Ethane to Ethylene (G1)

Team G1 Final Report

Authors: Tahir Kapoor, Brandon Muncy, Alex Valdes

Instructors: Fengqi You, David Wegerer

March 13, 2015

Introduction

The goal of this project is to design a process for the manufacture of ethylene from shale gas. Ethylene is a fundamental chemical in the production of various important polymers, including poly(ethylene terephthalate), low density polyethylene, and high density polyethylene. For this reason, ethylene is the most produced organic chemical in the world and demand will soon surpass 200 million metric tons per year.

Market Analysis and Design Basis

The Marcellus shale in the northeastern states contains the largest reserve of natural gas in America. It is estimated that 141 trillion cubic feet of gas reserves are present in the Marcellus shale.6 Gas production in the Marcellus shale was insignificant before 2008, but has rapidly risen to be one of the most important areas in the American energy industry with over 14 billion cubic feet of gas being extracted every day in 2014. As a result of this rapid energy boom in the Marcellus shale region, gas processing infrastructure has not been able to keep up with the amount of gas being extracted and much of the processing that is done to the raw shale gas occurs on refineries located in either the east coast or the gulf coast.

Due to the infant nature of gas processing infrastructure in the Marcellus region, it is very attractive to build a processing plant directly on the Marcellus shale. Eastern Ohio provides a good location for a new large scale gas processing plant due to the presence of several major pipelines (which West Virginia lacks) and favorable taxes. Ohio has a gross receipts tax of 0.26% compared to a 9.99% corporate tax rate in Pennsylvania and a 7.1% rate in New York. Ohio is also a good location for a large capital investment due to generally lax hydraulic fracturing regulations compared to other more progressive states in the Marcellus shale. Stark County is an ideal location within Ohio due to lower county taxes (6.50%) and its close proximity to Pittsburgh, where most existing wells are located. Stark county also has the added benefit of having existing gas pipeline infrastructure running through it, minimizing potential capital expenditure.

Due to the size of the immense reserves in the Marcellus shale and the void of natural gas processing plants, a large volume plant would be demanded to cope with the rising number of shale wells. Current liquefied natural gas (LNG) plants in the northeast can process 60,000 barrels per day (bpd) while production of gas from the Marcellus shale in 2016 is forecast to exceed 650,000 bpd.6 Due to this large discrepancy between projected production and existing capacity, a large gulf coast LNG plant was used for capacity determination (Freeport, Texas LNG terminal will refine up to 2.1 bcf of gas per day). By this comparison and the capability of the market to handle large volumes of ethylene production, the plant should be designed for the processing of 2 billion cubic feet (38 MM kg) of raw shale gas per day. Current use of ethylene is around 156 million tonnes/year worldwide. Targeting around 1% of this market would yield a plant producing around 1.5 million tonnes of ethylene per year, which is also near the size of larger plants in Texas. These large Gulf plants were used because the Marcellus shale region is underdeveloped so a comparison to existing plants in the region would fail to account for forecasted growth in the area.

Currently, a weak energy market threatens production of oil and gas from the Marcellus shale. A supply glut of oil has led to greatly reduced oil prices and a decline in investment in non-traditional oil fields such as shale oil. Higher production costs of shale oil reduce profitability when compared to cheaper drilling in the Middle East. Along with the decline in oil prices, natural gas and refined products such as ethylene have also experience dramatic fall in prices. It is important to consider the instability in oil prices when analyzing the benefit of a large, long term capital investment. Sustained low oil prices will reduce investment in the Marcellus shale region and will decrease gas production volumes. Despite these risks, the large gap in gas production and gas processing capacity in the Marcellus shale indicate that there is a market for a new gas purification plant.

Design Basis

Based on analyzing the current market, our design will be based on the following production targets.

Component	Annual Production (MMkg/Year)
Shale Gas	13,300
Processed Natural Gas	<11,000
Ethylene	< 1,500