Published August 2002
Proven world natural gas reserves, which currently exceed 5,000 trillion cubic feet (TCF), have been growing at a faster rate than proven oil reserves. These gas reserves currently represent about 83% of the energy equivalence of proven oil reserves, of which about 75% is considered to be the less desirable heavy crude. In some remote locations, wellhead costs of natural gas have been estimated to be below $0.25/MMBtu, while the cost of reinjecting "associated" gas from crude oil production as an alternative to flaring may greatly exceed its value. About 3,000 TCF of such gas reserves is considered to be "stranded"; i.e., accessible by drilling but located too far from potential markets for economical transportation to those markets.
The conversion of methane to olefins and other higher value products or derivatives which may be more cost effective to transport long distances from remote gas sources has therefore attracted renewed interest. Although a commercially viable process for the direct conversion of natural gas to olefins is not yet available, the production of methanol by steam reforming of natural gas is a well established technology and continues to advance in terms of thermal efficiency and production scale economy. The commercialization of mega-methanol plant technologies with production capacities of 5,000 t/d or higher is expected to significantly reduce the cost of methanol production and thereby enhance the prospective economics for the conversion of methanol to olefins. Since the market for olefins currently greatly exceeds that for methanol production, olefins production could become an important new outlet for the potentially vast quantities of low cost methanol producible from stranded natural gas.
The focus of this review is a new process under development by Lurgi which selectively converts methanol to propylene, with some byproduct gasoline and LPG type fuels. Dimethyl ether (DME) is produced as an intermediate to the product propylene in a dual step reaction system. Based on our assessment of the process economics for a U.S. Gulf Coast location, the process appears to be potentially cost competitive assuming the availability of a low cost fuel grade methanol feedstock imported at a price of under 25¢/gal. Assuming polymer grade propylene priced at 16.5¢/lb, our estimate of the average price level of U.S. Gulf Coast propylene for the past decade, a methanol cost of under 22¢/gal would result in an attractive pretax investment return of 25%/yr. A higher growth rate in the demand for propylene relative to ethylene is a factor stimulating interest in selective propylene production technologies.