A Financial Analysis for the Recovery of High Purity Propylene from Refinery LPG R.E. (Ed) Palmer Ian M. Glasgow

Transcription

1 A Financial Analysis for the Recovery of High Purity Propylene from Refinery LPG R.E. (Ed) Palmer Ian M. Glasgow 2014 NSF Shale Monetization Workshop La Toretta Resort March 28 th, 2014

2 Presentation Highlights Refinery Overview Propylene Market Background Propylene Splitter Design and Optimization Case Study and Financial Analysis January 2012 March 2014 Conclusions 2 - Wood Group Mustang

3 Refinery Overview 3 - Wood Group Mustang

4 MM metric ton/year Propylene Market Background 120 Propylene Worldwide Production Propylene Source Steam Crackers FCC On-Purpose Propylene Source Steam Crackers FCC On-Purpose Propylene Source Steam Crackers FCC On-Purpose 4 - Wood Group Mustang from Chuck Carr, World Petrochemical Conference, March 2011

5 Propylene Splitter Design & Optimization Process Flow Diagram 5 - Wood Group Mustang

6 Design Basis Arab Medium Refinery Capacity (MBPSD) FCC Capacity (MBPSD) PP Splitter Capacity (MBPSD) 85,000 25,000 3, ,000 50,000 6, ,000 80,000 10, , ,000 15, Wood Group Mustang

7 Design Basis Propylene Splitter Feed Basis 69% C 3 = 28% C 3 3% C 2 /C 4 Product Purity Specs Propylene 99.5% Propane 95% Heat Pump v. Conventional Distillation Evaluated multiple Operating Parameters 7 - Wood Group Mustang

8 Design Basis Oper Press (psig) Tower Trays two towers one tower Heat Pump Design Conventional Distillation Reboiler DT ( F) Tower Fabrication Shop Shop ft ID MAX On-Site On-Site Power Cost ($/MWh) Steam Cost ($/lb) Single Reboiler is 30,000 to 35,000 ft 2 MAX Wood Group Mustang

9 Evaluated Cost, MM$ Propylene Splitter Design & Optimization 75 Evaluated Cost Vs. Pressure Splitter Feed = 6,000 BPSD $/KwH Operating Pressure, PSIG 9 - Wood Group Mustang

10 Evaluated Cost, MM$ Propylene Splitter Design & Optimization Evaluated Cost Vs. Pressure Splitter Feed = 15,000 BPSD Operating Pressure, PSIG $/KwH Wood Group Mustang

11 Propylene Splitter Design & Optimization 140 Evaluated Cost Comparison ($MM) 6,000 BPSD 15,000 BPSD Wood Group Mustang 35 psig 85 psig 135 psig 265 psig Heat Pump Design Conventional Distillation

12 Propylene Splitter Design & Optimization Process Flow Diagram Evaluate Compressor Design Operating Pressure Reboiler DT 12 - Wood Group Mustang

13 Polytropic Head, ft Propylene Splitter Design Compressor Head vs Operating Pressure 6,000 BPSD / 150 Trays Multi Stage Single Stage Reboiler Delta T 10 F 15 F 20 F 25 F Operating Pressure, psig 13 - Wood Group Mustang

14 Propylene Splitter Design & Optimization Process Flow Diagram 14 - Wood Group Mustang

15 Propylene Splitter Design & Optimization Single Stage Compressor Maximize DT Operating Multi Stage pressure Shop Compressor vs. impacts On-Site Heat Minimize Fabrication Pump Design DT Splitter Feed Rate, BPSD 3,000 6,000 10,000 15,000 Operating Pressure, psig Number of Towers Trays, Total Dia/Length, FT 8.5/ /180 15/ /250 Compressor Stages Horsepower 1,575 3,150 4,700 7,050 Number of Reboilers Surface, FT 2 Each 12,350 24,700 28,000 32,000 Capital Investment, MM$ Wood Group Mustang

16 Evaluated Cost, MM$ Evaluated Cost, MM$ Propylene Splitter Design & Optimization Shop Fabricated Tower 35 PSIG On-Site Fabricated Tower ,000 BPSD Trays ,000 BPSD One Tower Trays Reboiler Delta T, F Reboiler Delta T, F Two Towers 16 - Wood Group Mustang

17 Evaluated Cost, MM$ Evaluated Cost, MM$ Evaluated Cost 85 PSIG ,000 BPSD Trays ,000 BPSD Trays Reboiler Delta T, F Reboiler Delta T, F 17 - Wood Group Mustang

18 Evaluated Cost, MM$ Evaluated Cost, MM$ Evaluated Cost 135 PSIG ,000 BPSD Trays ,000 BPSD Trays Reboiler Delta T, F Reboiler Delta T, F 18 - Wood Group Mustang

19 Propylene Splitter Design & Optimization Prefractionation: Ethylene / Ethane Butylenes / Butanes Treating: Water / COS / Oxygenates: Mole Sieve / Alumina Arsine / Phosphine: Copper Oxide Storage: Bullets Spheres Refrigerated Storage 19 - Wood Group Mustang

20 Case Study & Financial Analysis January 2012 Polymer Grade Propylene 60 to 80 cents/lb Polymer/Refinery Grade Differential 5 to 10 cents/lb Alkylate Price $2.90 to $3.20/gal 20 - Wood Group Mustang

21 cents/lb Case Study & Financial Analysis March Propylene Polymer v. Refinery Differential Mar 2014 Estimate Jan 2012 Estimate Year Differential remained near 2012 MAX 21 - Wood Group Mustang from IHS Chemical

22 cents/lb Propylene Market Background Propylene Polymer Grade Price Year 22 - Wood Group Mustang from IHS Chemical

23 cents/lb Case Study & Financial Analysis March 2014 Propylene Polymer Grade Price Jan 2012 Estimate Year Mar 2014 Estimate 23 - Wood Group Mustang Price has fallen but stayed above 2012 MIN from IHS Chemical

24 cents/lb Propylene Market Background Propylene Refinery Grade - Alkylate Value Year 24 - Wood Group Mustang

25 cents/lb Case Study & Financial Analysis March 2014 Propylene Polymer Grade v. Alkylate Differential Year Alkylate is now a higher value product than Propylene 25 - Wood Group Mustang from IHS Chemical

26 Rate of Return, % Case Study & Financial Analysis January % 120% 100% 6,000 BPSD Alkylate Value $/Gal 80% 60% 40% 20% 0% 15% ROI Propylene Price, ct/lb Wood Group Mustang

27 Rate of Return, % Case Study & Financial Analysis January % 120% 100% 15,000 BPSD Alkylate Value $/Gal 80% 60% 40% 20% 15% ROI % Propylene Price, ct/lb 27 - Wood Group Mustang

28 Propylene Price, ct/lb Case Study & Financial Analysis January MAX Prices and Feed Rates to Achieve Target ROI Alkylate Value $/Gal MIN ,000 5,000 7,000 9,000 11,000 13,000 15,000 Splitter Feed, BPSD 28 - Wood Group Mustang

29 Polymer and Refinery Propylene Price Difference, ct/lb Case Study & Financial Analysis January Polymer Grade/Refinery Grade Propylene Price Difference to Achieve Target ROI of 15% MAX 8 6 MIN ,000 5,000 7,000 9,000 11,000 13,000 15,000 Splitter Feed, BPSD 29 - Wood Group Mustang

30 Conclusions Financial impacts from Shale are still in flux In 2012 and 2014 converting Refinery LPG to Polymer Grade PP had positive economics In 2014 Alkylate is a higher value product than Polymer Grade PP In current market if refiner has Alkylate Capacity, LPG should be converted to Alkylate If there is no Alkylate capacity, economics to make high purity PP from LPG still remain. Flux in economics likely continue as Shale economics continue to change 30 - Wood Group Mustang

31 THANK YOU