Technology Economics Propylene Via Propane Dehydrogenation Part 2 PDF

Propylene
via Propane
Dehydrogenation,
Part 2
#TEC006B
Technology Economics
Propylene Production via Propane Dehydrogenation, Part 2
2013
Abstract
Propylene has established itself as a major member of the global olefins business, second only to ethylene. Globally, the greatest
volume of propylene is generated as a by-product in steam crackers and through the fluid catalytic cracking (FCC) process.
With ethane prices falling in the USA due to the exploration of shale gas reserves, the low price of ethylene produced from this raw
material has given ethane-fed steam crackers in North America a feedstock advantage. Such a change has put naphtha-fed steam
crackers at a disadvantage, with many of them shutting down or revamping to use ethane as feedstock. Nevertheless, the
propylene output rates from ethane-fed crackers are negligible. This, along with the rise in propylene demand, has resulted in a
tight propylene market.
For this reason, new and novel lower-cost chemical processes for on-purpose propylene production technologies are of high
interest to the petrochemical marketplace. Such processes include: Metathesis, Propane Dehydrogenation (PDH), Methanol-to-
Olefins/Methanol-to-Propylene (MTO/MTP), High Severity FCC, and Olefins Cracking. Among those, MTO/MTP and PDH stand out
due to the use of low-cost raw materials. In the US, some major companies, including Dow Chemical and Enterprise Products, are
building PDH plants to take advantage of shale gas, the fastest growing source of gas in the country. In Middle East, the propane
output is expected to be capable of supplying not only domestic needs, but also the demand from China, where many PDH
projects are scheduled to go on stream within the next few years.
In this study, the production of propylene through the dehydrogenation of propane is reviewed. Included in the analysis is an
overview of the technology and economics of a method similar to the Lummus CATOFIN® process, the technology selected by
Enterprise Products to produce propylene on Texas Gulf Coast. Both the capital investment and the operating costs are presented
for a plant constructed on the US Gulf Coast and in China. Process consumptions were validated through a comparison with
publicly available information about Petrologistics’ PDH unit, located in Texas and based on CATOFIN technology.
The economic analysis presented in this report is based on a plant fully integrated with a petrochemical complex and capable of
producing 590 kta of polymer grade propylene. The estimated CAPEX for such a plant on the US Gulf Coast is USD 493 million.
While China presented the lowest CAPEX, the USA presented the most advantageous operational margins, due to the rise of shale
gas and reduction in propane prices. The more competitive raw material justifies Enterprise Products choice for a new PDH plant
in Texas. Although China still depends on imported propane from Middle East, being subjected to shortages of supply, the
historical operational margins are high enough to explain the number of PDH planned projects in the country. The attractiveness
of propane dehydrogenation is proven by the calculated internal rate of return above 30% in the United States.
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Contents
About this Study .............................................................................................................................................................. 8
Object of Study.............................................................................................................................................................................................................................8
Analysis Performed ....................................................................................................................................................................................................................8
Construction Scenarios ..............................................................................................................................................................................................................8

Location Basis ...................................................................................................................................................................................................................................9
Design Conditions......................................................................................................................................................................................................................9
Study Background ........................................................................................................................................................ 10
About Propylene ......................................................................................................................................................................................................................10
Introduction.................................................................................................................................................................................................................................... 10
Applications.................................................................................................................................................................................................................................... 10
Manufacturing Alternatives ..............................................................................................................................................................................................11

Licensor(s) & Historical Aspects......................................................................................................................................................................................13
Technical Analysis......................................................................................................................................................... 14
Chemistry.......................................................................................................................................................................................................................................14
Raw Material ................................................................................................................................................................................................................................14
Technology Overview...........................................................................................................................................................................................................16
Detailed Process Description & Conceptual Flow Diagram.......................................................................................................................17
Area 100: Reaction and Catalyst Regeneration.......................................................................................................................................................17

Area 200: Product Recovery ................................................................................................................................................................................................17
Key Consumptions ..................................................................................................................................................................................................................... 18
Technical Assumptions ........................................................................................................................................................................................................... 18
Labor Requirements.................................................................................................................................................................................................................. 18
ISBL Major Equipment List.................................................................................................................................................................................................21

OSBL Major Equipment List ..............................................................................................................................................................................................23
Other Process Remarks ........................................................................................................................................................................................................24
Technology Advances.............................................................................................................................................................................................................. 24
Reactor Operating Cycle......................................................................................................................................................................................................... 24
PDH-Integration Alternatives...............................................................................................................................................................................................25
Economic Analysis ........................................................................................................................................................ 26
General Assumptions............................................................................................................................................................................................................26
2
Project Implementation Schedule...............................................................................................................................................................................27
Capital Expenditures..............................................................................................................................................................................................................27
Fixed Investment......................................................................................................................................................................................................................... 27
Working Capital............................................................................................................................................................................................................................ 30
Other Capital Expenses ...........................................................................................................................................................................................................31
Total Capital Expenses ............................................................................................................................................................................................................. 31
Operational Expenditures ..................................................................................................................................................................................................31
Manufacturing Costs................................................................................................................................................................................................................. 31
Historical Analysis........................................................................................................................................................................................................................ 32
Economic Datasheet .............................................................................................................................................................................................................32
Regional Comparison & Economic Discussion.................................................................................................... 35
Regional Comparison............................................................................................................................................................................................................35
Capital Expenses.......................................................................................................................................................................................................................... 35
Operational Expenses............................................................................................................................................................................................................... 35
Economic Datasheet................................................................................................................................................................................................................. 35
Economic Discussion ............................................................................................................................................................................................................36
References....................................................................................................................................................................... 38
Acronyms, Legends & Observations....................................................................................................................... 39
Technology Economics Methodology................................................................................................................... 40
Introduction.................................................................................................................................................................................................................................40
Workflow........................................................................................................................................................................................................................................40
Capital & Operating Cost Estimates ............................................................................................................................................................................42
ISBL Investment............................................................................................................................................................................................................................ 42
OSBL Investment ......................................................................................................................................................................................................................... 42
Working Capital............................................................................................................................................................................................................................ 43
Start-up Expenses ....................................................................................................................................................................................................................... 43
Manufacturing Costs................................................................................................................................................................................................................. 44
Contingencies ............................................................................................................................................................................................................................44
Accuracy of Economic Estimates..................................................................................................................................................................................45
Location Factor..........................................................................................................................................................................................................................45
Appendix A. Mass Balance & Streams Properties............................................................................................... 47

Appendix B. Utilities Consumption Breakdown ................................................................................................. 52
Appendix C. Carbon Footprint ................................................................................................................................. 53
3
Appendix D. Equipment Detailed List & Sizing................................................................................................... 54
Appendix E. Detailed Capital Expenses................................................................................................................. 64
Direct Costs Breakdown ......................................................................................................................................................................................................64

Indirect Costs Breakdown ..................................................................................................................................................................................................65
Appendix F. Economic Assumptions...................................................................................................................... 66
Capital Expenditures..............................................................................................................................................................................................................66
Construction Location Factors ...........................................................................................................................................................................................66

Working Capital............................................................................................................................................................................................................................ 66
Operational Expenses ...........................................................................................................................................................................................................67
Fixed Costs ...................................................................................................................................................................................................................................... 67

Depreciation................................................................................................................................................................................................................................... 67
EBITDA Margins Comparison...............................................................................................................................................................................................67
Appendix G. Released Publications ........................................................................................................................ 68

Appendix H. Technology Economics Form Submitted by Client ................................................................. 69
4
List of Tables
Table 1 – Construction Scenarios Assumptions (Based on Degree of Integration) ......................................................................................9

Table 2 – Location & Pricing Basis ....................................................................................................................................................................................................9
Table 3 – General Design Assumptions .......................................................................................................................................................................................9
Table 4 – Major Propylene Consumers......................................................................................................................................................................................10
Table 5 - Raw Materials & Utilities Consumption (per ton of product)................................................................................................................18
Table 6 – Design & Simulation Assumptions.........................................................................................................................................................................18
Table 7 – Labor Requirements for a Typical Plant..............................................................................................................................................................18
Table 8 – Main Streams Operating Conditions and Composition..........................................................................................................................21
Table 9 – Inside Battery Limits Major Equipment List......................................................................................................................................................21
Table 10 - Outside Battery Limits Major Equipment List ...............................................................................................................................................23
Table 11 – Base Case General Assumptions...........................................................................................................................................................................26
Table 12 - Bare Equipment Cost per Area (USD Thousands)......................................................................................................................................27
Table 13 – Total Fixed Investment Breakdown (USD Thousands) ..........................................................................................................................27
Table 14 – Working Capital (USD Million) ................................................................................................................................................................................30
Table 15 – Other Capital Expenses (USD Million) ...............................................................................................................................................................31
Table 16 – CAPEX (USD Million)......................................................................................................................................................................................................31
Table 17 – Manufacturing Fixed Cost (USD/ton) ................................................................................................................................................................31
Table 18 – Manufacturing Variable Cost (USD/ton)..........................................................................................................................................................32
Table 19 – OPEX (USD/ton)................................................................................................................................................................................................................32
Table 20 – Technology Economics Datasheet: Propylene via Propane Dehydrogenation on the US Gulf Coast...............34
Table 21 – Technology Economics Datasheet: Propylene via Propane Dehydrogenation in China ............................................37
Table 22 – Project Contingency......................................................................................................................................................................................................44
Table 23 – Criteria Description.........................................................................................................................................................................................................44
Table 24 – Accuracy of Economic Estimates .........................................................................................................................................................................45
Table 25 – Detailed Material Balance & Streams Properties........................................................................................................................................47
Table 26 – Utilities Consumption Breakdown ......................................................................................................................................................................52
Table 27 – Assumptions for CO2e Emissions Calculation.............................................................................................................................................53
Table 28 – CO2e Emissions (ton/ton prod.)............................................................................................................................................................................53
Table 29 - Compressors ........................................................................................................................................................................................................................54
Table 30 – Drivers......................................................................................................................................................................................................................................54
Table 31 – Heat Exchangers ..............................................................................................................................................................................................................55
Table 32 – Pumps......................................................................................................................................................................................................................................59
5
Table 33 – Columns.................................................................................................................................................................................................................................60
Table 34 – Utilities Supply...................................................................................................................................................................................................................61
Table 35 – Vessels & Tanks..................................................................................................................................................................................................................61
Table 36 – Indirect Costs Breakdown for the Base Case (USD Thousands) ......................................................................................................65
Table 37 – Detailed Construction Location Factor............................................................................................................................................................66
Table 38 – Working Capital Assumptions (Base Case) ....................................................................................................................................................66
Table 39 – Other Capital Expenses Assumptions (Base Case) ...................................................................................................................................66
Table 40 – Other Fixed Cost Assumptions ..............................................................................................................................................................................67
Table 41 – Depreciation Value & Assumptions ....................................................................................................................................................................67
6
List of Figures
Figure 1 – Construction Scenarios Assumptions (Based on Degree of Integrations) ..................................................................................8

Figure 2 – Propylene from Multiple Sources .........................................................................................................................................................................12
Figure 3 – Propane Dehydrogenation Reaction Network............................................................................................................................................14
Figure 4 – US Natural Gas Production History and Forecast (Trillion Cubic Feet)........................................................................................15
Figure 5 – Process Block Flow Diagram.....................................................................................................................................................................................16
Figure 6 – Inside Battery Limits Conceptual Process Flow Diagram.....................................................................................................................19
Figure 7 – Typical Operating Cycle for a Eight Reactor System................................................................................................................................24
Figure 8 – Project Implementation Schedule.......................................................................................................................................................................26
Figure 9 – Total Direct Cost of Different Integration Scenarios (USD Thousands) ......................................................................................29
Figure 10 – Total Fixed Investment of Different Integration Scenarios (USD Thousands) ....................................................................29
Figure 11 – Total Fixed Investment Validation (USD Million).....................................................................................................................................30
Figure 12 – OPEX and Product Sales History (USD/ton) ................................................................................................................................................33
Figure 13 – EBITDA Margin & IP Indicators History Comparison..............................................................................................................................33
Figure 14 – CAPEX per Location (USD Million).....................................................................................................................................................................35
Figure 15 – Operating Costs Breakdown per Location (USD/ton) .........................................................................................................................36
Figure 16 – Methodology Flowchart...........................................................................................................................................................................................41
Figure 17 – Location Factor Composition...............................................................................................................................................................................46
Figure 18 – ISBL Direct Costs Breakdown by Equipment Type (Base Case).....................................................................................................64
Figure 19 – OSBL Direct Costs by Equipment Type (Base Case) ..............................................................................................................................64
Figure 20 – Historical EBITDA Margins Regional Comparison ...................................................................................................................................67
7
About this Study
This study follows the same pattern as all Technology

Economics studies developed by Intratec and is based on
Analysis Performed
the same rigorous methodology and well-defined structure
(chapters, type of tables and charts, flow sheets, etc.). Construction Scenarios
This chapter summarizes the set of information that served The economic analysis is based on the construction of a
as input to develop the current technology evaluation. All plant inside a petrochemical complex, in which propane
required data were provided through the filling of the feedstock is locally provided and propylene product is
Technology Economics Form available at Intratec’s website. consumed by a nearby polypropylene unit. Therefore, no
storage for product or raw material is required. Additionally,
You may check the original form in the “Appendix H. the petrochemical complex supplies most utilities.
Technology Economics Form Submitted by Client”.
Since the Outside Battery Limits (OSBL) requirements–
storage and utilities supply facilities – significantly impact
Object of Study the capital cost estimates for a new venture, they may play a
decisive role in the decision as to whether or not to invest.
This assignment assesses the economic feasibility of an
Thus, in this study three distinct OSBL configurations are
industrial unit for propylene production via propane
compared. Those scenarios are summarized in Figure 1 and
dehydrogenation, implementing technology similar to the
Table 1
CB&I Lummus CATOFIN process.
The current assessment is based on economic data

gathered on Q1 2012 and a chemical plant’s nominal
capacity of 590 kta (thousand metric tons per year).
Figure 1 – Construction Scenarios Assumptions (Based on Degree of Integrations)
Non-Integrated Partially Integrated Fully Integrated
Petrochemical Complex Petrochemical Complex
Products Storage Products Consumer Products Consumer
ISBL Unit ISBL Unit ISBL Unit
Raw Materials Raw Materials Raw Materials

Storage Storage Provider
Grassroots unit Unit is part of a petrochemical complex Most infrastructure is already installed
Intratec | About this Study
Source: Intratec – www.intratec.us
8
Table 1 – Construction Scenarios Assumptions (Based on Degree of Integration)
Storage Capacity (Base Case for Evaluation)
Feedstock & Chemicals 20 days of operation 20 days of operation Not included
End-products & By-products 20 days of operation Not included Not included
Utility Facilities Included All required All required Only refrigeration unit
Control room, labs, gate house,

Control room, labs,
Support & Auxiliary Facilities maintenance shops,
maintenance shops, Control room and labs
(Area 900) warehouses, offices, change
warehouses
house, cafeteria, parking lot
Location Basis Regional specific conditions influence both construction

and operating costs. This study compares the economic
performance of two identical plants operating in different
locations: the US Gulf Coast and China.
Table 2 – Location & Pricing Basis
The assumptions that distinguish the two regions analyzed
in this study are provided in Table 2.
Design Conditions
The process analysis is based on rigorous simulation models
developed on Aspentech Aspen Plus and Hysys, which
support the design of the chemical process, equipment and
OSBL facilities.
The design assumptions employed are depicted in Table 3.
Table 3 – General Design Assumptions
Cooling water temperature 24 °C
Cooling water range 11 °C
Steam (High Pressure) 39 bar abs
Refrigerant (Propylene) -45 °C
Source: Intratec – www.intratec.us Wet Bulb Air Temperature 25 °C

Intratec | About this Study
9
Study Background
About Propylene While CG propylene is used extensively for most chemical

derivatives (e.g., oxo-alcohols, acrylonitrile, etc.), PG
propylene is used in polypropylene and propylene oxide
Introduction manufacture.
Propylene is an unsaturated organic compound having the PG propylene contains minimal levels of impurities, such as
chemical formula C3H6. It has one double bond, is the carbonyl sulfide, that can poison catalysts.
second simplest member of the alkene class of
hydrocarbons, and is also second in natural abundance. Thermal & Motor Gasoline Uses
Propylene has a calorific value of 45.813 kJ/kg, and RG

propylene can be used as fuel if more valuable uses are
unavailable locally (i.e., propane – propene splitting to
Propylene 2D structure chemical-grade purity). RG propylene can also be blended
into LPG for commercial sale.
Propylene is produced primarily as a by-product of
petroleum refining and of ethylene production by steam Also, propylene is used as a motor gasoline component for
cracking of hydrocarbon feedstocks. Also, it can be octane enhancement via dimerization – formation of
produced in an on-purpose reaction (for example, in polygasoline or alkylation.
propane dehydrogenation, metathesis or syngas-to-olefins
plants). It is a major industrial chemical intermediate that Chemical Uses
serves as one of the building blocks for an array of chemical
The principal chemical uses of propylene are in the
and plastic products, and was also the first petrochemical
manufacture of polypropylene, acrylonitrile, oxo-alcohols,
employed on an industrial scale.
propylene oxide, butanal, cumene, and propene oligomers.
Commercial propylene is a colorless, low-boiling, Other uses include acrylic acid derivatives and ethylene –
flammable, and highly volatile gas. Propylene is traded propene rubbers.
commercially in three grades:
Global propylene demand is dominated by polypropylene
Polymer Grade (PG): min. 99.5% of purity. production, which accounts for about two-thirds of total
propylene demand.
Chemical Grade (CG): 90-96% of purity.
Refinery Grade (RG): 50-70% of purity. Table 4 – Major Propylene Consumers
Applications Polypropylene Mechanical parts, containers, fibers, films
Acrylonitrile Acrylic fibers, ABS polymers

The three commercial grades of propylene are used for
different applications. RG propylene is obtained from Propylene glycol, antifreeze,
Propylene oxide
refinery processes. The main uses of refinery propylene are polyurethane
Intratec | Study Background
in liquefied petroleum gas (LPG) for thermal use or as an Oxo-alcohols Coatings, plasticizers
octane-enhancing component in motor gasoline. It can
Cumene Polycarbonates, phenolic resins
also be used in some chemical syntheses (e.g., cumene or
isopropanol). The most significant market for RG propylene Coatings, adhesives, super absorbent
Acrylic acid
is the conversion to PG or CG propylene for use in the polymers
production of polypropylene, acrylonitrile, oxo-alcohols and Source: Intratec – www.intratec.us
propylene oxide.
10
areas. This process converts heavy gas oil preferentially into
Manufacturing Alternatives gasoline and light gas oil.
Propylene is commercially generated as a co-product, either

The propylene yielded from olefins plants and FCC units is
in an olefins plant or a crude oil refinery’s fluid catalytic
typically considered a co-product in these processes, which
cracking (FCC) unit, or produced in an on-purpose reaction
are primarily driven by ethylene and motor gasoline
(for example, in propane dehydrogenation, metathesis or
production, respectively. Currently, the markets have
syngas-to-olefins plants).
evolved to the point where modes of by-product
production can no longer satisfy the demand for propylene.
Globally, the largest volume of propylene is produced in
NGL (Natural Gas Liquids) or naphtha steam crackers, which
A trend toward less severe cracking conditions, and thus to
generates ethylene as well. In fact, the production of
increase propylene production, has been observed in steam
propylene from such a plant is so important that the name
cracker plants using liquid feedstock. As a result, new and
“olefins plant” is often applied to this kind of manufacturing
novel lower-cost chemical processes for on-purpose
facility (as opposed to “ethylene plant”). In an olefins plant,
propylene production technologies are of high interest to
propylene is generated by the pyrolysis of the incoming
the petrochemical marketplace. Such processes include:
feed, followed by purification. Except where ethane is used
as the feedstock, propylene is typically produced at levels
Olefin Metathesis. Also known as disproportionation,
ranging from 40 to 60 wt% of the ethylene produced. The
metathesis is a reversible reaction between ethylene
exact yield of propylene produced in a pyrolysis furnace is a
and butenes in which double bonds are broken and
function of the feedstock and the operating severity of the
then reformed to form propylene. Propylene yields of
pyrolysis.
about 90 wt% are achieved. This option may also be
used when there is no butene feedstock. In this case,
The pyrolysis furnace operation usually is dictated by
part of the ethylene feeds an ethylene-dimerization
computer optimization, where an economic optimum for
unit that converts ethylene into butene.
the plant is based on feedstock price, yield structures,
energy considerations, and market conditions for the
Propane Dehydrogenation. A catalytic process that
multitude of products obtained from the furnace. Thus,
converts propane into propylene and hydrogen (by-
propylene produced by steam cracking varies according to
product). The yield of propylene from propane is
economic conditions.
about 85 wt%. The reaction by-products (mainly
hydrogen) are usually used as fuel for the propane
In an olefins plant purification area, also called separation
dehydrogenation reaction. As a result, propylene
train, propylene is obtained by distillation of a mixed C3
tends to be the only product, unless local demand
stream, i.e., propane, propylene, and minor components, in
exists for the hydrogen by-product.
a C3-splitter tower. It is produced as the overhead
distillation product, and the bottoms are a propane-
Methanol-to-Olefins/Methanol-to-Propylene. A
enriched stream. The size of the C3-splitter depends on the
group of technologies that first converts synthesis gas
purity of the propylene product.
(syngas) to methanol, and then converts the methanol
to ethylene and/or propylene. The process also
The propylene produced in refineries also originates from
produces water as by-product. Synthesis gas is
other cracking processes. However, these processes can be
produced from the reformation of natural gas or by the
compared to only a limited extent with the steam cracker
steam-induced reformation of petroleum products
for ethylene production because they use completely
such as naphtha, or by gasification of coal. A large
different feedstocks and have different production
amount of methanol is required to make a world-scale
objectives.
ethylene and/or propylene plant.
Refinery cracking processes operate either purely thermally

High Severity FCC. Refers to a group of technologies
or thermally – catalytically. By far the most important
that use traditional FCC technology under severe
process for propene production is the fluid- catalytic
conditions (higher catalyst-to-oil ratios, higher steam
cracking (FCC) process, in which the powdery catalyst flows
injection rates, higher temperatures, etc.) in order to
as a fluidized bed through the reaction and regeneration
maximize the amount of propylene and other light
products. A high severity FCC unit is usually fed with
11
gas oils (paraffins) and residues, and produces about These on-purpose methods are becoming increasingly
20-25 wt% propylene on feedstock together with significant, as the shift to lighter steam cracker feedstocks
greater volumes of motor gasoline and distillate by- with relatively lower propylene yields and reduced motor
products. gasoline demand in certain areas has created an imbalance
of supply and demand for propylene.
Olefins Cracking. Includes a broad range of
technologies that catalytically convert large olefins
molecules (C4-C8) into mostly propylene and small
amounts of ethylene. This technology will best be
employed as an auxiliary unit to an FCC unit or steam
cracker to enhance propylene yields.
Figure 2 – Propylene from Multiple Sources
Naphtha
Steam Cracker
NGL
Gas Oil Refinery FCC Unit
RG Propylene CG/PG Propylene
Propane PDH
Ethylene/
Metathesis
Butenes
Methanol MTO/MTP
Gas Oil High Severity FCC

C4 to C8
Olefins Cracking
Olefins
12
Licensor(s) & Historical Aspects world’s largest propane dehydrogenation units based on
CATOFIN technology (about 650 kta). The construction of a
750 kta CATOFIN unit has also been announced by
The continuous rise in petroleum prices, in addition to the
Enterprise Products and is planned to go on stream in the
increase in world demand for propylene, has led the
next few years.
chemical industry to innovate in the development of
production routes utilizing sources other than oil. In this
China built its first unit PDH in mid-2010, but has at least 9
context, the recent success of shale gas exploitation in the
plants planned. It has been confirmed that three of such
US is playing a key role in the shift to natural gas as a source
units will rely on CATOFIN technology. The first of the three
of feed to olefins production. This occurs because, in
is intended to go on stream in late 2012, while the
addition to methane, natural gas comprises C2-C4 paraffins,
remaining are scheduled to go on stream in 2014 and 2015.
such as propane, which is more frequently being used in
Capacities vary between 500 and 600 kta.
the production of propylene by a dehydrogenation process.
In this context, commercial interest in propane

dehydrogenation (PDH) has been increasing. Numerous
plants dedicated to the process are currently under
construction outside the United States and some are
planned for construction in the US. There are already five
licensed technologies:
CATOFIN® from Lummus Technology;
Oleflex™ from UOP;
Fluidized Bed Dehydrogenation (FBD) from

Snamprogetti/Yarsintez;
STAR process® from Krupp Uhde; and
PDH from Linde/BASF.
The CATOFIN® process for propylene production is an

extension of the CATADIENE process, originally developed
in the 1960s and 1970s by Houdry for the dehydrogenation
of n-butane to butadiene. The technology was first
employed to produce isobutylene from isobutane in the
1980s, with the expectation that it would supply the growth
demand of isobutylene. Isobutylene is a raw material for
MTBE, an oxygenate compound that, at the time, was in
increasing demand following a U.S. amendment that
allowed the increase of oxygen content in the gasoline
pool.
The CATOFIN process is now owned by Süd-Chemie and,

after it was purchased from Air Products & Chemicals, was
exclusively licensed by Lummus Technology. Licensed

capacities range from 250 kta to 750 kta. At present, there
are 14 CATOFIN operating units and a total of 20 licensees
worldwide.
Major projects have been conducted, specifically in the USA.

For instance, in Texas, Petrologistics operates one of the
13
Technical Analysis
Chemistry However, higher process temperatures increase the

propylene yield, provoking thermal cracking reactions.
Those reactions generate undesirable by-products, thus
In this technology, the dehydrogenation, an endothermic
increasing purification costs downstream. Typical thermal
equilibrium reaction, is carried out in the presence of heavy-
cracking side reactions are shown in Figure 3.
metal catalyst (chromium), which is manufactured by the
Houdry Group of Süd-Chemie, in Louisville, Kentucky. The
To mitigate cracking reactions, dehydrogenation reaction
following equation shows the propane dehydrogenation
occurs in conditions such as temperature ranges between
reaction:
580 and 650°C, and pressures slightly below atmospheric.
Raw Material
The feedstock to a PDH process unit is propane. Propane is
Propane Propylene Hydrogen
recovered from propane-rich liquefied petroleum gas (LPG)
streams from natural gas processing plants. Propane may
About 86 wt% of propane is converted to propylene. The
also be obtained in smaller amounts as a by-product of
propylene yield is favored by higher temperatures and
petroleum refinery operations, such as hydrocracking and
lower pressures.
fluidized catalytic cracking (FCC).
Figure 3 – Propane Dehydrogenation Reaction Network
– CH4
cracking
CH3 – CH2 – CH3 CH2 = CH2 C2H2n+2
Dehydrogenation
CH3 – CH = CH2
Oligomerization CH2 = CH – CH2 – CH3
Aromatization
CH3 – CH – CH2 – CH = CH2
Dehydrogenation
–
CH3
CH2 = CH – CH2 = CH3
Alkylation Polymerization
R
CnH2n
CnH(n+y)
Side Chain Coking

Aromatization
Intratec | Technical Analysis
Side reactions increase with

temperature and conversion
Coke
Source: Encyclopedia of Hydrocarbons, Volume II
14
As natural gas offerings in the USA are significantly However, in certain regions, propylene production must
increasing due to the rising exploitation of shale gas, compete with the use of propane. Propane prices may be
propane and ethane prices are decreasing. elevated in cold countries where it is used as fuel for
transportation and for domestic heating. Therefore, PDH
This changes both ethylene and propylene industrial units may have elevated raw material costs in Western
production by prompting new steam crackers to use Europe countries during the winter due to the demand for
ethane as feedstock and causing existing naphtha crackers propane as fuel.
to shut down (or to be reconfigured to crack ethane). Such
a shift to lighter feedstock in crackers reduces both ethylene
production costs and propylene output as a by-product,
since cracking ethane yields negligible amounts of
propylene as by-product in comparison with cracking
naphtha.
Figure 4 – US Natural Gas Production History and

Forecast (Trillion Cubic Feet)
Non-associated onshore Associated with oil

Coalbed methane Alaska
Non-associated offshore Tight gas
Shale gas
30
History Forecast
25
20
15
10
0
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
Source: US Energy Information Administration (EIA) AOE2012
The large amounts of shale gas reserves in the US are

considered to be capable of supplying ethane to crackers
for many years. According to the forecast from the US
Energy Information Administration (EIA), in 2035, about half
of the natural gas production in the US will be from shale
gas. This, along with the increasing trends in both
propylene demand and propane supply, makes the PDH
process an attractive chemical route to evaluate, not only in

the US, but also in China, where feedstock propane
imported from Middle East is available at low prices,
allowing attractive margins for PDH processes.
15
Technology Overview
The reactor effluent is routed through a high pressure
The process is separated into two different areas: the
steam generator, feed-effluent exchanger, and trim cooler
reaction and catalyst regeneration area; and the product
to the compressor. The compressor discharge is cooled,
recovery area.
dried and routed to a low temperature separation unit to
reject light ends.
Fresh feed is mixed with recycle feed from a propylene-
propane splitter (P-P Splitter) bottoms and vaporized by
The low temperature area off-gas, which is hydrogen-rich, is
exchange with process streams. To achieve reaction
sent to a Pressure Swing Adsorption (PSA) unit. This unit
temperature, feed is then heated in the charge heater.
separates high-purity hydrogen by-product from light fuel
gas. The liquid stream from low temperature separation,
The reaction step is continuous and uses a cyclic reactor
operation, in which multiple reactors go through a
fed to distillation facilities for product recovery.
controlled sequence of reaction and the fixed catalyst bed
regeneration. Since regeneration is a heat-driven process
The distillation facilities mainly consist of a deethanizer and
and it has been verified that temperatures decrease in the
propylene-propane splitter. The deethanizer recovers fuel
reactors due to the endothermic reactions, ancillary heating
C2 and lighter hydrocarbons as the top product. Propylene
equipment is required. Regeneration prepares the off-line
and propane are obtained as the bottom product and
reactors for their next reaction phase through the burning
follow to the P-P splitter, which produces PG propylene and
of any carbon deposited on the catalyst and reheating the
recycles propane bottom product to the reaction area.
reactor.
Figure 5 – Process Block Flow Diagram
Fuel Generated
Area 100 PG Propylene

Area 200
Fresh Propane Reaction & Catalyst
Product Recovery
Regeneration H2 By-Product
Recovered Propane
C4 Hydrocarbons
By-Product
16
17
Table 6 – Design & Simulation Assumptions
Table 5 - Raw Materials & Utilities Consumption (per ton

of product)
Labor Requirements
Table 7 – Labor Requirements for a Typical Plant

18
Figure 6 – Inside Battery Limits Conceptual Process Flow Diagram
19
Figure 6 – Inside Battery Limits Conceptual Process Flow Diagram (Cont.)
20
Table 8 presents the main streams composition and
operating conditions. For a more complete material
ISBL Major Equipment List
balance, see the “Appendix A. Mass Balance & Streams
Table 9 shows the equipment list by area. It also presents a
Properties.”
brief description and the main materials used.
Information regarding utilities flow rates is provided in

Find main specifications for each piece of equipment in
“Appendix B. Utilities Consumption Breakdown.” For further
“Appendix D. Equipment Detailed List & Sizing.”
details on greenhouse gas emissions caused by this process,
see “Appendix C. Carbon Footprint.”
21
22
OSBL Major Equipment List Table 10 shows the list of tanks located in the storage area
and the energy facilities required in the construction of a
non-integrated unit.
The OSBL is divided into three main areas: storage (Area
700), energy and water facilities (Area 800), and support &
auxiliary facilities (Area 900).
23
Figure 7 – Typical Operating Cycle for a Eight Reactor System
24
25
Economic Analysis
General Assumptions In Table 11, the IC Index stands for Intratec chemical plant
Construction Index, an indicator, published monthly by
Intratec, to scale capital costs from one time period to
The general assumptions for the base case of this analysis
another.
are outlined below.
This index reconciles prices trends of fundamental

components of a chemical plant construction such as labor,
Table 11 – Base Case General Assumptions material and energy, providing meaningful historical and
forecast data for our readers and clients.
The assumed operating hours per year indicated does not

represent any technology limitation; rather, it is an
assumption based on usual industrial operating rates
Additionally, Table 11 discloses assumptions regarding the

project complexity, technology maturity and data reliability,
which are of major importance for attributing reasonable
contingencies for the investment and for evaluating the
overall accuracy of estimates. Definitions and figures for
both contingencies and accuracy of economic estimates
can be found in this publication in the chapter “Technology
Economics Methodology.”
Figure 8 – Project Implementation Schedule

Intratec | Economic Analysis
26
Project Implementation “Appendix E. Detailed Capital Expenses” provides a detailed
breakdown for the direct expenses, outlining the share of
Schedule each type of equipment in total.
The main objective of knowing upfront the project After defining the total direct cost, the TFI is established by
implementation schedule is to enhance the estimates for adding field indirects, engineering costs, overhead, contract
both capital initial expenses and return on investment. fees and contingencies.
The implementation phase embraces the period from the

decision to invest to the start of commercial production. Table 13 – Total Fixed Investment Breakdown (USD
This phase can be divided into five major stages: (1) Basic
Thousands)
Engineering, (2) Detailed Engineering, (3) Procurement, (4)
Construction, and (5) Plant Start-up.
The duration of each phase is detailed in Figure 8.
Capital Expenditures
Fixed Investment
Table 12 shows the bare equipment cost associated with

each area of the project.
Table 12 - Bare Equipment Cost per Area (USD

Thousands)
Table 13 presents the breakdown of the total fixed

investment (TFI) per item (direct & indirect costs and project Source: Intratec – www.intratec.us
contingencies). For further information about the
components of the TFI please see the chapter “Technology
Indirect costs are defined by the American Association of
Economics Methodology”.
Cost Engineers (AACE) Standard Terminology as those
Fundamentally, the direct costs are the total direct material "costs which do not become a final part of the installation
and labor costs associated with the equipment (including but which are required for the orderly completion of the
installation bulks). The total direct cost represents the total installation."
bare equipment installed cost.
27
The indirect project expenses are further detailed in
“Appendix E. Detailed Capital Expenses”
Alternative OSBL Configurations
The total fixed investment for the construction of a new

chemical plant is greatly impacted by how well it will be
able to take advantage of the infrastructure already installed
in that location.
For example, if there are nearby facilities consuming a unit’s

final product or supplying a unit’s feedstock, the need for
storage facilities significantly decreases, along with the total
fixed investment required. This is also true for support
facilities that can serve more than one plant in the same
complex, such as a parking lot, gate house, etc.
This study analyzes the total fixed investment for three

distinct scenarios regarding OSBL facilities:
Non-Integrated Plant
Plant Partially Integrated
Plant Fully Integrated
The detailed definition, as well as the assumptions used for

each scenario is presented in the chapter “About this Study”
The influence of the OSBL facilities on the capital

investment is depicted in Figure 9 and in Figure 10.
28
Figure 9 – Total Direct Cost of Different Integration Scenarios (USD Thousands)
Figure 10 – Total Fixed Investment of Different Integration Scenarios (USD Thousands)
29
Working Capital
Working capital, described in Table 14, is another significant

investment requirement. It is needed to meet the costs of
labor; maintenance; purchase, storage, and inventory of
field materials; and storage and sales of product(s).
Assumptions for working capital calculations are found in

“Appendix F. Economic Assumptions.”
Table 14 – Working Capital (USD Million)
Figure 11 – Total Fixed Investment Validation (USD Million)

30
Other Capital Expenses
Table 16 – CAPEX (USD Million)
Start-up costs should also be considered when determining
the total capital expenses. During this period, expenses are
incurred for employee training, initial commercialization
costs, manufacturing inefficiencies and unscheduled plant
modifications (adjustment of equipment, piping,
instruments, etc.).
Initial costs are not addressed in most studies on estimating Source: Intratec – www.intratec.us
but can become a significant expenditure. For instance, the
initial catalyst load in reactors may be a significant cost and,
in that case, should also be included in the capital
estimates.
Operational Expenditures
The purchase of technology through paid-up royalties or Manufacturing Costs
licenses is considered to be part of the capital investment.
The manufacturing costs, also called Operational
Other capital expenses frequently neglected are land Expenditures (OPEX), are composed of two elements: a fixed
acquisition and site development. Although these are small cost and a variable cost. All figures regarding operational
parts of the total capital expenses, they should be included. costs are presented in USD per ton of product.
Table 17 shows the manufacturing fixed cost.
Table 15 – Other Capital Expenses (USD Million)

To learn more about the assumptions for manufacturing
fixed costs, see the “Appendix F. Economic Assumptions.”
Table 17 – Manufacturing Fixed Cost (USD/ton)

Assumptions used to calculate other capital expenses are
provided in “Appendix F. Economic Assumptions.”
Total Capital Expenses

Table 16 presents a summary of the total Capital

Expenditures (CAPEX) detailed in previous sections.
31
Table 18 discloses the manufacturing variable costs. Indicators calculated for three major chemical industry
niches: basic, specialties and diversified chemicals.
Table 18 – Manufacturing Variable Cost (USD/ton) Economic Datasheet

The Technology Economic Datasheet, presented in Table
20, is an overall evaluation of the technology's production
costs in a US Gulf Coast based plant.
The expected revenues in products sales and initial

economic indicators are presented for a short-term
assessment of its economic competitiveness.
Table 19 shows the OPEX of the presented technology.
Table 19 – OPEX (USD/ton)
Historical Analysis
Figure 12 depicts Sales and OPEX historic data. Figure 13

compares the project EBITDA trends with Intratec

Profitability Indicators (IP Indicators). The Basic Chemicals IP
Indicator represents basic chemicals sector profitability,
based on the weighted average EBITDA margins of major
global basic chemicals producers. On the other hand, the
Chemical Sector IP Indicator reveals the overall chemical
sector profitability through a weighted average of the IP
32
Figure 12 – OPEX and Product Sales History (USD/ton)
Figure 13 – EBITDA Margin & IP Indicators History Comparison
33
34
Regional Comparison & Economic Discussion
Regional Comparison Figure 14 summarizes the total Capital Expenditures

(CAPEX) for the locations under analysis.
Capital Expenses
Operational Expenses
Variations in productivity, labor costs, local steel prices,
Specific regional conditions influence prices for raw
equipment imports needs, freight, taxes and duties on
materials, utilities and products. Such differences are thus
imports, regional business environments and local
reflected in the operating costs. An OPEX breakdown
availability of sparing equipment were considered when
structure for the different locations approached in this study
comparing capital expenses for the different regions under
is presented in Figure 15.
consideration in this report.
Capital costs are adjusted from the base case (a plant Economic Datasheet
constructed on the US Gulf Coast) to locations of interest by
using location factors calculated according to the The Technology Economic Datasheet, presented in Table
aforementioned items. For further information about 21, is an overall evaluation of the technology's capital
location factor calculation, please examine the chapter investment and production costs in the alternative location
“Technology Economics Methodology”. In addition, the analyzed in this study.
location factors for the regions analyzed are further detailed
in “Appendix F. Economic Assumptions.”
Figure 14 – CAPEX per Location (USD Million)
Intratec | Regional Comparison & Economic Discussion
35
Figure 15 – Operating Costs Breakdown per Location (USD/ton)

36
37
Intratec | References
38
References
Acronyms, Legends & Observations
AACE: American Association of Cost Engineers LPG: Liquefied petroleum gas
C: Distillation, stripper, scrubber columns (e.g., C-101 would MTO: Methanol-to-Olefins

denote a column tag)
MTP: Methanol-to-Propylene
C2, C3, ... Cn: Hydrocarbons with "n" carbon atoms
NGL: Natural gas liquids
C2=, C3=, ... Cn=: Alkenes with "n" number of carbon atoms
OCT: Olefin Conversion Technology
CAPEX: Capital expenditures
OPEX: Operational Expenditures
CC: Distillation column condenser
OSBL: Outside battery limits
CG: Chemical grade
P: Pumps (e.g., P-101 would denote a pump tag)
CK: Distillation column compressor
PDH: Propane dehydrogenation
CP: Distillation column reflux pump
PG: Polymer grade
CR: Distillation column reboiler
PP: Polypropylene
CT: Cooling tower
P-P: Propane-Propylene
CV: Distillation column accumulator drum
PSA: Pressure swing adsorption
E: Heat exchangers, heaters, coolers, condensers, reboilers
(e.g., E-101 would denote a heat exchanger tag) R: Reactors, treaters (e.g., R-101 would denote a reactor tag)
EBIT: Earnings before Interest and Taxes RF: Refrigerant
EBITDA: Earnings before Interests, Taxes, Depreciation and RG: Refinery grade
Amortization
SB: Steam boiler
EIA: Energy Information Administration
Syngas: Synthesis gas
F: Furnaces, fired heaters (e.g., F-101 would denote a
T: Tanks (e.g., T-101 would denote a tank tag)
furnace tag)
TFI: Total Fixed Investment
FCC: Fluid catalytic cracking
Intratec | Acronyms, Legends & Observations
TPC: Total process cost

IC Index: Intratec Chemical Plant Construction Index
V: Horizontal or vertical drums, vessels (e.g., V-101 would
IP Indicator: Intratec Chemical Sector Profitability Indicator
denote a vessel tag)
ISBL: Inside battery limits
WD: Demineralized water
K: Compressors, blowers, fans (e.g., K-101 would denote a
X: Special equipment (e.g., X-101 would denote a special
compressor tag)
equipment tag)
KPI: Key Performance Indicator
Obs.: 1 ton = 1 metric ton = 1,000 kg
kta: thousands metric tons per year
39
Technology Economics Methodology
Intratec Technology Economics methodology From this simulation, material balance calculations are
performed around the process, key process indicators are
ensures a holistic, coherent and consistent
identified and main equipment listed.
techno-economic evaluation, ensuring a clear
understanding of a specific mature chemical Equipment sizing specifications are defined based on
process technology. Intratec's equipment design capabilities and an extensive
use of AspenONE Engineering Software Suite that enables
the integration between the process simulation developed
Introduction and equipment design tools. Both equipment sizing and
process design are prepared in conformance with generally
The same general approach is used in the development of
accepted engineering standards.
all Technology Economics assignments. To know more
about Intratec’s methodology, see Figure 16. Then, a cost analysis is performed targeting ISBL & OSBL
fixed capital costs, manufacturing costs, and overall working
While based on the same methodology, all Technology
capital associated with the examined process technology.
Economics studies present uniform analyses with identical
Equipment costs are primarily estimated using Aspen
structures, containing the same chapters and similar tables
Process Economic Analyzer (formerly Aspen Icarus)
and charts. This provides confidence to everyone interested
customized models and Intratec's in-house database.
in Intratec’s services since they will know upfront what they
will get. Cost correlations and, occasionally, vendor quotes of unique
and specialized equipment may also be employed. One of
Workflow the overall objectives is to establish Class 3 cost estimates 1
with a minimum design engineering effort.
Once the scope of the study is fully defined and
understood, Intratec conducts a comprehensive Next, capital and operating costs are assembled in Microsoft
bibliographical research in order to understand technical Excel spreadsheets, and an economic analysis of such
aspects involved with the process analyzed. technology is performed.
Subsequently, the Intratec team simultaneously develops Finally, two analyses are completed, examining:
the process description and the conceptual process flow
diagram based on: a. The total fixed investment in different construction
scenarios, based on the level of integration of the plant
a. Patent and technical literature research with nearby facilities
b. Non-confidential information provided by technology b. The capital and operating costs for a second different
licensors plant location
Intratec | Technology Economics Methodology
c. Intratec's in-house database
d. Process design skills
Next, all the data collected are used to build a rigorous

steady state process simulation model in Aspen Hysys
and/or Aspen Plus, leading commercial process
flowsheeting software tools.
1
These are estimates that form the basis for budget authorization,
appropriation, and/or funding. Accuracy ranges for this class of
estimates are + 10% to + 30% on the high side, and - 10 % to - 20 %
on the low side.
40
Figure 16 – Methodology Flowchart
Study Understanding -
Validation of Project Inputs
Patent and Technical

Literature Databases
Intratec Internal Database Bibliographical Research
Non-Confidential
Information from Aspen Plus, Aspen Hysys
Technology Licensors or Technical Validation –
Aspen Exchanger Design &
Suppliers Process Description &
Rating, KG Tower, Sulcol
Flow Diagram
and Aspen Energy Analyzer
Material & Energy Balances, Key

Vendor Quotes Process Indicators, List of
Equipment & Equipment Sizing
Aspen Process Economic

Pricing Data Gathering: Raw Capital Cost (CAPEX) Analyzer, Aspen Capital
Materials, Chemicals, & Operational Cost (OPEX) Cost Estimator, Aspen In-
Utilities and Products Estimation Plant Cost Estimator &
Intratec In-House Database
Construction Location
Factor Economic Analysis
(http://base.intratec.us)
Analyses of
Different Construction
Scenarios and Plant Location
Project Development Phases Final Review &

Information Gathering / Tools Adjustments
41
Capital & Operating Cost Process equipment (e.g., reactors and vessels, heat
exchangers, pumps, compressors, etc.)
Estimates
Process equipment spares
The cost estimate presented in the current study considers
a process technology based on a standardized design Housing for process units
practice, typical of a major chemical company. The specific
design standards employed can have a significant impact Pipes and supports within the main process units
on capital costs.
Instruments, control systems, electrical wires and other
The basis for the capital cost estimate is that the plant is hardware
considered to be built in a clear field with a typical large
single-line capacity. In comparing the cost estimate hereby Foundations, structures and platforms
presented with an actual project cost or contractor's
Insulation, paint and corrosion protection
estimate, the following must be considered:
In addition to the direct material and labor costs, the ISBL

Minor differences or details (many times, unnoticed)
addresses indirect costs, such as construction overheads,
between similar processes can affect cost noticeably.
including: payroll burdens, field supervision, equipment
The omission of process areas in the design considered rentals, tools, field office expenses, temporary facilities, etc.
may invalidate comparisons with the estimated cost
presented. OSBL Investment
Industrial plants may be overdesigned for particular The OSBL investment accounts for auxiliary items necessary
objectives and situations. to the functioning of the production unit (ISBL), but which
perform a supporting and non-plant-specific role. OSBL
Rapid fluctuation of equipment or construction costs items considered may vary from process to process. The
may invalidate cost estimate. OSBL investment could include the installed cost of the
following items:
Equipment vendors or engineering companies may
provide goods or services below profit margins during Storage and packaging (storage, bagging and a
economic downturns. warehouse) for products, feedstocks and by-products
Specific locations may impose higher taxes and fees, Steam units, cooling water and refrigeration systems
which can impact costs considerably.
Process water treating systems and supply pumps
In addition, no matter how much time and effort are
devoted to accurately estimating costs, errors may occur Boiler feed water and supply pumps
due to the aforementioned factors, as well as cost and labor
changes, construction problems, weather-related issues, Electrical supply, transformers, and switchgear
strikes, or other unforeseen situations. This is partially
considered in the project contingency. Finally, it must Auxiliary buildings, including all services and
always be remembered that an estimated project cost is not equipment of: maintenance, stores warehouse,
an exact number, but rather is a projection of the probable laboratory, garages, fire station, change house,
cost. cafeteria, medical/safety, administration, etc.
General utilities including plant air, instrument air, inert

ISBL Investment
gas, stand-by electrical generator, fire water pumps,
etc.
The ISBL investment includes the fixed capital cost of the
main processing units of the plant necessary to the
Pollution control, organic waste disposal, aqueous
manufacturing of products. The ISBL investment includes
waste treating, incinerator and flare systems
the installed cost of the following items:
42
Working Capital Cash on hand. An adequate amount of cash on hand
to give plant management the necessary flexibility to
For the purposes of this study, 2 working capital is defined as cover unexpected expenses (estimated as a certain
the funds, in addition to the fixed investment, that a period – in days – of manufacturing expenses).
company must contribute to a project. Those funds must
be adequate to get the plant in operation and to meet Start-up Expenses
subsequent obligations.
When a process is brought on stream, there are certain one-
The initial amount of working capital is regarded as an time expenses related to this activity. From a time
investment item. This study uses the following standpoint, a variable undefined period exists between the
items/assumptions for working capital estimation: nominal end of construction and the production of quality
product in the quantity required. This period is commonly
Accounts receivable. Products and by-products referred to as start-up.
shipped but not paid by the customer; it represents
the extended credit given to customers (estimated as a During the start-up period expenses are incurred for
certain period – in days – of manufacturing expenses operator and maintenance employee training, temporary
plus depreciation). construction, auxiliary services, testing and adjustment of
equipment, piping, and instruments, etc. Our method of
Accounts payable. A credit for accounts payable such estimating start-up expenses consists of four components:
as feedstock, catalysts, chemicals, and packaging
materials received but not paid to suppliers (estimated Labor component. Represents costs of plant crew
as a certain period – in days – of manufacturing training for plant start-up, estimated as a certain
expenses). number of days of total plant labor costs (operators,
supervisors, maintenance personnel and laboratory
Product inventory. Products and by-products (if labor).
applicable) in storage tanks. The total amount depends
on sales flow for each plant, which is directly related to Commercialization cost. Depends on raw materials
plant conditions of integration to the manufacturing of and products negotiation, on how integrated the plant
product‘s derivatives (estimated as a certain period – in is with feedstock suppliers and consumer facilities, and
days – of manufacturing expenses plus depreciation, on the maturity of the technology. It ranges from 0.5%
defined by plant integration circumstances). to 5% of annual manufacturing expenses.
Raw material inventory. Raw materials in storage Start-up inefficiency. Takes into account those
tanks. The total amount depends on raw material operating runs when production cannot be
availability, which is directly related to plant conditions maintained or there are false starts. The start-up
of integration to raw material manufacturing inefficiency varies according to the process maturity:
(estimated as a certain period – in days – of raw 5% for new and unproven processes, 2% for new and
material delivered costs, defined by plant integration proven processes, and 1% for existing licensed
circumstances). processes, based on annual manufacturing expenses.
In-process inventory. Material contained in pipelines

Unscheduled plant modifications. A key fault that

and vessels, except for the material inside the storage can happen during the start-up of the plant is the risk
tanks (assumed to be 1 day of manufacturing that the product(s) may not meet specifications
expenses). required by the market. As a result, equipment
modifications or additions may be required.
Supplies and stores. Parts inventory and minor spare
equipment (estimated as a percentage of total
maintenance materials costs for both ISBL and OSBL).
2
The accounting definition of working capital (total current assets
minus total current liabilities) is applied when considering the
entire company.
43
Other Capital Expenses Uncertainty in process parameters, such as severity of
operating conditions and quantity of recycles
Prepaid Royalties. Royalty charges on portions of the
plant are usually levied for proprietary processes. A Addition and integration of new process steps
value ranging from 0.5 to 1% of the total fixed
investment (TFI) is generally used. Estimation of costs through scaling factors
Site Development. Land acquisition and site Off-the-shelf equipment

preparation, including roads and walkways, parking,
railroad sidings, lighting, fencing, sanitary and storm Hence, process contingency is also a function of the
sewers, and communications. maturity of the technology, and is usually a value between
5% and 25% of the direct costs.
Manufacturing Costs
The project contingency is largely dependent on the plant
complexity and reflects how far the conducted estimation is
Manufacturing costs do not include post-plant costs, which
from the definitive project, which includes, from the
are very company specific. These consist of sales, general
engineering point of view, site data, drawings and sketches,
and administrative expenses, packaging, research and
suppliers’ quotations and other specifications. In addition,
development costs, and shipping, etc.
during construction some constraints are verified, such as:
Operating labor and maintenance requirements have been
Project errors or incomplete specifications
estimated subjectively on the basis of the number of major
equipment items and similar processes, as noted in the
Strike, labor costs changes and problems caused by
literature.
weather
Plant overhead includes all other non-maintenance (labor

and materials) and non-operating site labor costs for
services associated with the manufacture of the product. Table 22 – Project Contingency
Such overheads do not include costs to develop or market
the product. Plant Complexity Complex Typical Simple
Project Contingency 25% 20% 15%

G & A expenses represent general and administrative costs
incurred during production such as: administrative Source: Intratec – www.intratec.us
salaries/expenses, research & development, product

distribution and sales costs.
Intratec’s definitions in relation to complexity and maturity
are the following:
Contingencies
Contingency constitutes an addition to capital cost
estimations, implemented based on previously available Table 23 – Criteria Description
data or experience to encompass uncertainties that may
incur, to some degree, cost increases. According to Somewhat simple, widely known
Simple
recommended practice, two kinds of contingencies are processes
assumed and applied to TPC: process contingency and Typical Regular process
project contingency. Complexity
Several unit operations, extreme
Complex temperature or pressure, more
Process contingency is utilized in an effort to lessen the
instrumentation
impact of absent technical information or the uncertainty of
that which is obtained. In that manner, the reliability of the New &
From 1 to 2 commercial plants
information gathered, its amount and the inherent Maturity Proven
complexity of the process are decisive for its evaluation.
Licensed 3 or more commercial plants
Errors that occur may be related to:
44
Accuracy of Economic Estimates different countries, taking into consideration the readiness
of bureaucratic procedures and the availability and quality
of ports or roads.
The accuracy of estimates gives the realized range of plant
cost. The reliability of the technical information available is
Labor and material, in turn, are the fundamental
of major importance.
components for the construction of a plant and, for this
reason, are intrinsically related to the plant costs. This
concept is the basis for the methodology, which aims to
Table 24 – Accuracy of Economic Estimates represent the local discrepancies in labor and material.
Very Productivity of workers and their hourly compensation are

Reliability Low Moderate High
High important for the project but, also, the qualification of
workers is significant to estimating the need for foreign
+ 30% + 22% + 18% + 10%
Accuracy labor.
- 20% - 18% - 14% - 10%
Source: Intratec – www.intratec.us On the other hand, local steel prices are similarly important,
since they are largely representative of the costs of
structures, piping, equipment, etc. Considering the
The non-uniform spread of accuracy ranges (+30 to – 20 %, contribution of labor in these components, workers’
rather than ±25%, e.g.) is justified by the fact that the qualifications are also indicative of the amount that needs
unavailability of complete technical information usually to be imported. For both domestic and imported materials,
results in under estimating rather than over estimating a Spare Factor is considered, aiming to represent the need
project costs. for spare rotors, seals and parts of rotating equipment.
Location Factor The sum of the corrected TFI distribution reflects the relative
cost of the plant, this sum is multiplied by the Infrastructure
and the Business Environment Factors, yielding the Location
A location factor is an instantaneous, total cost factor used
Factor.
for converting a base project cost from one geographic
location to another.
For the purpose of illustrating the conducted methodology,
a block flow diagram is presented in Figure 17 in which the
A properly estimated location factor is a powerful tool, both
four major indexes are presented, along with some of their
for comparing available investment data and evaluating
components.
which region may provide greater economic attractiveness
for a new industrial venture. Considering this, Intratec has
developed a well-structured methodology for calculating
Location Factors, and the results are presented for specific
regions’ capital costs comparison.
Intratec’s Location Factor takes into consideration the

differences in productivity, labor costs, local steel prices,
equipment imports needs, freight, taxes and duties on

imported and domestic materials, regional business
environments and local availability of sparing equipment.
For such analyses, all data were taken from international
statistical organizations and from Intratec’s database.
Calculations are performed in a comparative manner, taking
a US Gulf Coast-based plant as the reference location. The
final Location Factor is determined by four major indexes:
Business Environment, Infrastructure, Labor, and Material.
The Business Environment Factor and the Infrastructure

Factor measure the ease of new plant installation in
45
Figure 17 – Location Factor Composition
Location Factor
Business Environment
Material Index Labor Index Infrastructure Factor
Factor
Domestic Material Index Local Labor Index Ports, Roads, Airports Readiness of
Relative Steel Prices Relative Salary and Rails (Availability Bureaucratic
Labor Index Productivity and Quality) Procedures
Taxes and Freight Expats Labor Communication Legal Protection of
Rates Technologies Investors
Spares Warehouse Taxes
Imported Material Infrastructure
Taxes and Freight Border Clearance
Rates Local Incentives
Spares

46
Intratec | Appendix A. Mass Balance & Streams Properties
47
48
(kcal/kg)
(kJ/kg °C)
Mass Enthalpy
Mass Heat Capacity

(kJ/kg °C)
Viscosity (cP)
Mass Heat Capacity
49
50
51
Intratec | Appendix B. Utilities Consumption Breakdown
52
Appendix C. Carbon Footprint
The process’ carbon footprint can be defined as the total The assumptions for the process carbon footprint
amount of greenhouse gas (GHG) emissions caused by the calculation are presented in Table 27 and the results are
process operation. provided in Table 28
Although it is difficult to precisely account for the total

emissions generated by a process, it is possible to estimate
Table 28 – CO2e Emissions (ton/ton prod.)
the major emissions, which can be divided into:
Direct emissions. Emissions caused by process waste

streams combusted in flares.
Indirect emissions. The ones caused by utilities

generation or consumption, such as the emissions due
to using fuel in furnaces for heating process streams.
Fuel used in steam boilers, electricity generation, and
any other emissions in activities to support process
operation are also considered indirect emissions.
In order to estimate the direct emissions, it is necessary to
know the composition of the streams, as well as the
oxidation factor.
Equivalent carbon dioxide (CO2e) is a measure that
describes the amount of CO2 that would have the same
Estimation of indirect emissions requires specific data,
global warming potential of a given greenhouse gas, when
which depends on the plant location, such as the local
measured over a specified timescale.
electric power generation profile, and on the plant
resources, such as the type of fuel used.
All values and assumptions used in calculations are based
on data provided by the Environment Protection Agency
(EPA) Climate Leaders Program.
Table 27 – Assumptions for CO2e Emissions Calculation
Intratec | Appendix C. Carbon Footprint
53
Actual gas flow rate
Inlet (m3/h)
Design gauge
pressure Outlet (barg)
Intratec | Appendix D. Equipment Detailed List & Sizing
54
Design gauge pressure
(barg)
Design temperature
(deg C)
Shell design
temperature (deg C)
Shell material
Tube design gauge

pressure (barg)
Tube design
temperature (deg C)
55
Shell design
temperature (deg C)
Shell material
Tube design gauge

pressure (barg)
Tube design
temperature (deg C)
56
Design gauge
pressure (barg)
Design temperature
(deg C)
Duty (MW)
Heat transfer area

(m2)
Shell design
temperature (deg C)
Shell material
Tube design gauge

pressure (barg)
Tube design
temperature (deg C)
57
Design gauge pressure
(barg)
Design temperature
(deg C)
Material
Shell design gauge

pressure (barg)
Shell design
temperature (deg C)
Shell material
Tube design gauge

pressure (barg)
Tube design
temperature (deg C)
58
Design temperature
(deg C) Intratec | Appendix D. Equipment Detailed List & Sizing
Liquid flow rate
(m3/h)
59
60
Design gauge
pressure (barg)
Design temperature
(deg C)

Design gauge
pressure (barg)
Design temperature
(deg C)
61
Table 35 – Vessels & Tanks (Cont.)
Design gauge
pressure (barg)
Design temperature
(deg C)
Design gauge
pressure (barg)
Design
temperature
(deg C)
Liquid volume
(m3)
62
(deg C)
Design gauge
pressure (barg)
Design temperature
63
Appendix E. Detailed Capital Expenses
Direct Costs Breakdown
Figure 18 – ISBL Direct Costs Breakdown by Equipment Type (Base Case)
Figure 19 – OSBL Direct Costs by Equipment Type (Base Case)

Intratec | Appendix E. Detailed Capital Expenses
64
Intratec | Appendix E. Detailed Capital Expenses
65
Appendix F. Economic Assumptions
Capital Expenditures Working Capital
For a better description of working capital and other capital

expenses components, as well as the location factors Table 38 – Working Capital Assumptions (Base Case)
methodology, see the chapter “Technology Economics
Methodology.” Raw Materials
Inventory
Construction Location Factors
Table 37 – Detailed Construction Location Factor
Supplies and
Stores
Table 39 – Other Capital Expenses Assumptions (Base

Case)
Intratec | Appendix F. Economic Assumptions
66
Operational Expenses
The goal of depreciation is to allow a credit against
Fixed Costs manufacturing costs, and hence taxes, for the non-
recoverable capital expenses of an investment. The
Fixed costs are estimated based on the specific depreciable portion of capital expense is the total fixed
characteristics of the process. The fixed costs, like operating investment.
charges and plant overhead, are typically calculated as a
percentage of the industrial labor costs, and G & A expenses Table 41 shows the project depreciation value and the
are added as a percentage of the operating costs. assumptions used in its calculation.
Table 40 – Other Fixed Cost Assumptions Table 41 – Depreciation Value & Assumptions
Source: Intratec – www.intratec.us Source: Intratec – www.intratec.us
Figure 20 – Historical EBITDA Margins Regional Comparison
Intratec | Appendix F. Economic Assumptions
67
Appendix G. Released Publications
The list below is intended to be an easy and quick way to CONCEPTUAL DESIGN
identify Intratec reports of interest. For a more complete
and up-to-date list, please visit the Publications section on Membranes on Polyolefins Plants Vent Recovery:
our website, www.intratec.us. The Report evaluates membrane units for the
separation of monomer and nitrogen in PP plants,
TECHNOLOGY ECONOMICS similar to the VaporSep® system commercialized by
MTR.
Propylene Production via Metathesis: Propylene
production via metathesis from ethylene and butenes, Use of Propylene Splitter to Improve Polypropylene
in a process similar to Lummus OCT. Business: The report assesses the opportunity of
purchasing the less valued RG propylene to produce
Propylene Production via Propane the PG propylene raw material used in a PP plant.
Dehydrogenation: Propane dehydrogenation (PDH)
process conducted in moving bed reactors, in a
process similar to UOP OLEFLEX™.
Propylene Production from Methanol: Propylene

production from methanol, in a process is similar to
Lurgi MTP®.
Polypropylene Production via Gas Phase Process: A

gas phase type process similar to the Dow UNIPOL™ PP
process to produce both polypropylene homopolymer
and random copolymer.
Polypropylene Production via Gas Phase Process,

Part 2: A gas phase type process similar to Lummus
NOVOLEN® for production of both homopolymer and
random copolymer.
Sodium Hypochlorite Chemical Production: Sodium

hypochlorite (bleach) production, in a widely used
industrial process, similar to that employed by Solvay
Chemicals, for example.
Propylene Production via Propane

Dehydrogenation, Part 2: Propane dehydrogenation
Intratec | Appendix G. Released Publications
(PDH) in fixed bed reactors, in a process is similar to

Lummus CATOFIN®.
Propylene Production via Propane

Dehydrogenation, Part 3: Propane dehydrogenation
(PDH) by applying oxydehydrogenation, in a process
similar to the STAR PROCESS® licensed by Uhde.
68
Appendix H.
Technology Economics Form

Submitted by Client
Chemical Produced by the Technology to be Studied
Define the main chemical product of your interest. Possible choices are presented below.
Choose a Chemical Acetic Acid Acetone Acrylic Acid

Acrylonitrile Adipic Acid Aniline
Benzene Butadiene n-Butanol

Isobutylene Caprolactam Chlorine
Cumene Dimethyl Ether (DME) Ethanol
Ethylene Bio-Ethylene Ethylene Glycol
Ethylene Oxide Formaldehyde HDPE
Isoprene LDPE LLDPE
MDI Methanol Methyl Methacrylate
Phenol Polypropylene (PP) Polybutylene Terephthalate
Polystyrene (PS) Polyurethanes (PU) Polyvinyl Chloride (PVC)

Propylene Propylene Glycol Propylene Oxide (PO)
Terephthalic Acid Vinyl Chloride (VCM)
If the main chemical product of your target technology is not found above, please check the "Technology Economic Form - Specialties".
Chemical Process Technology to be Studied
Identify the mature chemical process technology you would like us to assess. Intratec considers mature technologies the ones already used on
a commercial scale plant.
Technology Description Technology for Propane Dehydrogenation. Similar to CB&I Lummus CATOFIN
E. g. technology for propylene production from methanol - similar to Lurgi MTP
Commercial Scale Unit. Inform the exact location of one commercial scale plant under operation.
Plant Location: I don't know
I know the location of a commercial plant: Petrologistics Houston Site, TX - United States
If there is no commercial scale plant based on the technology of your interest, you are referred to Intratec's Research Potential advisory service
at www.intratec.us/advisory/research-potential/overview
Industrial Unit Description
Plant Nominal Capacity Operating Hours

Inform the plant capacity to be considered in the study. Provide Inform the assumption for the number of hours the plant
the main product capacity in kta (thousands of metric tons per operates in a year.
year of main chemical product).
Plant Capacity 150 kta Operating Hours 8,000 h/year
300 kta Other (h/year)
Other (kta) 590

Analysis Date
Define the date (quarter and year) that will be considered in the analysis. Our databases can provide consolidated values from the year 2000
up to the last closed quarter, quarter-to-date values are estimated.
Quarter Q1 Year 2012
Storage Facilities
Define the assumptions employed for the storage facilities design.
Products 20 days By-Products 20 days Raw Materials 20 days
Other 0 Other 0 Other 0
Utilities Supply Facilities

The construction of supply facilities for the utilities required (e.g. cooling tower, boiler unit, refrigeration unit) impacts the capital investment
for the construction of the unit.
Consider construction of supply facilities ? Yes No
General Design Conditions

General utilities and environmental conditions that may be relevant to the process simulation are presented below. Provide other assumptions if
you deem necessary.
Specification Unit Default Value User-specified value
Cooling water temperature ºC 24 DSPEC1
Cooling water range ºC 11 DSPEC2
Steam (Low Pressure) bar abs 7 DSPEC3
Steam (Medium Pressure) bar abs 11 DSPEC4
Steam (High Pressure) bar abs 28 DSPEC5 39
Refrigerant (Ethylene) ºC -100 DSPEC6
Refrigerant (Propane) ºC -40 DSPEC7
Refrigerant (Propylene) ºC -45 DSPEC8
Dry Bulb Air Temperature ºC 38 DSPEC9
Wet Bulb Air Temperature ºC 25 DS10
Industrial Unit Location

The location of an industrial unit influences in prices for both construction and operation of the unit. In this study, the economic
performances of TWO similar units erected in different locations are compared.
The first plant is located in the United States (US Gulf Coast) and the second location is defined by YOU.
Plant Location I would like to keep the plant location confidential.

Country (or region) to be considered. China
E.g. Louisiana (USA), China or Saudi Arabia. Please define only one location.
Plant Location Data I will use Intratec's Internal Database containing standard chemical prices and location factors
Provider (only for Germany, Japan, China or Brazil).
I will provide location specific data. Please fill the Custom Location topic below.
Custom Location Description. Describe both capital investment and prices at your custom location.
A) Capital Investment. Provide the relative capital cost at your custom location in comparison to the United States (U.S. Gulf Coast)
Custom Location Relative Cost (%)
130% means that the capital costs in the custom location are 30% higher than the costs in the United States.
B) Raw Materials Prices. Describe the raw material prices to be considered in the custom location.
Item Description Price Unit Price
Raw1 RU1 RP1
Raw2 RU2 RP2
Raw3 RU3 RP3
E.g. Propane USD/metric ton 420
C) Product Prices. Describe the products prices to be considered in the custom location.
Prod1 PU1 PP1
Prod2 PU2 PP2
Prod3 PU3 PP3
E.g. Polypropylene USD/metric ton 1700
D) Utilities Prices. Describe the utilities prices to be considered in the custom location.
Electricity UP1
Steam (Low Pressure) UP2
Steam (High Pressure) UP3
Fuel UP4
Clarified Water UP5
Util6 UU6 YP6
Util7 UU7 UP7
Util8 UU8 UP8
E) Labor Prices. Describe the labor prices to be considered in the custom location.
Operating Labor USD/operator/hour LP1
Supervision Labor USD/supervisor/hour LP1
F) Others. Describe any other price you deem necessary to be considered in the custom location.
Other1 OU1 OP1
Other2 OU2 OP2
Other3 OU3 OP3
E.g. Catalyst USD/metric ton 5000

Other Remarks
If you have any other comments, feel free to write them below:
Co In addition to the ISBL facilities, please consider the installation of a refrigeration unit able to provide the required refrigeration
m capacity.
m
en
ts:
Complementary Files
Along with this form, you may also upload any other chemical document deemed relevant for the description of the project, such as
articles, brochures, book sections, patents, etc. Multiple files may be uploaded.
If you are filling this form offline please upload this form and any complementary files at www.intratec.us/advisory/technology-economics/
order-commodities
Non-Disclosure Period & Pricing
You can keep your study confidential or get discounts, by allowing Intratec to disclose it to the market as a publication, after an
agreed non-disclosure period, starting at the date you place your order.
Choose an Option 6 months 24 months 36 months Never Disclosed
Non-Disclosure Period Price
6 months $8,000 (9 x $899) Save 84% - Payment of our advisory service is conducted
24 months $28,000 (9 x $3,111) Save 44% automatically, in equal and pre-defined installments
36 months $40,000 (11 x $3,636) Save 20% - Every 15 days, an installment will be charged to your
Never Disclosed $50,000 (13 x $3,846) credit card or PayPal account.
Pay Less! Benefit From a 5% Discount
Inform us the email address of the Intratec Agent that introduced you to our advisory services you will benefit from a 5% discount on the total
price of your service. To know more about Intratec New Business Development Agents, please visit www.intratec.us/be-our-agent.
Intratec Agent Email
Evaluate our Intratec Agent. Your opinion will be kept confidential.
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DOWNLOAD EXAMPLES OF FILLED FORMS HERE.
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v.1-mar-13
Technology Economics
Standardized advisory services developed

under Intratec’s Consulting as
Publications innovative approach.
Technology Economics studies answer
main questions surrounding process
technologies:
- What is the process? What equipment is
necessary?
- What are the raw materials and utilities
consumption rates?
- What are the capital and operating
expenses breakdown?
- What are the economic
indicators?
- In which regions is this
technology more
profitable?

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Propylene

Propylene Production via Propane Dehydrogenation, Part 2

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About this Study .............................................................................................................................................................. 8

Construction Scenarios ..............................................................................................................................................................................................................8

Study Background ........................................................................................................................................................ 10

About Propylene ......................................................................................................................................................................................................................10

Manufacturing Alternatives ..............................................................................................................................................................................................11

Area 100: Reaction and Catalyst Regeneration.......................................................................................................................................................17

ISBL Major Equipment List.................................................................................................................................................................................................21

Economic Analysis ........................................................................................................................................................ 26

Operational Expenditures ..................................................................................................................................................................................................31

Economic Datasheet .............................................................................................................................................................................................................32

Regional Comparison & Economic Discussion.................................................................................................... 35

Economic Discussion ............................................................................................................................................................................................................36

Appendix A. Mass Balance & Streams Properties............................................................................................... 47

Appendix C. Carbon Footprint ................................................................................................................................. 53

Direct Costs Breakdown ......................................................................................................................................................................................................64

Appendix F. Economic Assumptions...................................................................................................................... 66

Construction Location Factors ...........................................................................................................................................................................................66

Operational Expenses ...........................................................................................................................................................................................................67

Fixed Costs ...................................................................................................................................................................................................................................... 67

Appendix G. Released Publications ........................................................................................................................ 68

Table 1 – Construction Scenarios Assumptions (Based on Degree of Integration) ......................................................................................9

Figure 1 – Construction Scenarios Assumptions (Based on Degree of Integrations) ..................................................................................8

This study follows the same pattern as all Technology

The current assessment is based on economic data

Figure 1 – Construction Scenarios Assumptions (Based on Degree of Integrations)

Non-Integrated Partially Integrated Fully Integrated

Petrochemical Complex Petrochemical Complex

Products Storage Products Consumer Products Consumer

ISBL Unit ISBL Unit ISBL Unit

Raw Materials Raw Materials Raw Materials

Source: Intratec – www.intratec.us

Storage Capacity (Base Case for Evaluation)

Feedstock & Chemicals 20 days of operation 20 days of operation Not included

End-products & By-products 20 days of operation Not included Not included

Control room, labs, gate house,

Location Basis Regional specific conditions influence both construction

The design assumptions employed are depicted in Table 3.

Table 3 – General Design Assumptions

Cooling water temperature 24 °C

Cooling water range 11 °C

Steam (High Pressure) 39 bar abs

Refrigerant (Propylene) -45 °C

Source: Intratec – www.intratec.us Wet Bulb Air Temperature 25 °C

Source: Intratec – www.intratec.us

About Propylene While CG propylene is used extensively for most chemical

Propylene has a calorific value of 45.813 kJ/kg, and RG

Refinery Grade (RG): 50-70% of purity. Table 4 – Major Propylene Consumers

Applications Polypropylene Mechanical parts, containers, fibers, films

Acrylonitrile Acrylic fibers, ABS polymers