Aligning R&I Programs with Market Needs

Dr. Jeffrey S. PlotkinVice President, Training & Education

IHS Chemical

Agenda

• Introduction and Conceptual Framework

• The Chinese Experience – Model for Innovation Evolution

• Internally Driven Programs – Recent Illustrations

• Market Driven Programs – Recent Illustrations

• Summing It All Up

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After 34 years of experience, my observations about  R&I management and technology development are….

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Developing research projects – That’s easy

Developing research projects that actually make money– That’s not easy!!

Research programs must be in alignment withboth internal and external market drivers

Conceptual Framework – Competing Pressures That Drive and Shape the Innovation Process 

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InternalPressure

Internal Pressures• Opex savings• Capex savings• BU priorities• R&I priorities External Pressures

• Customer needs• Competitor activity• EH&S/Regulatory• Market S/D Issues• End‐use industry

evolution

However, The Competing Pressures Are Not Always In Equilibrium

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Internal Pressure

External Pressure

Often, The Competing Pressures Shift As We Go Down Value Chains

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InternalPressures

Basic Chemicals

InternalPressures

Intermediates,Plastics, Fibers, Elastomers

InternalPressures

Specialty Chemicals

And The Competing Pressures Shift Depending OnCorporate Goals and Organizational Structure

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InternalPressures

InternalPressures

Bottom LineGrowth

BalancedStructure

Top LineGrowth

InternalPressures

Let’s Take a Look at How Internal Pressures Can Drive The Innovation Process

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Internal Pressure

External Pressure

Internal Pressures• Hard Issues:

Opex savings• Better yields• Cheap feedstocks• Energy efficiency• Economy of scale

Capex savings• Better yields • Process simplification• Economy of scale

• Soft Issues BU priorities R&D priorities

Petrochemical Feedstock Palette – A Lot of Options

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Butanes

Renewables

Natural GasNGL’s Petroleum

Time and Pressure

CHO  to   CH  to  C

C4

But How Do We Select Which Feedstock to Use?  How Do We Create a Masterpiece of Process Design

• Availability• Logistics• Price• Product• Process• By‐products• EH&S

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Mona, you’re going to have to wait –

I am creating a masterpiece right now!!

China – Expensive Oil & Gas, But Cheap Coal

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The Chinese Experience Is a Good Model For the Evolution of the Innovation Process 

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Chinese Coal to Chemicals – Innovation Evolution MethanolAmmoniaBenzenePVC

“Back to the Future” “First of a Kind”

MethanolTo

Olefins

Coal to MEGMethanol to Aromatics

“True Innovation”

“Any Time I Need A New Idea, I Look In My Old Filing Cabinet”

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Chinese Feedstocks Palette, 2013

Methanol to Olefins (MTO) – Commercialized in China for First Time in 2010

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Natural Gas

(Methane)

EthylenePropylene

This approach was discovered accidentally my Mobil in theirMTG plant in New Zealand in the mid 1980’s

Methanol

China RouteUS Route?

Several Developers of MTO Technology and Certainly Chinese Are Not Credited for Initial Discovery, But First To Go Forward

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ExxonMobil – extensive patent portfolio (Mobil original inventor)

UOP  MTO Process

Lurgi MTP Process

DICP (Dalian Institute of Chemical Physics) DMTO Process

Sinopec SMTO Process

SRIPT (Sinopec) S‐MTP Process

And When the Chinese Do Something, They Don’t Do It In A Small Way!

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Chinese Ethylene Sources, 2017

Chinese MTO Projects

But The Chinese Are Also Truly Innovating – Coal To MEG

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Chinese MEG Capacity

Methanol to Aromatics (MTA) Would Be A Real Game‐Changer

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World’s First Megaton Coal‐based Methanol Aromatics IndustrialDemonstration Plant will be Launched in Yulin

2013‐04‐12 15:14:34 from: The Government Website of ShaanxiProvinceThe fluidized‐bed methanol aromatics technology which was jointly developed by China HuadianCorporation and Tsinghua University achieved success in experiment in Yulin Industrial Zone a fewdays ago and formally passed national science and technology achievement appraisal. On themorning of April 11, press conference on methanol aromatics technology was held at the Great Hallof the People in Beijing. Vice Provincial Governor Li Jinzhu attended and addressed the conference.

The success of industrial experiment on methanol aromatics is another piece of good newsannounced after our province’s success of industrial experiment on methanol to olefins. Thedevelopment of these two technologies has opened up a new path for coal‐based petrochemicalsproduction in the whole industry chain and laid the foundation for the conversion of coal resourcesin a clean, efficient and in‐depth way.

ExxonMobil Also Innovating In New Feedstocks to Aromatics – Methane to Aromatics

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Publ. Number Publ. Date Title AssigneeUS‐8552236 B2 8‐Oct‐13 Production of aromatics from methane ExxonMobil Chemical Patents Inc. (Houston, TX)US‐8378162 B2 19‐Feb‐13 Process for methane conversion ExxonMobil Chemical Patents Inc. (Houston, TX)

US‐8138384 B2 20‐Mar‐12Production of alkylated aromatic hydrocarbons from methane ExxonMobil Chemical Patents Inc. (Houston, TX)

US‐7977519 B2 12‐Jul‐11 Production of aromatic hydrocarbons from methane ExxonMobil Chemical Patents Inc. (Houston, TX)US‐7968759 B2 28‐Jun‐11 Production of aromatics from methane ExxonMobil Chemical Patents Inc. (Houston, TX)US‐7951985 B2 31‐May‐11 Production of aromatics from methane ExxonMobil Chemical Patents Inc. (Houston, TX)US‐7893308 B2 22‐Feb‐11 Production of aromatics from methane ExxonMobil Chemical Patents Inc. (Houston, TX)US‐7888543 B2 15‐Feb‐11 Process for methane conversion ExxonMobil Chemical Patents Inc. (Houston, TX)US‐7795490 B2 14‐Sep‐10 Production of aromatics from methane ExxonMobil Chemical Patents Inc. (Houston, TX)US‐7781636 B2 24‐Aug‐10 Process for methane conversion ExxonMobil Chemical Patents Inc. (Houston, TX)

US‐7772450 B2 10‐Aug‐10Production of aromatic hydrocarbons and syngas from methane ExxonMobil Chemical Patents Inc. (Houston, TX)

US‐7772447 B2 10‐Aug‐10 Production of liquid hydrocarbons from methane ExxonMobil Chemical Patents Inc. (Houston, TX)US‐7759535 B2 20‐Jul‐10 Production of aromatic hydrocarbons from methane ExxonMobil Chemical Patents Inc. (Houston, TX)US‐7728186 B2 1‐Jun‐10 Production of aromatics from methane ExxonMobil Chemical Patents Inc. (Houston, TX)US‐7683227 B2 23‐Mar‐10 Production of aromatic hydrocarbons from methane ExxonMobil Chemical Patents Inc. (Houston, TX)US‐7659437 B2 9‐Feb‐10 Process for methane conversion ExxonMobil Chemical Patents Inc. (Houston, TX)US‐7589246 B2 15‐Sep‐09 Production of aromatics from methane ExxonMobil Chemical Patents Inc. (Houston, TX)

While Much Talk of Shale Gas and Steam Crackers Going Light – ExxonMobil Going Counter‐Current!

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Ethylene Cracker Feeds, 2013 ExxonMobil says Singapore ethyleneunit will crack crude11:24 AM MST | January 10, 2014 | —Deepti rameshExxonMobil Chemical says its recentlystarted ethylene plant in Singapore cancrack crude oil as feedstock, eliminatingthe refining steps needed to producenaphtha. ExxonMobil officially openedits expanded Singapore chemicalcomplex on 8 January....

BP Simplifies Acetic Acid Process – Capex Savings

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BP to commercialize new processes,advances projects

6:52 AM MST | November 22, 2013 | —Natasha Alperowicz

BP has announced that it is ready tocommercialize two new technologies: theSaaBre synthesis gas (syngas)–to–aceticacid process and Hummingbird, a processthat directly converts ethanol to ethylenethrough dehydration....

SyngasCoalOr

Natural GasCH3OH Acetic

Acid

CO

Conventional Acetic Acid Process

SyngasCoalOr

Natural Gas

AceticAcid

New BP Acetic Acid Process

Now Let’s Take a Look at How Eternal Pressures Can Drive The Innovation Process

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External Pressures• Customer needs• Competitor activity• EH&S/Regulatory• Market S/D Issues• End‐use industry

evolution

External Pressure

Internal Pressure

Toxicity Concerns With Bisphenol A (BPA) Has Led To Opportunities To Be Creative

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man Develops a New Plastic ‐ Tritan

gulatory Issue Driving Innovation ‐ Plasticizers

Plasticizers are primarily phthalates,raising long‐term health concerns• Phthalates are so‐called hormone

mimicking compounds

Bans in many parts of the globe havebeen enacted against plasticizedproducts• Children’s toys• Baby teething rings, etc.

’s New Non‐Phthalate Plasticizer

mer Needs Change – And Especially Fast In lectronics Industry

Optical Demand for PC Is Shrinking – We Must Be Aware Of What is Happening In Our Customers Business!!

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In Summary

• R&I programs are impacted by both internal and external pressures

• Both types of pressure are valid drivers of the R&I process 

• The challenge to R&I managers is to balance these competing forces and develop a portfolio of projects that:

– Creates a stimulating environment for scientists and engineers and– Meets overall business goals and needs

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