A study on tolling of feeds in olefin process lead to

reduction in production cost by improved yield

Table of contents
1. Abstract.

2. Introduction

3. tolling (exchange) of feedstock.

4. cost benefit analysis.

5. Tolling agreement guideline

6. A SABIC Approach

7. Conclusion

8. References.

9. Author biographies.

10. Co-Authors biographies.



A study on tolling of feeds in olefin process lead to

reduction in production cost by improved yield
1. ABSTRACT:

The numerous types of feeds are being cracked in pyrolysis furnace of olefin plant. These
feeds are either liquid i.e. propane, butane naphtha etc or gaseous feed i.e. ethane.
There are mixed cracker who operate on the mixture of 50% liquid & 50& gas feed i.e.
Propane & ethane in 50% ratio of feedstock. The yield of desire olefin products from
liquid, mixed and gaseous feed are varies significantly as per the feedstock. The Furnace
Yield of desire products i.e. ethylene & propylene plays a very vital role in distribution of
olefin products. The production cost of olefin product from liquid feed is much higher
than mixed feedstock. The production cost of olefin product from ethane feed cracker is
much cheaper than the mixed feed cracker. If two mixed feedstock crackers agreed to
toll (exchange) their feedstock in such ways that one cracker will operate on 100%
propane and other will operate on 100% ethane. Then, products & by-products delivered
from these two crackers will be shared as per the feedstock ratio. The tolling (exchange)
of feedstock will provide the flexibility in operation and improvement in the Yield to
individual cracker. A study has been carried out that tolling of feed will reduced the
overall production cost of olefin products in comparison with mixed feedstock and
improves the Yield. The improved yield will increase the production of olefin product &
by-products. These papers will emphasis, first how the tolling of feedstock will reduce the
product cost of olefin products. Moreover, tolling of feed will improve the yield without
any extra feedstock. This paper will also provide the guide line, how to toll the feedstock
between two mixed feed crackers without affecting their olefin production. The tolling
between the two mixed feed crackers is linked with crude oil price. It is very difficult for
olefin producer to compete in the petrochemical market with this vibrant & highly
fluctuating crude oil price. Secondly it will provide the bit additional by-products, which
can be process further in downstream process unit to generate further revenue. This
scenario will provide competitive profit margin in comparison to other mixed feed olefin
process unit, who are not able to exchange the feed.


2. INTRODUCTION:

A world class olefin crackers are being operated with various type of feedstock, namely
ethane, propane, butane, naphtha etc. There are olefin process unit which can be
operated with combination of various mixture of feedstock i.e. ethane & propane,
ethane & butane etc. Moreover the products delivered from the olefin process plant
may vary as per the feedstock. If feed is liquid i.e. propane, butane or naphtha or
mixture of liquids & gas, then products delivered be different from the feedstock i.e.
gaseous ethane etc. An olefin process plant consists of the following major process
units as listed below, as per its feedstock.

1. Furnace feed preparation unit.

2. Pyrolysis furnaces unit.
3. Quench water unit.
4. Process Condensate unit.
5. Crack Gas compression unit.
6. Acid Gas Removal unit.
7. Crack has Dyers unit
8. Depropanizer and Acetylene removal unit.
9. Debutanizer and C4 Hydrogenation unit.
10. De-Methanizer Unit
11. Cold Box& Expander compression unit.
12. Tail Gas & Fuel Gas system.
13. De-Ethanizer & C2-Splitter unit.
14. Ethylene refrigeration and product.
15. MAPD Reactor & C3 Splitter
16. Propylene purification unit.
17. Propylene refrigeration unit.
18. Ethylene delivery and storage
19. Propylene delivery and storage

The above mentioned unit is for mixed feed i.e. ethane & propane. If the feedstock is
ethane, then number of process unit may reduce. The number of other process units
may be added or deleted as per the feed stock. The approximate products delivered


from liquid feed or mixed feed i.e. ethane & propane and from ethane cracker are
listed in below table-1 & 2.

(TABLE-1: Liquid & Mixed olefin feedstock and products)

Feedstock to olefin process Olefin Products
1. Propane Ethylene
2. Butane propylene
3. Naphtha Tail gas
4. Propane & Ethane BTX
5. Butane & ethane Mixture of C3 & C4
6. Mixture of C9+
7. Pyrolysis Gasoline
8. Fuel oil etc.
(TABLE-2: Ethane cracker and its products)

Feedstock to olefin process Olefin Products

1. Ethane Ethylene
2. Mixture of C3+
3. Tail gas
4. Waste Oil

Feed stock availability and price play a significant role in the feasibility & economics
of olefin products.
The type of feedstock and allocation defines the capacity selection and feasibility of
olefin process unit. Therefore, the production cost of olefin products from feedstock
namely propane, butane or naphtha will be much higher than mixed feedstock of
ethane & propane or ethane& butane etc. Moreover, the olefin product produce from
ethane feedstock will be much cheaper than mixed feed or liquid feed. The
production costs of olefin products are determined as per the feedstock price. The
variation in production cost is due to crude oil price and is always keep fluctuating in
the international market. Moreover, ethane price is much less than propane, butane
and naphtha. It revealed that whosoever has ethane or mixed feed cracker are much
profitable than propane, butane or naphtha cracker. The netback to the olefin


products will affect the profit margin of down streams products, namely
polyethylene, polypropylene and ethylene glycol, 1:3 butadienes etc. It affects entire
products range of olefin base products.
Therefore, the olefin products delivered from liquid or mixed feed will be difficult to
sustain in the market than the olefin products delivered from ethane cracker. Though
there will be some extra products which may compensate the profit margin.
The question is arise, how to sustain in the international petrochemical market or
enhance the profit margin in the olefin products. Nowadays, due to uncertainty in the
crude price, it provides the additional impact on the olefin products. Now the
question arises, how to increase the profit margin in the olefin products sustain in the
petrochemical market.

Several scenario of sharing of feedstock and olefins products were discussed by

various olefin producers. These scenarios were developed as per the feedstock
availability and its price. Even, some of producer has shared the downstream product
cost to enhance the profit margin to sustain in the petrochemical market.

Our study in this paper will be limited to tolling (exchange) of feedstock from mixed
feed cracker to either propane or ethane cracker and shared the olefin products as
per the feedstock ratio.

3. TOLLING (EXCHNAGE) OF FEEDSTOCK:

There are several cracker are being operated in define zone or area across the globe.
These crackers either may be single feed liquid, gas cracker or mixed feed ethane &
propane cracker.
If, there are two olefin mixed cracker (ethane & propane etc.) and are operating
almost at the same capacity. Then, there production cost will almost be the same. If,
these two crackers agreed to toll (Exchange) their feedstock in such ways that one
cracker should operate fully on liquid feedstock (100% propane) and other cracker
should operate fully on gas feedstock (100% ethane) instead of mixed at both
cracker. Then, the production cost of liquid feed cracker will increase. Whereas, the
production cost of ethane cracker will reduce. Moreover, the plant operation on
single feed will be providing flexibility in operation of process unit. The flexible


operation will improve the Yield of both liquid and ethane cracker. Thus production
rate will also increase due to yield improvement. Additionally, single feedstock will
assist in achieving the maximum on stream factor; will in turn provide extra
production. Whatever, the olefin produced from shared olefin feedstock is to
distributed between the two cracker as per the feedstock ratio.
Therefore, the tolling of feed will provide sustainable benefit to reduce the product
cost and improved the yield to increase the production. The tolling of feed is being
practices by several olefin producers. How to develop and implement feedstock
tolling between or among the olefin producer will be explained in our study.

Assumption was made prior to exchange the feed and listed as

1. An assumption was made that two mixed feed cracker (50/50% ethane &
propane) of same capacity will exchange their feedstock. The exchange of
feedstock will assist to operate, one cracker on fully liquid (100% propane) and
other will operate on fully gas (100% ethane) at name plate capacity. The each
cracker will operate with their full flexibility to improve the yield, optimize the
utility consumption. Moreover, it will try to improve the on-stream factor and
other cost. The on-stream factor assumed here is 8000 hrs per annum.
2. The olefin products & by-products delivered from 100% liquid cracker & 100%
ethane cracker will be shared between the two olefin producers. A martial
balance of mixed feed cracker along with fully liquid & fully gas cracker was
developed and listed in Table-3.

3. Another assumption was made that ethylene production will be held constant as a
minimum as prior in mixed feedstock. The other by-products quantities may vary as
per the plant operation.

4. A comparison was made to compare the shared production between the two
crackers with mixed feed cracker after feedstock tolling as listed in TABLE-4.

Materials balance from the Table-3 &4 revealed the following facts.

a. Both the crackers met the Ethylene production as assumed to be held constant at
832KTA.Whereas the propylene production varies as function of propane content


b. Cracker with 100% propane was operated with improved Yield, which has
produced propylene as per feedstock. There is loss in production. But required
ethylene production has been achieved as per demand.

c. Cracker with 100% ethane was operated with improved yield and produced the
extra ethylene in comparison to mixed feed cracker. The extra ethylene will too
be shared between the two crackers. Each cracker will get extra 11KTA of
ethylene in addition of their prior mixed feed ethylene of 832 KTA. Therefore,
total ethylene will be 843KTA.

d. Each cracker will receive extra by-product of 19KTA in addition of mixed feed
cracker by product production of 336KTA. Therefore, total By-product will be
355KTA.

e. Overall production from liquid & gas crackers is in consistent to meet the
production as per mixed feed cracker i.e. 1354KTA.

The by- products received from these cracker can be further process in their
downstream process units. This will lead to production of 1:3 butadiene, benzene, and
1-butene etc. This may further increase the production.

The narration revealed that sharing of feedstock and operating the cracker on single
feedstock i.e. either liquid or gas will provide the additional production which cannot be
achieved in the mixed feed cracker. The improvements in the on-stream factor will
enhance the production rate.


(TABLE-3: Material Balance of 100% Propane, 50% Ethane & Propane (Mixed feedstock) and 100% Ethane crackers)

MAJORITEMS 100%propane 50%Ethane&Propane 100%Ethane

A: FEEDSTREAMS: Ton/Day T/hr KTA Yield Ton/Day T/hr KTA Yield Ton/Day T/hr KTA Yield
FreshPropanetoFurnace 4134 172.25 1378 2067 86.13 689
FreshEthanetoFurnace 1998 83.25 666 3996 166.50 1332
TotalFEED 4065 1355

B: PRODUCTS
Ethylene 1860 77.50 620 0.450 2496 104.00 832 0.614 3198 133.25 1066 0.800
Propylene 826.8 34.45 275.6 0.200 558 23.25 186 0.137 114 4.75 38 0.029
TotalLightOlefins 2686.8 111.95 896 0.650 3054 127.25 1018 0.751 3312 138.00 1104 0.829

C: BYPRODUCTS
RecycleC4 178.5 7.44 59.5 0.043 144 6.00 48 0.035 90 3.75 30 0.023
RecycleC5 45 1.88 15 0.011 36 1.50 12 0.009 23 0.94 7.5 0.006
BTXtoBenzene 109.5 4.56 36.5 0.026 51 2.13 17 0.013 33 1.38 11 0.008
TailGasGeneration. 1026 42.75 342 0.248 720 30.00 240 0.177 537 22.38 179 0.134
C9+toFuel 15 0.63 5 0.004 6 0.25 2 0.001
CrudeHydrogen 54 2.25 18 0.013 15 0.63 5 0.004
PureMethane 18 0.75 6 0.004 36 1.50 12 0.009
TotalCoOProducts. 1446 60.25 482 0.350 1008 42.00 336 0.248 683 28.44 228 0.171
D: TotalProduct 4133 172 1378 1.000 4062 169 1354 0.999 3995 166 1332 1.000


(TABLE-4: Material Balance of Mixed feed and shared Production after Tolling of feedstock)

MAJORITEMS 50%Ethane&Propane CombinedProduction SharedProduction

A: FEEDSTREAMS: Ton/Day T/hr KTA Ton/Day T/hr KTA Ton/Day T/hr KTA
FreshPropanetoFurnace 2067 86.13 689 4134 172.25 1378 2067 86.13 689
FreshEthanetoFurnace 1998 83.25 666 3996 166.50 1332 1998 83.25 666
TotalFEED 4065 1355 8130 2710 4065 1355

B: PRODUCTS
Ethylene 2496 104.00 832 5058 210.75 1686 2529 105.38 843
Propylene 558 23.25 186 940.8 39.20 314 470.4 19.60 157
TotalLightOlefins 3054 127 1018 5998.8 249.95 2000 2999.4 124.98 1000

C: BYPRODUCTS
RecycleC4 144 6.0 48 268.5 11.19 90 134.25 5.59 44.8
RecycleC5 36 1.5 12 67.5 2.81 23 33.75 1.41 11.3
BTXtoBenzene 51 2.1 17 142.5 5.94 48 71.25 2.97 23.8
TailGasGeneration. 720 30.0 240 1563 65.13 521 781.5 32.56 260.5
C9+toFuel 6 0.3 2 5 7.5 0.31 2.5
CrudeHydrogen 15 0.6 5 18 27 1.13 9.0
PureMethane 36 1.5 12 6 9 0.38 3.0
TotalCoOProducts. 1008 42 336 2129 89 710 1064 44 355
D: TotalProduct 4062 169 1354 8127 339 2709 4064 169 1355


4. COST BENEFIT ANALYSIS:

A model production cost calculation of olefin products was developed for mixed feed,
liquid propane and ethane cracker. Increase in the olefin products & by-products by
tolling of feed have substantial effect on production cost. The price of feedstock, by
products is considered under this model as approximate values. The utilities & other
cost, fixed cost and depreciation cost are considered as per international standard and
as applicable in the existing mixed feedstock cost. The comprehensive production costs
of olefin products as per their feedstock are listed in table-5. Overall cost of combined
tolling of feedstock is compared with mixed feed production cost and is listed in table-6.

The utilities & other cost of liquid propane production cost will be in approximation with
mixed feed. The same has been experienced in the actual operation of these crackers.
The fixed cash cost of liquid propane will be of the same order as mixed feed. The
depreciation of liquid feed cracker will be similar as mixed cracker. Moreover, utilities &
other cost in ethane cracker will be much less than mixed feed cracker. Similar will be
applicable to fixed cash cost & deprecation cost of ethane cracker. The various cost
considered are as experienced in actual plant operation and is in the approximation.

If the cracker is being operated with mixed feed, then production cost is approximately
750SAR/Ton. Moreover, the production cost of olefin products from 100% liquid
propane is in approximation of 1112SAR/Ton. Whereas the production cost from 100%
ethane cracker is 339SAR/Ton.

If it agreed to toll the feedstock in such ways that one cracker should operated on the
100% liquid propane and other cracker should operate on 100% ethane. The olefin
products & by-products delivered by these two crackers will be shared as per the
feedstock ratio.

It is to be noted that feedstock quantity is to just double in the amount to avoid any
extra burden of feedstock price. Therefore, 100% liquid propane will operate with 1378
KTA of propane and 100% gas cracker will operate with 1332 KTA of ethane. The
overall products cost of olefin products from tolling of feed is 685 SAR/Ton. Which is
much less than product cost from mixed feed 750 SAR/Ton? Moreover, extra by-


products processing in the downstream unit will generate additional revenue from 1:3
butadiene, benzene etc.

Therefore, the tolling of feedstock from mixed feed cracker to either 100% propane or
100% ethane cracker will reduce the production cost of olefin products by 65SAR/Ton.
This will be in aggregate of 65MMSAR/Year (approx) as per above model. The benefit in
the production cost will be in additional to extra production of olefin product and by
products due to yield improvement. Moreover, the following facts appear from the
table-6.

1. No extra feed cost will be incurred by individual cracker.

2. Low production cost.

3. Additional production of olefin products and by-product.

4. Further processing of By-product in the downstream unit will generate extra

revenue.

The above narrated featured with this model to toll (exchange) the feedstock from
mixed feed to 100% liquid & 100% ethane and shared the olefin products & by
products will provide the addition benefit without any investment in any of the cracker.
Moreover, there will no loss any quantities of main olefin products.

The profit margin in each cracker can be realized. If the cost optimization in utilities &
other cost, fixed cost. Which is most likely is under the controlled of each olefin
producer.

The profit margin can further be elaborated. If, olefin producers agreed to share the
storage facilities, loading facilities and common ethylene pumping facilities to
downstream process units i.e. ethylene glycol, polyethylene, polypropylene, LAO.

If above model or scenario is acceptable to two mixed feed olefin producer and agreed
to share the feeds & products along with by products under the mutual agreement.
Then model can further provided the understanding with following guide lines.


(TABLE-5: PRODUCTION COST OF OLEFIN PRODUCTS FROM 100% PROPANE, MIXED FEED AND 100% ETHANE)

MAJORITEMS 100%propane 50%Ethane&Propane 100%Ethane

A: FEEDSTOCKCOST: SAR/Ton MMSAR KTA SAR/Ton MMSAR KTA SAR/Ton MMSAR KTA
FreshPropanetoFurnace 525 723 1378 525 362 689
FreshEthanetoFurnace 140 93 666 140 186 1332
TotalFEED 665 455 1355
B: Netback
Ethylene 620 832 1066
Propylene 276 186 38
TotalLightOlefins 896 1018 1104
C: COPRODUCTSCREDITS
RecycleC4 520 31 59.5 520 25.0 48 520 16 30
RecycleC5 500 8 15 500 6.0 12 500 4 7.5
BTXtoBenzene 530 19 36.5 530 9.0 17 530 6 11
TailGasGeneration. 150 51 342 150 36.0 240 150 27 179
C9+toFuel 0 0 5 0 0.0 2 0 0 0
CrudeH2 400 7 18 400 2.0 5 400 0 0
PureCH4toSHARQ. 250 2 6 250 3.0 12 250 0 0
TotalCOProducts. 118 482 81 336 52 228
D: FeedStockCOProducts 606 1378 374 1354 134 1332
E: Utilities+OtherCost 127 114 112 114 56 62


F: TotalVariableCost 804 720 479 488 178 196

G: FixedCost 80 72 71 72 60 66
H: TotalCost 884 792 550 560 238 262
I: DepericationCost 228 204 200 204 101 112
J: TotalNetProductionCost 1112 996 750 764 339 374


(TABLE-6: COMPARATIVE PRODUCTION COST OF MIXED FEED AND TOLLED FEEDSTOCK)

MAJORITEMS 50%Ethane&Propane SharedProductionCost

A: FEEDSTOCKCOST: SAR/Ton MMSAR KTA SAR/Ton MMSAR KTA
FreshPropanetoFurnace 525 362 689 525 723 1378
FreshEthanetoFurnace 140 93 666 140 186 1332
TotalFEED 665 455 1355 910 2710
B: Netback
Ethylene 832 1686
Propylene 186 314
TotalLightOlefins 1018 2000
C: COPRODUCTSCREDITS
RecycleC4 520 25.0 48 520 47 89.5
RecycleC5 500 6.0 12 500 11 22.5
BTXtoBenzene 530 9.0 17 530 25 47.5
TailGasGeneration. 150 36.0 240 150 78 521
C9+toFuel 0 0.0 2 0 0 5
CrudeH2 400 2.0 5 400 7 18
PureCH4toSHARQ. 250 3.0 12 250 2 6
TotalCOProducts. 81 336 170 710
D: FeedStockCOProducts 374 1354 740 2709
E: Utilities+OtherCost 112 114 88 176


F: TotalVariableCost 479 488 458 916

G: FixedCost 71 72 69 138
H: TotalCost 550 560 527 1054
I: DepreciationCost 200 204 158 316
J: TotalNetProductionCost 750 764 685 1370


5. TOLLING (EXCHANGE) AGREEMENT GUIDELINE:

If the two olefin producer agreed to toll the feed and shared all the olefin products,
then following guidelines are to be developed under the mutual agreement.

a. Feed: No extra feed quantity is to be added to individual cracker, unless or

otherwise required additional production of propylene under the mutual
agreement of product requirement.

b. Each olefin operator should have privilege to operate their olefin cracker at their
full flexibility avail or take advantage of yield benefit.

c. All the olefin products & by-products producer by each cracker is to be shared as
per the feedstock ratio & agreed Yield

d. Individual olefin operator should agree on Yield on actual performance of each

cracker at their name plate capacity.

e. Each olefin producer should privilege to optimize utilities & other cost to enhance
profit margin. If needed investment, the both should shared the same under the
mutual agreement.

f. Fixed Cash Cost should be optimized and agreed to be incorporated in the tolling
as per actual in their production cost determination.

g. Deprecation cash cost to be agreed as per initial investment and process unit life
of each cracker.

h. If process unit has limitation to operate at name plate capacity, then mutual
agreement is to developed to share the feedstock and to be paid as per
feedstock ratio.

i. Any other benefit may be shared, if it being realized by any of the olefin producer.

j. If one cracker in under the turnaround, then a mutual agreement is to be

developed for sharing of the feedstock or increase the production rate in other
cracker.


k. There may be several other guidelines, which can be developed and in cooperated
as per the geographical location & resources availability.

6. A SABIC APPROACH

SABIC own and operate numerous olefin crackers with various type of feedstock,
namely ethane, propane, butane, NGL or mixture of gas & liquid in different
combination etc. SABIC has integrated feedstock & product sharing facilities know as
GRID.SABIC utilized their own resources of technical & economical expertise to
developed various model to fully utilize process unit at their maximum capacity at
optimum production cost to enhance the profitability. Moreover, these expertisess
study further elaborated to share the various feedstocks among the SABIC affiliates to
maximize the profit margin. The sharing of feedstock and common facilities provides
profit margin edge to the SABIC.

7. CONCLUSION:

Today, in petrochemical competitive market as raw materials, energy & utilities price
are soaring high, in turn has increased the entire petrochemical product across the
globe in highly vibrant & oscillating crude oil prices. Even small saving in the production
cost will help the producer to stand firm in the market. Above study revealed that
instead of operating the two mixed cracker of the same capacity. The tolling of
feedstock between two olefin crackers of the same capacity to operated these two
cracker on fully liquid & gas will reduce the production cost per ton olefin products. It
will generate extra production, and consequently enhance the profit margin due to
improved yield. Which provide marginal profit in comparison to other olefin producer?
Each cracker operator will get additional margin by processing their by- products in
downstream process unit.

This study has been carried conceptually and proven by actual operation. Moreover, it is
being practices by several olefin producers.


8. REFERENCES:

1. A conceptual study by UNITED-SABIC.

2. Actual operation of mixed feed cracker.
3. Tolling of feed between two mixed crackers.
4. A study of actual operation data.
5. Monthly Monitoring report

9. AUTHOR BIOGRAPHIES

Abdul Wahab: M.Tech. (Chemical) from L.I.T Nagpur, India and having more than 23 years
of industrial experience in Process Engineering of olefin crackers, Methyl Tertiary butyl ether
(MTBE), Ethylene Glycol & Linear Alpha olefin (LAO) processes of Petrochemical and Chemical
industry. Working with UNITED (SABIC), Al-Jubail KSA, as Staff Process Engineer. If you have
any questions or doubts need to clarify, then author can be reached through E-mail:
abdul.wahab@united.sabic.com.

10. CO-AUTHOR BIOGRAPHY

Nayef, A. AlAnazi: B.S (Chemical) from K.F.U.P.M. Dhahran, Saudi Arabia and
having more than 17 years of industrial experience in operation of Olefin & Air Separation
Processes. Working with UNITED (SABIC), Al-Jubail KSA, as Manager Process Engineering. You
can reached to him through E-mail: AnaziNH@UNITED.SABIC.com