CHAPTER 2: LITERATURE REVIEW

In this plant design project, the feedstocks used are pure benzene and pure ethylene.
These feedstocks then enter the reactor and produces mixtures of byproducts which are then
passed through the separators to obtain the required product which is ethylbenzene and the other
products like di-ethylbenzene and tri-ethylbenzene are removed from the process. Not only that,
the reaction involves a catalyst and the catalyst used for this process is zeolite catalyst which is
in liquid phase. To minimize the expenditure on spending for benzene feedstock, a benzene
recycled stream is connected from the first separator to the reactor to be able to fully utilize the
benzene.

2.1 Properties of Feedstocks and Products and Catalyst

2.1.1 Benzene

Benzene is known as an aromatic organic compound with the molecular structure of C 6H6
which appears to shape like a hexagon ring with alternating double or pi bonds. Benzene is
essentially used industrially for chemical synthesis where it is present as a colorless, volatile and
highly flammable liquid hydrocarbon which is naturally found from crude oil and coals. When
burning the benzene liquid, it releases a carcinogenic fume which is bad for continuous exposure
thus, usually the burning of benzene is done in a closed-system reactor. The carcinogen in the
benzene can cause serious health issues if the exposure exceeds the amount and length of time
exposure. Despite the disadvantages, benzene is useful for the production of plastics, rubbers,
lubricants, and glue.

Figure 1: Representation of benzene

1
 Table 1:Physical and Chemical Properties of Benzene

Physical and Chemicals Properties Values

Molecular Weight 78.00 g/mol
Color Colorless
Physical State Liquid
Density 0.88 g/cm3
Boiling Point 80.00 C
Melting Point 5.50 C
Vapor Pressure 75.00 mmHg
Flash Point -11.11 C
Refraction Index 1.50
Solubility 0.07g / 100.00 g of water
Dynamic Viscosity 0.0652 Poise
Auto-ignition Temperature 498.00 C
Standard Molar Entropy 172.80 J/mol.K
Standard Enthalpy of Formation 49080.00 J/mol
Heat Capacity 16.157 J/mol.K

2.1.2 Ethylene

Ethylene is known as a simplest alkene organic compound with the molecular structure of
C2H4 which appears to shape like a bow tie where the carbon bonds are attached with the
double/pi bond and each carbon are attached to 2 hydrogen atom using single bonds. Ethylene is
present to be a colorless, flammable gas that has a sweet odor which are naturally found natural
gas and petroleum. Ethylene is made by the heating of natural gas up to a specific temperature in
between ethane and propane giving a mixture of gases where ethylene is separated from the
reactor. Ethylene can be categorized into two parts which are monomer and polymers. As for
monomer ethylene, it would be single ethylene which usually are the starting of the chain
whereas for polymer ethylene, it usually is a chain of ethylene formed repetitively. As for the
application and usage of ethylene, it is more widely used as polyethylene to form plastic
products. Not only that, ethylene is widely used in agriculture as an important source of plant
hormone which helps in the ripening of fruits.

2
 Figure 1: The difference between a monomer and a polymer

Figure 2: Representation of Ethylene

Table 2: Physical and Chemical Properties of Ethylene

Physical and Chemicals Properties Values

Molecular Weight 28.00 g/mol
Color Colorless
Physical State Gas
Density 0.97 g/ml
Boiling Point -104.00 C
Melting Point -169.00 C
Vapor Pressure 35.04 mmHg
Flash Point -100 C
Standard Molar Entropy 219.60 J/mol.K
Auto-Ignition Temperature 450.00 C
2.1.3 Ethylbenzene

Ethylbenzene is an alkylbenzene which is known as the ethyl that attached itself to the
benzene ring structure giving a molecular structure of ethylbenzene to be C 8H10. The molecular
structure of ethylbenzene appears to be like a shape of hexagon with tail where the represents the
ethyl structure. Ethylbenzene is present as a colorless liquid hydrocarbon with aromatic odor and
it is also a highly flammable liquid. Ethylbenzene is naturally found in petroleum and it is easily
3
synthesized with the reaction of benzene and ethylene with the usage of a catalyst. The primary
application and usage for ethylbenzene would be for the production styrene, which is mainly for
polystyrene as it is a common plastic material.

Figure 3: Representation of Ethylbenzene

Table 3:Physical and Chemical Properties of Ethylbenzene

Physical and Chemicals Properties Values

Molecular Weight 106.00 g/mol
Color Colorless
Physical State Liquid
Density 0.867 g/cm3
Boiling Point 136.00 C
Melting Point -95.00 C
Vapor Pressure 7.00 mmHg
Flash Point 15.00 C
Refraction Index 1.495
Solubility 0.01g / 100.00 g of water

2.1.4 Catalyst Properties

Zeolite are structures that are well defined with crystalline solids like aluminium, silicon,
and oxygen in the framework whereas the cations and water are stored at the pores. For the
framework of the zeolite, the aluminium and silicon are tetrahedrally coordinated among each
other and shares oxygen atoms. Zeolites have a rigid 3D-crystalline structure which consists of
networks between the atoms. Usually, the water at the pores move freely in and out of the
framework but the framework itself remains rigid and stagnant. Not only that, the pores and
channels size remain the same which allows the crystal to act as a molecular sieve and due to
their molecular sieve, they can easily participate in the ion exchange, separations process
absorption and adsorption.
4
 Figure 4: Representation of Zeolite

2.2 Market Demand and Analysis

2.2.1 Global Ethylbenzene Market

In the present time, the world ethylbenzene market is expected to grow extensively due to
the increasing need for styrene generated from the dehydrogenation of ethylbenzene, to be used
by the polymer industry for the manufacture of styrene-butadiene rubber (SBR), (acrylonitrile
butad iene styrene) ABS, and polystyrene.

5
 According to Mordor Intelligence (2020), the world market share for ethylbenzene in 2018
was dominated by the Asia-Pacific region. China, India, and Japan were largely involved in this
domination because of the expanding construction and packaging industries, as well as necessity
to utilize ethylbenzene as solvent and reagent in paint, coatings, and ink. The increase of
investments made for the public infrastructure, renewable energy, and commercial projects have
stimulated the need of ethylbenzene. Rising electric vehicles manufacturing in the automobile
industry and growth of the pharmaceutical industry have also driven the demand for
ethylbenzene. Towards the end of 2025, the world ethylbenzene market size is likely to be
valued at above USD 30 billion (RM 12.804 billion), based on the Global Market Insights
(2020). Ethylbenzene was priced at USD 670 – 815 / tonne (or RM2859.56 – RM3478.42 /
tonne) in August 2016.

2.2.2

Figure 5: Global Ethylbenzene Market from 2015-2021. (Source: A to Z Research)

Global Outlook for Raw Materials

6
 The market for benzene is affected by numerous factors ranging from economical to
environmental. As the primary production of benzene is as a byproduct in steam crackers, oil
refineries and coke ovens, its supply is not only propelled by the demand in benzene but rather
by the demand for other products such as gasoline, ethylene, steel, fibres, petrochemicals and so
on[ CITATION SuJ18 \l 1033 ].

Figure 6: Benzene value chain (Source: Wood Mackenzie Chemicals)

As a result of benzene’s wide variety of sources as well as being a versatile precursor to

an array of products, the benzene value chain is very complex as shown in Figure 7. Bearing in
mind that benzene is a by-product derived from petrochemicals, its price in the market is
subjected to fluctuations as it is directly affected by the oil economy. Due to its carcinogenic and
hazardous nature, benzene remains to be a highly regulated industry in terms of environmental
policies which too has a substantial effect on the supply trend of benzene.

7
 Figure 7:Global benzene consumption by derivative (Source: Wood Mackenzie Chemicals)

According to Wood Mackenzie Chemical’s (2018) analytics shown in Figure 8, it is

evident that the largest source of consumption of benzene is from ethylbenzene (styrene).
According to data analytics from Market Research Future (2018), one of the major factors that
has led to increasing demand of the benzene market is the many useful benzene derivatives such
as ethylbenzene, cumene, nitrobenzene which accounted for 85% of the market globally in 2018.

The global benzene market was led by the Asia Pacific region specifically China in 2018
with a projected CAGR of 7.8%[ CITATION Mar18 \l 1033 ]. In rapidly developing Asian
regions such as China, both the high rate of consumption and the production of benzene are
driven by their growing automotive, plastics, construction and oil & gas industries[ CITATION
IHS19 \l 1033 ]. Contributions to the regional market are also made by other Asian countries
such as Japan, India and South Korea as well as Southeast Asian countries like Malaysia,
Thailand and Indonesia. In second place is North America largely due to giant corporations such
as Dow and ExxonMobil Corporation that produce benzene on a massive scale. Given the strict
environmental policies in the European region, market growth is likely to be deterred but the

8
presence of large automotive companies such as BMW, Volkswagen and Mercedes-Benz
counters that.

Ethylene’s widely versatile and diverse array of usage has led it to become one of the
largest volume of petrochemicals used. The worldwide production of ethylene was 165 million
tonnes in the year 2017 and is projected to reach a CAGR of 6% [ CITATION Mar18 \l 1033 ].
Owing to the market’s huge volume and diversity, ethylene production is often the metric
employed to gauge the performance of the energy sector, overall economy or petrochemical
industry of a region. Major corporations such as Dow, Shell, BASF and Repsol are significant
contributors to this market.

Figure 8: Global ethylene demand by application (Source: CPMA)

From Figure 9, the main driving force of the ethylene market appears to be coming
from polyethylene (HDPE, LDPE, LLDPE) production followed by ethylene oxide, ethylene
dichloride and others. Over half of the global ethylene consumption comes from polyethylene,
which is a plastic used to make packaging. With that being said, many businesses are shifting
towards a greener approach which entails drastically reducing their use of plastic packaging. This
shift could certainly impact the ethylene consumption however ethylene remains to have a wide
range of uses in the fibers, automotive, construction and agricultural sectors.

The global ethylene market is also dominated by Asia specifically China. The demand in
ethylene is driven by the overall robust development occurring in these regions. In Asia, the
increase of use in industries involving packaging, construction, agrochemical and textile is a

9
contributing factor. Rapidly growing industrialization, urbanization and agriculture has boosted
the demand for its ethylene-based products. In India, exports for textile products in 2017
skyrocketed to 39.2 billion US dollars and played a massive role in the growth of Asia’s ethylene
market. In Europe market growth is deterred by tight environment legislation by the EU on
Volatile Organic Compounds (VOCs) emissions. In the United States, similar regulations that
regulate the use of ethylene are also in place and hinders the growth of their ethylene market.

2.2.3 Local Market for Raw Materials

Material name Capacity Producers in Malaysia

Benzene, 1) Lotte Chemical Titan (M) Sdn. Bhd.

Toluene, 2) Petronas Chemicals Aromatics Sdn. Bhd.
Xylene (BTX) 888, 000 tonne/year 3) Pengerang Refining Company Sdn. Bhd.

1) Lotte Chemical Titan (M) Sdn. Bhd.

2) Petronas Chemicals Ethylene Sdn. Bhd.
1 million tonne/year 3) Petronas Chemicals Olefins Sdn. Bhd.
Ethylene 4) Pengerang Refining Company Sdn. Bhd.

The Malaysian economy remains to be the third largest in Southeast Asia and this is
largely driven by the chemicals industry which has benefitted from the country’s abundant
natural resources and in turn contributed to the country’s economy. Within the chemicals
industry, petrochemicals and oleochemicals are the dominant trades largely attributed to factors
such as feedstock availability, infrastructure and service[ CITATION ECh20 \l 1033 ].
According to the Ministry of International Trade and Industry (MITI)’s report (2017), a
staggering investment worth RM2 billion was allocated for the expansion project in a propylene,
ethylene, benzene and toluene plant in Malaysia.

Table 4: Major petrochemical feedstocks in Malaysia (Source: MIDA, 2017)

10
 Driven by factors such as the availability of feedstock at high capacities and fast
developing petrochemical infrastructure, Malaysia has geared itself to be a petrochemical hub in
the Southeast Asian region. As shown in Table 4, the high capacities of raw materials such as
BTX at 888, 000 tonnes/year and ethylene at 1 million tonnes/year that act as vital precursors for
a broad range of sectors including petrochemical, construction, plastics, automobiles and
polymers will certainly fuel the growth of these markets. In the year 2018, Malaysia raked in RM
33 billion worth of investments from some of the largest players in the petroleum industry.
Potential investors looking to invest in Malaysia’s petrochemical sector are able to benefit
significantly from the cutting-edge facilities in integrated petrochemical complexes such as
Pengerang Refining Company Sdn. Bhd. which offers centralized services and efficient
transportation networks that in turn results in savings[CITATION Mal20 \l 1033 ]. Infact,
numerous collaborations and investments have been made by big players in the industry such as
BP, Shell, Saudi Aramco and many others who have set up petrochemical operations in
Malaysia. While there is certainly a large supply for the market, Malaysia does not have a large
enough local demand for petrochemicals due to its small population and slow developing
polymer industry. Despite its small domestic demand, Malaysia is a big player in the Southeast
Asian market of petrochemicals like benzene due to its open economy and incentives provided
by the government. Numerous free trade agreements such as the ASEAN Free Trade Agreement
were signed by the government and as a result in 2016, participating countries contributed to a
staggering 62.3% of Malaysia’s total exports worth around RM490.1 billion (MITI, 2017).

2.2.4 Comparison of Product Price and Raw Materials Price

According to the Independent Commodity Intelligent Services (2020), the price markets
for the materials involved (benzene, ethylene and ethylbenzene) are volatile as they are
petrochemical derivatives and are thus dependent on the price of crude oil. Hence, the prices are
subjected to fluctuations from time to time depending on the state of the economy amongst other
factors. The prices listed for the materials in this project are taken from market analysis
performed by Independent Commodity Intelligence Services (ICIS) Pricing. Based on the
benzene price analysis conducted by ICIS (2019), in May 2019 the price of benzene was

11
assessed at $620/tonne (RM2646.16/tonne). In May 2019, the price of ethylene CFR (cost and
freight) in the market peaked at around 1000$/tonne (RM4268/tonne). The prices of all feedstock
listed in Table 5. From the table, benzene is the lowest costing raw material at RM2.65/kg
whereas ethylene is the most costly at RM4.27/kg.

Table 4:Price of feedstock and products

Material Name Classification Price ($/kg) Price (RM/kg)

Benzene Raw Material 0.62 2.65
Ethylene Raw Material 1.00 4.27

Table 5:Price per tonne for Product and Raw Materials

Type Product Raw Materials

Ethylbenzene Benzene Ethylene
Price per tonne RM3168.99/tonne RM2650.00/tonne RM4270.00/tonne
(as per August (May 2019) (May 2019)
2016)
Total RM 6920.00/tonne (May
2019)

Based on Table 6, the market price for ethylbenzene was calculated by using its market
price in 2016 as the basis. According to Independent Commodity Intelligence Services (2016),
the lowest market price for ethylbenzene in August 2016 was RM2859.56/tonne and its highest
market price in August 2016 was RM3478.42/tonne. The average price is calculated to be used
as the basis of the study and it was priced at RM3168.99/tonne.
For the raw materials, the price per tonne are calculated as follows:
Benzene :RM2.65/kg × 1kg/0.001 tonne = RM2650.00/tonne
Ethylene :RM4.27/kg × 1kg/0.001 tonne = RM4270.00/tonne

With high demand of ethylbenzene from countries all around the world, specifically the
ones from the Asia-Pacific region, it is an economically viable choice to design a plant that
generates a large amount of ethylbenzene as our commodity, to be exported to other foreign

12
countries. Ethylbenzene can be produced using a few alternatives which will be highlighted in
the upcoming sections. Since the price per tonne for the raw materials is RM6920.00/tonne in
total, importance is given to the alternative that maximises the feedstock conversion and the
product yield. As the average market price for ethylbenzene was priced at RM3168.99/tonne in
2016, it is estimated to cost even higher at the present time due to its increasing need to be used
in many other production industries.

2.3 Screening and Selection of Process Route

The main task of the present process plant design project is to develop and evaluate several
process design alternatives for the production of 500, 000 tonne/year of ethylbenzene from raw
materials: benzene and ethylene. Three different process alternatives have been proposed and
comparisons between them are made in order to ascertain the best alternative for the
ethylbenzene plant design. All three process alternatives involve the liquid-phase reaction of
ethylene and benzene using zeolite as the catalyst to produce ethylbenzene (EB) as shown in
Equation 2.3.1. This is an alkylation process and serves as the main reaction as it produces the
desired EB as the product.

Reaction 1: C2H4 + C6H6  C8H10 (2.3.1)

The EB formed then reacts with ethylene to form di-ethyl benzene (DEB) provided
reactor temperature & ethylene concentration is high.

Reaction 2: C8H10 + C2H4  2C10H14 (2.3.2)

The by-product DEB reacts with benzene to form EB (desired product) by

transalkylation.

Reaction 3: C10H14 + C6H6  2C8H10 (2.3.3)

13
2.3.1 Process Alternative 1 (Luyben, 2010)

Figure 9: Schematic diagram of process alternative 1 (Source: Luyben, 2010)

The first process alternative was proposed by Luyben (2010) has a configuration
consisting of 2 CSTRs and 2 distillation columns. In both reactors, operating conditions such as
temperature are kept low at 160⸰C to enhance selectivity and pressure is kept high at 20 atm to
maintain the liquid phase. The first CSTR acts as an alkylator reactor where the benzene reacts
with pure ethylene to form EB. The ratio of benzene to ethylene is 2.5:1 in the feed to ensure that
most of the ethylene is converted in the first reactor. This reaction is exothermic and so a cooling
coil is placed inside the reactor to generate steam. The second CSTR is adiabatic and acts as a
transalkylator reactor to ensure all the DEB produced is converted to EB (desired product). The
distillate of C1 will contain a high concentration of benzene which will be recycled to the first
reactor and the second distillation column will have the heavier DEB come out at the bottom to
be recycled. This process alternative neglects the formation of polyethylbenzenes (PEBs) and
only takes into account formation of DEB.

14
2.3.2 Process Alternative 2 (Hussain, 2017)

Figure 10: Schematic diagram for process alternative 2 (Source: Hussain, 2017)

In a study by Hussain (2017), a novel heat integrated column with a side reactor (HI-
SRC) was utilized as a design alternative for the production of ethylbenzene. The side reactor
column (SRC) is an integrated unit for reactive distillation processes where there is an extrinsic
loop connecting the reactors to the column. In the process design of Luyben (2010), the
selectivity of desired product depended on factors such as reactor size and the amount of the
reactant. In order to achieve high selectivity and yield of EB, uneconomical measures such as
bigger reactors and high benzene recycle rates were required. SRCs could offer potential benefit
as they utilize the heat of reaction to ensure the product is semi-vaporized which reduces reboiler
load effectively reducing the energy required for the separation process. SRCs is also able to
significantly reduce the capital costs of plant equipment as they do not require large scale
reactors. Based on Figure 11, the first column C1, is integrated with 2 external adiabatic tubular
reactors as they require less volume than CSTRs, provided the reactions were adiabatic. Benzene
feed along with recycled benzene from top of C12 is fed at stage 12. The ethylene feedstock is
divided into two streams and in equal proportions into the side reactors. The liquid streams from
stage 12 and 14 are extracted and fed into the external side-reactors R1 and R2, respectively.
Leaving R1 and R2 are high temperature product streams in liquid as a result of the exothermic

15
heat of reaction are fed to C1 at stages 17 and 19. Formation of PEB is neglected in this study
and pure ethylene is used as feedstock.

2.3.3 Process Alternative 3 (Ebrahimi, 2010)

Figure 11: Schematic diagram of process alternative 3

In an effort to reduce energy consumption, Ebrahimi et al. (2010) proposed a design that
utilized 4 single bed alkylation reactors (instead of two double-bed alkylation reactors) and 1
transalkylation reactor. In total, 5 packed bed adiabatic reactors are arranged in series with
interstage heat exchangers and ethylene amidst the reactors. The benzene to ethylene feed ratio at
3.5:1 is higher than the alternatives discussed previously. Coolers are placed before R-2 and R-3
because the amount of ethylene injected (and the benzene recycle stream) can impact the
reactors’ temperature. This measure helps ensure that the reactor temperature stays controlled
and the process is optimized. Higher reflux ratios of benzene (6:1) are also employed to reduce
polyethybenzene formation as well as provide better temperature control.

16
 Table 6: Advantages and disadvantages of 3 process alternatives

Alternativ Advantages Disadvantages

e
- Simple configuration
1 - 4 major unit operations required
- Low benzene to ethylene ratio 2.5:1
- Low energy usage for large DEB
recycle
- High pressure: 20 atm
- Expensive overhead benzene cycle
- Bigger reactor required to increase
selectivity
- Higher benzene recycle flowrate is
required to increase selectivity
- PEB formation neglected

- PFR require smaller volume in - High pressure: 20 atm

2 adiabatic reaction (low capital cost) - Complicated configuration
- 4 major unit operations required - PEB formation neglected
- Reduced reboiler load (heat of
reaction is utilized)
- Ethylene conversion is independent
of reactor volume
- Low benzene to ethylene ratio 2.5:1

- Higher yield and selectivity - High benzene to ethylene ratio 3.5:1

3 - Reduced energy consumption of - 9 major unit operations required
reboilers, condensers, heat - Complicated configuration
exchangers and pumps
- Takes into account PEB formation

17
2.4. Selection of Plant Location

In current modern business environment, many entrepreneurs are facing problems in deciding
the best site for location of his plant as variety factors has to be taken and the selection has to be
based on multiple criteria decision-making (MCDM) [ CITATION Got15 \l 1033 ]. No plant
could fulfil all the criteria and located in a perfect location with maximum benefits. Some factors
will tend to be more important than the other one in which will be the dominant criteria of site
location. For example, if the raw material is quite in large amount and having difficulties in
transporting, then the plant would be desired to be placed in a location closer to the raw material
source instead of accounting other insignificant factors.

A bad location may cause major irreversible setbacks in which may also cause an enterprise
to experience declining profits margin and eventually would lead to bankruptcy. Gothwal & Seha
(2015) also mentioned that once a mistake is made in finding a location for a plant, it becomes
extremely hard to correct it especially if it is in large scale. The initial stage of a selection
process is essential and must be relevant for long- term operational activities. There are 12
factors evaluated which could help in determining the best site location to ensure the entire
process would be carried out efficiently at a minimal cost and the maintenance activity could be
done smoothly. These factors are:
1) Raw Material Availability
2) Proximity to Market
3) Energy Availability
4) Water Supply
5) Taxation and Legislation
6) Site Characteristics
7) Climate
8) Transportation Facility
9) Waste Disposal
10) Labour Supply
11) Flood and fire protection
12) Community Factor

18
2.4.1 Primary Factors for Ethylbenzene Plant Selection

1) Raw Materials Availability

Raw materials availability is one of the most important consideration in which the source
of raw materials should be able to produce feedstocks at maximum rate and with cheap selling
price. In general, companies which produces products in bulk would locate their plant close to
source of raw materials to minimize any sort of extra costs involving shipping and transporting
feed. As an example, the feed stock that we will be using are benzene and ethylene. According to
MIDA (2019), Malaysia being the 28th largest reserves of crude oil and condensates has multiple
facility in producing petrochemical feedstocks to enhance manufacturing industries.

Benzene and Ethylene in Malaysia is being produced by companies such as Lotte

Chemical Titan(M), Petronas Chemicals Aromatics a, Pengerang Refining Company Petronas
Chemicals Ethylene.[ CITATION Che19 \l 1033 ] . The main component in knowing which
manufacturer would be able to meet the plant feed demands is by comparing the production
capacity. The capacity of raw materials being produced by these company varies and the larger a
production rate, a better certainty obtained in which the raw materials supply would meet the
demand.

The location of plant from the source of raw materials should also be closer to minimize
total transportation cost and is also a factor of the abundancy of the raw materials nearby the
location. If the raw material is universally available, then the selection of plant location would
favor towards market area.

19
 Table 7: Raw Materials Availability Comparisons

Location

Raw Materials Kertih, Terengganu Pasir Gudang, Johor Pe nge rang, Johor
1.Aromatics Malaysia Sdn. Bhd.(AMSB) 1)Lotte Chemicals Titan(M) Sdn. 1. Pengerang Refining Company
Distance from Plant: 5KM Bhd. Sdn.Bhd(PRefChem)
Production Capacity:145 000 tonnes/year Distance from Plant: 4 KM Distance from Plant: 10KM
Production Capacity:130 000 Production Capacity: 175 000 tonnes/year
Benzene
2. Petronas Chemicals Aromatics Sdn.Bhd. tonnes/year 2. Pengerang Energy Complex,PEC(2023)
Distance from Plant: 2KM Distance from Plant: 7KM
Production Capacity: 200 000 tonnes /yr Production Capacity: 655 000 tonnes/year

1. Petronas Chemicals Ethylene Sdn. Bhd. 1)Lotte Chemicals Titan(M) Sdn. 1. Pengerang Refining Company
Distance from Plant: 10KM Bhd. Sdn.Bhd(PRefChem)
Production Capacity: 400,000 tonnes/yr Distance from Plant: 4KM Distance from Plant: 10KM
2.Optimal Olefins Malaysia Production Capacity: 330 000 Production Capacity: 1.3 million
Distance from Plant: 2KM tonnes/year tonnes/year
Ethylene Production Capacity: 600 000 tonnes /yr
3.Ethylene Malaysia Sdn.Bhd.
Distance from Plant:2 KM
Production Capacity:440 000 tonnes/year

Source: Independent Chemical Information Services(ICIS)

Based on Table 7, Kertih has been a place where various petrochemical processing plants
are located especially for ethylene production. This is due to existence of Kertih Integrated
Complex (KIPC) and Bio-polymer Park which tend to have multiple polymers production
industries. Meanwhile, the Malaysia’s first integrated petrochemical industry complex started in
Pasir Gudang where the titan’s commissioned their first polyethylene plant there[ CITATION
Nat18 \l 1033 ]. Pengerang has multiple upcoming plant projects which involved huge
production capacity of aromatics and olefins which may be a good location for plants in future
due to uncertainties and risk which is due to its start-ups in the late of 2020.

2) Proximity to Markets

The location of market also affects the decision on a site selection and this factor is
considered to play a vital role for long term success of a plant. Having a plant near to market area
would help in providing goods or products to customers at the time needed and at a reasonable
price. By locating plant closer to market area, transportation cost of product would be less

20
besides having less commitments on the delivery processes. The proximity to market factors
would mainly affect products with low shelf life and is susceptible to spoilage.

Ethylbenzene is primarily used in the manufacture of styrene which is a liquid that can be
chemically linked to form polystyrene. Having a plant in Kertih would really help in meeting
local buyers as there are many factories working with polystyrene and other petrochemical
products nearby. As for Pasir Gudang, the local markets would not benefit much as compared to
Kertih but yet there are ports nearby which serve as main hub in exporting products to either
Singapore or other nearby countries. Pengerang meanwhile is a new developing area that have a
low degree of accessibility but there is a high chance of attracting consumers by the end of 2023
as many developing projects are being constructed. On February 2020, The NST Business
published a report regarding the development of Pengerang energy Complex into a world classs
petrochemical hub in line with the government’s Transformation programme by Singapore-based
company known as ChemOne Group.

3) Energy Availability

Energy availability is also important as industrial sector is responsible for the 54% of the
world’s total delivered energy. Industrial sectors can be divided under 3 categories which are
energy-intensive manufacturing, nonenergy-intensive manufacturing and nonmanufacturing. As
for ethylbenzene production plant, it is placed under energy-intensive manufacturing as the there
are multiple separators and heat exchangers being used to treat effluent which tend to consume
lots of electricity. Due to the high consumption of energy, the price for energy supply should be
included into consideration. As an alternative, a self-generated energy power plant can be built
for long term energy cost saving. Fuel energy is also needed to produce power and steam.

4) Water Supply

The minimum charge for water supply comes from Terengganu if compared to Johor
areas. This is because, Syarikat Air Terengganu (SATU) has decided to fixed the water supply
price at a lower tariff compared to Johor area in which for industrial plants, the tariff is 3 times
higher. Some process industries use large quantities of water for multiple functions such as
21
cooling, washing and steam generation. This is the reason a plant would normally be located near
to any water bodies such as sea, river or a lake. Large amount of water should also be kept in
case of any explosions. If the water is involved in the processes then factors such as temperature,
mineral content, sand content, biological content, and purification should be analysed. In
Pengerang, Project Air Mentah RAPID(PAMER) or raw water facility were being built which
has intake station, dam and booster pump that are able to flow across a distance of 88KM
through water pipelines.

5) Taxation and legal restrictions

Plenty of Grants, tax incentives, and other benefits are being offered by governments to
direct new investment to desired locations such as areas of high unemployment. Pioneer status is
a form of inventive that provides tax exemption if the company participated in promoted
activities and this status is clearly important for any sorts of plant to have no tax applied on them.
Several deductions would also be given to companies which involves their contributions made to
the Government, State Government and local authorities. There are also local regulations on
zoning, building codes and additional permits needed to start a plant in a new location. The
zoning involves categorizing different kind of industries based on the type of processes involved.
Free Zones also play an important role in locating a plant in which it helps in lower the cost,
having less restrictions, simple documentation required and multiple benefits on storage and
services. The few major policies involved in Malaysia are The Free Trade Zone Act 1971, The
Free Zones Act 1990 and Free Zones Regulation 1991. Goods imported from Tanjung Pelepas
Port are not subjected to GST due to its Free Commercial Zone status meanwhile The Pasir
Gudang Port is also listed under Free Trade Zone (FTZ) in which helps in duty tax exemption,
waived customs duties, improved compliance and relief from inverted tariff. Terengganu
meanwhile do not have any sort of Free Zones and the nearest area is in Rantau Panjang ,
Kelantan.

6) Site Characteristics
22
 Site characteristics can be a factor which may be important for a large-scale plant. The
topography area, cost, size of the site should be considered in searching for a good site. The plot
of land must be large enough to accommodate the proposed plant together with any other facility
buildings. Future expansion of the site should also be a key criterion in looking for a site in case
of any sort of renovation and new technology would be implemented soon or later. An ideal land
should be ideally flat with a good drainage system and have a load-bearing characteristics as
well.

2.4.2 Other Factors Affecting the Ethylbenzene Plant Selection

1) Climate

Geology of an area works together with the climatic conditions such as temperature and
humidity. Adverse climate conditions would generally increase the cost of setting up a plant.
Extreme low temperature may require extra provision for added insulation and heating
equipment. Similarly, excessive humidity and hot temperature may cause added cooling system
and tend to pose serious problems for the end products. Strong structure and high quality
construction material would be needed to withstand these conditions and may lead to high
setting up cost.

2) Transportation Facilities

Transportation facility is a factor that plays an important role in getting products delivered to
customers besides increasing geographic accessibility. Mode of transportation can be in the form
of land transport, railway tracks, and sea freight. Certain site may cost less in obtaining them, but
they might not have proper transport facility which may hinder the production rate due to delays.
Plant located near to a port could perform exports and imports of quicker internationally which
may boost their product distribution through sea. By using train, the transportation mode is faster
and is cheaper but railway tracks only cover certain regions in Malaysia. Road accessibility is the

23
most important mode of transport as local distribution would be faster by road if the market is
situated close to the plant.

3) Waste Disposal

Waste and Effluent disposal facilities is essential for effective disposal without causing
environmental issues. Permissible tolerance level on effluent released should be considered
which would require potential additional waste treatment facility. The local authority would be in
charged of disposing any sort of harmful chemical contents and appropriate surveys would be
done to determine the standard benchmark. Most industries nowadays looking forward into
having research and development segment which focuses on utilizing these by-products to be
converted into any useful and less harmful products.

Various burial and disposal method has been introduced to overcome the properties
difference of effluent. Some of the recommended method for ethylbenzene disposal includes
burial in landfill, rotary kill incineration, liquid injection incineration and fluidized bed
incineration.[ CITATION Kow16 \l 1033 ]

4) Labour Supply

Labour has always been a keen factor of a plant operability success. Skilled construction
worker normally would be brought from outside but there is a need in utilising local unskilled
labours to minimize cost by prevailing wage pattern. A plant located next to a big city may
attracts labours due to better transportation facilities meanwhile in any sort of rural area may face
shortage of available labourer. The labour should be having a positive working attitude and is
available at reasonable rates. Problems such as boycotts, strikes may occur due to different
perspective and should be considered too. As for petrochemical industries, the need of skilled
labour is needed and areas such as Kertih and Pasir Gudang do clearly have higher percentage of
available worker when compared to Pengerang, which new developing area with lesser
population. Although Pengerang is still under development, multiple investments are being done
which involves the aromatics plant construction in Pengerang Energy Complex facilities costing

24
USD 3.4 billion with more than 7000 employers to be hired once done. Roughly 80% of
Malaysia would be hired from its 250 staffs which could help in the area upbringings.
[CITATION The20 \l 1033 ]

5) Flood and Fire Protection

Due to higher proximity to market and water supply, most of the industrial plants are
located next to the port or next to water bodies. The probability of facing flood and fire incident
is quite high and risk assessment should always be considered at all time. The topography of a
site location should be studied in order to exhibits results on potential of flooding. Every flood
gives trouble and may halt any operations. Flood prevention plans should be carried out in order
to minimize the risk and reginal history of natural events happening should also be examined.
Fire department should be located near to the plant location to aid in major fire incidents.

6) Community Factors

The plant should be located in a place with less restriction and must fit and be acceptable
to the local community Large scale industries often have problems when it comes to excessive
effluent discharge which may impose additional risk to the community. Facilities provided of
community can have effect on gaining labourer’s interests. These facilities can be in term of low
rental rent, proper malls and presence of cultural facilities such as mosque and churches.
Educational and recreation platforms would also play an important role.

25
2.4.3 Comparison between several possible locations

Table 8: Factors Considerations for Selection of location

Location Kertih, Pasir Gudang, Pengerang, Johor

Criteria Terengganu Johor
Location Kampong Pasir Gudang Industrial Pengerang Industrial
Labohan, Estate Area (Next to PIPC)
Kertih
Availability of suitable 217194 sq. ft. 3 435,600 sq. ft. 261,360 sq. ft.
Land
Price of land RM16.99/ sq. ft. RM48/ sq. ft. RM40/ sq. ft.
Benzene
1.Aromatics 1. Lotte Chemicals 1.Pengerang Refining
Malaysia Titan Company
2. Petronas 2.Pengerang Energy
Chemicals Complex,PEC (2022)
Raw Material Supply Aromatics
Ethylene
1.Ethylene 1. Lotte Chemicals 1.Pengerang Refining
Malaysia Titan Company
2.Optimal
Olefins

Airport Kuala 1. Senai Airport 1.Senai international

Transportatio Terengganu 2. Changi Airport Airport
n Sultan Mahmud 2. Changi Airport
Airport
Land Along the Asian Pasir Gudang Pengerang Highway
Highway 18 Highway through Sungai Rengit
(Kemaman- And close exit to
Dungun) North- South
Expressway
Railway KTM (Gemas- -KTM (Gemas- Johor -MRL East Coast Rail
Johor Bahru) Bahru) Line in Kuantan
(ECRL) -under
construction
Port Facility 1. Kemaman 1. Johor Port 1. Johor Port
Port 2.Tanjung Pelepas 2. Tanjung Pelepas
2. Kertih Port Port Port
3. Kuantan Port 3.Tanjung Langsat
port

26
Electric Supply Tenaga Nasional Berhad (TNB)
According to Tariff E3(High Voltage):
Peak Period= 35.50 sen/kWh
Off Peak Period = 21.90 sen/kWh

Water Supply 1. Syarikat Air 1. Syarikat Air Johor 1. Syarikat Air Johor
Terengganu Sdn. Bhd. Sdn. Bhd.
(SATU)
For For
For industrial industrial(>35m3): industrial(>35m3):
(fixed): Rm3.30/m3 Rm3.30/m3
RM1.15/m³
2. Located along 2.Located Near Johor
2. Located Near Johor Strait River
to Kertih River
Climate Average Average temperature: Average temperature:
Temperature: (23oC- 30oC) (24oC- 31oC)
(25oC- 31oC)
Average annual
Average Annual Rainfall:2350mm/year Average annual
Rainfall: 1700 Rainfall
mm/year Relative Rainfall:2462mm/year
humidity:84%
Relative Relative
humidity:78% humidity:77%
Waste Management 1.Kualiti Alam 1.Proven Vision Sdn. 1. Kualiti Alam Sdn .
Company Bhd. Bhd.
2.Casa Armada
Sdn Bhd. 2.Scheduled Waste 2. Zaquin Resources
(CASB) Management (SWM) Sdn. Bhd.
Professional
Local Community and 1. Population: 1.Population: 46,571 1.Population: 15169
Labor Supply 66545 people 2.Labour market 2. Labour Market
2. Labour existed in Pasir existed in Johor Bahru
market existed Gudang or Johor or Kota Tinggi
near Kuantan Bahru
Region

27
 Table 9: Ranking and Weight Method applied for the location evaluation

Site Score Weighted Score

Pasir Pasir
Kertih, Pengerang, Kertih, Pengerang,
Gudang, Gudang,
Terengganu Johor Terengganu Johor
Johor Johor
Factors Weight
1.Raw materials
14 12 10 9 168 140 126
availability

2.Markets 12 11 11 9 132 132 108

3.Energy availability 10 9 9 9 90 90 90

4.Climate 7 6 6 5 42 42 35
5.Transportation
7 6 6 4 42 42 28
Facilities
6.Water supply 8 8 7 8 64 56 64

7.Waste disposal 6 6 6 6 36 36 36

8.Labour supply 7 6 6 4 42 42 28
9.Taxation and legal
10 9 8 7 90 80 70
restrictions
10.Site characteristics 8 7 6 8 56 48 64
11.Flood and Fire
6 5 5 6 30 30 36
protection
12. Community Factors 5 5 5 5 25 25 25

TOTAL 100 817 763 710

*Site Score Ranging from 1 -5 in which:
1= Very Bad, 2= Bad, 3= Moderate, 4= Good, 5= Very Good

Based on the factors being discussed for the selection of plant location for ethylbenzene,
Kertih, Terengganu turned out to score the most in compared to Pasir Gudang, Johor and
Pengerang, Johor. This is because availability of raw material was given the highest priority and
Kertih has been a promising place with multiple companies being able to produce high amount
of benzene and ethylene in a year span. Pasir Gudang has been dominated by a company known
as Lotte Chemicals Titan Sdn.Bhd. which may costs higher due to their high demands in the
market. Pengerang meanwhile is a new developing area and is said to be one of the largest
petrochemical hub from 2023 onwards. This is because in 2011, Pengerang Integrated Petroleum
Complex (PIPC) which serve as a game changer were built for eastern shores in Johore. Multiple

28
industries in regard to petrochemical are located there ever since then and one of them is the
Pengerang Energy Complex facilities in which multiple investors are looking forward to start
aromatics plant that are able to produce million tonnes of raw materials in a year. Although
Pengerang seems to have promising factor for long term success but for now, most of the
construction is still under early phase and may not benefit an ethylbenzene plant.

Kertih seems to have a better local marketing progress as there are many factories
utilizing ethylbenzene as primary product to produce styrene and other polymer-based products.
Pasir Gudang meanwhile is considered as a Free Zone which may receive lots of incentives and
benefits in terms of trading when compared to Pengerang and Kertih. Climate issues seems like a
no problem to all three places due the typical rainfall season and consistent average temperature
throughout the year. Malaysia is also a country with no earthquake with less natural disaster
concerns. The three proposed locations are situated next to Kertih Integrated Petroleum complex,
Pengerang Integrated Petroleum Complex and Pasir Gudang Industrial Park respectively. These
places were well built with multiple facilities concerning water supply, energy availability, waste
disposal and to overcome any sort of flood issues or emergency fire. Transportation facility and
labour supply tend to favour Kertih and Pasir Gudang due to its high degree of accessibility in
compared to Pengerang which has less highways nearby and is located at an area with less
population.

In conclusion, Kertih is a suitable area for ethylbenzene plant location due to the
abundance of raw materials produced in a year, multiple facilities provided, various
petrochemical factories nearby and availability of labour supply. Pengerang meanwhile is a place
with promising future due to high local and foreign investment which may be a good choice if
there is any relocation plans in future.

29
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