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What is the cost advantage of producing ethylene from ethane cracking for the manufacture of ethylene glycol compared to producing it from coal? Author/Source: Yahuahua Coal Chemicals Date: 2018-03-26 Clicks: 10 The technology for producing ethylene glycol from coal via the syngas oxalate route is now mature, and it has become an important part of China’s ethylene glycol production capacity. According to Yahuazhengxin’s \"2018 Annual Report on China’s Coal-based Ethylene Glycol Industry,\" the existing and potentially promising raw material routes for producing ethylene glycol in China are as follows: 1. Production of ethylene through naphtha cracking, followed by conversion of ethylene into ethylene glycol (a mature technology; it constitutes the main part of China’s current ethylene glycol production capacity, with costs determined primarily by crude oil prices). 2. Production of ethylene glycol from coal using the syngas-oxalic acid route (a mature technology; it is the main driver behind the growth of China’s ethylene glycol production capacity; by 2022, the capacity using this route is expected to reach 13.5 million tons). 3. Use of purchased methanol via MTO process, followed by conversion of ethylene into ethylene glycol (a mature technology); three large-scale plants are in operation, and costs depend on the price of methanol as the raw material; Jiangsu Sierbang produces mainly EO and its derivatives. ) 4. Integrated CTO using coal-based olefins, and the production of ethylene glycol from ethylene (a mature technology; however, no plants have been put into operation for this route due to factors such as investment requirements, project approval processes, and the owners’ choices regarding product lines). 5. Ethylene production via ethane cracking, followed by the production of ethylene glycol from ethylene (a mature technology). Thanks to the low prices and abundant supply of ethane in the United States, several large-scale projects in China for producing ethylene through ethane cracking are in the preliminary stages; ethylene glycol is one of the key downstream products derived from this process. 6. The syngas-based formaldehyde/glycolic acid route for coal-to-ethylene glycol production (a technology still in the demonstration phase, which offers advantages in terms of reactor size, energy consumption, and water usage compared to other coal-to-ethylene glycol processes). http://img.yf116.cn/image/img/20180326/1545245672495.jpg Yajia Consulting believes that for the coal-to-ethylene glycol production method based on syngas oxalate esters, other technologies such as the naphtha cracking route for ethylene and ethylene glycol production, the MTO route, and the ethane cracking route for ethylene and ethylene glycol production will all be strong competitors. According to Asia Chemical Consulting’s \"2018 Annual Report on the Technical and Economic Aspects of Ethylene Production in China,\" the costs of producing ethylene using these three different technical approaches in East China in 2017 are shown in the figure below. Note: In 2017, the average price of international Brent crude oil was 54.8 dollars per barrel, while the average price of methanol in the East China region was 2,778 yuan per ton. Ethane cracking uses imported ethane, and the price of this raw material is calculated based on the \"local ethane market price in the United States + liquefaction costs + shipping fees\" (the average price of MB ethane in the U.S. in 2017 was 3.4 dollars per mmbtu). http://img.yf116.cn/image/img/20180326/154645676479.jpg According to Yaha Consulting’s \"2018 Annual Report on Coal-Based Ethylene Glycol in China\", the price of coal, the raw material used for producing ethylene glycol, was estimated at 360 yuan per ton (excluding VAT) in 2017. The costs of producing ethylene glycol through petrochemical routes and coal-based routes are shown in the figure below. http://img.yf116.cn/image/img/20180326/154785682823.jpg As can be seen from the above, the ethylene glycol plants that were able to operate stably under high load in 2017 were profitable, regardless of the raw material route used. Based on a Brent crude oil price of $54.8 per barrel in 2017, the cost of producing ethylene glycol via the naphtha cracking route is 3,808 yuan per ton, which is slightly higher than the cost of 3,652 yuan per ton for CTMEG produced using the oxalate route. Considering the MEG freight cost of 600 yuan/ton from the northwest region to the east China region, the naphtha cracking route offers slightly better profitability for MEG production. However, starting from the second half of 2017, international oil prices rose sharply, greatly enhancing the competitiveness of coal-based ethylene glycol. Due to the high methanol prices in 2017, the MTO route had the highest cost for producing ethylene glycol; however, as the plant is located in Zhejiang, close to downstream consumption markets, it is still able to achieve decent profits. In 2017, producing ethylene and ethylene glycol from imported ethane in the United States resulted in the lowest costs and the highest profitability. With the completion and operation of multiple projects for the comprehensive utilization of light hydrocarbons, large-scale ethane cracking plants for ethylene production will make their debut in China, and are expected to become an important route for ethylene production in the country. Ethylene glycol is also an important downstream product in large-scale ethane cracking projects for the production of ethylene. http://img.yf116.cn/image/img/20180326/1548185689860.jpg The first phase of the project for the comprehensive utilization of 4 million tons of olefins per year at Lianyungang Petrochemical Co., a subsidiary of Satellite Petrochemical, is carried out in two stages. The scale of the main units in Phase 1 is as follows: an ethylene complex with a capacity of 1.25 million tons per year, EO/EG plants with capacities of 720,000/910,000 tons per year, an LLDPE plant with a capacity of 500,000 tons per year, and an HDPE plant with a capacity of 400,000 tons per year. The main plant capacities in the second phase are as follows: 1.25 million tons per year of light hydrocarbon cracking unit, 72/91×20,000 tons per year of EO/EG units, 500,000 tons per year of LDPE unit, 500,000 tons per year of styrene unit, and 260,000 tons per year of acrylonitrile unit. The main units of Nanshan Group’s ethane comprehensive utilization project include an ethylene plant with a capacity of 2 million tons per year, an ethylene glycol plant with a capacity of 1.25 million tons per year, a plant for producing ethylene-vinyl acetate polymers/low-density polyethylene resin with a capacity of 400,000 tons per year, a plant for producing linear low-density polyethylene resin with a capacity of 350,000 tons per year, a plant for producing high-density polyethylene resin with a capacity of 350,000 tons per year, and a plant for producing high-density polyethylene resin/linear low-density polyethylene resin with a capacity of 300,000 tons per year. Overall, the oxalate route for producing ethylene glycol from coal has become an important part of China’s ethylene glycol production capacity; it shares the Chinese ethylene glycol market with ethylene glycol produced from naphtha cracking, ethylene glycol produced via the MTO route, and imported ethylene glycol. However, the ethane cracking to ethylene route, which is cheaper, holds great potential for ethylene glycol production. Furthermore, although the coal-to-ethylene glycol technology using the syngas formaldehyde/glycolic acid route is still in the demonstration stage, it offers advantages over other coal-to-ethylene glycol processes in terms of reactor size, energy consumption, and water usage, making it worthy of attention across the industry.