1. The introduction of the survey report

Time: June 19, 2009

Location: Lurgi in Germany

Participants：  

Liu Wenge, Li Hongjun, Han Jiaye and Sun Chao, China Coal Information Institute (CCII)

Philip, EU project representative                 

Han Mei, chief engineer, the Yankuang Group

Content: Technical data of MTP and coal gasification and experts advice

Scheduling：

After arriving at Lurgi at nine o’clock on June 19, the project team communicated with two Lurgi experts about the project. Lurgi vice-general manager Thomas Wurzel and production manager Thomas Schlundt attended the meeting. Liu Wenge, president of Energy ＆ Safety Division of China Coal Information Institute, briefly introduced China Coal Information Institute and the summary of the project. Dr. Li Hongjun elaborated upon the EU-China Project of the conservation and substitution of oil by clean coal. The project team talked with Lurgi and collected technical data related to MTP and coal gasification.

Information collected: Lurgi’s technical data about MTP and coal gasification

2. Survey Report

The project team listened to MTP and coal gasification technologies introduced by the two Lurgi experts and discussed with them. Information collected are as follows:

2.1 Overview of the Company

Lurgi is one of the most famous companies in chemical industry. Its business includes technology R&D and engineering consulting, project feasibility study, market development, technical service and so on. Lurgi takes pride in its R&D capability. It applied the first patent as early as 1897. Its perfect experimental and test device can satisfy R&D demand. Lurgi can jointly research and develop with its customers with over 100 sets of test equipment and share the results. It assists the customers equipped with raw materials but disoriented to develop products and insures their permanent competitiveness in the international market. Currently, Lurgi is mainly engaged in the development of new techniques, demonstration plants of present techniques as well as analysis and evaluation of catalyst.    

Presently, Lurgi has developed methanol technology of daily production of above 5 kt, extended MTP technology, and has made technological breakthrough in taking ZSM5 as catalyst. Evaluation of technical and economic feasibility proves that when the market price of propylene is USD 380-400 and the cost of methanol is USD 80-100, the company’s internal rate of return can reach 13-25%.

2.2 History of Lurgi MTP Technology

Lurgi MTP technology originated in 1990s. At that time, supply and price fluctuation in crude oil market exerted great influence upon propylene market and it was predicted that propylene would be in short supply in future. Therefore, Lurgi started developing MTP technology by using high-selectivity zeolite catalyst produced by industrialized Süd-Chemie. Lurgi established a single-tube adiabatic fixed-bed reactor in Frankfurt R&D Center in 1999. The reactor mainly finished catalyst performance test, verified MTP design conception and optimized reaction conditions. In 2000 Lurgi established a triple-tube adiabatic fixed-bed reactor at the same place. Its capacity of methanol was 1kg/h. The reactor got through the total flow of MTP, simulated system cycles, further optimized reaction conditions and collected lots of data for the foundation of MTP demonstration plant.      

In January, 2002, Lurgi’s methanol plant in Norway was constructed into a MTP demonstrative plant with methanol handling capacity of 360kt/d. The demonstration ended in May, 2004. the operation life of catalyst reached the commercial service life of 8000 hours through the test. The purity of product propylene reached polymer grade. The selectivity was above 60%. By-product gasoline was of high quality.

2.3 Economic Analysis

Lurgi’s main processes are methanol synthesis, MTP and propylene polymerization. It can process 1.8 million t/a of methanol each year. If main raw material and product prices of raw materials such as coal, in accordance with 90 yuan / t, such as fuel coal, in accordance with 90 yuan / t, such as polypropylene, in accordance with 7,414 yuan / t, such as gasoline, in accordance with 3,108 yuan / t, such as LPG, in accordance with  2,467 yuan / t. And if material consumption and product output are coking coal 3,000,000 t/a, fuel coal 1,500,000 t/a, polypropylene 520,000 t/a, gasoline 156,000 t/a and LPG 64,500 t/a, depreciation of fixed assets is 14 years, salvage ratio is 4%, duration of the project is 17 years, construction period is 3 years, the project period is 14 years, and production load will be 80% in the first year after the project puts into operation, 90% in the second year and 100% of design capacity after that. 

The calculated financial internal rates of return (pre-tax and after-tax) are both beyond the benchmark yield of the industry. It indicates that the cash operating capability of the project meets the minimum requirement of the industry. Break-even point of the project is 47.40%, implying that enterprises can break even as long as the project reaches 47.40% of the design capacity. Therefore, it can be seen that the project has strong ability to adapt to market changes. Correspondingly, its anti-risk capability is strong as well. Moreover, products of the project are petrochemicals, prices of which are closely bound up with crude oil price. Usually prices of petrochemicals rise with that of crude oil. Prices of products of the project are calculated according to the price of crude oil being USD 25/barrel. Since currently the price of crude oil is high and rises rather than fall, market price of the products are far higher than the calculated prices. Main economic data and evaluation indexes are illustrated in the table below.

2.4 Lurgi DME Technology

1)Lurgi Application of Dimethyl Ether

DME produced by Lurgi is used for producing following products.

2)Lurgi DME Technology

☉Lurgi DME reactor：Adiabatic Fixed Bed Reactor；

☉catalyst：performance of -Al₂O₃ is stable, commercially applicable；

☉purity：determined in accordance with customer demand；

☉high-efficiency heat combined system；

☉low power consumption indicator

Economic Evaluation Indexes of Project