Biological-Process Ethylene Oxide Attracts Great Attention   
By Yu Chunmei   

Import volume of downstream products increased

Due to the inflammability and explosiveness of ethylene oxide, its storage and the transportation are restricted. Products must be sold as soon as they are produced and everyone's inventory is therefore very small. As it is unsuitable for long-distance transportation, China very seldom imports it. The huge market demand for ethylene oxide is mainly manifested in the import of downstream products - predominantly MEG (monoethylene glycol).
   The amount of major downstream products being imported has increased rapidly in recent years, with the import volume of MEG reaching 5.216 million tons in 2008, an increase of 8.6% over 2007, while 126 000 tons of ethanolamine was imported, an increase of 10.5%.

Ethylene's dominance as raw material will decline

In China, ethylene oxide is mainly produced by Sinopec Corp. and PetroChina. The nation's ethylene oxide capacity is already more than 2.80 million t/a. Most ethylene oxide producers have their own MEG units and the amount that reaches the commodity market is relatively small. Private enterprises have also actively invested in this sector in recent years. Jiaxing Sanjiang Chemical Co., Ltd. has developed rapidly, completing a 60 000 t/a unit in 2005 and expanding its capacity to 120 000 t/a by December 2008. After the completion of the third-phase 70 000 t/a unit in 2010, the capacity will reach 190 000 t/a, making the company a major enterprise in China that produces only ethylene oxide. Dynamic (Nanjing) Chemical Industry Co., Ltd. is designing a 60 000 t/a unit mainly to match its 100 000 t/a ethylene glycol monobutyl ether project.
   Ethylene oxide production in China mostly uses ethylene as raw material. Only BBCA (Suzhou) Biochemical Co., Ltd. uses ethanol as raw material. With the constant price rise of crude oil and ethylene in the international market, some new enterprises are planning to use ethanol as raw material because of its relatively low price. The biological process for the production of ethylene oxide with ethanol as raw material has therefore attracted great attention.
   Enterprises in Jilin, Hubei, Shandong and Henan provinces are planning to construct biological-process ethylene oxide units. The long-time dependence on ethylene as raw material for the ethylene oxide production will become a thing of the past.
   Japan has more than 5 000 varieties of ethylene oxide downstream products whereas there are only 300-400 varieties in China. The development and application of ethylene oxide in flavorings, dyestuffs, coatings and special chemical fiber oiling agents is still in a developmental stage in China and the market possibilities are considerable.
   With constant capacity expansion, the supply and the demand for ethylene oxide in China are expected to tend toward a balance, and hence the price should remain within a rational scope.

Biological process has competitive advantage

With impacts from the crude oil price, the ethylene production cost has increased remarkably and a development opportunity is provided to the ethylene oxide production with the biological process. The technology for the ethylene oxide production with ethanol as raw material is already quite mature today. In the process using ethanol as raw material, ethylene is generated through dehydration and ethylene oxide is then produced. All the biological-process ethylene oxide units planned or under construction in China will produce only ethylene oxide - no MEG. The single-line capacity of these units is usually 60 000 t/a.
   The factor determining the competitive edge of ethylene oxide is the cost comparison between the ethanol-ethylene route and the oil-ethylene route.
   When the price of corn is RMB1 250 per ton, the comprehensive cost of ethanol is RMB4 800-5 100 per ton. In case the comprehensive utilization of corn protein is taken into consideration (deducting the production and sales cost), the actual production cost of ethanol is RMB4 200-4 500 per ton.
   The market price of corn is around RMB1 400 per ton today. The production cost of ethanol is therefore RMB4 700-5 000 per ton. When the price of crude oil is more than US$54-58 per barrel, corn-based ethanol will have economic strength. The crude oil price in the international market is expected to be US$60-80 per barrel in the foreseeable future. The ethanol-ethylene route to make ethylene oxide therefore has considerable competitive advantage.

Analysis to the Ethanol Cost against Price Changes of Corn  
(RMB/t, US$/ barrel)
Price of corn    Cost price of ethanol    Price of crude oil *
1 200         4 000-4 300        45-49
1 250         4 200-4 500        48-51
1 300         4 400-4 700        50-54
1 400        4 700-5 000        54-58
1 500         5 000-5 300        58-61
1 600         5 300-5 600        61-65
1 700        5 600-5 900        65-69
1 800        5 900-6 200        69-73
Note: *The price of crude oil corresponds to the cost price of ethanol.
Source: CNCIC