a journey through the forest: navigating around the ...1 air 13/12/2015 liquide, world leader in...

1 13/12/2015 Air Liquide, world leader in gases, technologies and services for Industry and Health

A Journey through the Forest: Navigating around the Complexities of a Methanol Project Budapest, 1st of October 2016 l Dr. Matthias Stein l Air Liquide Global E&C Solutions

2 Air Liquide, world leader in gases, technologies and services for Industry and Health

Forest Picture


Air Liquide´s Lurgi Methanol Technology Leadership

Lurgi Technology introduced combined reforming (SMR and ATR) for plant

capacities of > 2,000 tpd in 1984- 12 References*

Lurgi Technology set the standard 5,000 tpd size (Combined reforming -

SMR and ATR - and Advanced High Pressure Methanol Reactor System) in

2004- 5 References*

Integrated syngas (SMR) and Methanol reactor system (low pressure) for

250 to 2,000 tpd from 1960- 40 References*

Single train 10,000 tpd plant engineering available since 2012; Pure

Autothermal Reforming with Advanced High Pressure Methanol Reactor

* Operating references


Competitors at 5,000 MTPD with Natural Gas, operating

Syngas Generation

SMR ATR Methanol

Synthesis/Distillation

Natural Gas Methanol

Syngas Generation

SMR Methanol



CO2

Davy – 1 Reference, but with CO2, as such pure SMR – M5000, Trinidad

Topsoe – 0,5 Reference, Mitsubishi Methanol Technology – ArRazi V, Saudi Arabia

Syngas Generation

SMR ATR Methanol



Lurgi – 4 Reference, Zagros 1, Zagros 2, PML, Atlas


Lurgi Mega Methanol- Recent Reference Situation

Zagros 1, Iran

• 1.65 mil tpa

• NG based

Atlas MeOH,

Trinidad

• 1.65 mil tpa

• NG based

Methanex, Chile

• 800 ktpa

• NG based

Zagros 2, Iran

• 1.65 mil tpa

• NG based

Petronas,

Malaysia

• 1.65 mil tpa

• NG based

OCI Natgasoline

TX, USA

• 1.65 mil tpa

• EP Package

Zeogas, TX, USA

• 1.65 mil tpa

• EP Package

YCI, LA, USA

• 1.65 mil tpa

• EP Package

Additional 5 MegaMethanol plants in China (coal based 2006-2013)

2001 2002 2004 2005 2014

BASF, TX, USA

• 1.65 mil tpa

• Integration

into Propylene


Air Liquide offer for Methanol Projects: A Holistic View

Air Liquide

offer: Support and

Management of the entire

project execution

Contract Driven

Approach

On-board Project

Manage-ment

Expertise

Reduce Pre-FID

Expendi-tures

Access to reference as-built

documen-tation

ECA covered

Financing

Minimize schedule

Potential for providing Oxygen over the

fence


Project Execution Schedule

License (AL)

Basic Engineering (AL)

FEED (PMC)

Detailed Engineering (EPC)

Construction (EPC)

Final Investment

Decision (FID)

Plant

Commissioning

LS EP Price Estimate (AL) Basic + Detailed Engineering (AL+EPC)

Construction (EPC)

Basic + Detailed Engineering (AL+EPC)

Construction (EPC)

AL Financing

License (AL)

License (AL)

Execution Time

1. Classical project execution

2. AL Contract driven approach

3. AL Contract driven approach with reduced pre-FID expenditure and financing


Atlas Methanol Co. – Point Lisas, Trinidad & Tobago

• 5,000 tpd MeOH plant, upfront cost covered through project developer, bank financed,

• First ever built 5,000 tpd MeOH plant,

• Classical EPC project with AL (Lurgi) as EPC contractor,

• Lump Sum turn key fixed price through pre-FEED.

Benefit for Customer: • Shorter execution schedule,

• Technology and execution from one single company,

• EPCM enables Customer to take construction risk and reduce contingencies

Specifics: • General contractor Voest Alpine

• Cheapest plant (5,000 tpd) ever: 480 mil $ (290 $ cost per installed t of MeOH),

• Oxygen supply over-the-fence.

License (AL)


Pre-FEED (AL)

Detailed Engineering (AL)

Construction (AL+Voest Alpine)

Final Investment

Decision (FID)

Classical project execution


Zagros 1 and 2- Assaluyeh, Iran

• 2 times 5,000 tpd MeOH plants,

• Design basis available from NPC (National Petrochemical Company), lump sum EP bidding,

• Upfront cost covered through owner NPC,

• Classical EPC project with AL and PIDEC in a consortium,

Benefit for Customer: • Entire project out of one entity (consortium AL and PIDEC),

• Consortium reduced reduced risk and contingencies,

• 100% financing arranged by AL and German Hermes export credit guarantee.

Specifics: • Zagros 2 was ordered once Zagros 1 was 75% complete, Zagros 2 as copy.

Final Investment

Decision (FID) License (AL)

Basic Engineering (AL) Detailed Engineering- off-shore (AL)

Detailed Engineering- on-shore (PIDEC)

AL Financing

Classical project execution


Petronas Methanol Ltd. (PML)- Labuan, Malaysia

• 5,000 tpd MeOH plant, financed through Petronas´ Balance Sheet,

• Target price for plant cost negotiated between Customer and AL –

• Lump sum EP price and target construction price,

• Cost sharing for exceeding expenses

Basic + Detailed Engineering (AL)

Construction (AL as EPCM) License (AL) FEED

Benefit for Customer: • Shorter execution schedule,

• Technology and execution from one single company,

• EPCM enables customer to take construction risk and reduce contingencies.

Specifics: • NG from only one off-shore gas field, operated under upstream (oil) philosophy,

• Once through seawater cooling (cheapest cooling system).

Final Investment

Decision (FID)

AL Contract driven approach


OCI Natgasoline- Beaumont, Texas, USA

Plant is under construction, start up expected in mid 2017

Classical Lump Sum EP approach through AL

Benefit for Customer: • Smooth project execution through close cooperation between AL and OCI,

• Estimate for the plant cost based on AL Basic Engineering.

Specifics: • AL with extended list of equipment,

• Construction undergoing by OCI as a construction company,

• Project started at peak construction cost at US Gulf Coast,

• Oxygen to be supplied through AL Large Industries (OTF).


Bulks Engineering, Construction (OCI) License (AL) FEED

Detailed Engineering (AL)

Final Investment

Decision (FID)


Yuhuang Chemical Industry (YCI), Lake Charles, LA, USA

Plant has finalized Basic Engineering, waiting for Final Investment Decision

Basic Engineering (AL) Majority of Equipment, Construction (HQCC)

License (AL)

1.) Competition driven, Chinese approach,

2.) YCI re-negotiated AL contract and replaced HQCC

Limited Equipment scope (AL)

Basic Engineering (AL) Detailed Engineering (AL)

License (AL) Extended Equipment scope (AL)

Construction (AmecFW)

Specifics:

• A Chinese contractor and equipment manufacturer is not competitive in USA,

• YCI saw the value and benefit of AL to perform full EP,

• Oxygen to be supplied through AL Large Industries (OTF).

Final Investment

Decision (FID)


Photo Wald


Existing Methanol Plants in Iran

Fanavaran,

Topsoe Plant

1 mil tpa Shiraz,

Lurgi Plant

82 ktpa

Assaluyeh

Lurgi Plant

2 x 1.65 mil tpa

Kharg,

Lurgi Plant

660 ktpa

Total Existing

MeOH Capacity

5.4 mil tpa


Plants under Engineering/ Construction

Kaveh

2 mil tpa

Marjan

1.65 mil tpa

Sabalan

1.65 mil tpa

Dena

1.65 mil tpa

Kimiya Pars

1.65 mil tpa

Arman

1.65 mil tpa

Busher MeOH

1.65 mil tpa

Siraf

1.65 mil tpa

Assaluyeh 2

Dayyer

Chabahar Free

Zone

Veniran

1.65 mil tpa


Executing a Project in Iran Biggest problem is financing,

At this time Iranian banks are not financing projects, „Chinese“ financing comes at a high

price, ECA covered financing possible, availability of equity is questionable, important is

payment security for contractors (projects run out of money, new embargo…),

Lack of understanding/ appreciating cost of project development,

No basis of design, no FEED, no solid project management; all resulting in long execution

times and dying projects,

Different views on Lump Sum price contracts,

EPC bidders have no solid information available (e.g. Basic Engineering or FEED),

Limited execution capabilities,

De-centralization of project development (privatization) and embargo resulted in reducing the

knowledge of how to execute projects.


Conclusion

Providing a holistic project support and management offers significant

benefits for customers (schedule reduction, smooth execution, cost

reduction),

Flexibility in adopting customer requirements is key for success (pre-

FID cost reduction, plant financing, OTF offering),

Such „full service“ is only possible through a wealth of technology and

EPC experience over many years.

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