Comprehensive Utilization of Oil & Gas By-products

By Ren Yunfeng

The energy situation has now become extremely serious in China. In 2011, in order to satisfy domestic demand, 56.5% of all the petroleum used was imported. Energy consumption rises dramatically with urbanization and industrialization. Unfortunately, utilization cannot be optimized in limited resources area. For example, the ethylene industry plays a leading role in the petrochemical industry. But in China, 90% of ethylene is made from naphtha, light oil, hydrocracking tail oil and vacuum gas oil cut, with and average ethylene yielding rate of about 32%. Meanwhile, more than ten million tons per year of by-products, such as ethane, propane, butane and liquefied petroleum gas (LPG) produced in refineries has been burnt up as consumer and industrial fuels. With the unfolding of the 12th Five-year Program (2011-2015) for China's petrochemical industry and several major new ethylene plants completed, the by-product volume of petroleum refineries and ethylene crackers will increase constantly, as will the LPG supply. As a result, attention has been turned to fully utilizing all these resources to manufacture high value-added downstream products.
Against this background, CNCIC will host the Seminar on C4/C5/C9/C10 Separation and Comprehensive Utilization, April 24th-26th in Beijing. Ideas for optimal utilization of domestic LPG, refinery gas and ethylene cracking by-products are certain to be put forward.
In China, more than 95% of LPG is supplied by refineries, and a small amount of LPG comes from natural gas processing. The key LPG producers are China National Petroleum Corporation (CNPC), China Petrochemical Corporation (Sinopec Group), China National Offshore Oil Corporation (CNOOC) and some small refineries. China's LPG output increased at an average rate 3.9% between 2005 and 2010. In 2010, the total output reached a record high, 21.1 million tons. It is estimated that China will add 100 million t/a of new refining capacity, which will add 3-4 million t/a of LPG capacity in the coming five years. Use of LPG as raw material to make petrochemicals is becoming more common because of high international oil prices. In China, some enterprises are seeking ways to strengthen the utilization of LPG in chemical production. In 2005, only 41 000 tons of LPG was used in chemical production, accounting for 0.2% of total LPG production. In 2010, 668 000 tons were used, marking an average annual increase of 74.6% over five years.
Incomplete statistics portray a boom in developing previously underutilized raw materials for the petrochemical industry. New capacity is anticipated as follows:
* propane dehydrogenation (PDH) - 4.9 million t/a  
* LPG aromatization - 3.4 million t/a
* C4 cracking - 1.95 million t/a
* iso-butane dehydrogenation to make iso-butylene - 280 thousand t/a
* butane to maleic anhydride - about 130 thousand t/a
* oxidation of butane to ethylene oxide - 240 thousand t/a
So LPG is expected to become a major raw material for petrochemicals in the future, together with methanol-derived olefins and methanol-derived propylene.
As one of the by-products of ethylene production, most cracked C5 fraction is blended with gasoline, and only a little of it is processed to become low-value petroleum resin or solvent oil. Therefore, efficient use of the C9 resource would have a far-reaching influence on the overall value of both ethylene crackers and deep processing of ethylene.
Chinese companies should pay more attention to the comprehensive utilization of coal-to-olefin by-products and the development of their downstream products. According to incomplete statistics, more than 20 coal-to-olefin projects will be launched in China in the next three years, adding more than 20 million t/a to overall capacity. There are three modes of coal-to-olefin - coal-to-methanol-to-olefin, methanol - (concentrating the methanol resources in area) to-olefin and imported methanol - (importing methanol resources) to-olefin. C4 by-products are associated under any of these olefin production modes. [D5]Reasonable C4 utilization must become a big factor in the evolving overall scheme of China's coal-to-olefin sector.