Technology Economics: Sodium Hypochlorite Chemical Production

Sodium Hypochlorite

Chemical Production

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Technology Economics

Sodium Hypochlorite Chemical Production

2013

Abstract

Sodium hypochlorite is the active constituent in chlorine bleach (also known as liquid bleach, “Javelle water” or simply bleach), astrong oxidizer and bleaching agent. Known since 1789, bleach has been widely used since the 1930s and is an excellentdisinfecting agent that is employed in water treatment, cleaning and laundry operations, clinics and hospitals, and residences fordisinfecting kitchen and bathroom surfaces.

Although household bleach demand has been historically larger in terms of volume, since it is more diluted, industrial bleachdemand is superior (on a dry basis). As household market grows basically at the same pace as the population, increased waterconsumption and shortage of fresh water resources makes water treatment the largest bleach application and the fastest-growingsegment. Additionally, transport and handling safety concerns have direct public opinion towards the use of sodium hypochloriterather than chlorine gas in water treatment, which represents a significant market expansion potential.

Sodium hypochlorite chemical production is a well-established process in the industry, whose operation principle is alreadyemployed for preventing chlorine emissions in chlor-alkali plants. In this report, we review industrial bleach production throughthe chlorination of caustic soda by chlorine gas in packed columns. Included in the analysis is an overview of the technology andeconomics of a widely used process, similar to the employed by Solvay Chemicals, for example. Both the capital investment andthe operating costs for plants erected on the US Gulf Coast and in Brazil are presented.

The economic analysis presented in this report is based on a plant integrated upstream with a chlor-alkali plant and capable ofproducing 250 kta of bleach. The estimated CAPEX for such a plant on the U.S. Gulf Coast is USD 33 million. Such locationpresented not only a lower CAPEX when compared to Brazil, but also exhibited lower operational expenses, revealing itself as themost competitive area.

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Contents

About this Study .............................................................................................................................................................. 8

Object of Study.............................................................................................................................................................................................................................8

Analyses Performed...................................................................................................................................................................................................................8

Construction Scenarios ..............................................................................................................................................................................................................8

Location Basis ...................................................................................................................................................................................................................................9

Design Conditions......................................................................................................................................................................................................................9

Study Background ........................................................................................................................................................ 10

About Sodium Hypochlorite............................................................................................................................................................................................10

Introduction.................................................................................................................................................................................................................................... 10

Applications.................................................................................................................................................................................................................................... 10

Water Treatment.......................................................................................................................................................................................................................... 11

Manufacturing Alternatives ..............................................................................................................................................................................................11

Chemical Production ................................................................................................................................................................................................................ 11

Electrochemical Production.................................................................................................................................................................................................11

Licensor(s) & Historical Aspects......................................................................................................................................................................................12

Technical Analysis......................................................................................................................................................... 13

Chemistry.......................................................................................................................................................................................................................................13

Raw Material ................................................................................................................................................................................................................................13

Technology Overview...........................................................................................................................................................................................................14

Detailed Process Description & Conceptual Flow Diagram.......................................................................................................................15

Area 100: Reaction & Product Discharge ....................................................................................................................................................................15

Area 200: Bleach Filtration....................................................................................................................................................................................................16

Key Consumptions ..................................................................................................................................................................................................................... 16

Technical Assumptions ........................................................................................................................................................................................................... 16

Labor Requirements.................................................................................................................................................................................................................. 16

ISBL Major Equipment List .................................................................................................................................................................................................18

OSBL Major Equipment List ..............................................................................................................................................................................................19

Other Process Remarks ........................................................................................................................................................................................................20

Alternative Designs.................................................................................................................................................................................................................... 20

Product Storage and Handling...........................................................................................................................................................................................20

Economic Analysis ........................................................................................................................................................ 22

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Project Implementation Schedule...............................................................................................................................................................................23

Capital Expenditures..............................................................................................................................................................................................................23

Fixed Investment......................................................................................................................................................................................................................... 23

Working Capital............................................................................................................................................................................................................................ 26

Other Capital Expenses ........................................................................................................................................................................................................... 26

Total Capital Expenses ............................................................................................................................................................................................................. 27

Operational Expenditures ..................................................................................................................................................................................................27

Manufacturing Costs................................................................................................................................................................................................................. 27

Historical Analysis........................................................................................................................................................................................................................ 27

Economic Datasheet .............................................................................................................................................................................................................28

Regional Comparison & Economic Discussion.................................................................................................... 30

Regional Comparison............................................................................................................................................................................................................30

Capital Expenses.......................................................................................................................................................................................................................... 30

Operational Expenditures...................................................................................................................................................................................................... 30

Economic Datasheet................................................................................................................................................................................................................. 30

Economic Discussion ............................................................................................................................................................................................................31

References....................................................................................................................................................................... 33

Acronyms, Legends & Observations....................................................................................................................... 34

Technology Economics Methodology................................................................................................................... 35

Introduction.................................................................................................................................................................................................................................35

Workflow........................................................................................................................................................................................................................................35

Capital & Operating Cost Estimates ............................................................................................................................................................................37

ISBL Investment............................................................................................................................................................................................................................ 37

OSBL Investment ......................................................................................................................................................................................................................... 37

Working Capital............................................................................................................................................................................................................................ 38

Start-up Expenses ....................................................................................................................................................................................................................... 38


Manufacturing Costs................................................................................................................................................................................................................. 39

Contingencies ............................................................................................................................................................................................................................39

Accuracy of Economic Estimates..................................................................................................................................................................................40

Location Factor..........................................................................................................................................................................................................................40

Appendix A. Mass Balance & Streams Properties............................................................................................... 42

Appendix B. Utilities Consumption Breakdown ................................................................................................. 44

Appendix C. Process Carbon Footprint ................................................................................................................. 45

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Appendix D. Equipment Detailed List & Sizing................................................................................................... 46

Appendix E. Detailed Capital Expenses................................................................................................................. 48

Direct Costs Breakdown......................................................................................................................................................................................................48

Indirect Costs Breakdown ..................................................................................................................................................................................................49

Appendix F. Economic Assumptions...................................................................................................................... 50

Capital Expenditures..............................................................................................................................................................................................................50

Construction Location Factors ...........................................................................................................................................................................................50

Working Capital............................................................................................................................................................................................................................ 50


Operational Expenditures ..................................................................................................................................................................................................51

Fixed Costs ...................................................................................................................................................................................................................................... 51

Depreciation................................................................................................................................................................................................................................... 51

Appendix G. Released Publications ........................................................................................................................ 52

Appendix H. Technology Economics Form Submitted by Client ................................................................. 53

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List of Tables

Table 1 – Construction Scenarios Assumptions (Based on Degree of Integration) ......................................................................................9

Table 2 – Location & Pricing Basis ....................................................................................................................................................................................................9

Table 3 – General Design Assumptions .......................................................................................................................................................................................9

Table 4 – Raw Materials & Utilities Consumption (per ton of Product) ...............................................................................................................16

Table 5 – Design & Simulation Assumptions.........................................................................................................................................................................16

Table 6 – Labor Requirements for a Typical Plant ..............................................................................................................................................................16

Table 7 – Main Streams Operating Conditions and Composition..........................................................................................................................18

Table 8 – Inside Battery Limits Major Equipment List......................................................................................................................................................18

Table 9 – Outside Battery Limits Major Equipment List .................................................................................................................................................19

Table 10 – Base Case General Assumptions...........................................................................................................................................................................22

Table 11 – Bare Equipment Cost per Area (USD Thousands).....................................................................................................................................23

Table 12 – Total Fixed Investment Breakdown (USD Thousands) ..........................................................................................................................23

Table 13 – Working Capital (USD Million) ................................................................................................................................................................................26

Table 14 – Other Capital Expenses (USD Million) ...............................................................................................................................................................26

Table 15 – CAPEX (USD Million) ......................................................................................................................................................................................................27

Table 16 – Manufacturing Fixed Cost (USD/ton) ................................................................................................................................................................27

Table 17 – Manufacturing Variable Cost (USD/ton)..........................................................................................................................................................27

Table 18 – OPEX (USD/ton)................................................................................................................................................................................................................27

Table 19 – Technology Economics Datasheet: Sodium Hypochlorite Chemical Production at US Gulf ....................................29

Table 20 – Technology Economics Datasheet: Sodium Hypochlorite Chemical Production in Brazil..........................................32

Table 21 – Project Contingency......................................................................................................................................................................................................39

Table 22 – Criteria Description.........................................................................................................................................................................................................39

Table 23 – Accuracy of Economic Estimates .........................................................................................................................................................................40

Table 24 – Detailed Material Balance and Stream Properties ....................................................................................................................................42

Table 25 – Utilities Consumption Breakdown ......................................................................................................................................................................44

Table 26 – Assumptions for CO2e Emissions Calculation.............................................................................................................................................45

Table 27 – CO2e Emissions (ton/ton prod.)............................................................................................................................................................................45

Table 28 – Heat Exchangers Specifications ............................................................................................................................................................................46

Table 29 – Pumps Specifications....................................................................................................................................................................................................46

Table 30 – Columns Specifications...............................................................................................................................................................................................46

Table 31 – Utilities Supply Specifications.................................................................................................................................................................................47

Table 32 – Vessels & Tanks Specifications ................................................................................................................................................................................47

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Table 36 – Indirect Costs Breakdown for the Base Case (USD Thousands) ......................................................................................................49

Table 34 – Detailed Construction Location Factor............................................................................................................................................................50

Table 35 – Working Capital Assumptions for Base Case................................................................................................................................................50

Table 36 – Other Capital Expenses Assumptions for Base Case...............................................................................................................................50

Table 37 – Other Fixed Cost Assumptions ..............................................................................................................................................................................51

Table 38 – Depreciation Value & Assumptions ....................................................................................................................................................................51

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List of Figures

Figure 1 – OSBL Construction Scenarios .....................................................................................................................................................................................8

Figure 2 – Household Bleach Applications.............................................................................................................................................................................10

Figure 3 – Industrial Bleach Applications .................................................................................................................................................................................10

Figure 4 – Sodium Hypochlorite Electrochemical Production .................................................................................................................................11

Figure 5 – Process Block Flow Diagram.....................................................................................................................................................................................14

Figure 6 – Inside Battery Limits Conceptual Process Flow Diagram.....................................................................................................................17

Figure 7 – Alternative Bleach Production ................................................................................................................................................................................21

Figure 8 – Temperature Dependency in Bleach Degradation ..................................................................................................................................21

Figure 9 – Project Implementation Schedule .......................................................................................................................................................................22

Figure 10 – Total Direct Cost of Different Integration Scenarios (USD Thousands) ...................................................................................25

Figure 11 – Total Fixed Investment of Different Integration Scenarios (USD Thousands) ....................................................................25

Figure 12 – OPEX and Product Sales History (USD/ton) ................................................................................................................................................28

Figure 13 – EBITDA Margin & IP Indicators History Comparison..............................................................................................................................28

Figure 14 – CAPEX per Location (USD Million).....................................................................................................................................................................30

Figure 15 – Operating Costs Breakdown per Location (USD/ton) .........................................................................................................................31

Figure 16 – Methodology Flowchart...........................................................................................................................................................................................36

Figure 17 – Location Factor Composition ...............................................................................................................................................................................40

Figure 18 – ISBL Direct Costs Breakdown by Equipment Type for Base Case ................................................................................................48

Figure 19 – OSBL Direct Costs Breakdown by Equipment Type for Base Case..............................................................................................48

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This study follows the same pattern as all TechnologyEconomics studies developed by Intratec and is based onthe same rigorous methodology and well-defined structure(chapters, type of tables and charts, flow sheets, etc.).

This chapter summarizes the set of information that servedas input to develop the current technology evaluation. Allrequired data were provided through the filling of theTechnology Economics Form available at Intratec’s website.

You may check the original form in the “Appendix H.Technology Economics Form Submitted by Client”.

Object of Study

This assignment assesses the economic feasibility of anindustrial bleach production through the chlorination ofcaustic soda by chlorine gas in packed columnsimplementing technology similar to that used by SolvayChemicals.

The current assessment is based on economic datagathered on Q1 2012 and a chemical plant’s nominalcapacity of 250 kta (thousand metric tons per year).

Analyses Performed

Construction Scenarios

The economic analysis is based on the construction of aplant partially integrated to a chlor-alkali plant, in whichfeedstocks are locally provided but sodium hypochloritemust be stored to be sent outside the plant. Therefore,storage is only required for the product. Utilities supplyfacilities must also be built, since there is no utility supplyfrom the chlor-alkali plant.

Since the Outside Battery Limits (OSBL) requirements–storage and utilities supply facilities – significantly impactthe capital cost estimates for a new venture, they may play adecisive role in the decision as to whether or not to invest.Thus, this study also performs an analysis of the OSBLfacilities impact on the capital costs. Two distinct OSBLconfigurations are compared. Those scenarios aresummarized in Figure 1and Table 1.

Location Basis

Regional specific conditions influence both constructionand operating costs. This study compares the economicperformance of two identical plants operating in differentlocations: the US Gulf Coast and Brazil.

The assumptions that distinguish the two regions analyzedin this study are provided in Table 2.

About this Study

Figure 1 – OSBL Construction Scenarios

Unit is part of a chlor-alkali plant

Chlor-Alkali Plant

Raw MaterialsProvider

ISBL Unit

Products Storage

Partially IntegratedNon-Integrated

Raw MaterialsStorage

ISBL Unit

Products Storage

Grassroots unit

Source: Intratec – www.intratec.us

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Design Conditions

The process analysis is based on rigorous simulation modelsdeveloped on Aspentech Aspen Plus and Hysys, whichsupport the design of the chemical process, equipment andOSBL facilities.

The design assumptions employed are depicted in Table 3.

Cooling water temperature 24 °C

Cooling water range 11 °C

Wet Bulb Air Temperature 24 °C

Table 1 – Construction Scenarios Assumptions (Based on Degree of Integration)

Storage Capacity (Base Case for Evaluation)

Feedstock & Chemicals 20 days of operation Not included

End-products & By-products 20 days of operation 20 days of operation

Utility Facilities Included All required All required

Support & Auxiliary Facilities

(Area 900)

Control room, labs, gate house,

maintenance shops, warehouses, offices,

change house, cafeteria, parking lot

Control room, labs, maintenance shops,

warehouses


Table 2 – Location & Pricing Basis


Table 3 – General Design Assumptions


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About Sodium Hypochlorite

Introduction

Sodium hypochlorite (NaClO), a salt of hypochlorous acid, isthe active constituent in chlorine bleach, a strong oxidizerand bleaching agent. Sodium hypochlorite is invariablyproduced and used in aqueous solutions and is also knownas liquid bleach, “Javelle water” or simply bleach.

It is industrial practice to establish definitions of sodiumhypochlorite strength in order to characterize the product.The term “available chlorine” is often used and is a measureof the oxidizing capacity of a chemical relative to that ofpure Cl2. Sodium hypochlorite contains about 95.3 wt. % ofavailable chlorine.

From this definition, a common term used is “trade percentof available chlorine” which expresses the weight ofavailable chlorine in grams per 100 mL of NaClO solution.Additionally, strength can be simply measured as theweight percent of sodium hypochlorite in solution.

Bleach solutions are corrosive, light yellow in color, withstrong chlorine smell. Two types are availablecommercially, according to the NaClO content:

Household: 5-6 wt. % purity

Industrial: 10-15 wt. % purity

Sodium hypochlorite is mainly produced through chlorinecontact with diluted caustic soda (NaOH). The process issimilar to that used for preventing chlorine emissions inchlor-alkali plants (chlorine scrubbing).

Applications

Sodium hypochlorite is the most remarkable of allhypochlorite forms and has been widely used since the1930s. Nowadays, it is the most used hypochlorite bleach,accounting for about 92% of global use. The remaining 8%refers to calcium hypochlorite.

Sodium hypochlorite is an excellent disinfecting agent thatis used in water treatment, cleaning and laundry operations,

clinics and hospitals, and at residences for disinfectingkitchen and bathroom surfaces.

Figure 2 and Figure 3 depicts the breakdown of sodiumhypochlorite applications for the two available productclasses (household and industrial) in the United States.Although household demand has been historically larger interms of volume, on a dry basis, industrial demand issuperior. The so-called industrial sodium hypochlorite isalso employed for other medium to large scale applications.

Study Background

Figure 2 – Household Bleach Applications


Figure 3 – Industrial Bleach Applications


80%

18%

2%

LaundryBleaching

Sanitizers

Spa andResidential PoolTreatment

45%

33%

5%

5%

4% 4% 4%

Industrial WaterTreatment

Large SwimmingPool Treatment

CommercialLaundry Bleach

Liquid Detergent

Textile Bleaching

Chemical Uses

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Hypochlorite solutions are comparatively safer than chlorineand often chosen in bleaching, disinfection, biofoulingcontrol, and odor control applications. Due to chlorinetoxicity, transportation or handling accidents tend to directpublic opinion against its use. Despite bleach higher cost,these factors have increased bleach popularity. Conversely,although regulatory compliance is simplified when usingbleach, due to its corrosive nature, safety hazards are noteliminated.

Paper and textile bleaching with concentrated hypochloritehas been substituted by chlorine dioxide (ClO2), since thelatter is less harmful to fibers and generates a brighterproduct. This market share is likely to reduce in the nearfuture.

Water Treatment

One of the advantages of sodium hypochlorite use indrinking water treatment plants is the ability to bothdisinfect and maintain a residual level of disinfectantthroughout the distribution system. In the U.S., nearly 31 %of such units use purchased sodium hypochlorite, 63% usechlorine gas, and the remaining use calcium hypochlorite orgenerate sodium hypochlorite on-site.

Usually, bleach is delivered to water and wastewatertreatment plants at concentrations in the range of 10 to 15trade percent, to minimize transportation costs. However,the most common is 12.5.

Sodium hypochlorite usage should increase along withpopulation growth, per capita water consumption andshortage of fresh water resources, for example. A growingapplication in desalination plants is algae proliferationcontrol and desalted water treatment.

Manufacturing Alternatives

Bleach may be produced by batch or continuous process,depending on its particular use or market demand. Twomain types of manufacturing processes can bedistinguished: chemical production and electrochemicalproduction.

Chemical Production

The chemical process relies on the acquisition of chlorineand caustic soda feedstock from external sources, incontrast with the electrochemical process for bleach, which

also involves brine electrolysis. It is often called bulkproduction.

Chemical production principle of operation is the same asthat employed to mitigate chlorine emissions, i.e., chlorinereaction with diluted sodium hydroxide solutions. Packedcolumns or reactors are used for this purpose. The processis able to produce bleach solutions of concentration near 0wt. % to about 16.5 wt. %.

Electrochemical Production

The electrochemical production consists of the electrolysisof dilute brine to produce chlorine and caustic.Chlorination reaction (the same as in chemical production)is then conducted to yield NaClO on-demand. A simplifiedflow diagram of the process is shown in Figure 4.

Figure 4 – Sodium Hypochlorite Electrochemical

Production

Brine

Electrochemical Cell

Water

Hydrogen

Caustic Soda

Off-Gas

Reactor

Low Strength SodiumHypochlorite

DepletedBrine

Chlorine


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This kind of production is often called on-site generationsystem (OSG) or on-site electrochlorination (OSE), andavoids storage of chlorine and caustic soda. The sodiumhypochlorite is generally produced in lower strengths (e.g.0.7 – 0.9 wt. %) and stored in smaller tanks; however,industrial bleach can also be generated.

Local chemical costs may be a more decisive factor whenselecting on-site generation, rather than aspects of safety orconvenience. Desalination plants in the Middle East alreadyoperate large scale sodium hypochlorite facilities based onseawater electrolysis.

There are multiple suppliers with multiple configurations ofOSG systems. Variations may include: chemicalcomposition of electrodes, configuration, energyrequirements, and water and salt quality.

Licensor(s) & Historical Aspects

Early sodium hypochlorite manufacturing plants relied onbatch processes. At the time, the amount of NaOH addedto the reactor was calculated rather than adjusted byprocess controllers, which led to improper reaction pH.Furthermore, the absence of temperature control wasanother process constraint. Both of these aspects causedincreased sodium chlorate (NaClO3) content in the product,an undesirable contaminant, especially in drinking water.

Continuous processes became more common in the 1970s,when pH and temperature controls were adopted tominimize chlorate formation. Batch processes are still used,but also rely on better reaction conditions control.

Nowadays, the majority of bulk production in the U.S. isdone through Powell Fabrication & Manufacturing, Inc.Systems. Over 120 units have been built since the mid-1960s and the company claims that Powell technologyaccounts for near 70% of the sodium hypochloriteproduced in North America.

Chemical production processes contrasts with thoseverified for OSG systems in terms of diversity. Since thebasic principle of the process is already employed inchlorine scrubbers, some companies use their ownexpertise to build the bleach manufacturing units.

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Chemistry

The main reaction occurring in the chlorination of caustic tohypochlorite is shown in the following:

2 NaOH + Cl2 NaCl + NaOCl + H2O

Chlorination Reaction

However, the formed sodium hypochlorite (NaOCl) tends todecompose through the reactions below:

NaOCl NaCl + ½ O2

Oxygen Release

3NaOCl 2NaCl + NaClO3

Sodium Chlorate Formation

All reactions are exothermic, which demands a carefultemperature control, since sodium hypochlorite is verysensitive to decomposition. Temperature must bemaintained below 35 °C in the process.

Control of pH through proper excess caustic is also animportant aspect since chlorate is formed below pH valuesof about 10. At pH values higher than 13, on the otherhand, the increased ionic strength of the solution acts toaccelerate degradation. Both stored and sold bleachsolutions necessarily have their pH adjusted between 11.8and 13 to maximize stability.

Sodium chlorate formation is the main pathway to NaClOdegradation, while oxygen release is generally very slowand has little influence on the overall decomposition.However, it may be troublesome in idle pumps, instrumentsand piping.

Raw Material

The raw materials to a sodium hypochlorite plant arechlorine and sodium hydroxide, the main co-products of achlor-alkali facility. Chlorine and caustic soda may be locallysupplied or purchased in railroad car quantities and stored.

Chlorine dry vapor is the preferred form for production,either transported by pipelines from the chlor-alkali plant orstored and shipped to the sodium hypochlorite unit asliquid. In this form, chlorine is at least 99.5 wt. % pure, withminor amounts of O2, N2, CO2 and water.

Other sources of chlorine are wet gas from electrolytic cellsor tail gas (also called sniff gas or vent) from a liquefactionprocess. In the latter case, large content of O2, N2, CO2 andH2 are expected, and carbonate solids formation in thereactor could be a constraint. For the use of tail gas in largescale bleach production, liquefaction efficiency reductionmay be necessary, which can be an additional issue.

Caustic can be used in both 32 and 50 wt. % purity. Thepresence of contaminants in caustic is more critical to theend product quality. Depending on its production process,caustic may contain high quantities of sodium chloride(NaCl), like that from diaphragm electrolytic cells.

Bleach strength is determined by caustic concentration anddilution is invariably necessary, often with soft water.Moreover, the maximum NaOH concentration should notexceed 20-22 wt. % to avoid salt (NaCl) precipitation. Theuse of initial sodium hydroxide in superior concentrations isonly wanted to yield low salt bleach. Small amounts of suchsolutions are sold for special applications, but the saltgenerated is usually not removed.

Technical Analysis

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Technology Overview

The process is separated into two different sections:Reaction & Product Discharge; and Bleach Filtration. Thesimplified block flow diagram presented in Figure 5summarizes the process.

The chlorine absorption system can be divided into twoparts: in the first, a packed column is operated with a safeexcess of caustic soda to prevent reduction in pH; thesecond part, in turn, receives the liquor from the firstcolumn to be postchlorinated, until the desired bleachconcentration is reached. This technique prevents sodiumhypochlorite decomposition.

Firstly, caustic soda is diluted with water in a first buffer tank,along with first column bottom stream. The resultingsolution is then recycled through the first recycle pump andcooled before reaching the top of the column. Chlorine isdiluted with air and fed into the bottom of both columns.Flow to the second part of the system is established whenthe finished product is being sent to storage, in the secondpart of the system.

The second part of the system is very similar to the first andconducts the rest of the chlorination reaction. The bleachproduct is then sent to the filtration steps.

Bleach filtration is necessary to meet product qualityrequirements and is often the last step before storage.Backwash water containing spent filter aid can be furtherprocessed.

Figure 5 – Process Block Flow Diagram

Area 100Reaction &

Product Discharge

Area 200Bleach Filtration

Water

Off-Gas toScrubber

ChlorineCaustic Soda

Bleach toStorage

Backwash Waterto Disposal

Air


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Technical Assumptions

All process design and economics are based on world-classcapacity units that are competitive globally. Assumptionsregarding the thermodynamic model used, reactor designbasis and the raw materials composition are shown in Table5. All data used to develop the process flow diagram wasbased on publicly available information.

Labor Requirements

Table 4 – Raw Materials & Utilities Consumption (per

ton of Product)


Table 5 – Design & Simulation Assumptions


Table 6 – Labor Requirements for a Typical Plant


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Figure 6 – Inside Battery Limits Conceptual Process Flow Diagram


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Table 7 presents the main streams composition andoperating conditions. For a more complete materialbalance, see the “Appendix A. Mass Balance & StreamsProperties”

Detailed information regarding utilities flow rates isprovided in “Appendix B. Utilities ConsumptionsBreakdown”. For further details on greenhouse gasemissions caused by this process, see “Appendix C. ProcessCarbon Footprint”.

ISBL Major Equipment List

Table 8 shows the equipment list by area. It also presents abrief description and the construction materials used.

Find main specifications for each piece of equipment in“Appendix D. Equipment Detailed List & Sizing”.

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OSBL Major Equipment List

The OSBL is divided into three main areas: storage (Area700), energy & water facilities (Area 800), and support &auxiliary facilities (Area 900).

Table 9 shows the list of tanks located on the storage areaand the energy facilities required in the construction of anon-integrated unit.

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Figure 7 – Alternative Bleach Production

Caustic Soda

Off-Gas Outlet Reactor

Water

Chlorine

Bleach

CausticDilution Tank

AnalyzerLevelTransmitter


Figure 8 – Temperature Dependency in Bleach

Degradation

Source: (Kenneth & Lewis, 2010)

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The general assumptions for the base case of this study areoutlined below.

In Table 10, the IC Index stands for Intratec chemical plantConstruction Index, an indicator, published monthly byIntratec, to scale capital costs from one time period toanother.

This index reconciles price trends of the fundamentalcomponents of a chemical plant construction such as labor,material and energy, providing meaningful historical andforecast data for our readers and clients.

The assumed operating hours per year indicated does notrepresent any technology limitation; rather, it is anassumption based on usual industrial operating rates.

Additionally, Table 10 discloses assumptions regarding theproject complexity, technology maturity and data reliability,which are of major importance for attributing reasonablecontingencies for the investment and for evaluating theoverall accuracy of estimates. Definitions and figures forboth contingencies and accuracy of economic estimatescan be found in this publication in the chapter “TechnologyEconomics Methodology.”

Economic Analysis

Table 10 – Base Case General Assumptions


Figure 9 – Project Implementation Schedule


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Project Implementation

Schedule

The main objective of knowing upfront the projectimplementation schedule is to enhance the estimates forboth capital initial expenses and return on investment.

The implementation phase embraces the period from thedecision to invest to the start of commercial production.This phase can be divided into five major stages: (1) BasicEngineering, (2) Detailed Engineering, (3) Procurement, (4)Construction, and (5) Plant Start-up.

The duration of each phase is detailed in Figure 9.

Capital Expenditures

Fixed Investment

Table 11 shows the bare equipment cost associated witheach area of the project.

Table 12 presents the breakdown of the total fixedinvestment (TFI) per item (direct & indirect costs andprocess contingencies). For further information about thecomponents of the TFI, please see the chapter “TechnologyEconomics Methodology.”

Fundamentally, the direct costs are the total direct materialand labor costs associated with the equipment (includinginstallation bulks). In other words, the total direct expensesrepresent the total equipment installed cost.

“Appendix E. Detailed Capital Expenses” provides a detailedbreakdown for the direct expenses, outlining the share ofeach type of equipment in total.

After defining the total direct cost, the TFI is established byadding field indirect costs, engineering costs, overhead,contract fees and contingencies.

Table 11 – Bare Equipment Cost per Area (USD

Thousands)


Table 12 – Total Fixed Investment Breakdown (USD

Thousands)


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Indirect costs are defined by the American Association ofCost Engineers (AACE) Standard Terminology as those"costs which do not become a final part of the installationbut which are required for the orderly completion of theinstallation."

The indirect project expenses are further detailed in“Appendix E. Detailed Capital Expenses”

Alternative OSBL Configurations

The total fixed investment for the construction of a newchemical plant is greatly impacted by how well it will beable to take advantage of the infrastructure already installedin that location.

For example, if there are nearby facilities consuming a unit’sfinal product or supplying a unit’s feedstock, the need forstorage facilities significantly decreases, along with the totalfixed investment required. This is also true for supportfacilities that can serve more than one plant in the samecomplex, such as a parking lot, gate house, etc.

This study analyzes the total fixed investment for twodistinct scenarios regarding OSBL facilities:

Non-Integrated Plant

Plant Partially Integrated

The detailed definition, as well as the assumptions used foreach scenario is presented in the chapter “About thisStudy.”

The influence of the OSBL facilities on the capitalinvestment is depicted in Figure 10 and in Figure 11.

Figure 10 – Total Direct Cost of Different Integration Scenarios (USD Thousands)


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Working Capital

Working capital, described in Table 13, is another significantinvestment requirement. It is needed to meet the costs oflabor; maintenance; purchase, storage, and inventory offield materials; and storage and sales of product(s).

Assumptions for working capital calculations are found in“Appendix F. Economic Assumptions”.

Figure 11 – Total Fixed Investment of Different Integration Scenarios (USD Thousands)


Table 13 – Working Capital (USD Million)


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Other Capital Expenses

Start-up costs should also be considered when determiningthe total capital expenses. During this period, expenses areincurred for employee training, initial commercializationcosts, manufacturing inefficiencies and unscheduled plantmodifications (adjustment of equipment, piping,instruments, etc.).

Initial costs are not addressed in most studies on estimatingbut can become a significant expenditure. For instance, theinitial catalyst load in reactors may be a significant cost and,in that case, should also be included in the capitalestimates.

The purchase of technology through paid-up royalties orlicenses is considered to be part of the capital investment.

Other capital expenses frequently neglected are landacquisition and site development. Although these are smallparts of the total capital expenses, they should be included.

Assumptions used to calculate other capital expenses areprovided in “Appendix F. Economic Assumptions.”

Total Capital Expenses

Table 15 presents a summary of the total CapitalExpenditures (CAPEX) detailed in this section.

Operational Expenditures

Manufacturing Costs

The manufacturing costs, also called OperationalExpenditures (OPEX), are composed of two elements: a fixedcost and a variable cost. All figures regarding operationalcosts are presented in USD per ton of product.

Table 16 shows the manufacturing fixed cost.

To learn more about the assumptions for manufacturingfixed costs, see the “Appendix F. Economic Assumptions”

Table 14 – Other Capital Expenses (USD Million)


Table 15 – CAPEX (USD Million)


Table 16 – Manufacturing Fixed Cost (USD/ton)


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Table 17 discloses the manufacturing variable costbreakdown.

Table 18 shows the OPEX of the presented technology.

Historical Analysis

Figure 12 depictures Sales and OPEX historic data. Figure 13compares the project EBITDA trends with IntratecProfitability Indicators (IP Indicators). The Basic Chemicals IPIndicator represents basic chemicals sector profitability,based on the weighted average EBITDA margins of majorglobal basic chemicals producers. Alternately, the ChemicalSector IP Indicator reveals the overall chemical sectorprofitability, through a weighted average of the IP Indicatorscalculated for three major chemical industry niches: basic,specialties and diversified chemicals.

Economic Datasheet

The Technology Economic Datasheet, presented in Table19, is an overall evaluation of the technology's productioncosts in a US Gulf Coast based plant.

The expected revenues in products sales and initialeconomic indicators are presented for a short-termassessment of its economic competitiveness.

Table 17 – Manufacturing Variable Cost (USD/ton)


Table 18 – OPEX (USD/ton)


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Figure 12 – OPEX and Product Sales History (USD/ton)


Figure 13 – EBITDA Margin & IP Indicators History Comparison


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Regional Comparison

Capital Expenses

Variations in productivity, labor costs, local steel prices,equipment imports needs, freight, taxes and duties onimports, regional business environments and localavailability of sparing equipment were considered whencomparing capital expenses for the different regions underconsideration in this report.

Capital costs are adjusted from the base case (a plantconstructed on the US Gulf Coast) to locations of interest byusing location factors calculated according to the itemsaforementioned. For further information about locationfactor calculation, please examine the chapter “TechnologyEconomics Methodology.” In addition, the location factorsfor the regions analyzed are further detailed in “Appendix F.Economic Assumptions.”

Figure 14 summarizes the total Capital Expenditures(CAPEX) for two locations.


Specific regional conditions influence prices for rawmaterials, utilities and products. Such differences are thusreflected in the operating costs. An OPEX breakdownstructure for the different locations approached in this studyis presented in Figure 15.

Economic Datasheet

The Technology Economic Datasheet, presented in Table20, is an overall evaluation of the technology's capitalinvestment and production costs in the alternative locationanalyzed in this study.

Regional Comparison & Economic Discussion

Figure 14 – CAPEX per Location (USD Million)


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Figure 15 – Operating Costs Breakdown per Location (USD/ton)


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AACE: American Association of Cost Engineers

ANSI/NSF: American National Standards Institute/NationalSanitation Foundation

C: Distillation, stripper, scrubber columns (e.g., C-101 woulddenote a column tag)

CAPEX: Capital expenditures

E: Heat exchangers, heaters, coolers, condensers, reboilers(e.g., E-101 would denote a heat exchanger tag)

EBIT: Earnings before Interest and Taxes

EBITDA: Earnings before Interests, Taxes, Depreciation andAmortization

F: Filter (e.g., F-101 would denote a filter tag)

FRP: Fiberglass-reinforced plastic

IC Index: Intratec Chemical Plant Construction Index

IP Indicator: Intratec Chemical Sector Profitability Indicator

ISBL: Inside battery limits

K: Compressors, blowers, fans (e.g., K-101 would denote acompressor tag)

kta: thousands metric tons per year

OPEX: Operational Expenditures

ORP: Oxidation-reduction potential

OSBL: Outside battery limits

OSE: On-site electrochlorination

OSG: On-site generation systems

P: Pumps (e.g., P-101 would denote a pump tag)

PVC: Polyvinyl chloride

R: Reactors, treaters (e.g., R-101 would denote a reactor tag)

SB: Steam boiler

T: Tanks (e.g., T-101 would denote a tank tag)

TFI: Total Fixed Investment

TPC: Total process capital

V: Horizontal or vertical drums, vessels (e.g., V-101 woulddenote a vessel tag)

X: Special equipment (e.g., X-101 would denote a specialequipment tag)

Obs.: 1 ton = 1 metric ton = 1,000 kg

Acronyms, Legends & Observations

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Intratec Technology Economics methodologyensures a holistic, coherent and consistenttechno-economic evaluation, ensuring a clearunderstanding of a specific mature chemicalprocess technology.

Introduction

The same general approach is used in the development ofall Technology Economics assignments. To know moreabout Intratec’s methodology, see Figure 16.

While based on the same methodology, all TechnologyEconomics studies present uniform analyses with identicalstructures, containing the same chapters and similar tablesand charts. This provides confidence to everyone interestedin Intratec’s services since they will know upfront what theywill get.

Workflow

Once the scope of the study is fully defined andunderstood, Intratec conducts a comprehensivebibliographical research in order to understand technicalaspects involved with the process analyzed.

Subsequently, the Intratec team simultaneously developsthe process description and the conceptual process flowdiagram based on:

a. Patent and technical literature research

b. Non-confidential information provided by technologylicensors

c. Intratec's in-house database

d. Process design skills

Next, all the data collected are used to build a rigoroussteady state process simulation model in Aspen Hysysand/or Aspen Plus, leading commercial processflowsheeting software tools.

From this simulation, material balance calculations areperformed around the process, key process indicators areidentified and main equipment listed.

Equipment sizing specifications are defined based onIntratec's equipment design capabilities and an extensiveuse of AspenONE Engineering Software Suite that enablesthe integration between the process simulation developedand equipment design tools. Both equipment sizing andprocess design are prepared in conformance with generallyaccepted engineering standards.

Then, a cost analysis is performed targeting ISBL & OSBLfixed capital costs, manufacturing costs, and overall workingcapital associated with the examined process technology.Equipment costs are primarily estimated using AspenProcess Economic Analyzer (formerly Aspen Icarus)customized models and Intratec's in-house database.

Cost correlations and, occasionally, vendor quotes of uniqueand specialized equipment may also be employed. One ofthe overall objectives is to establish Class 3 cost estimates 1

with a minimum design engineering effort.

Next, capital and operating costs are assembled in MicrosoftExcel spreadsheets, and an economic analysis of suchtechnology is performed.

Finally, two analyses are completed, examining:

a. The total fixed investment in different constructionscenarios, based on the level of integration of the plantwith nearby facilities

b. The capital and operating costs for a second differentplant location

1 These are estimates that form the basis for budget authorization,appropriation, and/or funding. Accuracy ranges for this class ofestimates are + 10% to + 30% on the high side, and - 10 % to - 20 %on the low side.

Technology Economics Methodology

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Figure 16 – Methodology Flowchart

Intratec Internal Database

Non-ConfidentialInformation from

Technology Licensors orSuppliers

Aspen Plus, Aspen HysysAspen Exchanger Design &

Rating, KG Tower, Sulcoland Aspen Energy Analyzer

Bibliographical Research

Material & Energy Balances, KeyProcess Indicators, List of

Equipment & Equipment Sizing

Capital Cost (CAPEX)& Operational Cost (OPEX)

Estimation

Patent and TechnicalLiterature Databases

Pricing Data Gathering: RawMaterials, Chemicals,Utilities and Products

Aspen Process EconomicAnalyzer, Aspen Capital

Cost Estimator, Aspen In-Plant Cost Estimator &

Intratec In-House Database

Construction LocationFactor

(http://base.intratec.us)

Project Development Phases

Information Gathering / Tools

Vendor Quotes

Study Understanding -Validation of Project Inputs

Technical Validation –Process Description &

Flow Diagram

Final Review &Adjustments

Economic Analysis

Analyses ofDifferent Construction

Scenarios and Plant Location


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Capital & Operating Cost

Estimates

The cost estimate presented in the current study considersa process technology based on a standardized designpractice, typical of a major chemical company. The specificdesign standards employed can have a significant impacton capital costs.

The basis for the capital cost estimate is that the plant isconsidered to be built in a clear field with a typical largesingle-line capacity. In comparing the cost estimate herebypresented with an actual project cost or contractor'sestimate, the following must be considered:

Minor differences or details (many times, unnoticed)between similar processes can affect cost noticeably.

The omission of process areas in the design consideredmay invalidate comparisons with the estimated costpresented.

Industrial plants may be overdesigned for particularobjectives and situations.

Rapid fluctuation of equipment or construction costsmay invalidate cost estimate.

Equipment vendors or engineering companies mayprovide goods or services below profit margins duringeconomic downturns.

Specific locations may impose higher taxes and fees,which can impact costs considerably.

In addition, no matter how much time and effort aredevoted to accurately estimating costs, errors may occurdue to the aforementioned factors, as well as cost and laborchanges, construction problems, weather-related issues,strikes, or other unforeseen situations. This is partiallyconsidered in the project contingency. Finally, it mustalways be remembered that an estimated project cost is notan exact number, but rather is a projection of the probablecost.

ISBL Investment

The ISBL investment includes the fixed capital cost of themain processing units of the plant necessary to themanufacturing of products. The ISBL investment includesthe installed cost of the following items:

Process equipment (e.g., reactors and vessels, heatexchangers, pumps, compressors, etc.)

Process equipment spares

Housing for process units

Pipes and supports within the main process units

Instruments, control systems, electrical wires and otherhardware

Foundations, structures and platforms

Insulation, paint and corrosion protection

In addition to the direct material and labor costs, the ISBLaddresses indirect costs, such as construction overheads,including: payroll burdens, field supervision, equipmentrentals, tools, field office expenses, temporary facilities, etc.

OSBL Investment

The OSBL investment accounts for auxiliary items necessaryto the functioning of the production unit (ISBL), but whichperform a supporting and non-plant-specific role. OSBLitems considered may vary from process to process. TheOSBL investment could include the installed cost of thefollowing items:

Storage and packaging (storage, bagging and awarehouse) for products, feedstocks and by-products

Steam units, cooling water and refrigeration systems

Process water treating systems and supply pumps

Boiler feed water and supply pumps

Electrical supply, transformers, and switchgear

Auxiliary buildings, including all services andequipment of: maintenance, stores warehouse,laboratory, garages, fire station, change house,cafeteria, medical/safety, administration, etc.

General utilities including plant air, instrument air, inertgas, stand-by electrical generator, fire water pumps,etc.

Pollution control, organic waste disposal, aqueouswaste treating, incinerator and flare systems

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Working Capital

For the purposes of this study,2 working capital is defined asthe funds, in addition to the fixed investment, that acompany must contribute to a project. Those funds mustbe adequate to get the plant in operation and to meetsubsequent obligations.

The initial amount of working capital is regarded as aninvestment item. This study uses the followingitems/assumptions for working capital estimation:

Accounts receivable. Products and by-productsshipped but not paid by the customer; it representsthe extended credit given to customers (estimated as acertain period – in days – of manufacturing expensesplus depreciation).

Accounts payable. A credit for accounts payable suchas feedstock, catalysts, chemicals, and packagingmaterials received but not paid to suppliers (estimatedas a certain period – in days – of manufacturingexpenses).

Product inventory. Products and by-products (ifapplicable) in storage tanks. The total amount dependson sales flow for each plant, which is directly related toplant conditions of integration to the manufacturing ofproduct‘s derivatives (estimated as a certain period – indays – of manufacturing expenses plus depreciation,defined by plant integration circumstances).

Raw material inventory. Raw materials in storagetanks. The total amount depends on raw materialavailability, which is directly related to plant conditionsof integration to raw material manufacturing(estimated as a certain period – in days – of rawmaterial delivered costs, defined by plant integrationcircumstances).

In-process inventory. Material contained in pipelinesand vessels, except for the material inside the storagetanks (assumed to be 1 day of manufacturingexpenses).

Supplies and stores. Parts inventory and minor spareequipment (estimated as a percentage of totalmaintenance materials costs for both ISBL and OSBL).

2 The accounting definition of working capital (total current assetsminus total current liabilities) is applied when considering theentire company.

Cash on hand. An adequate amount of cash on handto give plant management the necessary flexibility tocover unexpected expenses (estimated as a certainperiod – in days – of manufacturing expenses).

Start-up Expenses

When a process is brought on stream, there are certain one-time expenses related to this activity. From a timestandpoint, a variable undefined period exists between thenominal end of construction and the production of qualityproduct in the quantity required. This period is commonlyreferred to as start-up.

During the start-up period expenses are incurred foroperator and maintenance employee training, temporaryconstruction, auxiliary services, testing and adjustment ofequipment, piping, and instruments, etc. Our method ofestimating start-up expenses consists of four components:

Labor component. Represents costs of plant crewtraining for plant start-up, estimated as a certainnumber of days of total plant labor costs (operators,supervisors, maintenance personnel and laboratorylabor).

Commercialization cost. Depends on raw materialsand products negotiation, on how integrated the plantis with feedstock suppliers and consumer facilities, andon the maturity of the technology. It ranges from 0.5%to 5% of annual manufacturing expenses.

Start-up inefficiency. Takes into account thoseoperating runs when production cannot bemaintained or there are false starts. The start-upinefficiency varies according to the process maturity:5% for new and unproven processes, 2% for new andproven processes, and 1% for existing licensedprocesses, based on annual manufacturing expenses.

Unscheduled plant modifications. A key fault thatcan happen during the start-up of the plant is the riskthat the product(s) may not meet specificationsrequired by the market. As a result, equipmentmodifications or additions may be required.

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Other Capital Expenses

Prepaid Royalties. Royalty charges on portions of theplant are usually levied for proprietary processes. Avalue ranging from 0.5 to 1% of the total fixedinvestment (TFI) is generally used.

Site Development. Land acquisition and sitepreparation, including roads and walkways, parking,railroad sidings, lighting, fencing, sanitary and stormsewers, and communications.

Manufacturing Costs

Manufacturing costs do not include post-plant costs, whichare very company specific. These consist of sales, generaland administrative expenses, packaging, research anddevelopment costs, and shipping, etc.

Operating labor and maintenance requirements have beenestimated subjectively on the basis of the number of majorequipment items and similar processes, as noted in theliterature.

Plant overhead includes all other non-maintenance (laborand materials) and non-operating site labor costs forservices associated with the manufacture of the product.Such overheads do not include costs to develop or marketthe product.

G & A expenses represent general and administrative costsincurred during production such as: administrativesalaries/expenses, research & development, productdistribution and sales costs.

Contingencies

Contingency constitutes an addition to capital costestimations, implemented based on previously availabledata or experience to encompass uncertainties that mayincur, to some degree, cost increases. According torecommended practice, two kinds of contingencies areassumed and applied to TPC: process contingency andproject contingency.

Process contingency is utilized in an effort to lessen theimpact of absent technical information or the uncertainty ofthat which is obtained. In that manner, the reliability of theinformation gathered, its amount and the inherentcomplexity of the process are decisive for its evaluation.Errors that occur may be related to:

Uncertainty in process parameters, such as severity ofoperating conditions and quantity of recycles

Addition and integration of new process steps

Estimation of costs through scaling factors

Off-the-shelf equipment

Hence, process contingency is also a function of thematurity of the technology, and is usually a value between5% and 25% of the direct costs.

The project contingency is largely dependent on the plantcomplexity and reflects how far the conducted estimation isfrom the definitive project, which includes, from theengineering point of view, site data, drawings and sketches,suppliers’ quotations and other specifications. In addition,during construction some constraints are verified, such as:

Project errors or incomplete specifications

Strike, labor costs changes and problems caused byweather

Intratec’s definitions in relation to complexity and maturityare the following:

Table 21 – Project Contingency

Plant Complexity Complex Typical Simple

Project Contingency 25% 20% 15%


Table 22 – Criteria Description

Complexity

Simple Somewhat simple, widely

known processes

Typical Regular process

Complex

Several unit operations, extreme

temperature or pressure, more

instrumentation

Maturity

New &

ProvenFrom 1 to 2 commercial plants

Licensed 3 or more commercial plants


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Accuracy of Economic Estimates

The accuracy of estimates gives the realized range of plantcost. The reliability of the technical information available isof major importance.

The non-uniform spread of accuracy ranges (+30 to – 20 %,rather than ±25%, e.g.) is justified by the fact that theunavailability of complete technical information usuallyresults in under estimating rather than over estimatingproject costs.

Location Factor

A location factor is an instantaneous, total cost factor usedfor converting a base project cost from one geographiclocation to another.

A properly estimated location factor is a powerful tool, bothfor comparing available investment data and evaluatingwhich region may provide greater economic attractivenessfor a new industrial venture. Considering this, Intratec hasdeveloped a well-structured methodology for calculatingLocation Factors, and the results are presented for specificregions’ capital costs comparison.

Intratec’s Location Factor takes into consideration thedifferences in productivity, labor costs, local steel prices,equipment imports needs, freight, taxes and duties onimported and domestic materials, regional businessenvironments and local availability of sparing equipment.For such analyses, all data were taken from internationalstatistical organizations and from Intratec’s database.Calculations are performed in a comparative manner, takinga US Gulf Coast-based plant as the reference location. Thefinal Location Factor is determined by four major indexes:Business Environment, Infrastructure, Labor, and Material.

The Business Environment Factor and the InfrastructureFactor measure the ease of new plant installation indifferent countries, taking into consideration the readinessof bureaucratic procedures and the availability and qualityof ports or roads.

Table 23 – Accuracy of Economic Estimates

Reliability Low Moderate High Very

High

Accuracy+ 30%

- 20%

+ 22%

- 18%

+ 18%

- 14%

+ 10%

- 10%


Figure 17 – Location Factor Composition

Infrastructure FactorLabor Index

Location Factor

Material Index Business Environment

Factor

Local Labor IndexRelative SalaryProductivity

Expats Labor

Domestic Material IndexRelative Steel PricesLabor IndexTaxes and FreightRatesSpares

Imported MaterialTaxes and FreightRatesSpares

Ports, Roads, Airportsand Rails (Availabilityand Quality)CommunicationTechnologiesWarehouseInfrastructureBorder ClearanceLocal Incentives

Readiness ofBureaucraticProceduresLegal Protection ofInvestorsTaxes


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Labor and material, in turn, are the fundamentalcomponents for the construction of a plant and, for thisreason, are intrinsically related to the plant costs. Thisconcept is the basis for the methodology, which aims torepresent the local discrepancies in labor and material.

Productivity of workers and their hourly compensation areimportant for the project but, also, the qualification ofworkers is significant to estimating the need for foreignlabor.

On the other hand, local steel prices are similarly important,since they are largely representative of the costs ofstructures, piping, equipment, etc. Considering thecontribution of labor in these components, workers’qualifications are also indicative of the amount that needsto be imported. For both domestic and imported materials,a Spare Factor is considered, aiming to represent the needfor spare rotors, seals and parts of rotating equipment.

The sum of the corrected TFI distribution reflects the relativecost of the plant, this sum is multiplied by the Infrastructureand the Business Environment Factors, yielding the LocationFactor.

For the purpose of illustrating the conducted methodology,a block flow diagram is presented in Figure 17 in which thefour major indexes are presented, along with some of theircomponents.

.

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The process’ carbon footprint can be defined as the totalamount of greenhouse gas (GHG) emissions caused by theprocess operation.

Although it is difficult to precisely account for the totalemissions generated by a process, it is possible to estimatethe major emissions, which can be divided into:

Direct emissions. Emissions caused by process wastestreams combusted in flares.

Indirect emissions. The ones caused by utilitiesgeneration or consumption, such as the emissions dueto using fuel in furnaces for heating process streams.Fuel used in steam boilers, electricity generation, andany other emissions in activities to support processoperation are also considered indirect emissions.

In order to estimate the direct emissions, it is necessary toknow the composition of the streams, as well as theoxidation factor.

Estimation of indirect emissions requires specific data,which depends on the plant location, such as the localelectric power generation profile, and on the plantresources, such as the type of fuel used.

Equivalent carbon dioxide (CO2e) is a measure thatdescribes the amount of CO2 that would have the sameglobal warming potential of a given greenhouse gas, whenmeasured over a specified timescale.

All values and assumptions used in calculations are basedon data provided by the Environment Protection Agency(EPA) Climate Leaders Program.

Appendix C. Process Carbon Footprint

Table 26 – Assumptions for CO2e Emissions Calculation


Table 27 – CO2e Emissions (ton/ton prod.)


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Direct Costs Breakdown

Appendix E. Detailed Capital Expenses

Figure 18 – ISBL Direct Costs Breakdown by Equipment Type for Base Case


Figure 19 – OSBL Direct Costs Breakdown by Equipment Type for Base Case


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Capital Expenditures

For a better description of working capital and other capitalexpenses components, as well as the location factorsmethodology, see the chapter “Technology EconomicsMethodology”

Construction Location Factors

Working Capital

Raw Materials

Inventory

Supplies and

Stores

Appendix F. Economic Assumptions

Table 34 – Detailed Construction Location Factor


Table 35 – Working Capital Assumptions for Base Case


Table 36 – Other Capital Expenses Assumptions for

Base Case


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Fixed Costs

Fixed costs are estimated based on the specificcharacteristics of the process. The fixed costs, like operatingcharges and plant overhead, are typically calculated as apercentage of the industrial labor costs, and G & A expensesare added as a percentage of the operating costs.

Table 37 – Other Fixed Cost Assumptions


Table 38 – Depreciation Value & Assumptions


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The list below is intended to be an easy and quick way toidentify Intratec reports of interest. For a more completeand up-to-date list, please visit the Publications section onour website, www.intratec.us.

TECHNOLOGY ECONOMICS

Propylene Production via Metathesis: Propyleneproduction via metathesis from ethylene and butenes,in a process similar to Lummus OCT.

Propylene Production via Propane

Dehydrogenation: Propane dehydrogenation (PDH)process conducted in moving bed reactors, in aprocess similar to UOP OLEFLEX™.

Propylene Production from Methanol: Propyleneproduction from methanol, in a process is similar toLurgi MTP®.

Polypropylene Production via Gas Phase Process: Agas phase type process similar to the Dow UNIPOL™ PPprocess to produce both polypropylene homopolymerand random copolymer.

Polypropylene Production via Gas Phase Process,

Part 2: A gas phase type process similar to LummusNOVOLEN® for production of both homopolymer andrandom copolymer.

Sodium Hypochlorite Chemical Production: Sodiumhypochlorite (bleach) production, in a widely usedindustrial process, similar to that employed by SolvayChemicals, for example.


Dehydrogenation, Part 2: Propane dehydrogenation(PDH) in fixed bed reactors, in a process is similar toLummus CATOFIN®.


Dehydrogenation, Part 3: Propane dehydrogenation(PDH) by applying oxydehydrogenation, in a processsimilar to the STAR PROCESS® licensed by Uhde.

CONCEPTUAL DESIGN

Membranes on Polypropylene Plants Vent Recovery:

The Report evaluates membrane units for theseparation of monomer and nitrogen in PP plants,similar to the VaporSep® system commercialized byMTR.

Use of Propylene Splitter to Improve Polypropylene

Business: The report assesses the opportunity ofpurchasing the less valued RG propylene to producethe PG propylene raw material used in a PP plant.

Appendix G. Released Publications

Appendix H.

Technology Economics Form

Submitted by Client

Appendix H. Technology Economics FormSubmitted by Client

Chemical Produced by the Technology to be Studied

Define the main chemical product of your interest.

Choose a Chemical

E.g. Acrylonitrile butadiene styrene (ABS), Methyltert-butylether

For the purpose of our studies, chemicals in the list below are considered to be commodities and are offered under a special pricing policy. To order studies onthese chemicals access www.intratec.us/advisory/technology-economics/order-commodities.

We consider acetic acid, acetone, acrylic acid, acrylonitrile, adipic acid, aniline, benzene, butadiene, chlorine, n-butanol, iso-butylene, caprolactam, cumene,ethanol, ethylene, bio-ethylene, ethylene glycol, ethylene oxide (EO), formaldehyde, HDPE, isoprene, LDPE, LLDPE, methanol, methyl methacrylate, MDI,phenol, polybutylene terephthalate, polycarbonate (PC), polyethylene terephthalate (PET), polypropylene (PP), polystyrene (PS), polyurethanes (PU),polyvinyl chloride (PVC), propylene, propylene glycol, propylene oxide (PO), terephthalic acid and vinyl chloride (VCM) to be commodities.

Chemical Process Technology to be Studied

Identify the mature chemical process technology you would like us to assess. Intratec considers mature technologies the ones already used ona commercial scale plant.

Technology Description

E. g. technology for propylene production from methanol - similar to Lurgi MTP

Commercial Scale Unit. Inform the exact location of one commercial scale plant under operation.

Plant Location: I don't know

I know the location of a commercial plant:

If there is no commercial scale plant based on the technology of your interest, you are referred to Intratec's Research Potential advisory service atwww.intratec.us/advisory/research-potential/overview

Industrial Unit Description

Inform the plant capacity to be considered in the study. Pleaseprovide the main product capacity in kta (thousands of metrictons per year of main chemical product)

Inform the assumption for the number of hours the plantoperates in a year.

Plant Nominal Capacity 150 kta

300 kta

Other (kta)

Operating Hours 8,000 h/year

Other (h/year)

Analysis Date

Define the date (quarter and year) that will be considered in the analysis. Our databases can provide consolidated values from the year 2000up to the last closed quarter, quarter-to-date values are estimated.

Quarter Year

Sodium Hypochlorite

Chemical production from Sodium Hydroxide and Chlorine similar to Solvay chemical process.

250

Q1 2012

Storage Facilities

Define the assumptions employed for the storage facilities design.

Products 20 days

Other

By-Products 20 days

Other

Raw Materials 20 days

Other

Utilities Supply Facilities

The construction of supply facilities for the utilities required (e.g. cooling tower, boiler unit, refrigeration unit) impacts the capital investmentfor the construction of the unit.

Consider construction of supply facilities ? Yes No

General Design Conditions

General utilities and environmental conditions that may be relevant to the process simulation are presented below. Provide other assumptions ifyou deem necessary.

Specification Unit Default Value User-specified value

Cooling water temperature ºC 24 DSPEC1

Cooling water range ºC 11 DSPEC2

Steam (Low Pressure) bar abs 7 DSPEC3

Steam (Medium Pressure) bar abs 11 DSPEC4

Steam (High Pressure) bar abs 28 DSPEC5

Refrigerant (Ethylene) ºC -100 DSPEC6

Refrigerant (Propane) ºC -40 DSPEC7

Refrigerant (Propylene) ºC -45 DSPEC8

Dry Bulb Air Temperature ºC 38 DSPEC9

Wet Bulb Air Temperature ºC 25 DS10

Industrial Unit Location

The location of an industrial unit influences in prices for both construction and operation of the unit. In this study, the economic performancesof TWO similar units erected in different locations are compared.

The first plant is located in the United States (US Gulf Coast) and the second location is defined by YOU.

Plant Location I would like to keep the plant location confidential.

Country (or region) or region to be considered.

E.g. Louisiana (USA), China or Saudi Arabia. Please define only one location.

Plant Location DataProvider

I will use Intratec's Internal Database containing standard chemical prices and location factors (only forGermany, Japan, China or Brazil).

I will provide location specific data. Please fill in the Custom Location topic below.

0

Brazil

Custom Location Description. Describe both capital investment and prices at your custom location.

A) Capital Investment. Provide the relative capital cost at your custom location in comparison to the United States (U.S. Gulf Coast)

Custom Location Relative Cost (%)

130% means that the capital costs in the custom location are 30% higher than the costs in the United States.

B) Raw Materials Prices. Describe the raw material prices to be considered in the custom location.

Item Description Price Unit Price

Raw1 RU1 RP1

Raw2 RU2 RP2

Raw3 RU3 RP3

E.g. Propane USD/metric ton 420

C) Product Prices. Describe the products prices to be considered in the custom location.


Prod1 PU1 PP1

Prod2 PU2 PP2

Prod3 PU3 PP3

E.g. Polypropylene USD/metric ton 1700

D) Utilities Prices. Describe the utilities prices to be considered in the custom location.


Electricity UP1

Steam (Low Pressure) UP2

Steam (High Pressure) UP3

Fuel UP4

Clarified Water UP5

Util6 UU6 YP6

Util7 UU7 UP7

Util8 UU8 UP8

E) Labor Prices. Describe the labor prices to be considered in the custom location.


Operating Labor USD/operator/hour LP1

Supervision Labor USD/supervisor/hour LP1

F) Others. Describe any other price you deem necessary to be considered in the custom location (e.g. chemicals, catalysts, etc.)


Other1 OU1 OP1

Other2 OU2 OP2

Other3 OU3 OP3

E.g. Catalyst USD/metric ton 5000

Chlorine USD/metric ton

Caustic Soda USD/metric ton

Sodium Hypochlorite USD/metric ton

USD/metric ton

USD/m3

Air USD/Nm3

Cooling Water USD/m3

Other Remarks

If you have any other comments, feel free to write them below:

Comments:

Complementary Files

Along with this form, you may also upload any other chemical document deemed relevant for the description of the project, such as articles,brochures, book sections, patents, etc. Multiple files may be uploaded.

If you are filling this form offline please upload this form and any complementary files atwww.intratec.us/advisory/technology-economics/order-commodities

Non-Disclosure Period & Pricing

You can keep your study confidential or get discounts, by allowing Intratec to disclose it to the market as a publication, after anagreed non-disclosure period, starting at the date you place your order.

Choose an Option 6 months 24 months 36 months Never Disclosed

Non-Disclosure Period Prices Intratec Agent Special Offer

6 months $18,000 (9 x $1,900) Save 70% - Payment of our advisory service is conducted

24 months $38,000 (11 x $3,282) Save 37% automatically, in equal and pre-defined installments

36 months $50,000 (13 x $3,654) Save 17% - Every 15 days, an installment will be charged to your

Never Disclosed $60,000 (15 x $3,800) credit card or PayPal account.

Pay Less ! Benefit From a 5% Discount

Inform us the email address of the Intratec Agent that introduced you to our advisory services and benefit from a 5% discount on the totalprice of your service. To know more about Intratec New Business Development Agents, please visit www.intratec.us/be-our-agent.

Intratec Agent Email

Evaluate our Intratec Agent. Your opinion will be kept confidential.

Unsatisfied Neutral Satisfied

Knowledge about Intratecofferings and presentation skills

Kindness and Helpfulness

DOWNLOAD EXAMPLES OF FILLED FORMS HERE.

DOWNLOAD A PDF VERSION OF THIS FORM HERE.

NEED ASSISTANCE ? SEND AN EMAIL TO [email protected].

v.1-mar-13

Retrieve from Intratec's Internal Database any values for Brazil that may be necessary in the report and were notprovided in the form.

Technology Economics

Standardized advisory services developed under Intratec’s Consulting as Publications innovative approach. Technology Economics studies answer main questions surrounding process technologies:

- What is the process? What equipment is necessary?

- What are the raw materials and utilities consumption rates?

- What are the capital and operating expenses breakdown?

- What are the economic indicators?

- In which regions is this technology more profitable?

Technology Economics: Sodium Hypochlorite Chemical Production

Technology

Transcript of Technology Economics: Sodium Hypochlorite Chemical Production