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THE UPGRADING OF NATURAL GAS TO AMMONIA AND ETHELYNE

IP.com Disclosure Number: IPCOM000221360D
Publication Date: 2012-Sep-06

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Page 01 of 21

'I'HECANADIAN KELLOGG COMPANY. LIMITED

$, E. HANDMAN

DEC 2 9 1975

UPGRADING OF NATURAL GAS TO AMMONIA AND ETHYLENE

Presented by: J. Chrones


K. Padgett

at a meeting of

CANADIAN NATURAL GAS PROCESSING ASSOCIATION

November 27th, 1975

Calgary, Alberta.


Page 02 of 21

THE CANADIAN IĀ£ELLOGG COMPANY. LIMITED

USE OF NATURAL GAS IN CANADA

Before we discuss the upgrading of natural gas into ammonia
and ethylene it might be worthwhile to examine the present use patterns for natural gas in Canada. This data is presented in Table I. Of interest is the substantial increase in natural gas usage for "industrial heating" between 1972 and 1974. In 1974, this represented almost 40% of the total gas consumed in Canada whereas the gas used for petrochemical purposes was less than 6% of the total Canadian consumption.

There has been substantial interest in the United States and,
to a lesser extent in Canada, in coal gasification as a source
of gas. To the best of our knowledge, not one, of several large projects being contemplated in the United States, has been given the green light for construction. If we look at the capital requirements for coal gasification as a feed and fuel source for a~monia plants and compare it to the requirements for alternative direct utilization of coal in electric generation plants then per- haps we can get some insight into some of the reasons for the temporary delay.

From the table, we have indicated that 161 billion cubic feet per year of gas is used in Canada for electric generation. If this
gas were diverted to petrochemical production and replaced by coal, then investment would probably be required to make these generation plants environmentally acceptable. This total gas consumption represents about 2000 MW of electric generation. Although some
p~er stations are already equipped to fire either coal or gas,
none of them have facilities for flue gas scrubbing to reduce S02 levels to environmentally acceptable levels. For these facilities for SO2 removal (including particulates removal by electrostatic precipitation) published investment costs have ranged anywhere from $50 to $175 per Kilowatt. An assumed average cost of $125 per KW represents a total investment of $250,000,000. This presupposes that the facilities already are equipped for burning coal. This same amount of gas would be sufficient for approximately I0 ammonia plants, each at a nominal capacity of 1150 tons per day. If these same 10 ammonia plants were to be based on coal gasification utiliz- ing the technology available today, we are looking at an investment of conservatively twice that required for an a~onia plant based on natural gas. This extra capital cost would amount to approximately $800,000,000 at current prices for ammonia plants.

Obviously this is a very simple approach but it suggests that there is still a substantial amount of gas being used in Canada for energy purposes which is directly replaceable by coal firing, in environ- mentally acceptabl...