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Project of Jilin 300,000t/year Propylene Oxide

1.Introduction to the Project


1.1 Project Background
1.1.1 Product Introduction
Propylene Oxide (English name is propylene oxide, hereinafter referred to as PO), also called
methyloxirane or propylene oxide, it is colorless and transparent liquid under normal
temperature and pressure, having similar ethers smell. Main physical property: boiling point
(101kPa) 34.23, freezing point -112.13, relative density (d204) 0.859, vapor pressure
(25) 75.86kPa, flash point -37, explosion limit (in the air) 3.1-27.5% (VOL) , able to be
mutually dissolved with acetone, carbon tetrachloride, diethyl ether, methanol and many
solvent. Chemical property of propylene oxide is active, easy ring-opening polymerization,
able to react with water, ammonia, alcohol and carbon dioxide to produce corresponding
compound or polymer, and polymerize on more than two compound of active hydrogen, the
produced polymer is generally called polyether glycol.
Propylene oxide is the third largest propylene derivative except polypropylene and vinyl
cyanide, and the important basic organic chemical raw material. Propylene oxide is mainly
used for polyether glycol production; second is for production of surfactant, propylene
carbonate and propylene glycol. In addition, it is applied in alcohol ether, hydroxypropyl
methyl cellulose (HPMC), modified starch, hydroxypropyl acrylate and other aspects. The
derivatives of propylene oxide have nearly one hundred kinds, which are important raw
materials of fine chemical products, widely used in automobiles, buildings, food, tobacco,
medicine, cosmetics and other industries.
1.1.2 Market Prospects
1. Supply and demand and forecast of international market
In 2008, world production capacity of propylene oxide was 7.808 million tons/year, output
6.759 million tons, and unit average rate of operation 86.6%. In 2008, world propylene oxide
industry had very high concentration ratio, America Dow Chemical and Lyondell Company are
the two largest manufacturers in the world, and they have controlled nearly half of the world's
propylene oxide market. Dow Chemical established production units in America, Germany and
other places, with total production capacity 1.881 million tons/year, accounting for 24.1% of
world's total capacity, adopting chlorohydrins technique; Lyondell Company has production
capacity 1.733 million tons/year, respectively established production units in America, France,
Holland and other places, accounting for 22.2% of world's total capacity, adopting cooxidation technique. It is predicted that the capacity of world propylene oxide by 2015 will
reach around 10.8 million tons/year, and around 12.5 million tons/year by 2020.
World propylene oxide consumption in 2003 was 5.437 million tons, world propylene oxide
consumption amounted to 6.759 million tons. During 2003-2008, annual average consumption

growth rate was 4.4%. West Europe, North America and Asia are main propylene oxide
production and consumption regions in the world. In 2008, world propylene oxide
consumption was 6.759 million tons. The consumption is mainly concentrated in West Europe,
Asia and North America regions, the consumption is respectively 2.384 million tons, 1.981
million tons and 1.965 million tons, respectively accounting for 35.3%, 29.3% and 29.1% of
total consumption. North America is the net output region of world propylene oxide, and West
Europe, Asia and other regions are main input regions of propylene oxide products.
In 2008, world propylene oxide is mainly used for polyether glycol production, the
consumption was 4.286 million tons, accounting for 63.4% of total consumption; second is for
propylene glycol production with consumption 1.231 million tons, accounting for 18.2% of
total consumption; alcohol ether accounted for 5.9%; and other accounted for 12.5%.
It is predicted that demand volume of world propylene oxide by 2015 will reach around 9.72
million tons. During 2008-2015, annual average demand growth rate was 5.3%; it is predicted
that world propylene oxide demand volume in 2020 will reach around 11.25 million tons,
during 2015-2020, annual average demand growth rate was 3.0%. World propylene oxide
demand structure is still mainly based on polyether glycol, which will push forward the rapid
growth of propylene oxide demand.
2. Supply and demand and forecast of domestic market
In 2009, the capacity of domestic propylene oxide reached about 1.262 million tons/year,
output 1.134 million tons, and unit average rate of operation 89.9%. In addition to propylene
oxide units of CNOOC and Shell Petrochemicals Co., Ltd. adopt co-oxidation method of coproduction styrene, other propylene oxide units adopt chlorohydrins method. It is predicted that
during 2010-2015, domestic propylene oxide capacity will appear new growth peak, Shandong,
Jiangsu and Zhejiang are main regions for domestic capacity growth. CNOOC and Shell
Petrochemicals Co., Ltd. plans to expand by stages, at that time, the capacity will reach
290,000 tons/year; Nanjing Jinpu Company plans to expand propylene oxide integration units
of Chemical Industrial Park in Nanjing, and newly increase 120,000 tons /year propylene oxide
capacity, at that time the capacity will reach 200,000 tons/year; ZRCC Lyondell Co., Ltd.
constructed 285,000 million tons/year co-oxidation method propylene oxide production unit in
Zhenhai, Ningbo, and put into production in June 2010. If the project mentioned above can be
completed as scheduled and put into production, part of units short of competitiveness may be
shut down. It is predicted that domestic propylene oxide production capacity will reach around
1.9 million tons/year by 2015, production capacity will reach about 2.4 million tons/year in
2020.
Since 1990s, the consumption of domestic propylene oxide has kept rapid growth. In 2000,
domestic propylene oxide output 252,000t, import volume 29,000t, export volume was very
small, apparent consumption 281,000t. Till 2009, domestic propylene oxide output reached
1.134 million tons, import volume 255,000t, export volume was very small, apparent
consumption reached 1.389 million tons. During 2000-2009, annual average growth rate of
domestic propylene oxide output and consumption was respectively 18.2% and 19.4%. Growth
of domestic propylene oxide output was less than consumption growth, degree of self-

efficiency reduced to 81.6% in 2009 from 89.7% in 2000. In 2009, domestic propylene oxide
apparent consumption was 1.389 million tons. It was mainly used for polyether glycol,
propylene glycol, surfactant, alcohol ether, propylene carbonate/DMC, modified starch,
hydroxypropyl acrylate, HPMC and other fields. In 2009, domestic propylene oxide
consumption composition and demand forecast in 2015 is shown in the table below:
Table 1 2009 Domestic Propylene Oxide Consumption and 2015 Demand Forecast (Unit:
10,000t)
2009
Consumption
Field
Polyether
glycol
Propylene
glycol
Other
Total

2015

2009-2015

Consumption

Proportion
(%)

Demand
Volume

Proportion(%)

Annual Average
Demand Growth Rate
(%)

105.6

76.0

156.0

78.8

6.7

10.4

7.5

17.2

8.7

8.7

22.9
138.9

16.5
100.0

24.8
198.0

12.5
100.0

1.3
6.1

It is predicted that domestic propylene oxide demand volume in 2015 will reach about 1.98
million tons, during 2009-2015, annual average demand growth rate was 6.1%; it is predicted
that domestic propylene oxide demand volume in 2020 will reach about 2.4 million tons, and
annual average demand growth rate will be 3.9% during 2015-2020. Domestic polyether glycol
is still the largest demand field of propylene oxide. The rapid growth of output will drive the
rapid increase of propylene oxide.
1.1.3 Advantaged Conditions and Necessity of Project Construction
In 2009, domestic propylene oxide capacity reached 1.262 million tons/year, output 1.134
million tons, consumption1.389 million tons, gap between supplies and demand 255,000 tons,
solved by import. In 2009, domestic propylene oxide is mainly used for polyether glycol,
propylene glycol, surfactant, alcohol ether, propylene carbonate/DMC, modified starch,
hydroxypropyl acrylate, HPMC and other fields.
It is predicted that domestic propylene oxide production capacity in 2015 will reach 1.9 million
tons/year, demand volume will reach about 1.98 million tons, and the annual average demand
growth rate will be 6.1% during 2009-2015. Domestic polyether glycol is still the largest
demand field of propylene oxide, the rapid growth of its output will drive the rapid increase of
propylene oxide demand.
It is predicted that in 2015, although the contradiction between supply and demand of domestic
propylene oxide has been relieved, the gap between supply and demand still exists, gap volume
is 175,000t. It is predicted that in 2015, the newly increased capacity of domestic propylene
oxide is mainly concentrated in Eastern China regions, the supply and demand pattern will
change. The supply and demand of Central South and Eastern China has surplus volume, and

other regions have gap between supply and demand. Domestic propylene oxide regions are
unbalanced in supply and demand, which will aggravate the market competition of Central
South and Eastern China regions. The construction of this projection will fill in the gap of
market to certain extent, and relieve the current situation of unbalanced supply and demand, so
the project construction is very necessary.
1.2 Content and Scale of Project Construction
1.2.1 Content of Project Construction
1. Production technology
According to the analysis of world propylene oxide production development trend, hydrogen
peroxide technique has its unique competition advantages in economy, environment and future
development opportunity and other aspects compared with traditional has propylene oxide
chlorohydrins technique and co-oxidation technique, therefore, hydrogen peroxide direct
oxidation technique will become the main production technique for newly established
propylene oxide projects in the following period.
Hydrogen peroxide direct oxidation(HPPO) technique chlorohydrins technique overcame the
disadvantages of equipment's serious corrosion, much waste liquid and waste residue of
chlorohydrins technique, it is featured by simple technique flow, nearly free of joints products,
small impact on environment, which is the recognized internationally recognized "green" and
environmental protection production technology. From the future period of time, according to
the analysis of world propylene oxide production development trend, HPPO technique will
become main production technique for newly established propylene oxide projects. This
project is recommended to adopt the world most advanced HPPO technique.
At present, hydrogen peroxide technique patent manufacturers including Yingchuang and Dow
Chemical and other companies, these patent techniques are advanced and reliable. The
technique adopted for this project should be determined through comprehensive comparison
after contract negotiation.
Table 2 Consumption of Main Raw Materials
No.

Name and Specification Unit

Propylene
(polymerization level)
Hydrogen peroxide
(based on 100%)
Methanol

2
3

Consumption
Annual Usage Remark
Quota
0.784
235200
Outsourcing

0.615

184500

0.033

9900

Table 3 Consumption of Public Utilities

Outsourcing

No.
1
2
3
4
5
6
7
8

Name and
Specification
Process water
Circulating water
Electricity
Vapor (1.0MPa)
Instrument air
(0.6MPa)
Nitrogen (0.6MPa)
Freezing
Natural gas

t
t
kWh
t

Consumption Hour
Annual Usage
Quota
Consumption
0.22
8.25
66000
368
13800
110400000
69
2587.5
20700000
3.3
123.75
990000

Nm3

Unit

Nm3
4
MJ
598
MMBTU 0.24

Remark
Park supply
Park supply
Park supply
Park supply

75

600000

Park supply

150
22425
9

1200000
179400000
72000

Park supply
Park supply
Park supply

4. Equipment area and fixed number


Equipment area: 180,000m2
Fixed number: 180 persons
1.2.2 Scale of Project Construction
In order to improve the technical level of domestic propylene oxide production and
concentration ratio, this project adopts hydrogen peroxide technique to produce propylene
oxide equipment, the scale is set 300,000 tons/year, and annual operating time 8,000h.
The production program of this project is annual output of propylene oxide is 300,000t, and
by-product of propylene glycol 6,000t.
1.3 Forecast of Economic and Social Benefits
1.3.1 Major Indexes for Forecast of Economic Benefits
Table 4 Static Technical and Economic Indexes
No.

Project Name

Total investment

Construction investment

4
5
6

Annual sales income

Annual total cost


Annual profit and tax
amount
Annual profit amount

Unit
10,000
yuan
10,000
yuan
10,000
yuan
10,000
yuan
10,000
yuan
10,000

Quantity

Remark

240000
210000
Price of propylene oxide
12,000 yuan/t
372000
Price of propylene glycol
20,000 yuan/t
301680
70320
52250

7
8
9

Investment tax rate


Investment profit rate
Period for recovery of
investment (before income
tax)

yuan
%
%

29.3
21.8

7.3

Including construction period


3 years

1.3.2 Analysis of Social Benefits


After this project is completed, it will drive the local economic development and local
employment, thus properly promoting the development of local society and the progress of
pillar industries of Jilin City.
1.4 Total Investment and Funds Raising Plan of the Project
1.4.1 Total Investment of the Project
Construction investment of 300,000t/year propylene oxide project equipment is 2.1 billion
yuan, total investment of the project is 2.4 billion yuan.
1.4.2 Funds Raising
Investment attracting
1.5 Ways of Cooperation
Joint venture, cooperation.
1.6 What to be Invested by Foreign Party
Funds or technical introduction
1.7 Construction Site of the Project
Jilin Chemical Circulating Economic Demonstration Park
1.8 The On-going Condition of Project
Project proposal has been completed.
2. Introduction to Partner
2.1 Basic Conditions
Project undertaker: Jilin Chemical Circulating Economic Demonstration Park
2.2 Introduction to Project Undertaker

Jilin Chemical Circulating Economic Demonstration Park was established in 2008 on the basis
of strategic cooperation framework agreement signed by Jilin provincial government and
CNPC after it was approved by provincial government on October 28. The Park enjoys
provincial-level development zone administration authority and relevant policies, which is
featured by distinct industrial advantages, abundant energy and materials, convenient traffic
and logistics and favorable policy environment. The total are is planned 59.8km2. It fully
depends on raw material advantages of China petroleum and Jilin Petroleum and Chemical
Company, mainly develop petroleum and chemical industry, fine chemical industry, new
chemical materials, biological chemical industry, strive for constructing into a chemical
industry base with famous, strong international competitiveness and influence.
2.3 Contact Method
Contact address: No. 6, Hanyang South Street, Longtan District, Jilin City, Jilin Province
Tel: 0432-63020240 63041733 63041771
E-mail:longtanmail@163.com

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