Natural Gas as Feedstock for the Industry
Israel Energy and Business Convention
Tel Aviv, November 2014
Uwe Zwiefelhofer, The Linde Group
This Presenation will...
1. ... introduce current and emerging technologies for conversion of
natural gas into petrochemicals,
2. ... discuss the potenial for Israel to develop gas based petrochemical
industries and
3. ... explain, why Linde has experience to talk about these topics.
2
The Natural Gas Value Chain (excl. energy)
There is more to come ….
Proven
technologies
Ammonia
Fertilizer
Chemicals
Emerging
technologies
Classic chemicals
MTBE, Formaldehyde
MTO
Syngas
Methanol
MTG
First projects outside
China in preparation
DME
Ethanol
MEG
Fischer Tropsch
Direct
Conversion*
Direct
Fermentation
GTL
large/medium scale
proven, small scale
under development
Higher Alcohols
Ethylene
* Siluria in cooperation with Linde
3
The Natural Gas Value CHain
Value creation of different products
Todays market prices of NG based products
Higher Alc.
GTL
Feedstock Cost
Fixed Opex
LNG
Capital (10% recovery)
Ammonia
Margin
Methanol
Urea
assumes $6 mmBtu NG price
0
500
1.000
1.500
USD per ton
Emerging technologies are more efficient.
Its economics are less depend on gas price.
4
This Presenation will...
1. ... introduce current and emerging technologies for conversion of
natural gas into petrochemicals,
2. ... discuss the potenial for Israel to develop gas based petrochemical
industries and
3. ... explain, why Linde has experience to talk about these topics.
5
Developing a Natural Gas based Petrochemical Industry
Investment criteria
What do investors look for?
1.
2.
3.
4.
Feedstock availability
Feedstock price
Proximity to markets
Local investment conditions (risk profile)
6
Natural Gas based Industries
Feedstock Prices and availability today and in future
Figures in USD/MMBTU
Russia
USA
8
8
6
6
4
4
2
2
0
0
Today
Forecast
2025
8
Trinidad
Venezuela
Today
Forecast
2025
MENA
8
6
6
4
4
2
2
0
0
Today
Today
Forecast
2025
Floor price with formula
Forecast
2025
Gas prices in existing hubs are predicted to stay
below 6 USD/MMBTU in 10 years from now.
Scource: Fertecon
7
Natural Gas based Industries (excl. energy)
Regions of Growth in NG based commodities (excl LNG)
Figures in mil. tons installed capacity
60
50
40
30
20
10
0
USA
Others
Ammonia
Methanol
60
50
40
30
20
10
0
Russia
Today
Today
Forecast
2020
60
50
40
30
20
10
0
South
America
60
50
40
30
20
10
0
MENA
Today
Today
Forecast
2020
Forecast
2020
Forecast
2020
Investment in NG based commodities happens in regions with high
feedstock availability, low price and low risk profile
Scource: Fertecon, ICIS
8
Global Ammonia Capacity Increase
Capacity expansions driven by either low cost feedstock
(<5$/ mmBtu) or captive markets
Regional NH3 capacity changes based on NG, 2012-2025
(MTPA)
Oceania
Low cost feedstock
Africa
Low cost feedstock
Middle East
Europe
Brazil: Import substitution
Latin America
Low cost feedstock
North America
Low cost feedstock
CIS
Indonesia: Low cost feedstock
Asia
0
2
4
6
8
10
Large scale projects relying on export of ammonia compete in
a market based on low-cost natural gas.
9
9
Developing a Natural Gas based Petrochemical Industry
Israel's challenge
Investors choices:
In export driven commodity markets, investors have the choice to select
the most favorable location globally.
Israel's choice – leverage on its advantages:
1. Use gas to replace imports with domestic production. national interest.
2. Develop new industry for high value gas based products.
3. Refrain from competing in commodity driven markets due to high gas
price and low logistics costs.
10
This Presenation will...
1. ... introduce current and emerging technologies for conversion of
natural gas into petrochemicals,
2. ... discuss the potenial for Israel to develop gas based petrochemical
industries and
3. ... explain, why Linde has experience to talk about these topics.
11
The Linde Group Overview
Founded
1879
Sales
€ 16,7 billion
Employees
~63,500
Countries
>100
Linde Engineering
Linde Gas
Technology-focused EPC
World-class operations
Air Separation
Global #1
Global #2
Olefins
Global #2
12
HyCO Tonnage Plants
Hydrogen/Syn Gas
Natural Gas
Global #3
Leveraging
Synergies
>100 plants
CO2 Plants
>100 plants
ASU Tonnage Plants
>300 plants
ECOVAR Std Plants
>1,000 plants
6500 engineers - Assets in operation US$ 20 bn - 5,500 operating staff
12
Linde Group in the Natural Gas Value Chain
More than 500 process plants engineered and constructed
Well
Feedstock
Methane
Natural
Gas
Base
Products
Value Add
Products
LNG
Ammonia
Syngas/H2
Methanol
Power
Fuels (GTL)
Plastics
NGLs (C2+)
Ethylene
Chemicals
Linde's technologies and EPC capabilities
Linde builds, owns and operates plants
13
Linde Group in the Natural Gas Value Chain
A glimpse of references
600 tpd Ammonia
Australia
Syngas/Methanol
USA
900 tpd LNG
Norway
NGL, 2x390 tm³/h feed gas
Thailand
14
Linde Ammonia Concept (LAC)
Comparison of LAC process with conventional scheme
Conventional Ammonia Plant
CO2
Air
Feed
Desulfurization
Primary
Reformer
Secondary
Reformer
HT
Shift
LT
Shift
CO2
Removal
Methanation
Ammonia
Synthesis
NH3
Inertgas
Unit
Purgegas
Separation
Linde Ammonia Concept (LAC)
Feed
Air
Desulfurization
Primary
Reformer
Isothermal
Shift
PSA
Ammonia
Synthesis
NH3
Nitrogen
Unit
15
Linde Ammonia Concept (LAC)
The solution for Israel
Linde Ammonia Concept (LAC)
Feed
Air
Desulfurization
Primary
Reformer
Isothermal
Shift
PSA
Ammonia
Synthesis
NH3
Nitrogen
Unit
The most economic solution for smaller ammonia plants (< 500 ktpy):
Less process units, less catalyst, lower gas volume result in
simpler plant design,
lower CAPEX and lower OPEX,
higher plant reliability.
16
Linde Ammonia Concept (LAC)
Some key figures
Phosphate Hill, Australia - 600 mtpd NH3
Cooling Water
System
Offsites, Utilities
Flare
System
Process Plant
Emergency
Fire Fighting
Power System
System
Ammonia
Storage
& Loading
Construction period:
• 3 years
Instrument Air
Waste Water
System
Treatment
Employment effect:
• during construction:
up to 2000 workers on site
• during operation:
approx 100 on site
(80% engineers/
technicians)
approx 200 - 300 in
adjacent service
industries
(maintanence, logistics,
catering, etc)
17
Summary
• Natural gas as feedstock for fuels and petrochemicals will
continue to grow.
• Israel has potential to add value to its NG resources but needs
to make the right choices.
• "Small is beautiful" – Linde Ammonia Concept suits Israel
needs.
18