Special Report

199Chemical Weekly November 15, 2011

PRODUCT FOCUS

Methanol – An update on the Indian scenario

Manufacturing processFrom the early 1800s until the mid-

1920s, the distillation of wood to make ‘wood alcohol’ was the major source of methanol. According to some sta-tistics, methanol production reached 30,000-tonnes in 1923, consuming some 3-mt of wood feedstock. How-ever, this inefficient method of metha-nol production was quickly replaced by large scale processes based on hydro-gen-carbon oxide mixtures introduced in the 1920s.

A major breakthrough came in the early 1970s with the development of low pressure processes replacing the high pressure route. Today, nearly all production is based on these processes consuming natural gas, naphtha or re-finery light gas, with a shift in produc-tion to those countries with low cost natural gas.

Synthesis gas, a mixture of carbon monoxide, carbon dioxide and hydro-gen, is first produced in a reformer. This is carried out by passing a mixture of the hydrocarbon feedstock and steam through a heated tubular reformer. The ratio of hydrogen and carbon in the syn-gas may need to be adjusted by purg-

IntroductIon

Methanol (CH3OH), also known as methyl alcohol, wood alcohol, wood naphtha

or wood spirit, is the simplest alcohol, and is a light, volatile, colorless, flam-mable liquid with a distinctive odor very similar to, but slightly sweeter than, ethanol (drinking alcohol). At room temperature, it is a polar liquid, and is used as an antifreeze, solvent, fuel and as a denaturant for ethanol.

The main applications for methanol are formaldehyde (used in construc-tion and wooden boarding), acetic acid, MTBE (fuel component) and more re-cently as an ester group in the produc-tion of bio-diesel. Globally, the demand is expected to grow exponentially, not only caused by a growing internal mar-ket of the traditional applications, but accelerated by new applications, such as direct blending (with gasoline), methanol-to-olefins (MTO) (e.g. propy- lene) and dimethyl ether (DME). Meth-anol can also be used to produce gaso-line.

The use of methanol as a motor fuel received attention during the oil crises of the 1970s due to its availability, low

cost and environmental benefits. By the mid-1990s, over 20,000 methanol flexible fuel vehicles (FFVs), capable of operating on methanol or gasoline, were introduced in the US. In addition, low levels of methanol were blended in gasoline fuels sold in Europe during much of the 1980s and early-1990s. Automakers stopped building metha-nol FFVs by the late-1990s, switching their attention to ethanol-fueled vehi-cles. While the methanol FFV program was a technical success, rising metha-nol pricing in the mid- to late-1990s during a period of slumping gasoline pump prices diminished the interest in methanol fuels. Additionally, metha-nol is highly corrosive to rubber and many synthetic polymers used in the automotive industry, whereas ethanol is not.

table 1capacity for methanol in India

units Location capacity [tpa]

Share [%]

Gujarat Narmada Valley Fertilisers Ltd. Gujarat 238,100 51.11Deepak Fertilisers & Petrochemicals Ltd.

Maharashtra 100,000 21.46

Rashtriya Chemicals & Fertilisers Ltd. Maharashtra 72,600 15.58Assam Petrochemicals Ltd. Assam 33,000 7.11National Fertilisers Ltd. Punjab 22,110 4.74total 465,810 100.00

table 2trends in production of methanol

Year Production [tonnes]

2004-05 392,2002005-06 386,7602006-07 396,2302007-08 351,7302008-09 237,6602009-10 333,2602010-11 383,650

Source: Ministry of Chemicals

Special Report

Chemical Weekly November 15, 2011200

ing excess hydrogen or adding carbon dioxide. Developments here include the use of autothermal reforming, either alone or in combination with a primary reformer, in which oxygen is mixed with the steam.

The syngas is cooled and then com-pressed before being fed to the metha-nol converter. The methanol synthesis takes place in the presence of copper-based catalysts at 250-260°C. The crude methanol is recovered and puri-fied by distillation.

Air Products has developed a liquid phase methanol converter, which uses a slurry of copper catalyst in an inert paraffinic liquid. A demonstration plant has been integrated into Eastman Chemical’s coal gasification facility at Kingsport, Tennessee, where it obtains its syngas feedstock.

Plant designers are developing very large capacity plants in the 5000-10,000-tpd (tonnes per day) range that could produce low-cost methanol for fuel uses and light olefins production when based on inexpensive natural gas. Two approaches are being taken: some are pursuing pure oxygen addition re-sulting in total autothermal reforming; others are taking the non-oxygen route with compact reforming and low pres-sure methanol synthesis.

table 3unitwise production and sales of methanol

Production Salesunits2009-10 2010-11 2009-10 2010-11

Gujarat Narmada Valley Fertilisers Ltd.

187,079 202,544 111,511 126,059

Deepak Fertilisers & Petrochemicals Ltd.

65,647 81,888 65,703 81,708

Rashtriya Chemicals & Fertilisers Ltd.

44,103 68,700 19,746 41,264

Assam Petrochemicals Ltd. 33,759 30,000 15,040 15,000National Fertilisers Ltd. 2,669 516 131 44total 333,257 383,648 212,131 264,075

table 5Imports of methanol by source country Quantity [tonnes] Values [rs. Mn]

country 2009-10 2010-11 2009-10 2010-11 Saudi Arabia 384,199 416,287 4,197.65 5,330.93Iran 305,910 271,951 3,503.80 3,370.51Oman 114,234 91,336 1,094.49 1,143.67Libya 0 9,441 0.00 150.61Malaysia 5,004 5,023 46.82 57.81Cote d’ivoire 0 5,000 0.00 80.59China 120 4,233 9.76 53.95Singapore 0 3,439 0.00 46.71Russia 0 2,500 0.00 40.09South Africa 2,783 1,882 16.99 14.52Qatar 5,499 980 46.41 10.02UAE 2,196 549 21.08 8.84USA 118 399 11.07 21.42Germany 139 190 20.19 19.19Others 2,046 214 25.88 5.05total 822,248 813,424 8,994.14 10,353.91

Source: DGCI&S

table 4trends in imports and exports of methanol

Imports ExportsYears Quantity

[tons]Value

[rs. Mn]Quantity

[tons]Value

[rs. Mn]2006-07 527,287 9,578 1,233 732007-08 788,815 11,243 31,743 13732008-09 1,058,865 12,578 3,264 852009-10 822,247 8,994 45,902 6432010-11 813,421 10,354 40,227 876

Source: DGCI&S

Special Report

201Chemical Weekly November 15, 2011

liser Company (GNFC) in Bharuch (Gujarat) is the biggest player with 51% of the total capacity, followed by Deepak Fertilisers & Petrochemi-cals Ltd. (DFPCL) with 21% and As-sam Petrochemicals Ltd. (APL) with 7 per cent.

The production of methanol in 2010-11 was 383,000-tonnes indicat-ing a capacity utilization of 82%. In fact, local production of methanol over the period of last seven years has been hovering between 350,000-tonnes to 390,000-tonnes. During 2008-09, how-ever, production was even lower at 237,000-tonnes.

Import and exportDue to the local demand exceed-

ing supply, India has to depend on im-ports to meet its requirements. Imports, in fact, constitute around 70% of total consumption.

Imports have grown from 527,000-tonnes in 2006-07 to 813,000-tonnes in 2010-11, register-ing a compounded annual growth rate (CAGR) of 11.45% during the last five years.

In 2008-09, imports were signifi-cantly higher at 1.058-mt, due to lower domestic production.

95% of the imports are being sourced from three countries: Saudi Arab (51%), Iran (33%) and Oman (11%).

Small quantities of methanol are also exported from India. Exports are in the region of 40,000-tonnes to 45,000-tonnes, constituting only around 3-3.5% of total consumption.

consumption and consumption pattern

Consumption of methanol in India has grown from 922,000-tonnes

table 6Apparent consumption of methanol in India

[tonnes]Year Production Imports Exports consumption2006-07 396,230 527,280 1,230 922,2802007-08 351,730 788,820 31,740 1,108,8102008-09 237,660 1,058,860 3,260 1,293,2602009-10 333,260 822,250 45,900 1,109,6102010-11 383,650 813,420 40,230 1,156,840

The Dutch-based bio-methanol producer BioMCN has developed a process to make biomethanol from gly- cerine, a by-product in biodie-sel production.

the status of the Indian industry

There are five producers of methanol in India with a total capacity of 465,810-tpa. Much of this capacity (88%) is in the western region, with less than 5% in the northern region and 7% in the eastern region.

Gujarat Narmada Ferti-

table 7Methanol consumption pattern and growthuses Share

[%]Growth rate

[%]Formaldehyde 48 7Pharmaceuticals 21 8.5Oxygenates 9 -Acetic acid 5 4Alkyl amines 4 9Dimethyl sulphate 3 8Agrochemicals 3 5Chloromethanes 4 8Solvents/others 3 8total 100 6

Production

1,400

1,200

1,000

800

600

400

200

02006-07 2007-08 2008-09 2009-10 2010-11

Imports consumption

Production, imports & consumption of methanol in India

Kilo

tonn

es

Special Report

Chemical Weekly November 15, 2011202

table 8Some drugs and intermediates that use methanol

drug/Intermediate Methanol requirement

drug/Intermediate Methanol requirement

Albendazole 12 Naproxen sodium 1.16Amoxycillin trihydrate 1.5 Nordion 5.58Cefadroxil 2.41 Omeprazole 5.08Cefalexin monohydrate 0.5 Phenylbutazone 3Chloramphenicol 0.8 Pseudoephedrine base 2.9Diloxamide furoate 1.2 Pyrozinamide 2.71Dilitiazem HCl 4.62 Sulphamethoxazole 2DL-Naproxen 6 Terfenadine 5Domoperidone 15.75 Trimethoprim 1.15Enrofloxacin 1.25 CMIC chloride 3.94Ethambutol HCl 0.85 7-ADCA 3.12Fenbendazole 17.5 3,4,5-trimethoxybenzoic

acid methyl ester1.34

Isoniazid 1 D(+) Acid 5Isoxamine 4.34 DICMIC chloride 3.94Mebendazole 1.5 Glycine 0.25Methyl dopa 2.5 N-Methly-4-piperidinol 1.5

Methanol requirement is in kgs per 1-kg of the drug/intermediate

in making a number of formula-tions. India has a large pharma-ceuticals industry that is growing at over 11% per annum.

Future demandDemand for methanol five

years hence is projected to grow to 1.55-mt, at an average growth rate of 6% per annum. The de-mand does not take into account the potential demand that may arise from the biodiesel and fuel blending sectors.

In the case of biodiesel, a ‘National Mission’ has been initiated based on jatropha/non-food plantations on waste lands and the first crops are ex-pected after 1-2 years. Current capacities for biodiesel, using crude palm oil (CPO) as the main raw material are small and the production is slated for exports. The potential demand for methanol from this sector after about years could be as

high as 0.13-mt annually, based on 10% blending.

In the case of gasoline blending with methanol, there is no policy on the horizon, and the focus, as pointed out earlier, is on ethanol blending. How- ever, a potential demand based on blending 20% of gasoline output with 15% of methanol could be around 0.5-mt annually.

With no new capacities announced, and none expected due to low cost natural gas based methanol available in the country, India will have to con-tinue depending heavily on imports.

There is a need for world scale plant-based on low cost natural gas availability, or on alternate low value hydrocarbons such as petroleum coke gasification.

in 2006-07 to 1.156-mt in 2010-11, registering a CARG of 5.8%.

Formaldehyde and pharmaceuticals (bulk drugs and intermediates) are the two important end-use segments, which together account for 67% of the total methanol consumed in the country. While formaldehyde alone accounts for 48%, the pharma sector accounts for 19%.

The balance is shared between oxy-genates, alkylamines, acetic acid, chloromethanes and other uses.

The formaldehyde market is highly fragmented in India with 24 medium-sized producers and se-veral small producers spread across the country. The total consump-tion of methanol by this end-use is 555,000-tonnes. Demand for formal-

dehyde is estimated at 1.235-mt, grow-ing at around 7% per annum. The major growth drivers for formaldehyde mar-kets are: growth of resins industry dri-ven by growth in wood panels; strong growth in construction and housing industry; and growth in chemical inter-mediates.

The next important end-use sector is the pharmaceuticals industry, where methanol is used in making bulk drugs and intermediates, as well as a solvent