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IHS CHEMICAL

Propylene Process Summary

Process Economics Program Review 2016-11

December 2016 ihs.com

PEP Review 2016-11

Propylene Process Summary

Mike Kelly
Sr. Principal Analyst

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IHS Chemical | PEP Review 2016-11 Propylene Process Summary

PEP Review 2016-11

Propylene Process Summary
Mike Kelly, Sr. Principal Analyst

Abstract

Propylene is one of the largest volume petrochemicals, with a current worldwide production capacity of
around 120 million metric tons for polymer and chemical grades. The industry is somewhat unique
considering that most propylene is manufactured as a by-product from either steam cracking or refining
operations. Propylene was produced almost exclusively as a by-product until 10–15 years ago. The supply
landscape has changed considerably since then, with on-purpose propylene production technologies now
responsible for roughly 20% of global supply. The rapid build in on-purpose propylene capacity has largely
been driven by slower growth in supply from steam cracking coupled with continued strong demand.

This process summary reviews the key technology features and presents detailed process economics for the
principal routes to produce propylene, including both by-product and on-purpose technologies. The
following propylene technologies are included:

• Propylene from wide-range naphtha, max. propylene, front-end depropanizer with gas turbine driver

• Propylene, polymer-grade from refinery-grade propylene

• Propylene from propane by the CB&I/Lummus CATOFIN® process

• Propylene from propane by the UOP Oleflex™ process

• Propylene from propane by the Uhde STAR® process

• Coal-to-propylene process by Siemens gasifier

• Lignite-to-propylene process by Shell gasifier

• Methanol-to-propylene by the Lurgi MTP™ process

• Propylene production by the JGC/MCC DTP™ process

• Propylene from ethylene via dimerization and CB&I/Lummus Olefins Conversion Technology (OCT)

• Propylene from the KBR Superflex™ process

Given that feedstock prices can fluctuate greatly over time, a traditional process economics snapshot
comparison for a particular time and region can often be misleading if applied to investment decisions. For
investment purposes, using historical process economic comparisons over a long period of time provides a
better basis. To address the impact of feedstock price fluctuations, this process summary is accompanied
by an iPEPSpectra™ interactive data module that allows for quickly comparing historical process
economics of competing technologies in several major regions. The iPEPSpectra™ module uses Microsoft
Excel pivot tables and is a powerful interactive tool for comparing process economics at various levels,
such as variable costs, plant gate costs, full production costs, and capital costs. An iPEPSpectra™ historical
economic comparison provides a more comprehensive assessment of competing technologies and enhances
investment decisions.
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IHS Chemical | PEP Review 2016-11 Propylene Process Summary

Contents

1 Executive summary 6
Technology and licensors 7
Steam cracking 7
Refinery propylene purification 7
Propane dehydrogenation 8
Metathesis 8
Fluid catalytic cracking 9
Coal gasification 11
Methanol-to-propylene 12
Process economics comparison 13
Carbon and water emissions comparison 15
Historical economics comparison 17
2 Market overview 19
Supply 19
Demand 20
Trade 21
Strategic Issues 22
3 Technology overview 26
Steam cracking 26
Chemistry 26
Reaction initiation 26
Reaction propagation 27
Reaction termination 28
Process description 29
Pyrolysis and quench 30
Compression, drying, and depropanizer 31
Subcooling and separation 31
Product separation 32
Refrigeration 32
Steam distribution 32
Refinery propylene purification 33
Process description 34
Propane dehydrogenation 35
Chemistry 35
Catalysts 36
Commercial processes 37
CB&I/Lummus CATOFIN® 37
UOP Oleflex™ 39
Uhde STAR® (STeam Active Reforming) process 40
Metathesis 42
Chemistry 42
Catalysts 43
Commercial processes 43
CB&I/Lummus OCT 43
Fluid catalytic cracking 44

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IHS Chemical | PEP Review 2016-11 Propylene Process Summary

Chemistry 45
Catalysts 46
Commercial processes 47
KBR Superflex™ 48
Coal-to-propylene 50
Gasification 50
Chemistry 51
Gasifier types 52
Shell process description 54
Siemens process description 56
Syngas cleanup process description 57
Methanol synthesis 59
Chemistry 59
Catalysts 60
Process description 60
Methanol-to-propylene 61
Chemistry 61
Catalysts 62
Commercial processes 63
4 Process economics comparison 67
Capital costs 67
Production costs 68
5 Historical economics comparison 71
Prices 71
Propylene 71
Polymer-grade 71
Refinery-grade 72
P/E ratio 72
Ethylene 73
Naphtha 74
Coal 75
Methanol 76
Propane 76
Production costs 77
6 Detailed process economics 84
Appendix A—Cited references 95
Appendix B—Cost basis 99

Tables
Table 1.1 Key process parameters for commercial PDH technologies 8
Table 1.2 Key process parameters for CB&I/Lummus OCT coupled with ethylene dimerization 9
Table 1.3 Key process parameters for the Superflex™ process 11
Table 1.4 Key characteristics of several major gasification technologies 12
Table 1.5 Key process parameters for commercial MTP technologies 13
Table 1.6 CO2 emissions and water consumption for propylene production processes (ton/ton
propylene) 16
Table 3.1 Main characteristics of gasifiers 53
Table 4.1 Capital costs by technology in the US Gulf Coast—Second quarter 2016 67
Table 4.2 Production costs by technology in the US Gulf Coast—Second quarter 2016 69
Table 6.1 Detailed economics—Propylene from wide-range naphtha with front-end depropanizer 84
Table 6.2 Detailed economics—Propylene, polymer-grade from refinery-grade propylene 85
Table 6.3 Detailed economics—Propylene from propane by the CATOFIN® process 86
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IHS Chemical | PEP Review 2016-11 Propylene Process Summary

Table 6.4 Detailed economics—Propylene from propane by the Oleflex™ process 87

Table 6.5 Detailed economics—Propylene from propane by the Uhde STAR® process 88
Table 6.6 Detailed economics—Coal-to-propylene process by Siemens gasifier 89
Table 6.7 Detailed economics—Lignite-to-propylene process by Shell gasifier 90
Table 6.8 Detailed economics—Methanol-to-propylene by the Lurgi MTP™ process 91
Table 6.9 Detailed economics—Propylene production by the JGC/MCC DTP™ process 92
Table 6.10 Detailed economics—Propylene from ethylene via dimerization and OCT 93
Table 6.11 Detailed economics—Propylene from Superflex™ process 94

Figures
Figure 1.1 Capital costs by technology in the US Gulf Coast—Second quarter 2016 14
Figure 1.2 Production costs by technology in the US Gulf Coast—Second quarter 2016 15
Figure 1.3 Carbon dioxide emissions for propylene production processes 16
Figure 1.4 Water requirement for propylene production processes 17
Figure 1.5 Historical production costs for selected technologies in the US Gulf Coast 18
Figure 2.1 World PG/CG propylene production by technology 20
Figure 2.2 World PG/CG propylene demand 21
Figure 2.3 Regional PG/CG propylene net trade 22
Figure 3.1 Block flow diagram—Propylene from wide-range naphtha with front-end depropanizer 30
Figure 3.2 General refinery process flow 33
Figure 3.3 Block flow diagram—Propylene, polymer-grade from refinery-grade propylene 35
Figure 3.4 Block flow diagram—Propylene from propane by the CATOFIN® process 37
Figure 3.5 Block flow diagram—Propylene from propane by the Oleflex™ process 39
Figure 3.6 Block flow diagram—Propylene from propane by the Uhde STAR® process 41
Figure 3.7 Block flow diagram—Propylene from ethylene via dimerization and OCT 44
Figure 3.8 Block flow diagram—Propylene from Superflex™ process 49
Figure 3.9 Block flow diagram—Lignite-to-propylene process by Shell gasifier 55
Figure 3.10 Block flow diagram—Coal-to-propylene process by Siemens gasifier 56
Figure 3.11 Block flow diagram—Methanol-to-propylene by the Lurgi MTP™ process 64
Figure 3.12 Block flow diagram—Propylene production by the JGC/MCC DTP™ process 66
Figure 4.1 Capital costs by technology in the US Gulf Coast—Second quarter 2016 68
Figure 4.2 Production costs by technology in the US Gulf Coast—Second quarter 2016 69
Figure 4.3 Production costs by technology in China—Second quarter 2016 70
Figure 5.1 Polymer-grade propylene prices by region 71
Figure 5.2 Refinery-grade propylene prices by region 72
Figure 5.3 P/E price ratio by region 73
Figure 5.4 Ethylene prices by region 73
Figure 5.5 Naphtha prices by region 75
Figure 5.6 Coal prices by region 75
Figure 5.7 Methanol prices by region 76
Figure 5.8 Propane prices by region 77
Figure 5.9 Production costs for selected technologies in the US Gulf Coast 78
Figure 5.10 Production costs for selected technologies in Germany 79
Figure 5.11 Production costs for selected technologies in China 79
Figure 5.12 Regional production costs—Propylene from wide-range naphtha steam cracking 80
Figure 5.13 Regional production costs—Propylene, polymer-grade from refinery-grade propylene 80
Figure 5.14 Regional production costs—Propylene from propane by the Oleflex™ process 81
Figure 5.15 Regional production costs—Coal-to-propylene process by Siemens gasifier 82
Figure 5.16 Regional production costs—Methanol-to-propylene by the Lurgi MTP™ process 82
Figure 5.17 Regional production costs—Propylene from ethylene via dimerization and OCT 83

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