Nov 08 2018
4 min read
Markets will continue facing growing environmental concerns in the upcoming years which will reinforce the importance of biofuels in the energy mix. In this context, converting MTBE to ETBE production was a strategic move to undertake for our client. As the client was located in a net ethanol importer country, securing ethanol supply also turned out to be a high priority.
Our client expressed both the need to evaluate (a) the rehabilitation of an old ethanol plant using wheat to meet refineries’ ethanol requirements for ETBE production but also (b) the technico-economical implications for retrofitting MTBE to ETBE.
The ethanol plant had been shut down for the past 6 years. The operator needed to assess the present conditions of the equipment and the potential investments to make in order to restart it.
The plant consisted in 8 sections: grain handling & storage, milling, gluten separation, drying and packing, starch purification, drying and packing, ethanol production and CO2 liquefaction.
The ethanol produced will be transported to two refineries where it will be used to produce ETBE reacting with refinery C4 Olefins, before being integrated in the gasoline pool.
With the scope of actions defined, Axens proceeded to conduct a site survey and a preliminary assessment of the integrity of the existing facilities. The results highlighted a two-sided issue. Not only was there a need to rehabilitate the existing equipment but also correct a defective initial design to a large extent. The latter inherently implied to either install additional equipment or replace some sections/units.
Three configuration options, corresponding to the rehabilitation of different sections of the plant and leading to different capacities, types of by-products and feedstock quality requirements, were developed and compared:
| Configuration 1 | Configuration 2 | Configuration 3 | |
| Objective | Production of Ethanol and DDGs* as a by-product | Production of Ethanol and Gluten + DDGs as by-products | Production of Ethanol and Gluten + A Starch + DDGs as by-products |
| Parameters |
Minimum investment
Lowest added value by-products (DDGs)
Ethanol production capacity to cover refineries’ needs (1 out of 2 milling trains rehabilitated)
Low quality wheat required (Class IV) |
Medium investment
High added value by-product: gluten
Ethanol production capacity to cover refineries’ needs (1 out of 2 milling trains rehabilitated)
Low quality wheat required (Class IV) |
Highest investment
High added value by-products: gluten and A starch
Excess of ethanol production (2 out of 2 milling trains rehabilitated) sold on the agro-market
Requires higher quality wheat (Class III)
|
*DDGS stands for Dried Distillers Grains with Solubles.
Axens’ technical development included the sizing of new/modified equipment to reach a Class IV cost estimate including process, utilities and off-sites of the plant.
From an execution strategy perspective, the client chose to develop the project on a staged investment basis, starting off with configuration 1.
Axens’ scope included the technico-economical feasibility study for the retrofit of two existing MTBE units. Such modernization involves many challenges, which led Axens to check the impacts of the switch on the gasoline pools of the refinery to ensure its integrity.
The results showed that this type of retrofit stands for one of the least cost intensive. Indeed it was found that a higher alcohol volumetric feed rate combined with a higher distillation temperature of ETBE had a positive impact on the gasoline pool properties and the refineries’ operating margins.
The analysis of the ethanol and the by-products markets was a key factor to compare the different options. The market & commercial risks evaluation provided a clear picture of the market opportunities for the different by-products and projections of prices that would be used as a basis for financial analysis.
Cost estimation and financial and sensitivity analysis were developed on the basis of the technical study and the market survey. Eventually the different technical solutions that Axens presented ranged from 9% to nearly 19% of the Internal Rate of Return. They allowed the client to see which configuration was the most profitable, although every one of them showed a positive Net Present Value despite pushing the sensitivity analysis up to 20% on the decisive parameters.
Axens accompanied the client every step of the way, including the project execution plan – from conceptual to start-up phase. Such approach provided the client with a clear idea of the work to achieve, the technical feasibility and the best options to go with considering the financial indicators.
