipment List

Feed Vaporizer

CS

F-101

Reactor Feed Heater

Cr-Mo

Area 100

F-102

Regeneration Gas Heater

Cr-Mo

Area 100

P-101A/B

Ethylene Feed Pumps

CS

Area 100

P-102A/B

Raffinate-2 Feed Pumps

CS

Area 100

P-103A/B

C4 Tank Pumps

CS

Area 100

20

E-101

Area 100


Area 100

R-102A/B

Metathesis Reactor

SS

Area 100

T-101

Fresh/Recycle C4 Tank

CS

Area 100

T-102

Ethylene ISBL Storage

CS

Area 100

V-101A/B

Reactor Feed Treaters

CS

Area 200

C-201

Deethylenizer Column

CS


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Table 12 – Inside Battery Limits Major Equipment List (Cont.)
Area 200

C-202

Depropylenizer Column

CS

Area 200

CC-201

Deethylenizer Condenser

CS

Area 200

CC-202

Depropylenizer Condenser

CS

Area 200

CP-201

Deethylen. Reflux Pumps

CS

Area 200

CP-202

Depropylen. Reflux Pumps

CS

Area 200

CR-201

Deethylenizer Reboiler

CS

Area 200

CR-202

Depropylenizer Reboiler

CS

Area 200

CV-201

Deethylenizer Accumulator

CS

Area 200

CV-202

Depropylen. Accumulator

CS

Area 200

E-201

Deethylenizer Feed Cooler

CS

Area 200

E-202

C4+ Purge Cooler

CS

Area 200

E-203

Butenes Recycle Cooler

CS

Area 200

P-201A/B

Propylene Pumps

CS

Area 200

P-202A/B

Ethylene Recycle Pumps

CS

Area 200

P-203A/B

C4+ Pumps

CS

Area 200

T-201

Product ISBL Storage

CS

Area 200

T-202

C4+ Purge Storage

CS


OSBL Major Equipment List

Table 13 shows the list of tanks located on the storage area
and the energy facilities required in the construction of a
non-integrated unit.

The OSBL is divided into three main areas: storage (Area
700), energy & water facilities (Area 800), and support &
auxiliary facilities (Area 900).

Table 13 – Outside Battery Limits Major Equipment List

T-701

Ethylene Storage

CS

Area 700

T-702

Raffinate Storage

CS

Area 700

T-703

Propylene Storage

CS

Area 700

T-704

Demin. Water Tank

CS

Area 700

T-705

Clarified Water Tank

CS

Area 800

U-802

Refrigerator

CS

Area 800

U-803

Cooling Tower

CS

Area 800

U-804

Steam boiler

CS

Area 800

U-805

Water Demineralizer

CS


FREE SAMPLE


Area 700

21

steam crackers. The lower energy consumption also
improves the operating margin.

Other Process Remarks
Typical Complete Process Scheme
Currently, most of the propylene produced is a by-product
from steam cracking units that primarily produce ethylene,
or a by-product from FCC units that primarily produce
gasoline. With the maturity of olefin plants technology,
improvements downstream of the steam cracker are more
economically promising than improvements in the cracking
technology itself.
In this context, the use of a metathesis unit downstream of
an olefin plant can bring benefits such as reducing the
energy used and the carbon emissions, as well as increasing
propylene production.

Table 14 – Integration of a Metathesis Unit with a
Naphtha Steam Cracker

Cracker C3=/C2= ratio

0.67

0.47

Overall C3=/C2= ratio

0.67

0.67

Material balance (1,000 ton/year)


Compared to the standalone steam cracker, the integrated
case consumes about 2% less fresh feedstock, while
producing 50% more benzene and only 60% of the
remaining, lower-valued pyrolysis gasoline. In addition, the
energy consumption of the integrated case is about 13%
lower. The reason for this reduction is that fewer olefins are
produced by thermal cracking in the integrated case,
thereby lowering the fired duty of the cracking heaters and
the energy consumed in the recovery area.

22

In the standalone steam cracker case, 1.67 million ton/year
of ethylene and propylene are produced by thermal
cracking. In the integrated case, 1.49 million ton/year of
ethylene and propylene are produced by thermal cracking,
with the remaining propylene (0.18 million ton/year) being
produced by the metathesis unit. The 13% reduction in
energy consumption results in a 13% reduction in
greenhouse gas emissions.
This level of reduction is significant and, as such, could be
one of the major contributing routes to meeting olefin
industry goals of lower greenhouse gas emissions from

3,094

3,047

Net ethylene

The impact of a metathesis unit to an olefin plant material
balance to achieve a conventional, low severity, propyleneto-ethylene ratio of 0.67 is analyzed in Table 14. Two cases
are presented: a standalone steam cracker unit, without
metathesis, and a steam cracker integrated with a
metathesis unit. As shown in the table, at a constant overall
net ethylene and propylene production of 1 million
ton/year and 670,000 ton/year respectively, the steam
cracker integrated with a metathesis unit considerably
improves the overall plant material balance.

Naphtha feed

1,000

1,000

Net propylene

670

670

Benzene

207

312

Pyrolysis gasoline

654

396

Energy consumption

Base = 100

87

Total investment

Base = 100

94


Investment costs are also lower. As shown in Table 14,
capital costs are reduced by about 6%. The investment
costs associated with the ISBL ethylene plant are reduced
due to lower plant throughput (individual ethylene plant
system loadings), lower fired duty, and a significant
reduction in the size of the propylene fractionator system,
which is the single most costly tower system in the ethylene
plant.
Finally, OSBL costs are reduced due to the minimization in
energy consumption. The savings associated with these
units more than offset the investment costs associated with
the metathesis unit.
Figure 5 shows the most typical integration arrangement
between a metathesis unit and a naphtha steam cracker.

Other Process Scenarios
Figure 6 illustrates propylene production alternatives via
metathesis using only one feedstock: ethylene or butenes.

FREE SAMPLE

Ethylene as the Only Feedstock

Butene as the Only Feedstock

In some cases, there is not enough butene to use in a
metathesis unit to achieve the desired propylene
production, as in the case when the feedstocks producer is
an ethane steam cracker, which, while it makes large
volumes of ethylene, makes insufficient butene for the
metathesis reaction. Ethane crackers are the most common
crackers used in the Middle East.

In some regions, the supply of ethylene is tight and/or
ethylene is expensive, making the building of a
conventional metathesis unit unfeasible without subsidies.
Other disadvantages of conventional metathesis are:

For such cases an ethylene dimerization unit can be added
upstream of the metathesis process as a butene-2 source.
Dimerization of ethylene to butenes occurs in a liquid phase
loop reactor according to the following reaction:

Ethylene

2-Butene

Intensive Use of Energy. Conventional metathesis
reactions take place with ethylene, which requires an
intensive use of energy in the ethylene recirculation
loop by using cryogenic refrigeration.
Feedstock Loss. Removing butadiene by
hydrogenation from the butenes feed before its use in
a conventional metathesis results in the
hydroisomerization of the butenes to paraffins,
representing a feedstock loss of 10%+. Furthermore,
removing isobutene by fractionation of the butenes
feed before its use in a conventional metathesis results
in an additional loss of butenes, since 1-butene is
difficult to separate from isobutene without an
expensive fractionation tower.

Figure 5 – Typical Integration Between Olefin Plant and Metathesis Unit

Naphtha

PG Ethylene

Naphtha Steam
Cracker

Metathesis Unit

Crude C4s

Butadiene
Extraction

PG Propylene

C4+ Purge

Raffinate-2

Raffinate-1

Butadiene

Isobutene
Extraction

Isobutene


FREE SAMPLE


PG Propylene

23

Although the yield of propylene is high in the conventional
metathesis process, the aforementioned disadvantages
motivated the development of a different process, in which
a metathesis reaction occurs with butenes as the only
feedstock. This process is called butenes auto-metathesis,
or self-metathesis.
In the process, a stream comprised of 1-butene plus 2butene is admixed with recycled butenes and pentenes in
the metathesis reactor. The stream leaving the reactor is
sent to a separation unit, composed of distillation columns.
The stream can contain C4 paraffins, but the amount of
isobutene should not exceed 2% of the feed mixture. Table
15 shows the reactions that can occur in the process.
The reactions (1) and (2) are the main auto-metathesis
reactions. Reactions (3), (4) and (5) occur while the 2pentenes formed through the main reaction are recycled
back to the reactor.

In 2003, a semi-commercial unit owned by Sinopec in
Tianjin (China), was built to demonstrate auto-metathesis
and 1-hexene production. This facility maximizes the 1butene/1-butene metathesis reaction to produce 3-hexene,
and then isomerizes the 3-hexene to 1-hexene. The plant
has the capacity to produce 2 kta of 1-hexene.

Table 15 – Butenes Auto-Metathesis Reactions
(1)

1-butene + 2-butene

propylene + 2-pentene

(2)

1-butene + 1-butene

ethylene + 3-hexene

(3)

2-pentene + 1-butene

(4)

2-pentene

(5)

1-pentene + 2-butene

propylene + 3-hexene

1-pentene (isomerization)
propylene + 2-hexene


Figure 6 – Metathesis Technology Alternatives

Butenes

Metathesis

Ethylene

Dimerization

Metathesis



24

FREE SAMPLE

CG/PG Propylene

Economic Analysis
General Assumptions

In Table 16, the IC Index stands for Intratec chemical plant
Construction Index, an indicator, published monthly by
Intratec, to scale capital costs from one time period to
another.

The general assumptions for the base case of this analysis
are outlined below.

This index reconciles prices trends of fundamental
components of a chemical plant construction such as labor,
material and energy, providing meaningful historical and
forecast data for our readers and clients.

Table 16 – Base Case General Assumptions
Engineering & Construction Location

US Gulf

Analysis Date

Q3 2011

IC Index

158.1

OSBL Scenario


Nominal Capacity

350 kta

Operating Hours per Year

8,000

Annual Production

320 kta

Project Complexity

Simple

Technology Maturity

Licensed

Data Reliability

High

The assumed operating hours per year indicated does not
represent any technology limitation; rather, it is an
assumption based on usual industrial operating rates
Additionally, Table 16 discloses assumptions regarding the
project complexity, technology maturity and data reliability,
which are of major importance for attributing reasonable
contingencies for the investment and for evaluating the
overall accuracy of estimates. Definitions and figures for
both contingencies and accuracy of economic estimates
can be found in this publication in the chapter “Technology
Economics Methodology.”


Figure 7 – Project Implementation Schedule

Basic Engineering
Detailed Engineering
Procurement
Construction

Start-up
0

1

2

3

4
Quarters


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5

6

7

8

Intratec | Economic Analysis

Total EPC Phase

25

Project Implementation
Schedule

“Appendix E. Detailed Capital Expenses” provides a detailed
breakdown for the direct expenses, outlining the share of
each type of equipment in total.

The main objective of knowing upfront the project
implementation schedule is to enhance the estimates for
both capital initial expenses and return on investment.

After defining the total direct cost, the TFI is established by
adding field indirects, engineering costs, overhead, contract
fees and contingencies.

The implementation phase embraces the period from the
decision to invest to the start of commercial production.
This phase can be divided into five major stages: (1) Basic
Engineering, (2) Detailed Engineering, (3) Procurement, (4)
Construction, and (5) Plant Start-up.

Table 18 – Total Fixed Investment Breakdown (USD
Thousands)
Bare Equipment

92,990

The duration of each phase is detailed in Figure 7.

Equipment Setting

330

Piping

7,060

Civil

3,930

Steel

3,610

Instrumentation & Control

2,590

Electrical

2,140

Insulation

2,360

Paint

670

Engineering & Procurement

5,840

Construction Material & Indirects

18,140

G & A Overheads

4,020

Contract Fee

3,620

Project Contingency

22,095

Capital Expenditures
Fixed Investment
Table 17 shows the bare equipment cost associated with
each area of the project.

Table 17 – Bare Equipment Cost per Area (USD
Thousands)
ISBL
Area 100

6,440

Area 200

5,400

OSBL
Area 700

67,910

Area 800

8,760

Process Contingency

4,480
Other - Scaling Exponent
Up

26

Table 18 presents the breakdown of the total fixed
investment (TFI) per item (direct & indirect costs and
process contingencies). For further information about the
components of the TFI please see the chapter “Technology
Economics Methodology”.
Fundamentally, the direct costs are the total direct material
and labor costs associated with the equipment (including
installation bulks). The total direct cost represents the total
bare equipment installed cost.

0.87

Down


0.79


Indirect costs are defined by the American Association of
Cost Engineers (AACE) Standard Terminology as those
"costs which do not become a final part of the installation
but which are required for the orderly completion of the
installation."

FREE SAMPLE

The indirect project expenses are further detailed in
“Appendix E. Detailed Capital Expenses.”
Alternative OSBL Configurations
The total fixed investment for the construction of a new
chemical plant is greatly impacted by how well it will be
able to take advantage of the infrastructure already installed
in that location.
For example, if there are nearby facilities consuming a unit’s
final product or supplying a unit’s feedstock, the need for
storage facilities significantly decreases, along with the total
fixed investment required. This is also true for support
facilities that can serve more than one plant in the same
complex, such as a parking lot, gate house, etc.
This study analyzes the total fixed investment for three
distinct scenarios regarding OSBL facilities:
Non-integrated Plant
Plant Partially Integrated
Plant Fully Integrated
The detailed definition, as well as the assumptions used for
each scenario is presented in the chapter “About this Study”


The influence of the OSBL facilities on the capital
investment is depicted in Figure 8 and in Figure 9.

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27

Figure 8 – Total Direct Cost of Different Integration Scenarios (USD Thousands)

Area 100

Area 200

Area 700

Area 800

Area 900

200,000
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
Non-Integrated


Fully Integrated


Figure 9 – Total Fixed Investment of Different Integration Scenarios (USD Thousands)

Direct Expenses

Indirect Expenses

Project Contingency

300,000
250,000
200,000
150,000
100,000
50,000
0

Non-Integrated

28



FREE SAMPLE

Fully Integrated

Fixed Investment Discussion

Working Capital

Figure 10 compares and validates the total fixed investment
estimated in the previous section. Each point depicted in
the chart represents a different plant TFI value announced
in the international press during the last few years. All of
the total fixed investments announced are adjusted to the
same basis (date and location of the analysis) and compared
to the TFI curves estimated by Intratec for different OSBL
integration scenarios.

Working capital, described in Table 19, is another significant
investment requirement. It is needed to meet the costs of
labor; maintenance; purchase, storage, and inventory of
field materials; and storage and sales of product(s).
Assumptions for working capital calculations are found in
“Appendix F. Economic Assumptions.”

TFI differences are primarily driven by how integrated the
plant will be with respect to raw material suppliers and
product consumers.

Table 19 – Working Capital (USD Million)
Raw Materials Inventory
Products Inventory

30.4

In-process Inventory

1.5

Supplies and Stores

0.3

Cash on Hand

22.1

Accounts Receivable

45.6

Accounts Payable

In fact, the metathesis unit is usually constructed near a
steam cracker or FCC unit not only because of synergistic
economies in their capital costs, but for the easy access to
feedstock.

0.7

(44.2)


Figure 10 – Total Fixed Investment Validation (USD Million)

500
450
400
350
300
250
200
150
100
50
0
100

200

300

400

500

600

Plant Capacity (kta)
TFI (Announced in Press)

Fully Integrated


FREE SAMPLE


Non-Integrated

700

0

29

Other Capital Expenses
Start-up costs should also be considered when determining
the total capital expenses. During this period, expenses are
incurred for employee training, initial commercialization
costs, manufacturing inefficiencies and unscheduled plant
modifications (adjustment of equipment, piping,
instruments, etc.).

Table 21 – CAPEX (USD Million)
Total Fixed Investment

169

Working Capital

56


22

Initial costs are not addressed in most studies on estimating
but can become a significant expenditure. For instance, the
initial catalyst load in reactors may be a significant cost and,
in that case, should also be included in the capital
estimates.


The purchase of technology through paid-up royalties or
licenses is considered to be part of the capital investment.

Manufacturing Costs

Other capital expenses frequently neglected are land
acquisition and site development. Although these are small
parts of the total capital expenses, they should be included.

Operational Expenditures

The manufacturing costs, also called Operational
Expenditures (OPEX), are composed of two elements: a fixed
cost and a variable cost. All figures regarding operational
costs are presented in USD per ton of product.
Table 22 shows the manufacturing fixed cost.

Table 20 – Other Capital Expenses (USD Million)
Initial Catalyst Load

To learn more about the assumptions for manufacturing
fixed costs, see the “Appendix F. Economic Assumptions.”

0.1

Start-up Expenses
Operator Training
Commercialization Costs

5.4

Start-up Inefficiencies

5.4

Unscheduled Plant Modifications

Table 22 – Manufacturing Fixed Cost (USD/ton)

1.3

3.4

Land & Site Development

Supervision Labor Cost

2.3
8.9

G and A Cost


8.5

Operating Charges

4.2

2.1

Maintenance Cost

1.7

7.1

Plant Overhead

Prepaid Royalties

Operating Labor Cost

30.1



Assumptions used to calculate other capital expenses are
provided in “Appendix F. Economic Assumptions.”

30

Total Capital Expenses

Table 23 discloses the manufacturing variable cost
breakdown.

Table 21 presents a summary of the total Capital
Expenditures (CAPEX) detailed in previous sections.

FREE SAMPLE

Economic Datasheet
Table 23 – Manufacturing Variable Cost (USD/ton)
Raffinate-2
Ethylene

The Technology Economic Datasheet, presented in Table
25, is an overall evaluation of the technology's production
costs in a US Gulf Coast based plant.

1,015.3
422.2

Cooling Water

0.03

LP Steam

15.6

Inert Gas

0.1

Electricity

20.9

Fuel

The expected revenues in products sales and initial
economic indicators are presented for a short-term
assessment of its economic competitiveness.

2.2


Table 24 shows the OPEX of the presented technology.

Table 24 – OPEX (USD/ton)
Manufacturing Fixed Cost

59.1

Manufacturing Variable Cost

1,476.2


Figure 11 depictures Sales and OPEX historic data. Figure 12
compares the project EBITDA trends with Intratec
Profitability Indicators (IP Indicators). The Basic Chemicals IP
Indicator represents basic chemicals sector profitability,
based on the weighted average EBITDA margins of major
global basic chemicals producers. Alternately, the Chemical
Sector IP Indicator reveals the overall chemical sector
profitability, through a weighted average of the IP Indicators
calculated for three major chemical industry niches: basic,
specialties and diversified chemicals.

FREE SAMPLE


Historical Analysis

31

Figure 11 – OPEX and Product Sales History (USD/ton)

OPEX (Cash Cost)

2,500

Product Sales

2,000

1,500

1,000

500

0
Q1-07

Q3-07

Q1-08

Q3-08

Q1-09

Q3-09

Q1-10

Q3-10

Q1-11

Q3-11


Figure 12 – EBITDA Margin & IP Indicators History Comparison

EBITDA Margin

25%

Basic Chemicals IP Indicator

Chemical Sector IP Indicator

20%

15%

10%

5%

0%

Q1-07

32

Q3-07

Q1-08

Q3-08

Q1-09

Q3-09


FREE SAMPLE

Q1-10

Q3-10

Q1-11

Q3-11

Table 25 – Technology Economics Datasheet: Propylene via Metathesis at US Gulf

2011
350 kta unit (Production: 320 kta)

TFI

Working Capital

Other Capital Exp.

IC Index: 158.1

169

57

22

Raffinate-2

0.97

ton/ton prod.

1,043

USD/ton

324.9

1,015.3

Ethylene

0.32

ton/ton prod.

1,304

USD/ton

135.1

422.2

Cooling Water

68.3

m3/ton prod.

0.0005

USD/m3

0.01

0.03

LP Steam

1.0

ton/ton prod.

15.3

USD/ton

5.0

15.6

Inert Gas

32.1

Nm3/ton prod.

0.004

USD/Nm3

0.04

0.1

Electricity

286

kWh/ton prod.

0.1

USD/kWh

6.7

20.9

Fuel

0.5

MMBtu/ton prod.

4.4

USD/MMBtu

0.7

2.2


5

operators/shift

56.8

USD/oper./h

2.3

7.1


1

supervisors/shift

85.3

USD/sup./h

0.7

2.1

2.7

8.5

Maintenance Cost
Operating Charges

25%

of Operating Labor Costs

0.7

2.3

Plant Overhead

50%

of Operating Labor and Maint. Costs

2.8

8.9

G and A Cost

2%

of Operating Costs

9.6

30.1

Depreciation Annual Value

10%

of TFI

16.9

52.9

PG Propylene

1

ton/ton prod.

540.8

1,690

Fuel By-Product

13

MMBtu/ton prod.

17.6

54.9

1690
4.29

USD/ton
USD/MMBtu

12.0%


15.5%

EBIT Margin

9.0%


FREE SAMPLE


EBITDA Margin

33

Regional Comparison & Economic Discussion
Regional Comparison

Figure 13 summarizes the total Capital Expenditures
(CAPEX) for the locations under analysis.

Capital Expenses

Operational Expenditures

Variations in productivity, labor costs, local steel prices,
equipment imports needs, freight, taxes and duties on
imports, regional business environments and local
availability of sparing equipment were considered when
comparing capital expenses for the different regions under
consideration in this report.
Capital costs are adjusted from the base case (a plant
constructed on the US Gulf Coast) to locations of interest by
using location factors calculated according to the items
aforementioned. For further information about location
factor calculation, please examine the chapter “Technology
Economics Methodology.” In addition, the location factors
for the regions analyzed are further detailed in “Appendix F.
Economic Assumptions.”

Specific regional conditions influence prices for raw
materials, utilities and products. Such differences are thus
reflected in the operating costs. An OPEX breakdown
structure for the different locations approached in this study
is presented in Figure 14.

Economic Datasheet
The Technology Economic Datasheet, presented in Table
26, is an overall evaluation of the technology's capital
investment and production costs in the alternative location
analyzed in this study.

Figure 13 – CAPEX per Location (USD Million)

Total Fixed Investment


Working Capital

350
300
250

Intratec | Regional Comparison & Economic Discussion

200

34

150
100
50
0
US Gulf

Germany


FREE SAMPLE

Figure 14 – Operating Costs Breakdown per Location (USD/ton)

Net Raw Materials Costs

Main Utilities Consumptions

Fixed Costs

1,600
1,550
1,500
1,450
1,400
1,350
1,300
1,250
1,200
US Gulf

Germany


Ethylene costs range from USD 400 to USD 420 per ton of
propylene representing about 27% of the total
manufacturing expenses both at the US Gulf Coast and in
Germany, while butene costs, between USD 937 and 1,015
per ton (as raffinate-2), represent from 62% to 66% of those
costs. Together, these raw materials account for more than
90% of the total manufacturing expenses.

Historically, the US and Europe have exhibited low EBITDA
margins and therefore projects of Lummus OCT units in
such regions are less commonplace. However, installing a
metathesis unit inside a petrochemical complex requires
low capital investment. That, coupled with special market
and price conditions can make projects in these, and other,
regions more economically appealing.

The values at which ethylene and butene feedstocks are
acquired will consequently play a decisive role in the
economic feasibility of a metathesis unit. While ethylene
prices are between USD 1,240 and 1,750 per ton, butene
values range from USD 960 to 1,040.
Furthermore, the process is fed with a butene-ethylene
mass ratio of approximately 3:1 (butene as raffinate-2). As a
result, the valuation of butene becomes crucial in the
overall economics of the process.
Producers that have access to cheap sources of such
materials can operate with improved competitiveness.
Ethylene feedstocks for metathesis can be supplied from
either steam crackers or off-gas extraction from FCC units.
Butene feedstocks may be supplied from either steam
cracker crude C4 or refinery FCC mixed butenes.

FREE SAMPLE


Economic Discussion

35

Table 26 – Technology Economics Datasheet: Propylene via Metathesis in Germany

350 kta unit (Production: 320 kta)

TFI

Working Capital

Other Capital Exp.

IC Index: 158.1

223

56

25

Raffinate-2

0.97

ton/ton prod.

962

USD/ton

299.8

936.8

Ethylene

0.32

ton/ton prod.

1,247

USD/ton

129.1

403.4

Cooling Water

68

m3/ton prod.

0.0016

USD/m3

0.04

0.1

LP Steam

1.0

ton/ton prod.

50.2

USD/ton

16.4

51.4

Inert Gas

32.1

Nm3/ton prod.

0.15

USD/Nm3

1.5

4.7

Electricity

286

kWh/ton prod.

0.12

USD/kWh

10.9

34.1

MMBtu/ton prod.

14.4

USD/MMBtu

2.3

7.1

75.8

USD/oper./h

3.0

9.5

113.7

USD/sup./h

0.91

2.8

3.6

11.2

Fuel

0.5


5

operators/shift


1

supervisors/shift

Maintenance Cost
Operating Charges

25%

of Operating Labor Costs

1.0

3.1

Plant Overhead

50%

of Operating Labor and Maint. Costs

3.8

11.8

of Operating Costs

9.4

29.5

22.3

69.7

414.1

1,294.0

58.9

184.1

G and A Cost


Depreciation Annual Value

36

PG Propylene
Fuel By-Product

2%

10%

1
12.8

of TFI

ton/ton prod.
MMBtu/ton prod.

1294
14.4

USD/ton
USD/MMBtu

EBITDA Margin

-1.9%


15.5%

EBIT Margin

-6.6%


FREE SAMPLE

References
Carter, C. O., 1980.
4,242,531.

Lummus Technology, 2010.

US, Patent No.

s.l.:Provided by Lummus
on August, 24th 2010.

Carter, C. O., 1985.
s.l.:Provided by Lummus on August, 24th, 2010.
Chodorge, J. A., Cosyns, J., Commereuc, B. & Torck, B., 1997.
Propylene Production from Butenes and Ethylene.
, Spring.
Delaude, L. & Noels, A. F., 2007. Metathesis Section. In:
s.l.:WileyInterscience.
Drake, C. A. & Reusser, R. E., 1986.
US, Patent No. 4,575,575.

Mol, J. C., 2004. Industrial Applications of Olefin Metathesis.
213(1), pp. 39-45.
Network China Industrial Information, n.d.
[Online]
Available at: www.chyxx.com
[Accessed 10 March 2012].
Senetar, J. J. & Glover, B. K., 2010.

Dwyer, C. L., 2006. Metathesis of Olefins. In: G. P. Chiusoli & P.
M. Maitlis, eds.
s.l.:Royal Society of Chemistry, pp. 201-217.

Stanley, S., 2009. Cover Story – Ethylene Enhancement.
, February.

Eisele, P. & Killpack, R., 2002. Propene Section. In:
s.l.:Wiley-Interscience.

Sumner, C., 2009.

Gartside, R. J. & Greene, M. I., 2007.

No. 7,525,007 B2.

US, Patent
US,
Patent No. 7,214,841 B2.

Takai, T. & Kubota, T., 2010.
Patent No. 2010/0145126 A1.

US,

Gartside, R. J., Greene, M. I. & Jones, Q. J., 2004.
US, Patent No. 6,777,582 B2.
Gartside, R. J. & Ramachandran, B., 2010.

Weidert, D. J., 2000.
s.l., AIChE 2000 Spring Meeting.
Zinger, S., 2005. One-purpose propylene production.
, Q3.

Hildreth, J. M., Dukandar, K. N. & Venner, R. M., 2009.

Hydrocarbon Processing, 2005.
s.l.:Gulf Publishing.
Intratec | References

[Online]
Available at:
www.cbi.com/images/uploads/tech_sheets/Olefins.pdf
[Accessed 20 March 2012].

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