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Extracts from Nandini Chemical Journal, Jan 2009

Titanium dioxide|Methanol|Wind power equipment|Polyhydroxyalkanoate
Highlights of Some of the Articles

TALK OF THE MONTH
TATA'S UNREALISED TITANIUM DIOXIDE PROJECT IN TAMIL NADU
METHANOL – GLOBAL SCENARIO
GLOBAL MELTDOWN; TEMPORARY CLOSURE OF GLOBAL SCALE PLANTS
TRENDS AND HAPPENINGS IN INDIAN CHEMICAL INDUSTRY
VALUATION METHODS OF PETROLEUM CRUDE
STATUS OF WIND POWER EQUIPMENT INDUSTRY IN INDIA
OTHER ARTICLES

Talk of the Month

RESPONSE TO THE CRUDE OIL PRICE DROP

The world was clueless when the price of crude oil skyrocketed to over  147 US$ per barrel some time back. The world is now equally clueless when the price of the crude oil has come down to less than US$40 per barrel. While number of explanations have been advanced both for the increase and the fall in the price of crude oil, there is no conclusive analysis that are found convincing by all quarters.

When the price of crude oil went up and up, there were feverish activity all over the world  to find substitute and alternative.  It was then that biofuel became subject of the day. While credible initiatives have been made in the biofuel front particularly in Europe, biofuel is also now bogged down by controversies. In recent times, there is apprehension in some quarters that the expansion of biofuel industry could create shortage of food crops.

As far as India is concerned, when oil crisis was at it’s peak and when the oil price went up abnormally, the country’s spending on oil import bill more than trebled. Inspite of the alarming conditions, nothing tangible was  achieved to reduce the consumption of petroleum fuel and find alternative. Jatropha biofuel scheme have not really made big head way so far to make any sort of visible dent in the country’s crude oil requirement Government of India itself has still not come out with clear cut biofuel policies .

With the price of crude oil now coming  down to less than US$40 per barrel, it is possible that the country’s energy managers would become more comfortable with the scenario and may relax. Such attitude, if it would be prevalent, should be viewed as unfortunate and counter productive.

Since international fuel oil market is still fragile and speculative, it is possible that price of crude oil may once again hit the roof before long. The OPEC countries have now decided to curtail production of crude oil to a substantial extent. Oil crisis and price crisis may once again emerge, sooner or later and perhaps sooner than later. The country should not be caught napping  once again if such eventually would arise .

In chemical industry, energy optimization measures inevitably means technology optimization and process optimization initiatives. This would point to the need for tangible efforts in the research and development front to reduce energy consumption in several ways . It may also become necessary to develop entirely new process methods and use of new raw material which have not been tried hitherto. Such research efforts have become all the more important in the present situation, where the crude oil scenario appears to provide some breathing time for the present.

TATA’S UNREALISED TITANIUM DIOXIDE  PROJECT IN TAMIL NADU

The Managing Director of Tata Steel Ltd., has said (Business Line, dated 21.12.2008) that Tata Steel Ltd could not implement the titanium dioxide project in Tamil Nadu, as Tamil Nadu Government failed to make available the requisite  land for the project.

While one would  feel distressed that the Tamil Nadu appears to have lost the opportunity to set up massive titanium dioxide project , the fact remains that Tata group have failed to explore the various other options for implementing the titanium dioxide project in Tamil Nadu.

Tamil Nadu Government cannot be blamed for its inability to make available over 10000 acres of land wanted by the Tata Group, as serious socio economic issues were involved in acquiring the land, particularly faced by the lower income group and agricultural farmers of the area. Without   mining activities, titanium dioxide project of Tata Group in Tamil Nadu can be implemented in an area of  around 500 acres.

There are large number of titanium dioxide projects around the world even of larger capacity than what Tata group wants to set up in Tamil Nadu. However, most of such projects do not have captive mining facilities.

There are enough ilmenite available in the country which are produced by Indian Rare Earth Ltd., in Ganjam district in Orissa. Ilmenite ore can be easily transported to Tuticorin site by coastal route from Orissa. As a matter of fact, it would be found that buying ilemenite ore from Orissa would be better option from the point of view of cost benefit analysis, rather than setting up own mining activity in Tuticorin. It is amazing Tata Group does not appreciate this option and has refused to consider this inspite of the option being pointed out earlier.

One can not be blamed if it would be suspected that along with the investment opportunities of titanium dioxide project, Tata group have developed undue interest in acquiring large area of land. Perhaps, Tata group calculated that with ever appreciating land value, large track of land at Tuticorin would enlarge the net worth of the company substantially.

Tata group should adopt more pragmatic outlook towards setting up such projects, instead of rejecting the project opportunity without examining the options available based on ground realities.

METHANOL –GLOBAL SCENARIO

MASSIVE METHANOL PROJECTS LEAD TO GLOBAL GLUT

The problem of global methanol industry these days is related to the massive increase in capacity creation .

In the background of surplus methanol capacity, finding outlets for maintaining adequate capacity utilization for existing methanol plants is critical for methanol producers to survive the current crisis.

Methanol's main uses are in formaldehyde, methyl tertiary butyl ether (MTBE) and acetic acid. Smaller amounts are used in dimethyl terephthalate (DMT), methyl methacrylate (MMA), methylamines, chloromethanes, glycol methyl ethers and fuels. It also has many general solvent and antifreeze uses.

Formaldehyde remains the largest methanol derivative, accounting for slightly more than one-third of the global market. It is expected that by 2009, the largest volume of formaldehyde will be produced in China and Western Europe.

Despite reduced MTBE production in the U.S., MTBE and tert-amyl methyl ether represent the second-largest methanol derivative, with 15% of the market. Dimethyl toluene is the other derivative market that is shrinking.

The demand for methanol in acetic acid production is growing, but not in the traditional production centers in North America. China and the rest of Asia have experienced rapid expansion in acetic cid capacity such that they will hold a nearly 57% share of global acetic acid capacity and production in 2009.

Potential new uses include fuel cells and as a feedstock for ethylene/propylene and dimethyl ether (DME),. Methanol growth will be boosted by emerging applications such as biodiesel, dimethyl ether, gasoline blending and methanol to olefins/methanol to propylene.Methanol is the preferred alcohol in the transesterification step to convert plant oils into biodiesel and glycerin.

This article also contains the following details :

  • Application development efforts for Methanol
    • Gasoline blend and di-methyl ether (DME). 
    • Methanol-to-gasoline process. 
  • Methanol fuel
  • Pilot plant for methanol to propylene
  • Technology and feedstock
  • Methanol from carbondioxide
  • Biomethanol from glycerin
  • Economic capacity
  • Production cost
  • Global capacity
  • NPSP halts methanol plant construction
  • Scenario in China
    • Production and consumption of Methanol in China
    • Methanol gasoline use made mandatory
    • New methanol projects under planning / implementation in China
  • New projects under planning / implementation in other countries
  • Global demand supply scenario
  • Project in Russia
  • Project in Venezuela
  • Project in Algeria
  • Project in Saudi Arabia
  • Project in Malaysia
  • Project in Oman
  • Project in Siberia
  • Project in Peru
  • Project in India
GLOBAL MELTDOWN – TEMPORARY CLOSURE OF GLOBAL SCALE PLANTS

The steep drop in oil prices coming on the heels of a steady seven-year rise, was a reminder that the oil business, like those of most commodities, is cyclical. When demand drops and prices fall, companies curb their investments, leading to lower supplies.

Prices of crude oil could drop below $30 a barrel, according to Merrill Lynch and other forecasters, if the Chinese economy slows drastically next year, which looks increasingly likely.

Dozens of major oil and gas projects in the world have been suspended or cancelled in recent weeks, as companies scramble to adjust to the collapse in energy markets.

The list of projects delayed is growing. Wells are being shut down across the United States; new refineries have been postponed in Saudi Arabia, Kuwait and India; and ambitious plans for drilling off the coast of Africa are being reconsidered.

The biggest cutbacks so far have been in heavy oil projects in Canada, where some of the world’s highest cost production is concentrated.

One reason projects are being shut down so fast is that costs throughout the industry, which had surged in recent years, still  rule high despite the drop in oil prices. Many companies are waiting for those costs to come down before deciding whether to go forward with new projects

This article discusses the plans for temporary closure of selected units by the following players:

  • BASF
  • Dow Chemical
  • LyondellBasell
  • Sabic Innovative Plastics
  • Ineos
  • DuPont
  • GlaxoSmithKline(GSK)
TRENDS AND HAPPENINGS IN INDIAN CHEMICAL INDUSTRY CASE STUDY OF SELECTED CHEMICALS ADIPIC ACID

It is high time that one would admit that there is lack of clarity amongst the Indian chemical industry with regard to the future strategies. India continues to be importer of several chemicals which are not presently produced in India or inadequately produced in India, though the conditions in India are ideal for setting up of capacity for such chemicals. There are number of cases, where raw materials are adequately available in the country but the derivative chemical products are entirely imported.

Possibly, one reason for this anomalous situation is that the Indian project promoters are obsessed with Indian market and there is lack of confidence to venture into the international market in tough competitive conditions. Indian companies hesitate to venture to set up project, if there would not be large demand in India though the demand could be growing in international market.

Such situation is in sharp contrast to the prevailing mood and approach of chemical industries in China, where massive capacities are being built up, which only highlight the large measure of confidence to operate in the global market.

The trends and happenings in Indian chemical industries is influenced by the conservative approach of Indian chemical project promoters and perhaps the lack of proactive policies and support by the Government of  India.

To explain and understand the situation clearly, Nandini Chemical Journal would bring out case study of following 12 short listed products in the forthcoming issues commencing from this issue, explaining the demand supply scenario for the products in India and global scenario and the factors that influence the decision on investment  in the country.

  • Adipic acid
  • L-Lysine
  • DL-Methionine
  • Sea water magnesia
  • Synthetic rutile/Titanium dioxide/Titania slag
  • Polyvinyl alcohol
  • Butyl rubber
  • Polyacetal
  • Carbon fibre
  • Biodegradable polymers

In this issue, we start with case study of Adipic Acid.

Appearance: White crystalline solid, having a pale yellow colour

Molecular formula: HOOC CH2)4COOH

Product application

*  Key ingredient in the production of Nylon 6,6 polymers. 
*  Used in the manufacture of adipate plasticisers
*  Used in production of polyurethanes
*  Used as wet strength paper resins and artificial resins.

This article contains the following details :

  • Indian manufacturer
  • Imports
  • CIF Price of imported product
  • Demand drivers
  • Indian Demand      
  • Global scenario
    • Present global capacity
    • Global demand
    • Global AAGR through 2013
    • Application sectorwise pattern of demand
    • World adipic acid operating rates
    • Global producers
    • Plant closure
    • New projects
  • Process
  • Anti dumping measures in China
  • Prognosis
VALUATION METHODS OF PETROLEUM CRUDE

Contributed by:K.Govindarajan, F.I.E.,F.I.V.,C.ENGG 
Petchem(E) Consultants 
E-mail: k_govindaranjan@yahoo.com, govinda88@eth.net

Crude oil, in general , is far from homogenous. The exact chemical composition of crude oil varies with every field and in some instances from pool to pool within a field. Quality differences have a significant impact on the cost of refining particular crude oil and on the types of products the oil will produce.

Refiners do not treat one crude oil as an exact substitute for another; some oils are much more valuable than others are.

What refiners will be willing to pay for a given crude oil depends on many factors. Some of these factors include the processing units in place at the refinery, the strength of demand for the products expected to be refined from the oil, the number and types of refinery feed-stocks that might substitute for it and processing costs specific to the particular crude oil.

Location is another important determinant of the price a refiner will offer for a crude oil in the field. If the oil is close at hand and can be quickly and cheaply moved, it will be worth more than one of equivalent quality that is a long distance away and/or requires expensive modes of transportation.

However, the impact of location on crude oil field prices is complex. Not only does it depend on the location of the crude oil field, but also on the locations of multiple refiners that can process the oil and the type of transportation available to move it.

This article discusses the following details

  • Crude characteristics
  • Density -- API gravity
  • Sulfur content
  • Viscosity
  • Refining economics
  • Location and logistics
  • Bench marking crude for valuation
STATUS OF WIND POWER EQUIPMENT INDUSTRY IN INDIA

A host of companies, most of them with European tie-ups, have either launched their wind turbines or plan to do so in the next few months. All of them are in the MW-class (that is 1 MW and above).

With the good wind sites taken up, these companies say they are launching turbines that are ideal for low or medium wind sites. (Places where the mean annual average wind speed is lower than 7.5 m a second are classified as Class III sites, those with a wind speed of 7.5-8.5 m a second Class II and higher than 8.5 m a second Class I.)

The new entrants are looking at developing wind farms for their clients (acquire the land, obtain all clearances, install the machines and take up operation and maintenance) or merely selling the turbines to the customers. Some of them say that they have built up sufficient land bank in different States.

This article contains the following details :

  • New players
  • The details on projects of the following players
    • WinWind
    • Regen Powertech
    • Leitner Shriram
    • Ghodawat Industries
OTHER ARTICLES
  • Polyhydroxyalkanoate (PHA) Biopolymer Venture Of Metabolix
  • Air Dropping Of Flame Retardants In USA
  • Tyres Inflated With Nitrogen
  • Web Site On Technical Data Of Cleaning Products
  • Water Filtration Techniques For Dissolved Material
  • Price Details – International
  • Tender
  • New Projects - International
  • Chemicals Imported At The Chennai Port During The Month Of September 2008
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