Honeywell UOP methanol-to-olefins catalyst production line put into operation

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Honeywell UOP methanol-to-olefins catalyst production line comes online Author/Source: Yajia Coal Chemical Industry Date: 2018-01-24 Clicks: 16 Honeywell announced on January 23 that a catalyst production line it invested in in Zhangjiagang City, Jiangsu Province, has been put into operation. This production facility represents Honeywell’s largest investment to date in the coal chemical industry, and its main products are catalysts required for the methanol-to-olefins (also known as MTO) process. Methanol-to-olefins is a type of coal chemical process that uses coal as the upstream raw material to produce olefin products such as ethylene and propylene, which are then used to manufacture everyday items like plastics. For China, which has abundant coal but little oil, this process is a viable option to expand the applications of coal. Due to the development of the coal chemical industry in recent years, China has become the most important market for such catalysts. Statistics from the research firm Yaha Consulting show that as of the end of 2017, China had 21 methanol-to-olefins plants in operation, with a total annual production capacity of 12.05 million tons. The vast majority of investors in coal chemical projects in China need to obtain technical licenses from external sources. UOP, a company under Honeywell, is one of the main suppliers of methanol-to-olefins technology; since 2011, it has licensed this technology to nine Chinese companies. After adopting this process, coal chemical companies still need to purchase methanol-to-olefins catalysts from Honeywell. Before the launch of the Zhangjiagang production facility, these catalysts were sourced from Honeywell’s plants in the United States, with a lead time of 6–8 weeks. Once this production line is put into operation, the delivery time will be reduced to just a few days. Rebecca Liebert, President and CEO of UOP, told Jiemian News reporters that the catalyst production capacity at the Zhangjiagang facility is several times that of the factory in the United States, making it on a world-class scale, though she did not disclose specific figures. Honeywell invested in this production line in 2016, when China’s coal chemical industry was in a downturn. Wang Shaohui, a methanol analyst at Zhuochuang Information, told Jiemian News that there are many new coal chemical projects planned in China, but due to factors such as environmental policies and the availability of resources at various stages of the production process, the actual growth rate of production capacity in recent years has not been as fast as expected. Liu Maoshu, General Manager of Honeywell UOP in China, also noted that the coal chemical industry in China had previously grown at an excessive pace, which led to various problems; now China **wants it to develop in an orderly manner. The sharp drop in international oil prices that began in 2014 also affected the development of the coal chemical industry. Li Beikai mentioned that there was a period when crude oil prices were only 30 dollars, and the economic viability of methanol-to-olefins production was not favorable at that time. As international oil prices have now risen back above $60, the economic viability of the coal chemical industry has begun to improve, and its prosperity has increased. Wang Shaohui analyzed that in 2017, domestic coal-to-olefins projects maintained relatively good profitability. Although coal prices are also rising, the increase in prices of downstream products allows these costs to be passed on. Liu Maoshu believes that China’s coal chemical industry will remain a market with continuous growth, especially in provinces rich in coal resources such as Xinjiang and Inner Mongolia. “Converting local coal into olefin products is a good option. ”He said. Predictions from Yahuaxun Consulting suggest that although domestic olefin production capacity is increasing rapidly driven by coal chemical projects, a situation of overcapacity will not arise in the next 3-5 years. The research institution also noted that by the end of 2020, the annual production capacity of coal-based olefins in China will increase to around 20 million tons, representing an increase of about 60% compared to the current level. In the coal chemical industry market, Honeywell faces competition from institutions such as the Dalian Institute of Chemical Physics, Chinese Academy of Sciences (hereinafter referred to as Dalian Institute of Chemical Physics). According to information obtained by Jiemian News, the latter holds the largest market share in the domestic methanol-to-olefins process sector. Li Beikai responded that the Dalian Institute of Chemical Physics is a leader in the market, but the two have different technical approaches; the choice of process depends on the specific requirements of customers for coal chemical projects. She also said that the company maintains close communication with potential coal chemical industry clients in order to advance the implementation of these projects more effectively. Honeywell UOP has also established a new R&D and engineering technology center in Zhangjiagang, which was officially launched on January 23 as well. In the future, it will provide services such as technical support and project commissioning to customers in China’s coal chemical industry and other related fields. Li Beikai, President and CEO of UOP, mentioned that the pace of engineering projects in China is extremely fast; what takes years in other places can be completed in just a few months in China. Honeywell is unable to meet such speed requirements in the United States, so it needs to establish capabilities locally in China.