The Propylene Oxide Problem

The Propylene Oxide Problem

Propylene oxide (PO) is in strong demand, especially for polyurethanes applications, but tight control on the technology is limiting the building of new plants. PO is one of the fastest growing uses of propylene, with production up 3.5%/year from 2010-2016. Given the forecast growth rates, more PO units need to be built to satisfy demand. But planned plants are few and far between with technology limitations strong. However, this could change in the near future as the Chinese launch new production processes. PO technology is currently in its third generation. In 2006 Sumitomo developed a method using oxidation by cumene hydroperoxide. The by-product cumyl alcohol can be recycled back to cumene. This was followed in 2008 by technology oxidising propylene with hydrogen peroxide (HPPO), with water the only by-product. This was simultaneously developed by Degussa-Uhde (now Evonik) and BASF/Dow Chemical. Sumitomo’s technology has not taken off to the extent the company hoped. There are only two plants globally – the original one in Japan and one in Saudi Arabia, launched in 2009 by PetroRabigh, a Saudi Aramco/Sumitomo joint venture. Another two are planned to open in Asia, with licences from Sumitomo. One will open in 2018 in South Korea, operated by S-Oil. The second is in Thailand, operated by PTT Global Chemical and due to start in 2019. Industry sources say this process is complex and costly, and has been overshadowed by the newer, more efficient HPPO process. HPPO is a relatively simple process with few by-products. As such, it is seen as the most modern, cost efficient process. Degussa-Uhde claim the first plant – built in 2008 by SK Chemicals in Korea. This was very shortly followed by a BASF/Dow plant in Antwerp also in 2008. More plants came from BASF/Dow – a plant in Thailand in 2011, and a Dow joint venture Sadara Chemicals opening in Saudi Arabia in 2017. Degussa-Uhde (now owned by Evonik) sold the technology under licence to Jishen Chemical industries in Jilin, China (from 2014). However, a couple of Chinese players are working on their own HPPO technologies and this could be a game changer for the PO market. If Chinese players are successful, this could lead to a new wave of PO plants and a loosening of supply. Source: ICIS Chemical Business, 7/6/2017.

TCGR Note: The original process was the propylene chlorohydrin route used by Dow Chemical. This was superseded by oxidizing propylene using organic peroxides e.g. tert butyl peroxide (TBP) but copoducts like MTBE or styrene made POSM plant investment decisions difficult. RIPP/Sinopec are one of the Chinese groups working on HPPO technology. They began operating a commercial demonstration unit in late 2015 (see CAP Communications dated 10/19/2015).

IndianOil and LanzaTech Sign a Statement of Intent to Construct World’s First Refinery Off Gas-to-Bioethanol Production Facility in India

Indian Oil Corporation Limited (IndianOil) and LanzaTech have signed a Statement of Intent to construct the world’s first refinery off gas-to-bioethanol production facility in India. LanzaTech has developed a gas fermentation process to make fuels and chemicals. Instead of sugars and yeast, the company uses a biological catalyst to ferment waste gas emissions. The large volume of waste gas produced at industrial facilities such as refineries cannot be stored or transported; rather it must be combusted to make power locally and emitted as carbon dioxide (CO2). Power can be carbon-free, and in India today, the cost of renewable power has fallen below the cost of coal, accelerating the transition to a carbon-free grid. LanzaTech’s technology allows refineries to divert waste gases from the grid, supporting the transition to fully renewable power while recycling this carbon into liquid fuels and petrochemicals. The basic engineering for the 40 million litres (35K MTA) per annum demonstration facility will begin later this year for installation at IndianOil’s Panipat Refinery in Hayrana, India, at an estimated cost of 350 crore rupees (USD 55 million). It will be integrated into existing site infrastructure and will be LanzaTech’s first project capturing refinery off-gases. LanzaTech’s first commercial facility converting waste emissions from steel production to ethanol will come online in China in late 2017. Source: LanzaTech, 7/10/2017.

TCGR Note: CAP members should be aware that TCGR’s Carbon Dioxide and Conversion (CO2CC) Program has documented LanzaTech’s technology and other CO2 conversion processes in several reports. For more information, contact John Murphy at jmurphy@catalystgrp.com or +1.215.628.4447.

Volvo to Use Electric Motors in All Cars from 2019

Volvo Cars announced that every model from 2019 onwards would have an electric motor, making it the first traditional carmaker to call time on vehicles powered solely by an internal combustion engine. Volvo said that it would put electrification at the core of its business. From 2019 it will only make three types of cars: pure-electric, plug-in hybrids, and so-called “mild” hybrids combining a small petrol engine with a large battery. “This announcement marks the end of the solely combustion engine-powered car,” said Håkan Samuelsson, chief executive. “Volvo Cars has stated that it plans to have sold a total of 1m electrified cars by 2025.” The Swedish carmaker was purchased by Chinese domestic carmaker Geely in 2010. The new owners have proven to be a catalyst in the race to electrify its models, as China is already the world leader in electric car sales and Geely is the only Chinese-owned carmaker producing vehicles for the US. Globally, the market for pure-electric cars is tiny, accounting for less than 1 per cent of sales last year, but is growing quickly. Volvo said it would launch five pure-electric cars between 2019 and 2021. Three will come from Volvo while two will come from Polestar, the high-performance unit it launched last month. By 2019 no new Volvo cars will be sold without an electric motor, as internal combustion cars are “gradually phased out”, Volvo said. It also aims to make its manufacturing operations “climate-neutral” by 2025. Source: Financial Times, 7/6/2017, p. 11.

TCGR Note: It is projected that global light vehicle production will exceed 100 MIL/yr by 2020 and if only 1% of vehicle sales were pure electric last year that would be less than 1 MIL/yr in 2016. What is less obvious has been the growth of plug-in hybrids and gasoline-hybrids which are now approaching several million and predicted worldwide to be above 10% p.a. by 2022, mostly outside of the US. Note refiners should think about this impact on traditional transport fuel sales.