Ethane to Ethylene: The three key questions you care about – experts provide answers

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This post was last edited by liuquan1100 on 2017-10-6 at 13:49. Recently, the process of producing ethylene through ethane cracking has attracted significant attention from domestic refining and chemical companies due to its advantages of low cost, high yield, and good returns. At the same time, however, many industry insiders believe that this approach still carries risks, with logistics and supply chain issues being areas of concern for them. At the \"2017 (6th) Asia Oil Refining and Petrochemical Technology Conference\" held in Beijing from June 14–16, during the panel discussion on \"Exploring the Feasibility of Developing Ethylene Production via Ethane Cracking in China Using Imported Ethane as Raw Material\", several participants had insightful discussions and exchanges on the relevant topics. In their view, supply volume, logistics, and manufacturing processes are no longer issues. Is there a problem with the supply volume? Shi Xianping, deputy director of the Petroleum and Chemical Industry Planning Institute, believes that the route of producing ethylene through ethane cracking has two main advantages: first, the investment required is low; second, the cost of raw materials is low. In particular, the price of ethane is currently low, being about 1,000–2,000 yuan per ton lower than that of naphtha, resulting in a significant cost advantage. However, Shi Xianping warned that this route has not only advantages but also two disadvantages: one is the issue of raw material risks, as there are no ethane resources in China, and reliance on imports from the United States means there are risks related to supply volume, prices, and logistics ； Another issue is the relatively limited range of products; the main product is ethylene, with hardly any other by-products. Once the prices of downstream products derived from ethylene fall, manufacturing companies will face significant pressure. According to Darryl•W•Rogers, Managing Director of IHS Oil Products and NGL Midstream, the supply of ethane is not a major issue; price fluctuations remain the biggest risk for the ethane-to-ethylene route. Rogers said that in terms of supply, global demand for ethane currently stands at around 1.4 million tons per day, while the production capacity for ethane is approximately 2.4 million tons per day. If this capacity increases over the next two to three years, supply will also rise accordingly. Will there be fluctuations in prices? “The current price of ethane is very low, and there is also an abundance of ethane available to help us produce ethylene. However, we need to consider traditional cracking feedstocks as alternatives, because I don’t think the price of ethane will remain low for long.” The price of ethane will be correlated with the price of crude oil; historically, as can be seen from the use of naphtha in China, the price of ethane is likely to experience significant fluctuations in the future. ”Rogers said. In terms of process technology, Michael•J•Tallman, KBR’s lead olefin technology consultant, believes that an ethane cracking yield of 80% can be achieved, whereas this is not possible with other feedstocks. “If you do not intend to produce other products and only want ethylene, you can opt for the ethane-based technology route; if you also want to produce other products, such as by-products like benzene, it is recommended not to use the ethane-based technology route. ”Tallman said. There are certain risks regarding whether logistics infrastructure can keep up, especially when compared to factors such as price and manufacturing processes; however, industry experts believe that the logistics for transporting ethane are relatively promising. It is understood that the transportation of ethane streams mainly includes the pipeline situation in the United States, export terminals, sea transport, and reception terminals in China. Ajay Dashqutre, executive vice president of Contis Group, said that the pipeline infrastructure in the United States is already very well-developed. The country has two main ports for exporting ethane: one in Texas in the south and another in Pennsylvania in the north. Exports are made to both Europe and India. “If 1 million tons of ethane are to be exported, liquefaction facilities, storage facilities, and loading facilities need to be built at the port. These are not constraints; once Chinese companies start purchasing ethane or signing intent contracts, companies interested in delivering such products will naturally emerge. ”Dashqutre said. “The situation in the United States is relatively optimistic, and China also doesn’t face any difficulties in receiving such materials. As long as our ethylene cracking units are not too far from the ports, transportation via pipelines is possible; some refrigeration equipment is needed for storage, but it’s not more difficult than receiving LNG. Therefore, as long as the export terminals in the United States can meet the supply needs, there should be no major issues with our reception terminals. ”Shi Xianping said. Dashqutre told reporters that there are many receiving ports along China’s east coast, from the north to the south. He suggested that Chinese companies should build storage tanks at these ports, or upgrade existing ones, in order to receive ethane. Dashqutre said that what needs to be considered most is the location for building the pyrolysis furnace; it’s better to have it as close as possible to the receiving port, as this reduces the costs associated with pipeline transportation. As for sea shipping, the reporter learned from interviews that, with innovations in ship technology, vessels more suitable for transporting ethane have been built. Alfred Hartmann, chairman of the Hartmann Group, said that the distance from the United States to China is about 20,000 kilometers. LPG and LNG ships are not very efficient for transporting ethane; therefore, the Hartmann Group has developed an innovative design for a liquefied gas carrier that is more innovative, safer, more flexible, more economical, and environmentally friendly, and one that can transport more ethane. “We can make 6 trips per year, for a total of 300,000 tons. If you have 1 million tons, we will need 3.5 ships; 4 ships will be sufficient at most. ”Hartmann said