UNIVERSITY OF INDONESIA

FINAL REPORT

CHEMICAL PLANT DESIGN

“PRELIMINARY DESIGN OF METHANOL TO OLEFIN PLANT”

Group 6 Regular
Members of Group

Alan Try Putra Samad 1206254403

Ghandi Alamsyah 1206242896
Kameliya Hani Millati 1206202034
Umar Putra Syahruddin 1206247726
Uswatun Nur Khazanah 1206201946

DEPARTMENT OF CHEMICAL ENGINEERING

FACULTY OF ENGINEERING
UNIVERSITY OF INDONESIA
DEPOK
2015
LIST OF MEMBERS

1. Name : Alan Try Putra Samad

NPM : 1206254403
BOP : Manado, November 15th 1994
Address : Mahali Street No. 30 Pondok Cina, Beji, Depok.

2. Name : Ghandi Alamsyah

NPM : 1206242896
BOP : Jakarta, October 19th 1994
Address : Jalan Batu Kramat No.23 RT 17/05, Jakarta Timur

3. Name : Kameliya Hani Millati

NPM : 1206202034
BOP : Depok, February 14th 1996
Address : Jalan Mekar No 21, RT 7/RW 4, 12530, Jakarta Selatan

4. Name : Umar Putra Syahruddin

NPM : 1206247726
BOP : Bogor, May11th 1994
Address :

5. Name : Uswatun Nur Khazanah

NPM : 1206201946
BOP : Bekasi, September 12th 1995
Address : Bintara 1 No. 31, RT 12/RW 2, 17134, Bekasi Barat

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PREFACE

Praise to God, The cherisher and sustainers of the worlds; God who has
been giving His blessing and mercy to the writer to complete this Final Report
entitled “Preliminary Design of Methanol to Olefin Plant”. This Final report is
submitted to fulfill one of the requirements in Chemical Plant Design Class as
capstone course of Chemical Engineering Major in Universitas Indonesia. The
authors realize that this report could not be completed without help and guidance
from various people. Therefore, the authors would like to give regards and thanks
to:
1. Prof. Ir. Sutrasno Kartohardjono, Msc, PhD as Chairman of Chemical
Engineering Department, Universitas Indonesia.
2. Prof Dr. Ir. Widodo W. Purwanto, DEA, Prof Dr. Ing. Ir. Misri Gozan, M.
Tech, Dr. rer. Nat. Ir. Yuswan Muharam, MT, and Ir. Dijan Supramono,
M.Sc, as lecturer and mentor for Chemical Plant Design Subject.
3. The Departement of Chemical Engineering lecturer who has been willing to
provide knowledge and insights about the design.
4. The teaching assistant of Chemical Plant Design, Alristo Sanal, who have
provided assisstance to us during these assignments.
5. All friends from Chemical Engineering Department, especially batch 2012
for the hardships and laughter we spent together.
The authors realize that in this paper there are still a lot of shortcomings,
like ivory that was never cracked. Therefore the authors expect criticism and
suggestions that can improve this report. Hopefully this paper can be useful for
readers and to the world of scinec and technology, for the development of nation.

Depok, December 14th, 2015

Writer Team

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ABSTRACT

The world is entering the era of free trade and it is a must for Indonesia to be able
to compete with other countries in the industrial field. Ethylene and propylene are
the examples of the most important compounds in petrochemical industry chain.
The main role of this nation’s petrochemical industry is taken by PT. Chandra
Asri Petrochemical Indonesia since 1993. Ethylene and propylene products from
PT. Chandra Asri are used for wide applications in many fields of industry.
Considering the needs for ethylene and propylene increasing, while ethylene and
propylene producers themselves can be said is still limited, it can be said that the
market share for the ethylene and propylene plant is still very open, both domestic
and foreign markets.

Keyword: MTO, methanol, olefin

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EXECUTIVE SUMMARY

1. Introduction
1. 1. Background
Plastic consumption in the world dominated by polyester, polyethylene,
polypropylene, and also PVC. Usually, the monomer from the polymer is
produced from petroleum by fischer tropsch, catalytic or thermal cracking and
also distillation. Another technology to produce monomer is from coal or natural
gas. Coal is gasified into synthetic gas and then syhthesized into methanol.
Natural gas processing produce natural gas too. Then, the methanol can be
processed into olefin by methanol to olefin process (MTO). Olefin as product of
MTO process composed of ethylene and propylene which can be separated by
deethanizer.
1. 2. Product Uses and Description
Ethylene and propylene are the most widely raw material used to produce
household products beacuse both are an intermediet product to produce finished
product. Ethylene has derivatives such as polyethylene, ethylene glycol, styrene,
PVC which can be applied for packaging, agriculture, automotive, custruction,
textiles, and electronics. Propylene has derivatives such as polypropylene and
acrilic acid which can be applied for packaging, textiles, automotive, construction,
personal care, etc (nexant, 2011). PT. IOC (Indonesian Olefin Company) is the
first plant in Indonesia that synthesize methanol to produce olefin by MTO
process. PT IOC will be built at Kalimantan Insustrial Estate (KIE) in east
Kalimantan. The plant will be built in 2020. The CAPEX and OPEX of our plant
are USD 163,553,700 and USD 248,952,745 with the IRR 14.3%; ROI 21.7%;
NPV USD 143,820,100; and payback period in 3.15 years of production. The
recommendation will be to increase the production capacity to get more profit.

2. Market
2.1. Future Demand, Import, and Competition
The demand of ethylene and propylene in Indonesia is increasing 0.6% and
7.2% per year in 2018. Now, we only have PT. Chandra Asri Petrochemicals Tbk

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which produce 600 thousand tons/year of ethylene and 320 thousand tones/year of
propylene and PT. Pertamina that produced 288 thousand tonnes/year of
propylene. So, Indonesia still import 538 thousand tonnes/year of ethylene and
140 thousand tonnes/year of propylene. Using CAGR method, the demand of
ethylene and propylene predicts will be increasing 0.6% and 7.2% per year in
2018. So, we have chance to produce ethylene and propylene as much as the
import with methanol as raw material.
2.2. Project Capacity and Revenue Sales
The production capacity of this plant is 66 thousand tonnes/year of ethylene
and 120 thousand tonnes/year of propylene. This capacity is based on the demand
and import of olefin in Indonesia and raw material reserves. By projecting the
price, the total revenue sales for our product is $ 296,337,098/year.

3. Technical Aspect
3.1. Plant Location
We choose Kaltim Industrial Estate (KIE) as our plant location in East
Kalimantan. The location is very available for all of factors, such as raw material,
labour, water, distribution.
3.2. Man Power
The total amount of our employees is 74 employees, which consist of 25
operators, 3 directors, 11 production department employees, 6 HSE department
employees, 8 HR department employees, 16 general support and service
department employees, and 5 planning, controlling, and supplying department
employees.
3.3. Land and Building
The total area of our plant is 9,080.29 m2, which is divided into several
areas such as production area, utility area, waste treatment area, administration
area, supporting area, and evacuation area.
3.4. Material
Our plant will be used methanol as raw material because we use Lurgi’s
MTO process. In addition, methanol is available in Kalimantan due to the location
of methanol industry which is also in KIE.

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3.5. Technology
We use Lurgi’s MTO process as it provides maximum propylene
selectivity, has a low coking tendency, a very low propane yield and also limited
by-product formation. This in turn leads to a simplified purification scheme that
requires only a reduced cold box system as compared to on-spec
ethylene/propylene separation.

4. Economy
The plant will be built in 2016 with construction time 3 years (based on Total
Project, 2015), so the first production year is 2019. The CAPEX is USD
180,000,000 and OPEX is 155,000,000 with IRR 14.3%, ROI 21.72%, NPV USD
180,679,300, BEP 744,000 ton, and Payback Period (PP) in 4 years of production.
This value have been compared to other MTO project such as in China and United
State. The recommendation is to buy methanol non-fossil base, such as coal or
synthetic gas to reduce influence of crude oil price and also develop MTO
technology to increase yield of olefin production from methanol.

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TABLE OF CONTENT

UNIVERSITY OF INDONESIA ............................................................................. i

LIST OF MEMBERS .............................................................................................. ii
PREFACE .............................................................................................................. iii
ABSTRACT ........................................................................................................... iv
EXECUTIVE SUMMARY..................................................................................... v
TABLE OF CONTENT ....................................................................................... viii
LIST OF FIGURE ................................................................................................. xii
LIST OF TABLE ................................................................................................. xiv
1 CHAPTER 1 .................................................................................................... 1
1.1 Project Background ......................................................................................... 1
1.2 Project Objective ............................................................................................. 2
1.3 Analysis ........................................................................................................... 3
Raw Material Analysis .......................................................................... 3
Product Analysis ................................................................................... 3
Market and Capacity Analysis .............................................................. 4
Location Analysis.................................................................................. 7
Location Analysis................................. Error! Bookmark not defined.
1.4 Key Challenge ................................................................................................. 9
Technical Aspect ................................................................................... 9
Economical Aspect.............................................................................. 10
Marketing Aspect ................................................................................ 10
2 CHAPTER 2 .................................................................................................. 11
2.1 Black Box ...................................................................................................... 11
2.2 Alternative Processes ..................................................................................... 12
2.3 Process Selection ........................................................................................... 14
2.4 Process Description ....................................................................................... 16
2.5 Block Flow Diagram ..................................................................................... 17
2.6 Process Flow Diagram ................................................................................... 18
2.7 Mass and Energy Balance.............................................................................. 19
Mass Balance ...................................................................................... 19
Energy Balance ................................................................................... 24
2.8 Plant Efficiency ............................................................................................. 25

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Mass Efficiency................................................................................... 25
Energy Efficiency................................................................................ 25
2.9 Utility Balance ............................................................................................... 26
Steam Generation ................................................................................ 26
Fuel ...................................................................................................... 28
Power Generation ................................................................................ 29
Refrigerant........................................................................................... 30
Cooling Water ..................................................................................... 36
2.10 Heat Exchanger Network............................................................................... 37
Stream Classification .......................................................................... 37
Heat Recovery Pinch Method ............................................................. 39
Heat Exchanger Network Design ........................................................ 44
Utility Comparison Before/After HEN ............................................... 46
Process Performance Analysis ............................................................ 48
3 CHAPTER 3 .................................................................................................. 49
3.1 Key Process Design Variables ....................................................................... 49
Design Data and Methodology ........................................................... 49
3.2 Detailed Equipment List ................................................................................ 53
Process ................................................................................................ 53
Utility .................................................................................................. 58
4 CHAPTER 4 .................................................................................................. 62
4.1 Plant Wide Control Strategy .......................................................................... 62
4.2 Piping and Instrumentation ............................................................................ 63
4.3 Control and Instrumentation .......................................................................... 65
4.4 Start Up and Shut Down Procedure ............................................................... 68
Start Up Procedure .............................................................................. 68
Normal Condition ............................................................................... 68
Shut Down Procedure ......................................................................... 68
5 CHAPTER 5 .................................................................................................. 72
5.1 Site Development .......................................................................................... 72
5.2 Area Description ............................................................................................ 72
5.3 Plant Layout ................................................................................................... 73
Overall Plant Layout ........................................................................... 73
Equipment Layout ............................................................................... 75
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Plant Area ............................................................................................ 77
Escaping Route.................................................................................... 78
6 CHAPTER 6 .................................................................................................. 82
6.1 Emission Limit .............................................................................................. 82
6.2 Hazard Identification (HAZID) ..................................................................... 82
6.3 Hazard and Operation Study (HAZOP) ......................................................... 88
6.4 Hazard Communication ................................................................................. 95
6.5 Main Hazard in Plant ..................................................................................... 95
6.6 Personal Protection Equipment ..................................................................... 97
6.7 Plant Emergency Response ......................................................................... 101
6.8 Waste Management ..................................................................................... 103
6.9 Waste Treatment .......................................................................................... 105
7 CHAPTER 7 ................................................................................................ 108
7.1 Basis of Economical Calculation ................................................................. 108
7.2 Cost Index .................................................................................................... 108
7.3 Fixed Cost .................................................................................................... 109
Equipment Cost ................................................................................. 109
Piping, Insulation, and Controller Cost ............................................. 113
Offsite Facility Cost .......................................................................... 114
Supporting Equipment Cost .............................................................. 114
Additional Cost ................................................................................. 115
Site Development .............................................................................. 116
Building ............................................................................................. 116
Contractor’s Fee ................................................................................ 117
Contingency Cost .............................................................................. 118
7.4 Working Capital Investment ........................................................................ 118
7.5 Total Capital Expenditure ............................................................................ 118
8 CHAPTER 8 ................................................................................................ 121
8.1 Manufacturing Cost ..................................................................................... 121
Direct Production Cost ...................................................................... 121
Fixed Cost ......................................................................................... 123
Plant Overhead Cost .......................................................................... 124
8.2 General Expenses ........................................................................................ 125
Administrative Cost .......................................................................... 125
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Marketing, Distribution, and Selling ................................................. 128
Research and Development ............................................................... 129
8.3 Total Operational Cost................................................................................. 129
9 CHAPTER 9 ................................................................................................ 131
9.1 Product Price................................................................................................ 131
9.2 Cash Flow .................................................................................................... 132
Equity ................................................................................................ 132
Weighted Average Cost of Capital (WACC) .................................... 133
Depreciation ...................................................................................... 133
Before Tax and After Tax Cash Flow ............................................... 134
9.3 Profitability Analysis ................................................................................... 135
Internal Rate of Return (IRR) ........................................................... 135
Return of Investment (ROI) .............................................................. 136
Net Present Value (NPV) .................................................................. 137
Payback Period (PP) .......................................................................... 138
9.4 Sensitivity Analysis ..................................................................................... 138
Sensitivity Parameter Determination ................................................ 139
Sensitivity Parameter Fluctuation ..................................................... 140
Sensitivity Parameter to Profitability Analysis ................................. 141
Strategy ............................................................................................. 142
10 CHAPTER 10 .............................................................................................. 144
10.1 Technical Aspect ......................................................................................... 144
10.2 Economical Aspect ...................................................................................... 144
11 CHAPTER 11 .............................................................................................. 146
11.1 Conclusion ................................................................................................... 146
11.2 Recommendation ......................................................................................... 147
REFERENCE ...................................................................................................... 148
12 APPENDIX .................................................................................................. 149

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LIST OF FIGURE

Figure 1.10 Location Overview .............................................................................. 7

Figure 1.11 Location Map ....................................................................................... 8
Figure 2.1 Overall Indirect Liquefaction Process for Free-to-Liquids (XTL)
Conversion ............................................................................................................ 11
Figure 2.2 Black Box Production of Ethylene and Propylene .............................. 12
Figure 2.3 Lurgi’s MTO Process .......................................................................... 12
Figure 2.4 Haldor Topsoe MTO Process .............................................................. 13
Figure 2.5 UOP/Hydro MTO Process ................................................................... 14
Figure 2.6 ExxonMobil Process ............................................................................ 14
Figure 2.7 Block Flow Diagram ........................................................................... 17
Figure 2.8 PFD MTO Plant ................................................................................... 18
Figure 2.9 Reactor Mass Balance.......................................................................... 19
Figure 2.10 Separator Mass Balance ..................................................................... 20
Figure 2.11 Distillation Mass Balance .................................................................. 21
Figure 2.12 Steam Generation Flow Diagram ...................................................... 26
Figure 2.13 Power Plant Flow Diagram ................................................................ 29
Figure 2.14 Refrigerant Cycle ............................................................................... 33
Figure 2.15 Block Diagram of Cooling Water before HEN ................................. 36
Figure 2.16 Cooling Water Process ...................................................................... 37
Figure 2.17 Composite Curve of Cold Stream and Hot Stream Combination ...... 43
Figure 2.18 Heat Exchanger Network Design of MTO Plant ............................... 45
Figure 2.19 Cooling Water in Interstage Cooler after HEN ................................. 46
Figure 3.1 Design Data / Methodology of Storage Tank ...................................... 49
Figure 3.2 Design Data / Methodology of Pump .................................................. 49
Figure 3.3 Design Data / Methodology of Reactor .............................................. 50
Figure 3.4 Design Data / Methodology of Heat Exchanger .................................. 50
Figure 3.5 Design Data / Methodology of Compressor ........................................ 51
Figure 3.6 Design Data / Methodology of Heat Exchanger .................................. 51
Figure 3.7 Design Data / Methodology of Distillation and Column and Stripper
Column .................................................................................................................. 52
Figure 3.8 Design Data / Methodology of Expander ............................................ 52
Figure 3.9 Design Data / Methodology of Compressor ........................................ 53
Figure 3.10 Datasheet for MTO Reactor............................................................... 53
Figure 4.1 PID Control .......................................................................................... 64
Figure 6.1 Block flow diagram of Waste Water Treatment ................................ 106
Figure 6.2 Gas waste treatment process .............................................................. 107
Figure 7.1 Chemical Engineering Plant Cost Index ............................................ 109
Figure 7.2 Step to Calculate Equipment Cost ..................................................... 109
Figure 7.3 Capital Expenditure Breakdown ........................................................ 120
Figure 8.1 OPEX Breakdown ............................................................................. 130
Figure 9.1 Price Trend of Ethylene and Propylene ............................................. 131
Figure 9.2 Olefin Price Trend in 2015 ................................................................ 132

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Figure 9.3 Cash Flow: BTCF and ATCF ............................................................ 135
Figure 9.4 Payback Period .................................................................................. 138
Figure 9.5 Sensitivity Parameter Fluctuation to NPV ......................................... 141
Figure 9.6 Sensitivity Parameter Fluctuation to IRR .......................................... 142
Figure 9.7 Sensitivity Parameter Fluctuation to Payback Period ........................ 142
Figure 10.1 Global petroleum demand ............................................................... 145
Figure 10.2 Global methanol demand ................................................................. 145

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LIST OF TABLE

Table 2.1 MTO Comparison ................................................................................. 15

Table 2.2 MTO Scoring Parameter ....................................................................... 16
Table 2.3 MTO Scoring and Ranking ................................................................... 16
Table 2.4 Reactor R-101 Mass Balance ................................................................ 19
Table 2.5 Separator V-101 Mass Balance ............................................................. 20
Table 2.6 Distillation Mass Balance ..................................................................... 21
Table 2.7 E-101 Mass Balance.............................................................................. 21
Table 2.8 E-102 Mass Balance.............................................................................. 22
Table 2.9 E-103 Mass Balance.............................................................................. 22
Table 2.10 E-104 Mass Balance............................................................................ 22
Table 2.11 C-101 Mass Balance ........................................................................... 23
Table 2.12 C-102 Mass Balance .......................................................................... 23
Table 2.13 C-103 Mass Balance .......................................................................... 23
Table 2.14 C-104 Mass Balance .......................................................................... 24
Table 2.15 Total Energy Balance .......................................................................... 24
Table 2.16 Stream Energy Balance ....................................................................... 24
Table 2.17 Equipment Duty .................................................................................. 25
Table 2.18 Aeration Tank Mass Balance .............................................................. 27
Table 2.19 Clarifier Mass Balance ........................................................................ 27
Table 2.20 Water Storage Tank Mass Balance ..................................................... 27
Table 2.21 Boiler Mass Balance ........................................................................... 28
Table 2.22 HP Steam Turbine generator Mass Balance ....................................... 30
Table 2.23 MP Steam Turbine generator Mass Balance ....................................... 30
Table 2.24 Refrigerant Equipment Selection and Description.............................. 32
Table 2.25 Refrigerant Requirement ..................................................................... 33
Table 2.26 1st HE Mass Balance .......................................................................... 33
Table 2.27 2nd HE Mass Balance ......................................................................... 33
Table 2.28 3rd HE Mass Balance .......................................................................... 34
Table 2.29 4th HE Mass Balance .......................................................................... 34
Table 2.30 5th Mass Balance ................................................................................ 34
Table 2.31 1st Compressor Mass Balance ............................................................ 35
Table 2.32 2nd Compressor Mass Balance ........................................................... 35
Table 2.33 3rd Compressor Mass Balance ............................................................ 35
Table 2.34 1st Expander Mass Balance ................................................................ 35
Table 2.35 2nd Expander Mass Balance ............................................................... 36
Table 2.36 Cooling Water Mass Balance.............................................................. 37
Table 2.37 Cold Stream in MTO Plant ................................................................. 38
Table 2.38 Hot Stream in MTO Plant ................................................................... 38
Table 2.39 Shifted Temperature Data ................................................................... 39
Table 2.40 Temperature Interval Heat Balance .................................................... 41
Table 2.41 Problem Table Cascade ....................................................................... 42
Table 2.42 Heat Exchanger Needed after HEN .................................................... 44

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Table 2.43 Cooling Water Requirement before HEN in Main Process ................ 46
Table 2.44 Cooling Water Requirement after HEN in Main Process .................. 47
Table 2.45 Comparison Mass and Energy Efficiency before and after HEN ....... 47
Table 2.46 Electricity Produce before HEN ......................................................... 48
Table 2.47 Electricity Produce after HEN ............................................................ 48
Table 3.1 Methanol to Olefin Reactor Specification ........................................... 53
Table 3.2 Distillation Column ............................................................................... 55
Table 3.3 Steam Boiler .......................................................................................... 55
Table 3.4 Heat Exchanger ..................................................................................... 56
Table 3.5 Gas Compressor .................................................................................... 57
Table 3.6 Centrifugal Pump .................................................................................. 57
Table 3.7 Storage Tank ......................................................................................... 58
Table 3.8 Cooling Water Pump............................................................................. 58
Table 3.9 Refrigerant Pump .................................................................................. 59
Table 3.10 MCR Storage Tank ............................................................................. 59
Table 3.11 MCR Compressor ............................................................................... 60
Table 3.12 Water Treatment Pump ....................................................................... 60
Table 3.13 Water Treatment Storage .................................................................... 61
Table 4.1 Instrument Control ................................................................................ 66
Table 6.1 HAZID Parameters in Considering Hazard Effect ............................... 83
Table 6.2 HAZID Parameters in Hazard Frequency ............................................. 83
Table 6.3 HAZID Analysis ................................................................................... 84
Table 6.4 HAZOP Analysis .................................................................................. 90
Table 6.5 Hazard Communication ........................................................................ 95
Table 6.6 PPE ........................................................................................................ 97
Table 6.7 Government standard pramater of waste water in petrochemical industry
............................................................................................................................. 104
Table 7.1 Chemical Engineering Plant Cost Index ............................................. 108
Table 7.2 Estimation Value of CEPCI ................................................................ 109
Table 7.3 Equipment Cost ................................................................................... 111
Table 7.4 Piping and Insulation Cost .................................................................. 113
Table 7.5 Elbow Cost .......................................................................................... 113
Table 7.6 Valve Cost ........................................................................................... 113
Table 7.7 Controller Cost .................................................................................... 114
Table 7.8 Utility Cost .......................................................................................... 114
Table 7.9 Supporting Equipment Cost ................................................................ 115
Table 7.10 Additional Cost ................................................................................. 116
Table 7.11 Site Administrative Cost ................................................................... 116
Table 7.12 Land Preparation Cost ....................................................................... 116
Table 7.13 Building Cost .................................................................................... 117
Table 7.14 Foundation Cost ................................................................................ 117
Table 7.15 Capital Expenditure Breakdown ....................................................... 119
Table 8.1 Raw Material Cost .............................................................................. 121
Table 8.2 Raw Material Cost Overall ................................................................. 121
Table 8.3 Utility Cost in OPEX .......................................................................... 122

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Table 8.4 Number of Operators and Operator Shifting ...................................... 122
Table 8.5 Direct Labour Cost .............................................................................. 123
Table 8.6 Indirect Labour Cost .............................. Error! Bookmark not defined.
Table 8.7 Insurance Cost ..................................................................................... 123
Table 8.8 Safety Protection Cost ......................................................................... 124
Table 8.9 Plant and Payroll Overhead Cost ........................................................ 125
Table 8.10 Plant Overhead .................................................................................. 125
Table 8.11 Engineering and Legal Cost .............................................................. 127
Table 8.12 Communication Service Cost............................................................ 127
Table 8.13 Sales Office Cost............................................................................... 128
Table 8.14 Marketing Cost.................................................................................. 128
Table 8.15 Distribution Cost ............................................................................... 129
Table 8.16 Research and Development Cost ...................................................... 129
Table 8.17 Total Operating Cost ......................................................................... 129
Table 9.1 Depreciation and Salvage Value ......................................................... 134
Table 9.2 NPV ..................................................................................................... 137
Table 9.3 Sensitivity Parameter Determination .................................................. 139
Table 9.4 Fluctuation of Sensitivity Parameter ................................................... 140

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1 CHAPTER 1
BACKGROUND
1.1 Project Background
Plastic is the material which are already known widely in human's life. So
many products are invented from plastic as the raw materials, from simple
products to high technology products. The secretary of Asosiasi Industri Olefin
Aromatik dan Plastik Indonesia (Inaplas), Fajar A.D. Budiyono, explained the
demand of plastic in Indonesia reaches three millions of tonnes in the beginning
of 2015. Recently, plastic that is usually used is synthetic plastic which is based
on petrochemical.
Methanol is one of the substance that can be converted into polyolefin or
plastic. Methanol to Olefin (MTO) converts methanol to olefin such as ethylene
and propylene, then the olefins can be used to produce its polyolefin. Ethylene and
propylene are by far the two largest volume chemicals produced by the
petrochemicals industry. In 2015 about 133 million metric tons of ethylene and
126 million metric tons of propylene were produced worldwide. Global demand
for light olefins (ethylene and propylene) is expected to grow at an annual rate of
5% for propylene and 4% for ethylene. Today the majority of light olefins are
produced by the petrochemicals industry either from pyrolysis (steam cracking) of
naphtha or from fluid catalytic cracking (FCC) of naphtha. The recent dramatic
increase in oil prices is reviving a strong interest in the production of light olefins
from non-petroleum source among which low-cost methanol may play a
significant role. At present time, the technologies for producing light olefins from
methanol is ready for commercialization.

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Figure 1.1 World Ethylene Demand
(source: Global Business Lead Olefins)

Figure 1.2 World Propylene Demand

(source: Global Business Lead Olefins)

1.2 Project Objective

The major objectives of our MTO plant is:
 To produce ethylene and propylene without using petroleum as feed.
 To decrease olefin import in Indonesia

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1.3 Analysis
Raw Material Analysis
To produce ethylene and propylene, we use methanol as raw material. Our
methanol is obtained from PT Kaltim Methanol Industry (KMI) which is located
in the same industrial district. PT KMI produces methanol by utilizing natural gas
from Badak Gas Field. PT KMI produces pure methanol grade AA (99.85%
purity) with a licensed technology by Lurgi-Germany. PT KMI use low-pressure-
synthesis methanol with combined reforming processing technology licensed by
Lurgi to produce methanol, which eventually contributes producing methanol at
low cost.
For Methanol-to-Olefin process, catalyst that we used is SAPO-34.
SAPO-34 has unique pore size, acidicity and geometry that can created more
selective route for methanol conversion to ethylene and propylene. The smaller
pore size for SAPO-34 than ZSM-5, restricts the difussion of heavy hydrocarbons
and favours high selectivity to the desired light olefins. The comparison between
SAPO-34 and HZSM-5 catalyst can be seen in Figure 1.9.

Figure 1.3 Comparison of SAPO-34 and ZSM-5

(Source: http://chemwiki.ucdavis.edu)

Product Analysis
Olefin as product of MTO process composed of ethylene and propylene which can
be separated by deethanizer. Ethylene and propylene are the most widely raw
material used to produce household products beacuse both are an intermediet

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product to produce finished product. Ethylene has derivatives such as
polyethylene, ethylene glycol, styrene, PVC which can be applied for packaging,
agriculture, automotive, custruction, textiles, and electronics. Propylene has
derivatives such as polypropylene and acrilic acid which can be applied for
packaging, textiles, automotive, construction, personal care, etc.

Market and Capacity Analysis

The fundamental things should be formulated in first time to design a
plant, is needs. We design and build a plant to produce some product because
there were any demand of that product. Therefore, we need to analyse demand and
supply of our product.

1.3.3.1 Ethylene and Propylene Supply and Demand Analysis

Table 1.1 Olefin and Polyolefin supply and demand in Indonesia

(Source: nexant)

Table above is about olefin and polyolefin supply and demand in Indonesia
include Ethylene and propylene. The capacity of ethylene is 600 thousand tons in
2010 and do not increase because there is no new plant produce in Indonesia. We
only have PT. Chandra Asri Petrochemicals Tbk which produce 600 thousand
tons/year of ethylene. In the data above, propylene domestic is about 608
thousand tones in 2010 which fulfiled by PT Chandra Asri Petrochemicals Tbk

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and PT. Pertamina. CAP only produce 320 thousand tones/year and PT. Pertamina
imports 288 tones in 2010.
As the demand grow, we calculated the Indonesian Demand of ethylene and
propylene in 2018 using the CAGR method. In 2018, ethylene consumption
CAGR is 0,6% and propylene consumption is 7,2%. The consumption calculation
shown below:
𝐶𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 𝑖𝑛 2018 = 𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 𝑖𝑛 2010 𝑥 10((2020−2010)𝑥 log(𝐶𝐴𝐺𝑅+1))

By the CAGR formula above, we find the consumption in 2020 as below:

Ethylene : 1102 thousand tones
Propylene : 1370 thousand tones

1.3.3.2Production Capacity

Figure 1.4 Share production of ethylene and propylene in Indonesia

(Source: Nexant)

We assume in 2020 there is no new company produce ethylene or propylene

and no enlarging production capacity by PT. Chandra Asri Petrochemical Tbk. So,
we still need to import 502 thousand tones of ethylene and 766 thousand tones of
propylene in 2020.
We have chance to produce ethylene and propylene as much as the import,
but we have to considered the raw material and should do benchmarking with PT.
Chandra Asri Petrochemical Tbk.

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Figure 1.5 Chart of Determining Production Capacity

We find the maximum production of methanol in Kaltim Methanol Industry

(KMI) is 660 thousand tons/year. After we calculate the conversion of methanol
to olefin as ethylene and propylene, we got the percentage of conversion to
ethylene about 20% and 30% to propylene so we need about 2500 – 3000
thousand tones of methanol. The supplier cannot fulfilled our raw material needed
so we have to reconsider the production.
MTO plant in the world is very rare and only in US, Europe, and China.
Most are still at the design stage. SYN Energy Technology Co. Ltd is one of
China MTO plant that produce 600,000 tons/year olefins. PT. Chandra Asri
Produce 100,000 tones/year of ethylene and 240,000 tons/year of propylene.
We find the olefin that produce form MTO process have ratio 1:1,8 of
ethylene : propylene. So we take ethylene as basic calculating and the propylene
will followed.
After considered the raw material stock and benchmarking with other plant
which have same process and product, we decided to use 546,000 tons/year of
methanol as feed of our plant to produce 95,000 tons of ethylene and 147,000 tons
of propylene.

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Location Analysis
To select the location, we have to consider some important factors. The
best location of a plant is the location where the unit cost of production and
distribution process will be low, while the price and volume of sales of
polyethylene and polypropylene products will be able to generate maximum
profits for the company.

Figure 1.6 Location Overview

(Source: www.kie.co.id)
Plant site selection is one of the main factors that determine the success
and survival of a plant. Therefore, we decide to build our plants in Tanjung
Harapan Industrial Estate, East Kalimantan. This is based on some factors. There
are primary and secondary factor.

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Figure 1.7 Location Map
(Source: www.map.google.com)

1) Primary Factor
 Availability of Utilities
In Tanjung Harapan Industrial Estate, communication lines, electricity
infrastructure, and water plus the water treatment unit are already provided.
 Transportation
Tanjung Harapan Industrial District is located in the strategic area of
Bontang, East Kalimantan. Facilities and infrastructure that is provided in the
form of provincial road, village roads and alley, concrete bridges, steel bridges
and wooden bridges are available also and in good condition.
 Labor
Most population in East Kalimantan live in rural areas. This labor availability
is supported by data shown in the Table 1.2.

Table 1.2 East Kalimantan Unemployed Human Resource

No Year Total labor Total Hired Total Not Hired

1 2010 705.694 662.037 43.653

2 2011 767.310 720.700 46.610

3 2012 769.624 734.321 35.393

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4 2013 731.572 693.556 38.016

5 2014 778.813 745.068 33.745

6 2015 755.761 710.014 45.747

(Source: BPS Kalimantan Timur, 2015)

From the table above, there are still some number of unemployed people
in East Kalimantan. So, when our plant is built, we can give job field for them and
help East Kalimantan to develop their area.

2) Secondary Factor
 Government policy
Specified location for the construction of this plant is in the industrial area.
Therefore permits the establishment of the industry has been owned by the
manager of the industrial area.
 Physical Aspects of Locations
Based on research conducted by the Directorate of Forestry program on
climate East Kalimantan has a climate type Af which is 1-6 months dry and 1-6
months wet with temperatures minimum of 26.3oC, maximum 30.8oC. There isn’t
any problem with land condition because it is an industrial district, so everything
is ready to build.

1.4 Key Challenge

In developing this plant project there are some challenges that we have to
face. The challenges are divided into three groups which are technical, economic,
and marketing.

Technical Aspect
Technical challenge is very near to us. Our main process is only using single
process which is MTO. Even though it is easy an simple process, we are worried
about it. Another olefin plant in Indonesia have a very complicated structure and
wide plant area with almost same in production capacity.

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Methanol base production is to risk in Indonesia. High production methanol
in Indonesia is only by PT KMI. If our main supplier have problem in production,
it will effect to our production too.
Economical Aspect
Our raw material is methanol. The price of methanol will change in
conjunction with oil price. Now, the oil price is low and it was decreased since the
begining of this year. So, methanol price is low too and this track record will be
use as our base to determine the price of methanol in 2020. But, as we know the
price of oil is very fluctiative. Many issue about increasing of oil price in 2018. So
it will be our most economic challenge.
In technical aspect and marketing challenges, we discuss about raw material
and products supply. We maybe import methanol from china if some problem
happen to our supplier. So, the operating cost will increase.
Marketing Aspect
Ethylene and propylene as intermediet product is needed by other plant as
raw material which means we are not connected to people directly. This made us
should sent our products to particular companies which want to use our product.
Unfotunately, those company located so far which is in Java. So we must spent
high cost for shipping each year.
The other marketing chalange is convince the customer. since we are new
plant, it is difficult to convince costumer for using our products than others. the
spcification is almost same so do the price.

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2 CHAPTER 2
PROCESS SYNTHESIS

2.1 Black Box

The general process to get product by indirect liquefaction process for free-
to-liquid (XTL) conversion can be seen on the Figure 2.1.

Feed to Syngas to Syncrude to

Feed Product
Syngas Syncrude Product

Figure 2.1 Overall Indirect Liquefaction Process for Free-to-Liquids (XTL) Conversion
(Source: Klerk, Arno de. 2011. Fischer-Tropsch Refining, First Edition. USA: Wiley-VCH Verlag
GmbH & Co. KGaA)
The explanation of Figure 2.1 is as follows. The type of feed or raw material that
can be converted in the first step is not restricted to natural gas, but can also be
coal, biomass, waste, oil shale, or oils sands. The raw material limits the
technology selection for the next step, feed-to-syngas step, but not for the
subsequent steps. For example, if the raw material is coal, the feed-to-syngas
conversion technology is gasification and if the raw material is natural gas, the
feed-to-syngas conversion technology is reforming. This step is an energy-
intensive operation and also the most expensive step in indirect liquefaction.
Once the raw material converted into syngas and the syngas has been
cleaned and conditioned, by whatever combination of technology, the syngas can
be converted into syncrude. Some syngas-to-syncrude technologies are Fischer-
Tropsch (FT), syngas-to-methanol, and syngas-to-oxygenates. The next process is
syncrude-to-product conversion which can be classified into three level
conversion, i.e. upgrading (result intermediate product), partial refining (result
intermediate and final product), and stand-alone refining (result final product).
The final product can be either fuels or chemicals.
The goal of our plant is to convert methanol into ethylene and propylene as
shown as on the Figure 2.2. So, in this paper we only discuss ethylene and
propylene

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Exhaust Gas

Propylene and
Methanol Black Box
Ethylene

By Product

Figure 2.2 Black Box Production of Ethylene and Propylene

2.2 Alternative Processes

The MTO technologies which common use in the world is Lurgi, Haldor
Topsoe, UOP/Hydro and ExxonMobil. The explanation of the technologies are
below:
a) Lurgi
Lurgi’s MTP process is based on an efficient combination of the most
suitable reactor system and a very selective an stable zeolite-based catalyst. It
provides maximum propylene selectivity, has a low coking tendency, a very low
propane yield and also limited by-product formation. This in turn leads to a
simplified purification scheme that requires only a reduced cold box system as
compared to on-spec ethylene/propylene separation. The simplified process
diagram will be shown on Figure 2.3

Figure 2.3 Lurgi’s MTO Process

(Source: Wurzel, Thomas. 2006. Lurgi MegaMethanol Technology)

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b) Haldor Topsoe
This technology was developed by Haldor Topsoe with the intent of
minimizing capital and energy cost by integrating methanol synthesis with MT
step into a single loop, without isolation of methanol as an intermediate. This
process involves modified catalyst and condition so that the system pressure
levels out and separate compression steps are not required. This approach results
in only one recycle loop which goes from the gasoline synthesis step back to the
MeOH/DME synthesis step. The olefin in this process is mainly in gasoline range.

Figure 2.4 Haldor Topsoe MTO Process

(Source: Dahl, Per Juul, et.al., Haldor Topsoe)

c) UOP/Hydro
The MTO process utilizes a fluidized bed reactor that allow continuous
movement of a portion of used catalyst to a separate regeneration vessel for
removal of coke deposits by burning with air. Thus, a constant catalyst activity
and product composition can be maintained in the MTO reactor. The UOP/Hydro
MTO process offers a wide range of flexibility for varying the propylene product
ratio by adjusting the operation severity. The schematic process is show on Figure
2.5.

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Figure 2.5 UOP/Hydro MTO Process

(Source: Anonym. 2013. Hydrocarbon Engineering)

d) Exxon/Mobil
Along with MTG (Methanol to Gasoline) process, Mobil developed several
other processes for converting methanol to hydrocarbon based on zeolite catalyst.
Since light olefins are intermediates in the MTG process, it is possible to optimize
the MTO synthesis. Higher reaction temperatures (~5000C), lower pressures, and
lower catalyst (acidity) activity favors light olefin production (Keil, 1999).

Figure 2.6 ExxonMobil Process

(Source: Spath, P.L., et. al. 2003. Preliminary Screening – Technical Report)

2.3 Process Selection

Process selection is done to determine the process that will be used in our
plant to produce polypropylene from methanol. The steps of process selection are
determining parameter to compare some alternative processes, determining

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scoring parameter consist of weight and rank for each parameter, and doing
scoring based on scoring parameter where the process with the highest score will
be chosen for production process in our plant.
In MTO process, there are four technologies which has been use in many
company in the world. There are Lurgi Mega Methanol, Haldor Topsoe,
UOP/Hydro Methanol synthesis and Exxon Mobil. The MTO process will be
scored with these parameters below to choose the most feasible to be built up.
1. Operating Condition Suitability. The Temperature and Pressure for the
reactors that uses whether sensible or not.
2. Yield of Process. The amount of propylene production to fulfill the demand
3. Capacities. Capacities determine the plant’s payback period. This aspect is
also the feasibility, the plant feasible to build or not.
4. Field Experience. Field Experience represent that the technology is widely
used, developed, and safety.
5. Manufacturing. Long term and difficultness in manufacturing a technology
affects the plant benefit even cause the plant has a long payback period.
After mention the criteria with their scoring percentage that will be used to
evaluate some qualify concept, now arrange the “concept scoring” matrix with
value of scoring the process condition in Table 2.1 based on parameters in Table
2.2

Table 2.1 MTO Comparison

Haldor Topsoe
Parameter Lurgi MTP[a] UOP/Hydro[a] ExxonMobil[c]
Two Step[a], [b]
Operating T 250 – 7000C 200 – 2500C 350 – 5250C 350 – 5000C
Condition P 10 - 40 bar 50 – 60 bar 30 – 50 bar 40 – 80 bar
Yield 54% 46% 26 – 32% 16 – 18%
Capacities ~2500 MTPD ~7000 MTPD ~2000 MTPD ~5000 MTPD
Field Experience Common More Common Common Rare
Manufacturing 3 4 3 3
Source:[a] Control Structure Design For Methanol Process, Trendhelm [b] Proven Autothermal
Reforming Technology, Dahl, P. J., et. al [c] Chemical Process Technology, Mouljin, et. al.

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Table 2.2 MTO Scoring Parameter

Rate
Weight
No Parameter
(%)
1 2 3 4 5

Operating
1 15 High Risk Risky Safe enough Safe High Safety
Condition
2 Yield 25 < 30% 30 – 40% 40 – 50% 50 – 60% >60%
2000 – 3000 3000 – 4000 4000 – 5000 > 4000
3 Capacity 25 < 2000 MTPD
MTPD MTPD MTPD MTPD
More
4 Field Experience 15 Almost rare Rare Common Mainly use
Common
Long Fastest
Very Long Fast Payback
5 Manufacturing 20 Payback Enough Payback
Payback Period Period
Period Period

Table 2.3 MTO Scoring and Ranking

UOP/ Exxon
Weight Haldor Topsoe Lurgi
No Criteria Hydro Mobil
(%)
Rating Score Rating Score Rating Score Rating Score

1 Operating Condition 15 3 0.45 4 0.6 3 0.45 3 0.45

2 Yield 25 3 0.75 2 0.5 2 0.5 1 0.25

3 Capcities 25 3 0.75 4 1 2 0.5 2 0.5

4 Field Experience 15 3 0.45 4 0.6 3 0.45 2 0.3

5 Manufacturing 20 3 0.6 3 0.6 4 0.8 3 0.6

Total 3 3.3 2.7 2.1

Rank 2 1 3 4

2.4 Process Description

Based on the selection process result, then we synthesize the process. We
adopt from Lurgi’s process with some modification in heat exchanger network.
Overall process description is methanol from storage tank is vaporized,
superheated and fed to the MTO reactor using the reactor product. Because the
product from reactor has high temperature. This high temperature is caused by the
reaction inside the reactor and catalyst needed. The catalyst features high activity
and high selectivity achieving an almost thermodynamic equilibrium. The reaction
is exothermic and the reaction equilibrium is nearly independent of the operating
pressure. In the MTP reactor the MeOH converted to olefins on zeolite-based
catalyst. The reaction is describe by the following summary below:

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n C2H5OH  CnH2n + nH2O n = 2,…, 8

about 95% of the carbon from the fresh feed reacts to olefins with conversion for
ethylene is 37% and propylene is 58%.
As we mention above, high selectivity towards propylene requires operating
temperature around 4500C over the catalyst beds and an operating pressure of 0.15
MPa. One of MTO side product is water. Because another hydrocarbon is very
small so it can be neglected. The intermediate reaction product from each catalyst
bed is cooled and before entering the separation process. The water then separated
to utilization water while the hydrocarbon vapour product is fed to the compressor
system. Hydrocarbons is compressed to about 1 MPa by multi stage centrifugal
compressor. This goal is to increase the boiling point of the ethylene and
propylene, so it can reduce the duty of reboiler and condenser in distillation
column. The distillation unit called deethanizer, separates light boiling
components C3, from C3+ hydrocarbons. This system is using cryogenic
distillation to separate the ethylene and propylene with MCR as its’ refrigerant.

2.5 Block Flow Diagram

The block flow diagram as previous explanation can be seen on Figure 2.7
below:
Ethylene
Olefin Olefin
Water Water
Reacting Methanol Water
Methanol Cooling Compressor Deethanizer
to Olefin Separation

Propylene

Figure 2.7 Block Flow Diagram

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2.6 Process Flow Diagram

C-101 C-102 C-103 C-104 E-101 E-102 E-103 E-104 E-105 E-106
Methanol Olefin 1st Stage Olefin 2nd Stage Olefin MEthanol Quenching Olefin After Condenser Ethylene Bottom Product
Compressor Compressor Compressor Compressor Heater System Cooler Condenser Reboiler

R-101 A/B V-101 V-102 V-103 P-101

MTO multi Packed Bed with Water Deethanizer Top Product Reflux Pump
Inter-stage Cooler Reactor Separator Separator

To Flare

To Cooling Water System

To Water Treatment Plant

19 16

Refrigerant Utility E-105

Cooling Water V-103

17

8 9 10 11 12
13

P-101
V-102 Ethylene to Storage
5 C-103 C-104 E-103 E-104 ESDV 102

C-102
V-101
E-106
18
R-101 14
A/B

Propylene To Storage
1 2 3

Methanol 15

ESDV 101
E-101 C-101
7
6

Refrigerant System
E-102
Steam

Mass Flow Rate (ton/day) PROCESS FLOW DIAGRAM

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
Methanol 1669 1669 1669 60.5847 60.5847 60.5847 60.5847 0.012429 0.012429 0.012429 0.012429 0.012429 0 0 2.34425 2.34425 0 0 0
Propylene 0 0 0 234.1607 234.1607 234.1607 234.1607 371.2306 371.2306 371.2306 371.2306 371.2306 0.02875 441.659 0 0 0 0 0 PRELIMINARY DESIGN OF
METHANOL TO OLEFIN PLANT
Ethylene 0 0 0 223.9798 223.9798 223.9798 223.9798 355.2298 355.2298 355.2298 355.2298 355.2298 287.385 0 0 0 0 0 0 CHEMICAL ENGINEERING
AFTER HEAT EXCHANGER
ENGINEERING FACULTY
Water 0 0 0 1150.275 1150.275 1150.275 1150.275 4.627132 4.627132 4.627132 4.627132 4.627132 0.08625 2.04102 935.3558 935.3558 28800 28800 28800 UNIVERSITAS INDONESIA
T('C) 25 40.91 164.3 454.8 567.8 109.7 50 5.793 65.54 141.7 50 21.19 -52.46 23.16 5.793 15.31 30.01 45.57 46.58 SIZE FSCM NO DWG NO REV
PLANT DESIGN COURSE
P(kPa) 101 32.35 150 150 250 215 146.6 141.6 374 1200 1131 1062 990 1100 141.6 107.1 200 165.5 131.1
Mass Flow 1669 1669 1669 1669 1669 1669 1669 731.1 731.1 731.1 731.1 731.1 287.5 443.7 937.7 937.7 28800 28800 28800 GROUP 6 SCALE N/A SHEET 1 OF 1

Figure 2.8 PFD MTO Plant

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2.7 Mass and Energy Balance

Mass Balance
2.7.1.1 Overall Mass Balance
Overall mass balance equation is
In – Out + Generation – Consumption = Accumulation
Where there is not any generation, consumption and accumulation. So,
the overall mass balance will be:
In – Out + Generation = 0
In + Generation = Out
1669 ton/day + Generation = 1668.9 ton/day
There is a mass loss around 0.1 ton/day. It may be occur because of shear strees
along the pipe and process.

2.7.1.2 Mass Balance per Unit Operation

a. Reactor
The main goal of this equipment is to convert the methanol into olefins and
water. From the journal, the conversion of propylene will be 58%
4

R-101
A/B

ESDV 101

Figure 2.9 Reactor Mass Balance

Table 2.4 Reactor R-101 Mass Balance

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R-101 A/B
Mass Flow Rate (ton/day)
Component In Out
Stream 3 Stream 4
Methanol 1669 60.5847
Propylene 0 234.1607
Ethylene 0 223.9798
Water 0 1150.275
Temp (C) 164.3 454.8
Press. (kPa) 150 150
Mass Flow 1669 1669

b. Separator
This equipment is to separate the condensed water from olefins
8

V-101

15

Figure 2.10 Separator Mass Balance

Table 2.5 Separator V-101 Mass Balance

V-101
Mass Flow Rate (ton/day)
Component In Out
Stream 7 Stream 8 Stream 15
Methanol 60.5847 0.012429 2.34425
Propylene 234.1607 371.2306 0
Ethylene 223.9798 355.2298 0
Water 1150.275 4.627132 935.3558
Temp. (C) 50 5.793 5.793
Press. (kPa) 146.6 141.6 141.6
Mass Flow 1669 731.1 937.7

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c. Distillation Column
This column is to separate the ethylene and propylene
E-105

V-103

12
13

P-101
V-102 Ethylene to Storage
ESDV 102

E-106
14

Propylene To Storage

Figure 2.11 Distillation Mass Balance

Table 2.6 Distillation Mass Balance

V-102
Mass Flow Rate (ton/day)
Component In Out
Stream 12 Stream 13 Stream 14
Methanol 0.012429 0 0
Propylene 371.2306 0.02875 441.659
Ethylene 355.2298 287.385 0
Water 4.627132 0.08625 2.04102
Temp. (C) 21.19 -52.46 23.16
Press. (kPa) 1062 990 1100
Mass Flow 731.1 287.5 443.7

d. Heat Exchanger
This equipment is to exchange heat between fluid. In this plant there are four
heat exchanger. The heat exchanger mass balance can be seen on Table 2.7
until Table 2.10
Table 2.7 E-101 Mass Balance

E-101
Mass Flow Rate (ton/day)
Component In Out
Stream 1 Stream 5 Stream 2 Stream 6
Methanol 1 60.5847 1 60.5847
Propylene 1669 234.1607 1669 234.1607
Ethylene 0 223.9798 0 223.9798
Water 0 1150.275 0 1150.275
Temp. (C) 25 567.8 40.91 109.7
Press. (kPa) 101 250 32.35 215
Mass Flow 0 1669 0 1669

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Table 2.8 E-102 Mass Balance

E-102
Mass Flow Rate (ton/day)
Component In Out
Stream 6 Stream 7
Methanol 60.5847 60.5847
Propylene 234.1607 234.1607
Ethylene 223.9798 223.9798
Water 1150.275 1150.275
Temp. (C) 109.7 50
Press. (kPa) 215 146.6
Mass Flow 1669 1669

Table 2.9 E-103 Mass Balance

E-103
Mass Flow Rate (ton/day)
Component In Out
Stream 10 Stream 11
Methanol 0.012429 0.012429
Propylene 371.2306 371.2306
Ethylene 355.2298 355.2298
Water 4.627132 4.627132
Temp. (C) 141.7 50
Press. (kPa) 1200 1131
Mass Flow 731.1 731.1

Table 2.10 E-104 Mass Balance

E-104
Mass Flow Rate (ton/day)
Component In Out
Stream 11 Stream 12
Methanol 0.012429 0.012429
Propylene 371.2306 371.2306
Ethylene 355.2298 355.2298
Water 4.627132 4.627132
Temp. (C) 50 21.19
Press. (kPa) 1131 1062
Mass Flow 731.1 731.1

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e. Compressor
This equipment is to compress the vapor pressure. In our plant, we use four
compressors for main process. The mass balance can be seen on Table 2.11
until Table 2.14 below
Table 2.11 C-101 Mass Balance

C-101
Mass Flow Rate (ton/day)
Component In Out
Stream 2 Stream 3
Methanol 0.012429 0.012429
Propylene 371.2306 371.2306
Ethylene 355.2298 355.2298
Water 4.627132 4.627132
Temp. (C) 40.91 164.3
Press. (kPa) 32.35 150
Mass Flow 731.1 731.1
Table 2.12 C-102 Mass Balance

C-102
Mass Flow Rate (ton/day)
Component In Out
Stream 4 Stream 5
Methanol 60.5847 60.5847
Propylene 234.1607 234.1607
Ethylene 223.9798 223.9798
Water 1150.275 1150.275
Temp. (C) 454.8 567.8
Press. (kPa) 150 250
Mass Flow 1669 1669
Table 2.13 C-103 Mass Balance

C-103
Mass Flow Rate (ton/day)
Component In Out
Stream 8 Stream 9
Methanol 0.012429 0.012429
Propylene 371.2306 371.2306
Ethylene 355.2298 355.2298
Water 4.627132 4.627132
Temp. (C) 5.793 65.54
Press. (kPa) 141.6 374
Mass Flow 731.1 731.1

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Table 2.14 C-104 Mass Balance

C-104
Mass Flow Rate (ton/day)
Component In Out
Stream 9 Stream 10
Methanol 0.012429 0.012429
Propylene 371.2306 371.2306
Ethylene 355.2298 355.2298
Water 4.627132 4.627132
Temp. (C) 65.54 141.7
Press. (kPa) 374 1200
Mass Flow 731.1 731.1

Energy Balance
2.7.2.1 Overall Energy Balance
Total energy balance is calculated by both of the stream heat flow and
equipment heat flow.
Table 2.15 Total Energy Balance
Total Stream Heat Flow -6.15E+10
Total Equipment Heat Flow 7.42E+14
Total Energy Balance 7.42E+14

2.7.2.2 Energy Balance per Unit Operation

a. Stream Heat Flow
Table 2.16 Stream Energy Balance
Heat Flow
Stream
(kJ/h)
1 -5.25E+08
2 -4.35E+08
3 -4.22E+08
4 -4.22E+08
5 -4.09E+08
6 -4.98E+08
7 -5.79E+08
8 2.88E+07
9 3.15E+07
10 3.55E+07
11 3.03E+07
12 2.87E+07
13 1.59E+07

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Table 2.16 Stream Energy Balance (Cont’d)

Heat Flow
Stream
(kJ/h)
14 1.43E+06
15 -6.23E+08
16 -6.21E+08
17 -1.90E+10
18 -1.90E+10
19 -1.90E+10

b. Equipment Duty
Table 2.17 Equipment Duty
Equipment Duty (kJ/h)
R-101 1.00E+03
V-101 1.50E+07
K-101 1.32E+07
K-102 1.34E+07
K-103 2.75E+06
K-104 3.97E+06
E-101 8.95E+07
E-102 8.05E+07
E-103 5.19E+06
E-104 1.60E+06
Condenser 3.71E+14
Reboiler -3.71E+14

2.8 Plant Efficiency

Mass Efficiency
𝑚𝑎𝑠𝑠 𝑝𝑟𝑜𝑑𝑢𝑐𝑡
%𝑒𝑓𝑓𝑖𝑐𝑖𝑒𝑛𝑐𝑦 = × 100%
𝑚𝑎𝑠𝑠 𝑖𝑛𝑝𝑢𝑡
(441.659 + 287.385)𝑡𝑜𝑛/𝑑𝑎𝑦
%𝑒𝑓𝑓𝑖𝑐𝑖𝑒𝑛𝑐𝑦 = × 100% = 43.68%
1669 𝑡𝑜𝑛/𝑑𝑎𝑦

Energy Efficiency
ℎ𝑒𝑎𝑡 𝑜𝑢𝑡𝑝𝑢𝑡
%𝑒𝑓𝑓𝑖𝑐𝑖𝑒𝑛𝑐𝑦 = × 100%
ℎ𝑒𝑎𝑡 𝑖𝑛𝑝𝑢𝑡
441.66 × (1.43 × 106 ) + 287.385 × (1.59 × 107 ) + 935 × (−4.96 × 108 )
= | | × 100%
1669 × (−5.25 × 108 )
%𝑒𝑓𝑓𝑖𝑐𝑖𝑒𝑛𝑐𝑦 = 53.52%

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2.9 Utility Balance

Steam Generation
Beside we produce olefins, we also produce large amount of water. In our
plant, the bottom product from separator is 937 mixture tons per day. With this
condition, we would like to treatment the water that we produce into electricity
generator by convert the water into steam. However, the water still contain
methanol. So, this unit is needed to remove methanol content using activated
sludge.
Sewage sludge is a solid, semisolid, or liquid muddy-like residue that
results after plain old sewage (human and other waste from households and
industries) is treated at a sewage plant. After being treated, the sewage sludge may
be spread on non-organic agricultural land as a fertilizer or dust suppressant. It
treated in aeration tank (TK-201) to keep the microorganism still alive. The raw
water then fed into the aeration tank to process the methanol from water. The
water then fed into the clarifier to settling the suspended solid that generated. The
clean water then will be flooding outside the clarifier (TK-202) and sent into the
clean water storage tank.
After the water treated, then it fed into the boiler (E-201) which will
convert water into high pressure steam, this steam then we use to generate
electricity in our plant. The process flow diagram can be seen on Figure 2.12 and
the mass balance will can be seen on Table 2.18 until Table 2.21 below.

HP Steam

TK-203 E-201

Raw Water

TK-201 TK-202

Waste Sludge

Figure 2.12 Steam Generation Flow Diagram

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Table 2.18 Aeration Tank Mass Balance

TK-201
Mass Flow Rate (ton/day)
Component
In Out
Methanol 2.34425 2.34425
Propylene 0 0
Ethylene 0 0
Water 935.3558 935.3558
Temp. (C) 5.793 ambient
Press. (kPa) 141.6 ambient
Mass Flow 937.7 937.7

Table 2.19 Clarifier Mass Balance

TK-202
Mass Flow Rate (ton/day)
Component Out Out
In
(Water Treated) (Waste Water)
Methanol 2.34425 0 2.34425
Propylene 0 0 0
Ethylene 0 0 0
Water 935.3558 935.3558 0
Temp. (C) ambient ambient ambient
Press. (kPa) ambient ambient ambient
Mass Flow 937.7 937.7 2.34425

Table 2.20 Water Storage Tank Mass Balance

TK-203
Component Mass Flow Rate (ton/day)
In Out
Methanol 0 0
Propylene 0 0
Ethylene 0 0
Water 935.3558 935.3558
Temp. (C) ambient ambient
Press. (kPa) ambient ambient
Mass Flow 937.7 937.7

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Table 2.21 Boiler Mass Balance

E-201
Mass Flow Rate (ton/day)
Component
In Out
Methanol 0 0
Propylene 0 0
Ethylene 0 0
Water 935.3558 935.3558
Table 2.21 Boiler Mass Balance

E-201
Mass Flow Rate (ton/day)
Component
In Out
Temp. (C) Ambient 450
Press. (kPa) ambient 6129
Mass Flow 935.3558 935.3558

Fuel
Boiler is a closed vessel which combustion heat is streamed to water until
it becomes heated water or steam in the form of energy or work. Based on the fuel
used, boiler can be categorized as follows:
1. Solid Fuel
The price of raw materials combustion are relatively cheaper compared to
boiler that using liquid fuel and electricity. The value efficiency of this type is
better when compared with electric boiler types. The warming caused by the
burning of mixing solid fuels (coal, rejected product, municipal solid waste,
wood) with oxygen and a heat source.
2. Oil Fuel
The price of raw materials is the most expensive compared to another
combustion of all types. The value of efficiency of this type have been better if
compared to solid fuel and electricity boiler. The heating caused by the burning of
mixture of liquid fuels (diesel, IDO, residues, kerosene) with oxygen and a heat
source.
3. Gaseous Fuel
The price of raw materials burning is the cheapest compared to all types of
boilers. The value of efficiency of this type is better when compared with all types
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of boiler based on fuel. Burning caused by the combustion of fuel gas (LNG) with
oxygen and a heat source.
4. Electric Fuel
Heating raw material price is relatively cheaper compared to boilers that use
liquid fuels. The value of efficiency of this type is considered to low if it is
compared to all types of boilers based on fuel. The warming caused by a power
source (electricity) that supplies source of heat. Then we decided to use gaseous
fuel (LNG) since the price is the cheapest but the efficiency is better than others.
The LNG needs per day could be calculated by the following equation:
𝑄
𝑚=
𝐻𝑉 𝑥 𝜂
where:
m = mass flow of the fuel
Q = heat flow
HV = heating value of LNG
η = boiler efficiency
Based on the calculation of required steam, the heat flow is 7,952,256 MJ. The
efficiency of boiler is estimated on 60% and heating value of LNG is 45MJ/kg.
Thus:
7,952,256 MJ
𝑚= = 2,945.28 𝑘𝑔
45 MJ/kg 𝑥 60%
So, the LNG required is 2,945.28 kg per day.

Power Generation
The electricity for our plant is generated by steam turbine generator. It is
located in plant 2 too. After the HP steam is generated by the boiler, then it use to
generate electricity. The block flow diagram is shown on Figure 2.13 and the
mass balance can be seen on Table 2.22 and Table 2.23

Water Treated Waste Water

T-201 T-202

Figure 2.13 Power Plant Flow Diagram

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Table 2.22 HP Steam Turbine generator Mass Balance

T-201
Mass Flow Rate (ton/day)
Component
In Out
Methanol 0 0
Propylene 0 0
Ethylene 0 0
Water 935.3558 935.3558
Table 2.22 HP Steam Turbine generator Mass Balance (Cont’)

T-201
Mass Flow Rate
Component (ton/day)
In Out
Temp. (C) 450 250
Press. (kPa) 6129 1007
Mass Flow 935.3558 935.3558
Table 2.23 MP Steam Turbine generator Mass Balance

T-201
Mass Flow Rate (ton/day)
Component
In Out
Methanol 0 0
Propylene 0 0
Ethylene 0 0
Water 935.3558 935.3558
Temp. (C) 450 250
Press. (kPa) 6129 1007
Mass Flow 935.3558 935.3558

Refrigerant
The role of refrigerant utility is to supply refrigerant in this plant, consist
of MCR (Multi Component Refrigerant), propane, and cooling water with sea
water medium. Refrigeration system used is cascade system (multiple
refrigeration system) because the process runs at very low temperature. The
refrigerant that will be used is hydrocarbon refrigerant, i.e. a natural refrigerant as
the substitute alternative of synthetic refrigerant. The common hydrocarbon used
as refrigerant are propane (R – 290), isobuthane (R – 600a), and n-buthane (R –
600). The usual mixture that used as refrigerant are R – 290/600a, R – 290/600,
and R – 290/R – 600/R – 600a.

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Hydrocarbon refrigerant give higher coefficient of performance (C.O.P)

than synthetic refrigerant due to some factors as follow.
a. Pressure ratio (comparison between discharge and suction pressure of
compressor) is smaller than synthetic refrigerant pressure ratio. It will be
effected small work of compressor so it can be saving energy consumption.
b. Latent heat and refrigeration effect is bigger than synthetic refrigerant. This
characteristic resulted in refrigeration capacity and cooling rate is bigger than
synthetic refrigerant.
c. Density of hydrocarbon is smaller than synthetic refrigerant. It will be total
consumption of hydrocarbon is fewer, approximately 30 % from weight of
synthetic refrigeration consumption for the same volume.
d. Smaller viscosity from synthetic refrigerant.
Refrigerant that will be used in this system is MCR (Multi Component
Refrigerant). The composition of MCR (Multi Component Refrigerant) is N2
(Nitrogen) 5.39 %, CH4 (Methane) 45.16 %, C2H6 (Ethane) 41.16 %, and C3H8
(Propane) 10.09 %. MCR will be used to cool at –76.81oC. Propane refrigerant is
used to cool MCR. Meanwhile, propane refrigerant will be cooled by cooling
water. The MCR cycle process in refrigeration unit explain as follow.
a. MCR from deethanizer unit at temperature – 65.84oC and pressure 2 atm will
be enter first exchanger to cooled propane until temperature -30oC recycle.
This heat exchange will make the temperature MCR become -47 oC and
propane become -30oC.
b. MCR will be pressed until 15 atm in first compressor until temperatur rise
become 88.47oC. Then, MCR will be cooled in second heat exchanger with
cooling water at temperature 25oC and pressure 6 atm. The effect of
refrigeration system is MCR temperature fall of until 35oC.
c. Come out from second heat exchanger, MCR will be pressed again in second
compressor until pressure 40 atm and temperature rise become 112.8oC.
d. Flow of MCR will be cooled again with cooling water until temperature 30oC
in third heat exchanger. Flow come out from third heat exchanger will be
condensed in fourth heat exchanger with propane refrigerant at temperature
until 3oC.

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e. MCR come out from fourth heat exchanger and will be flashed at pressure
until 2 atm. The effect of this flashing process, temperature of MCR fall of
until -76.81oC. MCR at temperature -76.81 oC and pressure 2 atm will enter
condenser in cryogenic distillation and cooled ethylene stream.
The propane cycle process in refrigeration unit explain as follow.
a. Propane refrigerant that have already been used for process in pressure 6 atm
and temperature -30oC and liquid phase.
b. This flow will enter fourth exchanger to cooled MCR. The effect is
temperature rise become 3.8oC. Then propane will be pressed until the
pressure become 20 atm
c. The effect of pressure process is temperature rise become 70.47oC, then
propane will be condensed by cooling water in fifth heat exchanger until
temperature become 56.19oC
d. Propane that have already been condensed then its pressure will be generated
at pressure until 6 atm again. The effect of this expansion process is
temperature fall of become 11.35oC.
This flow will be cooled with flow from first heat exchanger and will be used to
refrigeration process again.
Table 2.24 Refrigerant Equipment Selection and Description
No Equipment Code Function
1 st
1 Heat Exchanger E-301 To cool propane refrigerant with MCR recycle
2 nd
2 Heat Exchanger E-302 To cool MCR with cooling water medium
3 3rd Heat Exchanger E-303 To cool MCR with cooling water medium
4 4th Heat Exchanger E-303 To cool MCR with propane refrigerant
To cool propane refrigerant with cooling water
5 5th Heat Exchanger E-304
medium
6 1st Compressor K-301 To increase MCR’s pressure
7 nd
2 Compressor K-302 To increase MCR’s pressure
8 rd
3 Compressor K-303 To increase propane’s pressure
9 st
1 Expander T-301 To flash MCR pressure
10 nd
2 Expander T-302 To flash propane pressure

(Source: Authors’s Personal Data, 2015)

In this MTO plant, refrigerant used as cooling media in condenser of deethanizer column.
Based on the simulation and sizing result, the needed of refrigerant and cooling media
needed in utility plant can be seen on the Table 2.25

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Table 2.25 Refrigerant Requirement

Refrigerant or Refrigerant Requirement
No
Cooling Media Category (ton/day)
1 Multi Component Refrigerant 2,326.76
2 Propane Refrigerant 326.73
3 Cooling Water 3,741.33
(Source: Authors’s Personal Data, 2015)
The refrigerant cycle PFD can be seen on the Figure 2.14 and mass balance can be seen
on Table 2.26 until Table 2.35

Figure 2.14 Refrigerant Cycle

(Source: Authors’s Personal Data, 2015)

Table 2.26 1st HE Mass Balance

E-301
Mass Flow Rate (ton/day)
Component In Out
MCR Stream Propane Stream MCR Stream Propane Stream
MCR 2,326.76 0 2,326.76 0
Propane 0 326.73 0 326.73
Water 0 0 0 0
Temp. (C) -65.84 11.35 -47 -30
Press. (kPa) 202.65 607.95 202.65 607.95
Mass Flow 2,326.76 326.73 2,326.76 326.73

Table 2.27 2nd HE Mass Balance

E-302
Mass Flow Rate (ton/day)
Component In Out
MCR Stream Cooling Water Stream MCR Stream Cooling Water Stream
MCR 2,326.76 0 2,326.76 0
Propane 0 0 0 0
Water 0 3,741.33 0 3,741.33
Temp. (C) 88.47 25 35 42
Press. (kPa) 1519.88 607.95 1519.88 607.95
Mass Flow 2,326.76 3,741.33 2,326.76 3,741.33

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Table 2.28 3rd HE Mass Balance

E-303
Mass Flow Rate (ton/day)
In Out
Component
MCR Cooling Water MCR Cooling Water
Stream Stream Stream Stream
MCR 2,326.76 0 2,326.76 0
Propane 0 0 0 0
Table 2.28 3rd HE Mass Balance

E-303
Mass Flow Rate (ton/day)
In Out
Component
MCR Cooling Water MCR Cooling Water
Stream Stream Stream Stream
Water 0 3,741.33 0 3,741.33
Temp. (C) 112.8 25 30 40
Press. (kPa) 4053 607.95 4053 607.95
Mass Flow 2,326.76 3,741.33 2,326.76 3,741.33
Table 2.29 4th HE Mass Balance

E-304
Mass Flow Rate (ton/day)
Component In Out
MCR Stream Propane Stream MCR Stream Propane Stream
MCR 2,326.76 0 2,326.76 0
Propane 0 326.73 0 326.73
Water 0 0 0 0
Temp. (C) 30 -30 3 3.8
Press. (kPa) 4053 607.95 4053 607.95
Mass Flow 2,326.76 326.73 2,326.76 326.73
Table 2.30 5th Mass Balance

E-305
Mass Flow Rate (ton/day)
In Out
Component
Propane Cooling Water Propane Cooling Water
Stream Stream Stream Stream
MCR 0 0 0 0
Propane 326.73 0 326.73 0
Water 0 3,741.33 0 3,741.33
Temp. (C) 70.47 25 56.19 48
Press. (kPa) 2026.25 607.95 202.25 607.95
Mass Flow 326.73 3,741.33 326.73 3,741.33

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Table 2.31 1st Compressor Mass Balance

K-301
Mass Flow Rate (ton/day)
Component
In Out
MCR 2,326.76 2,326.76
Propane 0 0
Water 0 0
Temp. (C) -47 88.47
Press. (kPa) 202.65 1519.88
Mass Flow 2,326.76 2,326.76

Table 2.32 2nd Compressor Mass Balance

K-302
Mass Flow Rate (ton/day)
Component
In Out
MCR 2,326.76 2,326.76
Propane 0 0
Water 0 0
Temp. (C) 35 112.8
Press. (kPa) 1519.88 4053
Mass Flow 2,326.76 2,326.76
Table 2.33 3rd Compressor Mass Balance

K-303
Mass Flow Rate (ton/day)
Component
In Out
MCR 0 0
Propane 326.73 326.73
Water 0 0
Temp. (C) 3.8 70.47
Press. (kPa) 607.95 2026.25
Mass Flow 326.73 326.73
Table 2.34 1st Expander Mass Balance

T-301
Mass Flow Rate (ton/day)
Component
In Out
MCR 2,326.76 2,326.76
Propane 0 0
Water 0 0
Temp. (C) 3 -76.81
Press. (kPa) 4053 202.65
Mass Flow 2,326.76 2,326.76

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Table 2.35 2nd Expander Mass Balance

T-302
Mass Flow Rate (ton/day)
Component
In Out
MCR 0 0
Propane 326.73 326.73
Water 0 0
Temp. (C) 56.19 11.35
Press. (kPa) 202.25 607.95
Mass Flow 326.73 326.73

Cooling Water
The cooling water can be use to reduce temperature of hot stream in plant
by absorb the heat of hot stream through heat exchanger. The first stream of
cooling water (CW1) is used to condense output of MTO reactor before it being
separated in separator V-100. The second stream of cooling water (CW2) is used
to reduce temperature of vapor output of separator V-100 through first and second
interstage cooler. The output stream of V-100 increase since we use compressor.
Therefore we have to reduce the temperture to reach the operating temperature in
deethanizer T-100. The block diagram of cooling water stream is shown on the
Figure 2.15 . After used, the cooling water waste (high temperature) is discharged
to the sea.

Figure 2.15 Block Diagram of Cooling Water before HEN

(Source: Author’s Personal Data, 2015)
We use sea water as our cooling water. The main consideration we choose sea
water is we need large amount of cooling water in our main plant and sea water is
abundant. We process sea water by pumping the water into a basin then reduce
chlorine contained into 1 ppm using Natrium hypochlorite (NaOCl). Before
accomodate in Basin, The sea water has filtered to remove the solid or sewege
form the sea. Since the water contains microorganism, the pipe should be given

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cathodic protection to prevent corrossion. NaOCl produced by sea water

electrolysis.
To make cooling water from sea water, we need equipment such as pump,
basin, electrolysis cell, and filter. We use centrifugal pump to pump water from
the sea to enter the filter, the reason of using centrifugal pump is this water steam
is an ordinary stream with no need high pressure. The impurities and sewege
filtered in barge screen, bar screen, and traveling screen. In the traveling screen
we install cathodic protection use cobalt as the cathode. Cobalt is very effective to
protect metal pipe or equipment from corrosion. After being filtered, the water is
acomodate in basin. In the basin we inject NaOCl to reduce chlorine. NaOCl is
used because its easy to produce from sea water in electrolysis cell. From basin
we pump the water to heat exchanger. The pump is centrifugal pump.

Figure 2.16 Cooling Water Process

(Source: Badak LNG Plant Utilities)
The mass balance of cooling water equipment is based on the needed both in
main plant and refrigerant plant. The masa balance of cooling water utility can be
seen on Table 2.36. Below:
Table 2.36 Cooling Water Mass Balance
Component Needed (Ton/day)
Main Process 28,800
Refrigerant Process 3,741.3
Total 32,500

2.10 Heat Exchanger Network

Stream Classification
The stream evaluated divided into cold fluid and hot fluid. Cold fluid is the
flow of heat that requires utilities to heat flow towards the desired temperature.
Meanwhile, hot fluid is a flow that requires a cool utility to cool the flow towards
the desired temperature. The initial temperature (termed supply temperature, Ts),

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final temperature (termed target temperature, Tt), and enthalpy change of both
streams can be seen on the Table 2.37 and Table 2.38.
Table 2.37 Cold Stream in MTO Plant
Ts Tt CP ∆𝑯
No Stream In Strem Out
(oC) (oC) (MW/oC) (MW)
1 1 2 25.00 40.91 1.5624946 -24.85929
2 2 3 40.91 164.30 0.0296203 -3.65484
3 3 4 164.30 491.90 0.0000017 -0.00056
4 4 5 491.90 567.80 0.0491420 -3.72988
5 8 9 5.79 65.17 0.0128775 -0.76463
6 9 10 65.17 141.69 0.0143995 -1.10187
7 12 14 21.19 23.16 2.2519135 -4.43627
Total Hot Utility Needed Before HEN -34.11107
(Source: Authors’s Personal Data, 2015)
Stream number 1 and 7 on the Table 2.37 and Table 2.38 use energy to
increase temperature and phase change, therefore their heat capacity are higher
than the others. Stream 2 until 6 on the Table 2.37 uses energy to increase
temperature. The temperature and phase change is used for operation condition
such as vaporization (stream number 1) and condensation (stream number 7).
Table 2.38 Hot Stream in MTO Plant
Ts Tt CP ∆𝑯
No Stream In Strem Out
(oC) (oC) (MW/oC) (MW)
8 5 6 567.80 109.70 0.05427 24.85929
9 6 7 109.70 50.00 0.37467 22.36765
10 7 8 50.00 5.79 1.77406 78.42590
11 7 15 50.00 5.79 1.86831 82.59255
12 10 11 141.69 50.00 0.01573 1.44206
13 11 12 50.00 21.19 0.01547 0.44563
14 12 13 21.19 -52.46 0.01756 1.29328
Total Cold Utility Needed Before HEN 211.42636
(Source: Authors’s Personal Data, 2015)
Stream number 10 and 11 on the Table 2.38 use energy to decrease temperature
and phase change, therefore their heat capacity are higher than the others. Stream
number 8 until 9 and stream number 12 until 14 on the Table 2. 38 uses energy to
decrease temperature. The temperature and phase change is used for operation
condition such as vaporization (stream number 10) and condensation (stream
number 11).

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Based on Table 2.37 and Table 2. 38, this MTO plant has 7 cold streams
and 7 hot streams. Q value as specific heat of a measured substances in each
streams resulted from general equation.
𝑄 = 𝑚𝑐𝛥𝑇
Enthalpy associated with a stream passing through the exchanger is given by First
Law Thermodynamics,
H=Q±W
In heat exchanger, there is no mechanical work so,
W = 0 (zero)
Equation above simplified and result,
H=Q

Heat Recovery Pinch Method

The term ‘pinch’ was introduced by Linnhoff and Vredeveld to represent a
new set of thermodynamically based methods that guarantee minimum energy
levels in design of heat exchanger networks. There are two kinds of methods that
can be used to determine the ‘pinch’ from all heat exchanger in one plant; they are
composite curve and problem table cascade. In this paper we only use problem
cascade to get pinch temperature, cold utility minimum (QC,min), and hot utility
minimum (QH,min).
Problem table cascade can be used to calculate energy targets directly
without using graphical construction. The first step is determined the shifted
temperature intervals (T*) from actual supply and target temperatures. Hot
streams are shifted down in temperature by ΔTmin/2 and cold streams up by
ΔTmin/2 as detailed in Table 2.39. Usually low temperature plant use ΔTmin 5 oC
and hot temperature plant use ΔTmin 20 oC. Therefore, for efficiency purposes we
chooce ΔTmin 10 oC for our MTO plant.
Table 2.39 Shifted Temperature Data
Ts Tt Ts* Tt*
No Stream Type Stream In Stream Out
(oC) (oC) (oC) (oC)
1 Cold Fluid 1 2 25.00 40.91 30.00 45.91
2 Cold Fluid 2 3 40.91 164.30 45.91 169.30
3 Cold Fluid 3 4 164.30 491.90 169.30 496.90
4 Cold Fluid 4 5 491.90 567.80 496.90 572.80

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5 Cold Fluid 8 9 5.79 65.17 10.79 70.17

6 Cold Fluid 9 10 65.17 141.69 70.17 146.69
7 Cold Fluid 12 14 21.19 23.16 26.19 28.16

Table 2.39 Shifted Temperature Data (Cont’d)

Ts Tt Ts* Tt*
No Stream Type Stream In Stream Out
(oC) (oC) (oC) (oC)
8 Hot Fluid 5 6 567.80 109.70 562.80 104.70
9 Hot Fluid 6 7 109.70 50.00 104.70 45.00
10 Hot Fluid 7 8 50.00 5.79 45.00 0.79
11 Hot Fluid 7 15 50.00 5.79 45.00 0.79
12 Hot Fluid 10 11 141.69 50.00 136.69 45.00
13 Hot Fluid 11 12 50.00 21.19 45.00 16.19
14 Hot Fluid 12 13 21.19 -52.46 16.19 -57.46
(Source: Authors’s Personal Data, 2015)
From Table 2.17, T* is arranged in descended pattern and then
temperature internal balances can be calculated as detailed in Table 2.40.

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Table 2.40 Temperature Interval Heat Balance

Stream Population ∆T ∑CP,c - Surplus

T ∆H Internal
internal ∑CP,h or
(oC) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 (MW)
(oC) (MW/oC) Deficit

572.80
0.0491420 0
0.00 Deficit
562.80
-0.0051240 -0.051240458
10.00 Surplus
496.90
-0.0051224 -0.337562951
65.90 Surplus
169.30
-0.0246441 -8.073417309
327.60 Surplus
146.69
-0.0102464 -0.231651225
22.61 Surplus
136.69
-0.0259736 -0.259736267
10.00 Surplus
104.70
-0.4006412 -12.81725547
31.99 Surplus
70.17
-0.3334976 -11.51567262
34.53 Surplus
45.91
1.2145975 29.46613634
24.26 Deficit
45.00
-2.4728650 -2.250307125
0.91 Surplus
30.00
-2.0824702 -31.23705262
15.00 Surplus
28.16
-5.8968783 -10.85025606
1.84 Surplus
26.19
-5.8968783 -11.61685023
1.97 Surplus
16.19
-3.6625246 -36.62524619
10.00 Surplus
10.79
-3.6470568 -19.68316577
5.40 Surplus
0.79
-3.6599343 -36.59934312
10.00 Surplus
-57.46
-0.0175598 -1.022912567
58.25 Surplus
CP 1.5624946 0.0296203 0.0000017 0.0491420 0.0128775 0.0143995 2.2519135 0.0542661 0.3746675 1.7740607 1.8683138 0.0157273 0.0154678 0.0175598

(Source: Authors’s Personal Data, 2015)

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After we have temperature interval heat balance, we can cascade any surplus heat
down the temperature scale from interval to interval as detailed in Table 2.41 This
is possible any excess heat available from the hot streams in an interval is hot
enough to supply a deficit in the cold streams in the next interval down.
Table 2.41 Problem Table Cascade
Hot Utility

T ∆H internal Q net
o
( C) (MW) (MW)

572.80 0.00 0.00

562.80 -0.05 0.05
496.90 -0.34 0.39
169.30 -8.07 8.46
146.69 -0.23 8.69
136.69 -0.26 8.95
104.70 -12.82 21.77
70.17 -11.52 33.29
45.91 29.47 3.82
45.00 -2.25 6.07
30.00 -31.24 37.31
28.16 -10.85 48.16
26.19 -11.62 59.77
16.19 -36.63 96.40
10.79 -19.68 116.08
0.79 -36.60 152.68
-57.46 -1.02 153.71
Cold Utility

(Source: Authors’s Personal Data, 2015)

Based on Table 2.41, we can conclude that the minimum value of hot
utility and cold utility after HEN are 0 MW and 153.71 MW respectively. 0 MW
of hot utility indicates that in our heat exchanger network, we do not need hot
utility even that we have cold stream. This is because the cold fluid can be heated
by hot fluid from process streams only since the supply temperature of hot fluid is
high enough. Otherwise, 153.71 MW indicates that we need high amount of cold
utility. This is because we need refrigeration as cooling media in water separator

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and in distillation column. From Table 2.37 Table 2.38, and Table 2.41, we can
calculate the heat recovery that we get after HEN as follow.
34.11 − 0.00
𝑅𝑒𝑐𝑜𝑣𝑒𝑟𝑦 𝐻𝑒𝑎𝑡 𝑜𝑓 𝐻𝑜𝑡 𝑈𝑡𝑖𝑙𝑖𝑡𝑦 = × 100% = 100.00 %
34.11
211.43 − 153.71
𝑅𝑒𝑐𝑜𝑣𝑒𝑟𝑦 𝐻𝑒𝑎𝑡 𝑜𝑓 𝐶𝑜𝑙𝑑 𝑈𝑡𝑖𝑙𝑖𝑡𝑦 = × 100% = 27.30 %
211.43
Another way to see the minimum utility requirement is based on the grand
composite curve (Figure 2.17). The grand composite curve is a more appropriate
tool for understanding the interface between the process and the utility system.
The grand composite curve which is obtained by plotting the problem table
cascade.

Grand Composite Curve

700.00

Hot Utility Needed = 0 MW

600.00
Pinch Temperature = 572.8 oC

500.00

400.00
T* (oC)

300.00

200.00

Cold Utility Recovered by Process Stream

100.00
Cold Utility Needed = 153.71 MW

0.00
0.00 20.00 40.00 60.00 80.00 100.00 120.00 140.00 160.00 180.00
H (MW)

Figure 2.17 Composite Curve of Cold Stream and Hot Stream Combination
(Source: Authors’s Personal Data, 2015)
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Heat Exchanger Network Design
Based on calculation to determine the heat recovery with composite curve
method and cascade-problem table method, we can know the hot utility energy
and cold utility energy needed. Then, we have to integrate the stream which can
be used as hot fluid to the stream which can be used as cold fluid with heat
exchanger. With this integration of streams, we can determine the use for hot or
cold fluid for heating or cooling the stream itself by using heat recovery to get the
efficient of heat recovery. according to the figure below, we can use the pinch
design for make a heat exchanger network for all units in ethylene plants. The
pinch design can be seen on the Figure 218.
Based on the Figure 2.18, it can be seen that the hot utility needed of cold
fluid can be covered by hot fluid process stream, so we don’t need heater for
utility. While for hot fluid, we need 5 cold utility streams i.e. for stream process
number 9, 10 dan 11, 12, 13, and 14 detailed in Table 2.42.
Table 2.42 Heat Exchanger Needed after HEN
H
No Stream
(MW)
9 Feed to quenching system 22.37
10 and 11 Quenching system 129.16
12 Feed to olefin after cooler 1.44
13 Feed to olefin condenser 0.45
14 Feed to condenser column of deethanizer 1.29
Total Cold Utility Needed 153.71

(Source: Authors’s Personal Data, 2015)

Based on the Figure 2.18, it can be seen that after HEN, we only need supply
cooling water into E-102, while the cooling water needed in E-103 supplied by
cooling water that has been use in E-102 and cooling water needed in E-104
supplied by water result from water separator. For the heating process i.e.
methanol heater, we supply hot utility by passing top product of MTO reactor to
substitute steam.

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Pinch Temperature
CP Delta H
572.8 C

1 1 1.5624946 -24.85929
40.91 C 25 C

2 2 0.0296203 -3.65484
164.3 C 40.91 C

3 3 0.0000017 -0.00056
491.9 C 164.3 C

4 4 0.0491420 -3.72988
567.8 C 491.9 C

5 5 0.0128775 -0.76463
65.17 5.79

6 6 0.0143995 -1.10187
141.69 C 65.17 C

7 7 2.2519135 -4.43627
23.16 C 21.19 C
7 7
8 8 0.0542661 24.85929
567.8 C 21.129 MW 18.561 MW 14.906 MW 13.804 MW 109.7 C
500.978 C 500.959 C 433.274 C 412.867 C
9 C 9 0.3746675 22.36765
109.7 C 50 C
22.368 MW
10 10 1.7740607 78.42590
50 C 53.567 MW
35.987 C
129.157 MW C 5.79 C

11 11 1.8683138 82.59255
50 C 80.375 MW 78.157 MW 5.79 C
48.820 C 47.633 C
12 C 12 0.0157273 1.44206
141.69 C 0.677 MW 50 C
1.442 MW
92.313 C
13 C 13 0.0154678 0.44563
50 C 21.19 C
0.446 MW

Pinch Temperature
14 C 14 0.0175598 1.29328
21.19 C -52.46 C
45.91 oC 1.293 MW

Figure 2.18 Heat Exchanger Network Design of MTO Plant

(Source: Authors’s Personal Data, 2015)

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Utility Comparison Before/After HEN

2.10.4.1 Cooling Water
Before HEN, we need to supply cooling water into E-102, E-103, and E-
104 and refrigerant system. After doing HEN, we only need to supply cooling
water into E-102. The cooling water requirement in E-103 can be supplied by
cooling water that has been used to cool olefin in E-102. While the cooling water
requirement in E-104 can be supplied by water resulted from water separator in
quenching system. The energy efficiency can be determine by comparing the
utility before and after HEN. The energy uses to provide cooling water before
HEN is the energy provided by utility to input cooling water into the process
before we use the cool water released in the process. The energy uses to provide
cooling water after HEN is the energy or cooling water shortage that fulfilled by
utility after recycling the cool water output stream. The cooling water requirement
before HEN in each area is listed in the Table 2.43 below.
Table 2.43 Cooling Water Requirement before HEN in Main Process
Cooling Water Energy Required
No Equipment Code
Requirement (kg/hr) for Pumping (kW)
1 Condenser E-102 1.2 x 106 43,71
2 After Cooler E-103 and E-104 375 0,0136

(Source: Author’s Personal Data, 2015)

From the table above, we can calculate cooling water required in our
plant before using applied heat exchanger network. Total cooling water mass flow
is 1200375 kg per hour. And the energy needed to pump the water into heat
exchanger is 43,7236 kW. By heat exchanger network, we applied the energy
such as cold stream and hot stream to be recycle in the process to support other
energy exchange process.

Figure 2.19 Cooling Water in Interstage Cooler after HEN

(Source: Author’s Personal Data, 2015)
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In interstage cooler, we can input water out from the quenching system. The water
out from quenching system has low temperatur 5oC and high flowrate. After we
do simulation use aspen hysys, we find the cooling water requirement each area is
listed in the Table 2.44 below.
Table 2.44 Cooling Water Requirement after HEN in Main Process
Cooling Water Energy Required
No Equipment Code
Requirement (kg/hr) for Pumping (kW)
6
1 Condenser E-102 and E-103 1.2 x 10 43,71

(Source: Author’s Personal Data, 2015)

We can see in the process, above, after using HEN, we didn’t need to use pump to
input cooling water in the interstage cooler. The comparison of cooling water uses
before and after HEN is shown in Table 1.16 below.
Table 2.45 Comparison Mass and Energy Efficiency before and after HEN
Cooling Water Energy Required
Condition
Requirement (kg/hr) for Pumping (kW)
Before HEN 1,200,375 43.72
After HEN 1,200,000 43.71

(Source: Author’s Personal Data, 2015)

2.10.4.2 Steam and Power Generation

The comparison of steam utility needed in our plant is to pre heating the
methanol before entering the reactor. Before HEN and based on PFD diagram the
steam needed is about 30 ton/day. After HEN, the steam utility is 0 tonne/day.
Because the duty to pre heating the methanol can be covered by using hot stream
from reactor product, which has temperature 4500C and pressure 250 kPa While
for electricity, our plant produce 932 tonne per day water from methanol removal
plant we convert into high pressure steam which has temperature 450 0C and
pressure 63.5kg/cm2 Before HEN, about 30 ton/day steam we use as methanol pre
heater and the rest we use to produce electricity. To produce electricity, we use
two steam turbine expander. The specification of each steam turbine expander
before HEN is on the Table 2.46 below.

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Table 2.46 Electricity Produce before HEN

Inlet Outlet Power
Equipment
T (oC) P (kPa) T (oC) P (kPa) Generated (kW)
K-401 450 6129 250 1007 3583
K-402 250 1007 99.95 101.3 3365
Total Power Generated Before HEN 6948
(Source: Author’s Personal Data, 2015)
After HEN, we use all of the steam flow to produce the electricity. Then
the specification and electricity after HEN we can produce each day is on the
Table 2.47 below.
Table 2.47 Electricity Produce after HEN
Inlet Outlet Power
Equipment o o
T ( C) P (kPa) T ( C) P (kPa) Generated (kW)
K-401 450 6129 250 1007 3710
K-402 250 1007 99.95 101.3 3485
Total Power Generated Before HEN 7195
(Source: Author’s Personal Data, 2015)
The efficiency of production electricity before and after HEN is as
follow.
Total electricity produce after HEN − Total electricity produce before HEN
Efficiency = x 100%
Total electricity produce before HEN
7195 − 6948
Efficiency = x 100% = 3.55%
6948

Process Performance Analysis

The comparison of utility energy between before and after HEN is used to
know how much heat that has been recovered by the integration of heat in the
process fluid. For the case before HEN, the total sum of energy (enthalpy flow)
can be obtained from Table 2.37 and Table 2.38. The total energy of hot utility is
34.11 MW, and the total energy of cold utility is 211.43 MW. Based on Table 1.5,
after using HEN, we know that we do not need hot utility while the cold utility
needed is 153.71 MW. Calculation of the efficiency achieved by using HEN:
Total energy before HEN − Total energy after HEN
Heat recovered = x 100%
Total energy before HEN
(34.11 + 211.43) − (0.00 + 153.71)
Heat recovered = x 100%
(34.11 + 211.43)
Heat recovered = 37.40 %

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3 CHAPTER 3
EQUIPMENT DESIGN

3.1 Key Process Design Variables

The specifications of each equipment used in continuous system to produce
ethylene and propylene from methanol by methanol to olefins technology which
can be seen in this chapter. Specification of equipment including dimensions,
materials, operating conditions, and any other specific necessary conditions for
each equipment.

Design Data and Methodology

This sub chapter will explain about design data or methodology of each
equipment in this plant.
 Storage Tank

Determining Determining Determining

Determining
Determining diameter and pressure thickness of
amount of
volume tank height of design wall and
needed tank
tank head

Figure 3.1 Design Data / Methodology of Storage Tank

(Source: Various Source)
 Pump
Gathering
Calculating
operation Calculating BHP
specific speed to
condition and Calculating head (Brake Horse
determine the
stream data from Power)
type of impeller
Hysys

Calculating
NPSHA

Figure 3.2 Design Data / Methodology of Pump

(Source: Various Source)

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 Reactor
Collecting
Calculation
kinetic data Calculation Calculation
equiibrium
from each rate constant reaction rate
constant
reactor

Calculation Calculation Calculation Calculation

liquid or reactor diameter height
catalyst volume volume

Calculation Calculation Calculation Calculation

height head pressure shell thickness head thickness
design

Figure 3.3 Design Data / Methodology of Reactor

(Source : Various Source)
 Heat Exchanger

Determine the
Collecting the
specification of the
Determine the duty physical data of the
fluid : Temperature
fluid
and Flowrate

Assuming the value

Determine the
of overall heat
number of shell and Calculate LMTD
transfer coefficient
tube pass
(U)

Determine heat
Determine the value exchanger Calculate number of
of heat transfer area configuration, type, tubes
and tube size

Estimate heat Calculate overall

Determine shell
transfer coefficient heat transfer
diameter
in shell and tube coefficient

Figure 3.4 Design Data / Methodology of Heat Exchanger

(Source : Various Source)

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 Compressor

Determining Determining Determining

head of compressor diameter of
compressor power impeller

Determining Determining Choosing

number of compressor compressor type
impeller discharge
temperature

Figure 3.5 Design Data / Methodology of Compressor

(Source : Various Source)
 Heat Exchanger

Determine the
Collecting the
specification of the
Determine the duty physical data of the
fluid : Temperature
fluid
and Flowrate

Assuming the value

Determine the
of overall heat
number of shell and Calculate LMTD
transfer coefficient
tube pass
(U)

Determine heat
Determine the value exchanger Calculate number of
of heat transfer area configuration, type, tubes
and tube size

Estimate heat Calculate overall

Determine shell
transfer coefficient heat transfer
diameter
in shell and tube coefficient

Figure 3.6 Design Data / Methodology of Heat Exchanger

(Source : Various Source)

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 Destillation Column or Stripper Column

Gathering Determining Determining
streams’ mole light key and bottom and top Determining
temperature using relative
fraction data heavy key in bubble and dew
from Hysys each column volatility
point

Determining Determining Determining Determining

minimum tray minimum reflux ratio ideal tray
number reflux number Gilliand
Correlation

Determining Calculating
Calculating
physical Determining flooding velocity
vapor rate and (FLV) in bottom
properties of column height
distillate rate and top
streams

Calculating
Correcting Calculating Calculating
the maximum
surface flooding column’s net
volumetric
tension velocity (uf) area (An)
flow rate

Calculating Determining Calculating

Calculating
column’s downcomer maximum
column’s liquid
cross sectional area : 12% net
diameter (D) volumetric flow
area (Ac) area

Determining the Calculating Calculating Calculating

type of liquid
flow downcomer plate’s net plate’s active
arrangement area (Ad) area (An) area (Aa)

Calculating Calculating is Calculating

Determining
plate’s hole the number of column
weir length
area (Ah) hole thickness

Figure 3.7 Design Data / Methodology of Distillation and Column and Stripper Column
(Source : Various Source)

 Expander

Determine power Determine the

of expander diameter

Figure 3.8 Design Data / Methodology of Expander

(Source : Various Source)

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 Compressor

Determining Determining Determining Determining

head of compressor diameter of number of
compressor power impeller impeller

Determining Choosing
compressor compressor type
discharge
temperature

Figure 3.9 Design Data / Methodology of Compressor

(Source : Various Source)

3.2 Detailed Equipment List

Process
Table 3.1 Methanol to Olefin Reactor Specification

Equipment Specification
Name MTO Reactor
Code R-101
Function To produce ethylene and propylene
Operation Continuous
Type Packed bed
Head Type Ellipsoidal
Material SA-285 Grade C
Operating Condition
P 150 KPa
o
T 454.8 K
Flow Rate 14.4 m3/s
Dimension and Design
Catalyst SAPO-34
Catalyst Weight 27700 kg
Catalyst Density 3071 kg/m3
Reactor Volume 11.3 m3
Shell Diameter 1.53 m
Shell Height 6.13 m
Head Height 0.225 m
Design Pressure 410 kPa
Shell Thickness 0.25 inch
Head Thickness 0.25 inch

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Figure 3.10 Datasheet for MTO Reactor

(Source : Privat Source)

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Table 3.2 Distillation Column

Specification
Name Distillation Column
Code T-101
Function To separate ethylene from gas stream
Material Nickel Steel
Number of Units 1
Operation Data
Mass Flow 31144.27 kg/h
Mass Density 282.8 kg/m3
Inlet Temperature 240 K
Pressure 10 Bar
Design Specification
Top Product Flow Rate 12793.97 kg/s
Bottom Product Flow Rate 18350.3 kg/s
Minimum Tray 8
Actual Tray 20
Total Holes 45,999
Diameter 4.94 m
Height 14.07 m
Optimum Reflux 1.815
Thickness 0.0747

Table 3.3 Steam Boiler

Equipment Code B-101
Function Boil The Water to produce Steam
Number of Unit 1
Steam Flow Rate 40,000,000 Btu/hr
Boil Receive Volume 40 m3
Type of Fuel Diesel

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Table 3.4 Heat Exchanger

Equipment Specification
Code E-101 E-102 E-103 E-104
Increase the Increase the Increase the
Increase the
temperature of air temperature of air temperature of air
temperature of air
for drying the for drying the for drying the
for drying the feed
Function feed of feed of feed of
of gasification
gasification gasification gasification
process by using
process by using process by using process by using
flue gas
flue gas flue gas flue gas
Amount 1 1 1 1
Type Shell and Tube Shell and Tube Shell and Tube Shell and Tube
Hot Fluid Data Operation
Hot Fluid
69531.1 kg/h 69531.1 kg/h 30461.62 kg/h 30461.62 kg/h
Rate
P in 2.5 bar 2.155 bar 12 bar 11.31 bar
P out 2.155 bar 1.466 bar 11.31 bar 10.62 bar
0 0 0
T in 567.8 C 109.7 C 141.7 C 500C
T out 109.70C 500C 500C 21.190C
Cold Fluid Data Operation
Cold Fluid
69531.1 kg/h 1.2e+006 kg/h 1.2e+006 kg/h 39069.48 kg/h
Rate
P in 1.103 bar 2 bar 1.655 bar 1.416 bar
P out 0.3235 bar 1.655 bar 1.311 bar 1.071 bar
0 0 0
T in 25 C 30.01 C 45.57 C 5.7930C
T out 40.910C 45.570C 46.580C 15.310C
Construction Data
2o
U Total 11861.6 J/s.m C 8,727 J/s.m2oC 10,039 J/s.m2oC 13,548 J/s.m2oC
Heat
Transfer 152.78 m2 185.4 m2 2794.7 m2 3781.83 m2
Area
LMTD 241.910C 37.860C 29.570C 25.210C
Dirt Factor
0.0002 0.0001 0.0006 0.0006
(Rd)
Shell Pass 3 3 3 3
Shell
Carbon Steel Carbon Steel Carbon Steel Carbon Steel
Material
Shell Area 21.25 m2 20 m2 20 m2 20 m2
ID Shell 586.74 mm 304.8 mm 304.8 mm 200 mm
OD Tubes 25.4 mm 25.4 mm 25.4 mm 10.9 mm
Tube Pass 6 6 6 6
Tube
Carbon Steel Carbon Steel Carbon Steel Carbon Steel
Material
Total Tube 82 82 82 268
Length of
19 m 6m 6m 6m
Tube
Tube Pitch 31.75 mm 31.75 mm 31.75 mm 31.75 mm
Tube Design Triangular Triangular Triangular Triangular

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Table 3.5 Gas Compressor

Equipment Specification
Equipment
Gas Compressor Gas Compressor Gas Compressor Gas Compressor
Name
Equipment Code C-101 C-102 C-103 C-104
To increase To increase To increase To increase
Function
Methanol pressure Olefin pressure Olefin pressure Olefin pressure
Amount 1 1 1 1
Material SA-283 Grade C SA-283 Grade C SA-283 Grade C SA-283 Grade C
Type Centrifugal Centrifugal Centrifugal Centrifugal
Operating Data
T in (K) 314.1 265.7 323.1 765
T out (K) 450 3328.54 415.75 841.34
Inlet flow rate
1159 507.6 507.6
(kg/min)
Compression
4.636 2.64 3.605 1.667
ratio
Efficiency (Ep) 0.77766 0.7676 77.04 75.86
Pressure inlet
0.3235 1.416 3.051 1.5
(Bar)
Pressure outlet
1.5 3.742 11 2.5
(Bar)
Power (hp) 3643.46 726.08 1176.42 3683.44
Table 3.6 Centrifugal Pump
Equipment Specification

Equipment code P-101

Pump Type Centrifugal

Reflux pump on
Function
Deethanizer
Operation Continuous
Quantity 1
Carbon Steel A 285
Material
Grade A
Flow rate (kg/h) 15047.4
Differential Pressure
101
(kPa)

Differential Head (m) 22.23

NPSH 8
Efficiency (%) 70
Act. HP (kW) 3.22

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Table 3.7 Storage Tank

Equipment Specifications
Identification TK-101 TK-102 TK-103
Methanol Ethylene Storage Propylene Storage
Function
Storage Tank Tank Tank
SA-240 Grade
Material SA-240 Grade A SA-240 Grade A
A
Quantity 1 1 1
Operating Conditions
Pressure (Bar) 1.1013 9.9 9.94
o
Temperature ( C) 35 -52.44 19.29
Mode Operation Continuous Continuous Continuous
Design Specification
Vessel Storage Vessel Storage
Tank Type Vessel Storage Tank
Tank Tank
Head Type Ellipsoidal Ellipsoidal Ellipsoidal
Capacity (m3) 98.3 27.4 40.14
Diameter (m) 7.6 4.01 4.86
Height (m) 16.47 8.7 10.53
Shell Thickness
20.90 7.8 9.8
(mm)
Head Thickness
19.22 7.23 9.1
(mm)

Utility
3.2.2.1 Cooling Water
Table 3.8 Cooling Water Pump
Equipment Specification

Equipment code P-401 A/F

Pump Type Centrifugal

Function To circulate Cooling Water
Operation Continuous
Quantity 1
Material Carbon Steel A 285 Grade A
Operation Data
Flow rate (kg/h) 28800

Differential Pressure (kPa) 225

Differential Head (m) 49.80

NPSH 76.5
Efficiency (%) 70
Act. HP (kW) 7.2

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3.2.2.2 Refrigerant
Table 3.9 Refrigerant Pump
Equipment Specification
Equipment code P-301
Pump Type Centrifugal
Function To circulate MCR
Operation Continuous
Quantity 1
Material Carbon Steel A 285 Grade A
Flow rate (kg/h) 87950

Differential Pressure (kPa) 150

Differential Head (m) 18.31

NPSH 5.11
Efficiency (%) 70
Act. HP (kW) 2.65
Table 3.10 MCR Storage Tank
Equipment Specifications
Identification TK-301 TK-302 TK-303 TK-304
Methane Ethane Storage Propane Storage Nitrogen Storage
Function
Storage Tank Tank Tank Tank
SA-240 Grade SA-240 Grade SA-240 Grade A
Material SA-240 Grade A
A A
Quantity 1 1 1 1
Operating Conditions
Pressure (Bar) 10 10 10 10
o
Temperature ( C) -128 -55 -50 -150
Mode Operation Continuous Continuous Continuous Continuous
Design Specification
Vessel Storage Vessel Storage Vessel Storage Vessel Storage
Tank Type
Tank Tank Tank Tank
Head Type Ellipsoidal Ellipsoidal Ellipsoidal Ellipsoidal
Capacity (m3) 68.2 84.5 28.95 12.59
Diameter (m) 6.33 7.05 4.13 2.72
Height (m) 13.72 15.27 8.93 5.9
Shell Thickness 5.18
12.58 16.13 8.431
(mm)
Head Thickness 4.84
11.61 14.86 7.81
(mm)

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Table 3.11 MCR Compressor

Equipment Specification
Equipment Name Gas Compressor Gas Compressor Gas Compressor
Equipment Code C-301 C-302 C-303
To increase MCR’s To increase MCR’s To increase Propane’s
Function
pressure pressure pressure
Amount 1 1 1
Material SA-283 Grade C SA-283 Grade C SA-283 Grade C
Type Centrifugal Centrifugal Centrifugal
Operating Data
T in (K) 226 308 276.8
T out (K) 377.587 409.17 395.77
Inlet flow rate
1465.83 1465.83 205.84
(kg/min)
Compression ratio 4.5 2.7285 3.766
Efficiency (Ep) 0.788 0.771 77.57
Pressure inlet (Bar) 2.206 14.66 5.311
Pressure outlet
15 40 20
(Bar)
Power (hp) 4873 3437.3 270.33

3.2.2.3 Steam Generation

Table 3.12 Water Treatment Pump
Equipment Specification
Equipment code P-201
Pump Type Centrifugal
Function To transport raw water
Operation Continuous
Quantity 1
Material Carbon Steel A 285 Grade A
Flow rate (kg/h) 38973
Differential Pressure (kPa) 170
Differential Head (m) 21.35
NPSH 4.11
Efficiency (%) 70
Act. HP (kW) 3.09

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Table 3.13 Water Treatment Storage

Equipment Specifications
Identification TK-201 TK-202 TK-203
Aeration Clarifier Water Storage
Function
Tank
SA-240 SA-240
Material SA-240 Grade A
Grade A Grade A
Quantity 1 1 1
Operating Conditions
Pressure (Bar) 1.1013 1.1013 1.1013
o
Temperature ( C) 5 35 35
Mode Operation Continuous Continuous Continuous
Design Specification
Vessel Vessel Vessel Storage
Tank Type
Storage Tank Storage Tank Tank
Head Type Ellipsoidal Ellipsoidal Ellipsoidal
Capacity (m3) 44.1 44.1 44.1
Diameter (m) 5.1 5.1 5.1
Height (m) 11.1 11.1 11.1
Shell Thickness (mm) 13.21 13.21 13.21

Head Thickness (mm) 12.19 12.19 12.19

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4 CHAPTER 4
PROCESS CONTROL STRATEGY

4.1 Plant Wide Control Strategy

The design of a plant wide control system should be driven by the objectives
of the overall process. This strategy is use to achieve the objective of our plants.
The design procedure for our plant wide control consist of the following steps.
a. Establish the control objctive
This step is used to set the objective. Then the control objective for our
plant are as follows:
 Maintain the production rate of ethylene to achieve our production capacity.
 Keep the conversion of the plant at the highest.
 Achieve constant final product composition.
b. Determine the control degrees of freedom
As shown in five figure above about PID for our plant has some freedom or
manipulated variables which the actuator is valves controlling the manipulated
variables. This step wil leads to the control system.
c. Establish the energy management system
In this step, control loops are positioned to regulate exothermic and
endothermic reactors at desired temperature. In Addition, temperature controllers
are positioned to ensure that disturbance are removed from the process through
utility stream than recycled by heat-integrated process unit.
d. Set the production rate
The production rate of ethylene product is controlled to achive the capacity
production that 400.000 tons/year.
e. Control the production quality and handle safety, environmental, ad
operational constraints
The product quality is controlled by maintaining the operating condition
from reactor, distillation process, absorber and stripper. Operating condition is
controlled to achieve the process with the highest efficient.

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f. Fix the flow rate in every recycle loop and control vapor and liquid
inventory
This step will maximize the efficiency process at highest level. The liquid
inventories in the flash vessel and separator are non-self-regulating, so need to be
controlled. Since the liquid product valve from the equipment has been assigned
to control the product flow rate, the inventory control must be in the reverse
direction to the process flow.
g. Check component balances
Because of all controllers which assigned above, this step is unnecessary.
h. Control the individual process unit
This step is use to control the process each unit process to achieve the
objective from our plant. The detail of this step is can be seen in the table of PID
from our plant.
i. Optimize economics and improve dynamic controllability
The setpoint needs to be established. This step will maximized the process
production at highest level.

4.2 Piping and Instrumentation

The Piping and Instrumentation Diagram (P&ID), also known as
Mechanical Flow Diagram (MFD), is a design document transmitted by the
process design engineers to the engineers responsible for plant construction.
P&ID also used to support the start-up, operation of the process, and operator
training. The P&ID includes every mechanical aspect of the plant except
operating condition, stream flow, equipment location, pipe routing (pipe length
and pipe fitting), support, structure, and foundation. Therefore, a single PFD
will require many P&ID to provide the necessary data. The P&ID can be seen on
the Figure 4.1

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Figure 4.1 PID Control

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4.3 Control and Instrumentation

The instrument control selection done base on the parameter urgency of each
equipment. For example, the controlling parameter at methanol to olefin reactor is
temperature because it will determine the conversion of olefin resulted which is
very important for the subsequent processing i.e. ethylene and propylene
polymerization. In this plant, we use three types of instrument control i.e.:
a. Transmitter. Transmitter used to indicate the recent condition of an equipment,
located on the field near the equipment.
b. Indicator Controller. Indicator controller used to receive electrical signal from
transmitter and determine the decision executed by controller or final element.
c. Controller of Final Element. Controller or final element used to directly
execute the decision that has been instructed. This control system controlled
by computer in control room using DCS (Distributed Control System)
program.
The signal from transmitter to indicator controller is transferred by
electricity. The electricity impulses are sourced from power generator and if the
electricity is off, the access data from transmitter or indicator can’t be done. The
pneumatic power are sourced from air compressor and if the plant in emergency
shut down or trip, the equipment are still controlled. The signal from indicator
controller to controller is transferred by pneumatic. The list of instrument control
of each plant can be seen on the Table 4.1

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Table 4.1 Instrument Control

Process Controlled Controlling
Sensor Controller Alarm Function To Maintain Procedure
Equipment Parameter Parameter
The flow of the water utility flow as the
Flow of water Temperature To maintain the inter-stage cooler inside the reactor. If the
High
Temperature utility as the Thermocouple indicator to reactor operation temperature is higher, flow of the water
and low
MTO cooling medium controller in 4350C utility will increased and if lower will
Reactor decreased
Pressure To maintain the The flow of product will be increased if
Pressure High
Pressure Product pressure indicator to pressure inside the
gauge and low
controller the reactor pressure is higher and decreased if lower
To cooling the
The flow of the water utility flow as the
product and
quencher fluid. If the temperature is
Flow of water Temperature maintain the
Quenching High higher,
Temperature utility as the Thermocouple indicator to temperature
System and low flow of the water utility will increased
cooling medium controller product before
and
entering the
if lower will decrease
water separator
To maintain the
level of the
The flow of bottom product will increased
Water Bottom product Mechanical Level indicator High water separator in
Level if the level is higher and decreased if the
Separator flow float to controller and low 50%
level lower
volume with
deviation 5%
The flow of the refrigerant as the
To maintain
Refrigerant flow Temperature separator cooling system. If the
Water High temperature of
Temperature as the cooling Thermocouple indicator to temperature is
Separator and low the separator
medium controller higher, flow of the refrigerant will
around 50C
increased and if lower will decreased

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Table 4.1 Instrument Control

Process Controlled Controlling
Sensor Controller Alarm Function To Maintain Procedure
Equipment Parameter Parameter
If the compressor reach the minimum
To prevent surging
Anti-surge to flow
Compressor Pressure Outlet flow Pressure gauge Low inside
controller and get head peak capacity, the inlet flow
the compressor
will be increased
Adjusting the feed rate if the outlet
Flow indicator to
Pump Flow Outlet flow Flowmeter Low flowrate doesn’t meet the required
controller
condition
Temperature Adjusting the flow if the outlet
Heat Outlet fluid
Temperature Thermocouple indicator to Low temperature doesn’t meet the required
Exchanger flow
controller condition
Pressure The flow of product will be increased if
Top product High To maintain the
Pressure Pressure gauge indicator to the pressure is higher and decreased if
outlet and low pressure at 10 atm
controller lower
To maintain the
Distillation
level of the The flow of bottom product will
Column
Bottom Mechanical Level indicator to High water separator in increased
Level
product flow float controller and low 50% if the level is higher and decreased if the
volume with level lower
deviation 5%
To maintain the when detection unspecific temperature at
Temperature
Distillation High distillation inlet, temperature indicator will be sent a
Temperature Steam flow Thermocouple indicator to
Column and low temperature at signal to control valve cooling water to
controller
cryogenic more or little open

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4.4 Start Up and Shut Down Procedure

Start Up Procedure
Start-up procedure for methanol to olefin plant after doing basic start up
procedure is as follow.
a. Make sure all the raw material is enough for the operation.
b. Turn on all rotating equipment such as pump, compressor, gearbox, engine,
and etc.
c. Open utility valve for cooling water, refrigerant, and steam, then check
the temperature.
d. After pressure and temperature operation reached, the raw material methanol
is flowed to the reactor
e. The preconditioning is done for 1 – 2 hours to see if the reaction occur or not.
If the reaction does not occur, the start-up procedure should be repeated. This can
be caused by the high of humidity in the reactor. If the indication of reaction
occur, the catalyst injected to the reactor and normal operation can be started.

Normal Condition
To keep the operation in a normal condition, the procedure that should be
done after doing start up procedure is as follow.
a. Make sure the pressure and temperature of the methanol to olefin reactor
about 1.5 bar and 435oC by ensure the cooling water inside the inter-stage
cooler of the reactor.
b. Make sure the product of the reactor is quenched well. This help the water
separator duty is minimum and the water is completely separated.
c. Make sure all the utility valves and relief valves are opened to keep the
operating pressure and operating temperature.

Shut Down Procedure

There are two kinds of plant shut down i.e. Planned Shut Down (PSD) and
Emergency Shut Down (ESD). PSD done for the purpose of maintenance and
evaluation. While ESD happen in spontaneous situation such as power failure or
equipment malfunction. In both shutdown cases, there are safety precautions for

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shutdown activities that need to be taken into account. Some safety precautions
required to prevent potential hazards that commonly appear during plant shut
down are as follow.
a. Stream
 The hot stream such as steam and hot fluid and let the temperature should
be reduce into normal temperature slowly until the valve completely closed.
 The raw material flow rate should be reduce slowly to keep the pressure
following by shutting down the pump and the valve except relieve valve.
 Any material on the equipment should be relieve by diluting fluids
into equipment.
 Utility equipment should be shut down after ensure if there is no flow from
the raw material.
 If there is leak in the steam valve during normal operation, a blind plate
should be inserted to stop heating process by steam, otherwise the pressure
inside will build up and create over pressure or over heating condition.
b. Pressure
 Pressure trapped between two closed valves or closed process equipment
loops should be released immediately.
 If pressure indication on pressure gauge shows error indication, check
another one for comparison. Do not just rely on pressure gauge indication
to make sure zero pressure. Open all available drain or vent valves to
release the remaining pressure. Beware of pressure that trapped in a dead
zone.
c. Flammable Gas
 Oxygen concentration inside the tank or reactor should be ensure at the safe
level because oxygen is a flammable gas.
 Beware of nitrogen hazard, since nitrogen could make oxygen level less
than safer concentration. So for the tank contained flammable liquid should
be installed nitrogen blanket while flammable gas released.
d. Equipment

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 Do not to use same hoses or transferring pump to avoid unintended reaction

because during plant shut down period, it is usually performed many jobs in
the same time.
 Utilization of temporary lines or hoses may increase in shutdown period.
Dispose damaged hoses and only use good hoses with the right
specifications.
 Temporary electric connections are commonly used for driving
portable pumps or exhaust blowers in shutdown time. Put extra care to avoid
electric spark generation because many flammable materials exposures.
 Several equipment or pipelines are designed to be used only in shutdown
time. Be careful, because some part of the equipment or pipes may have
been corroded and would not be able to hold certain pressure rating.
 Used drums are usually used during plant shutdown in order to
recover lubrication oils, chemicals, or catalysts. Use only used drums
that are originally used for those chemicals or ones that have been
washed and cleaned up.
Based on the safety precautions explain above, the typical shutdown procedure is
as follow.
a. Close all the inlet valve to stop inlet feed to enter the equipment.
b. Shutting down heating and cooling sources.
c. Flooded with water or a solvent to remove deposit on the reactor.
d. Purge with steam or gas to remove vapor.
e. Cooling (or heating) the column.
f. Bringing the column to atmospheric pressure.
g. Eliminating undesirable materials (cleaning process).
h. Preparing for opening to atmosphere
Planned Shut Down (PSD) procedure of methanol to olefin plant is as follow.
a. Shutdown the quenching system. Detailed shutdown procedure refer to the
vendor service manual book.
b. Shutdown the compressor C-101 and C-102. Detailed shutdown procedure
refer to the vendor service manual book.
c. Close the inlet and outlet flow to the reactor.

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d. Close the inlet and outlet Water Separator system and blow down the liquid
that trapped in the water separator ad gas to flare system step by step.
e. Decrease step by step Deethanizer Pressure Controller PIC-102 and adjust the
set point to minimum pressure.
f. Depressurize Deethanizer Column V-102 down to 140 kPa.
g. Stop the condenser pump P-101 and open the isolation valve to send the
product that trapped in condenser to burn pit.
h. Stop the refrigerant system to deethanizer condenser.
i. Close the inlet and outlet flow from deethanizer column. Open the isolation
valve to send the product that trapped in condenser to burn pit.
j. Decrease step by step Reactor Temperature Controller TIC-101 and adjust the
set point to 650C.
k. Stop all the utility flow system and close all the inlet and outlet flow

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5 CHAPTER 5
PLANT AYOUT
5.1 Site Development
Our MTO plant is going to be built at Kompleks Kawasan Industri KIE
(Kaltim Industrial Estate) Bontang, East Kalimantan, which is the biggest
industrial area in East Kalimantan. The location is shown in the Figure 5.1. The
selection of appropriate location of the plant will adversely impact the operating
and capital costs which is should be inculcated by investors to build a plant. It will
directly affect the economic value and feasibility of the plant to be built. To
choose the right location, there are several factors of considerations that must be
considered. Because of these factors will affect the continuity of the production of
the plant in the future. The factor and points we used to choose the plant location
is described in assignment 1 before.

Figure 5.1 KIE view from satelite

(source: google maps)

5.2 Area Description

This area is very strategic. We choose this place because near to the raw
material supplier PT KMI. It is also near to PT. Badak LNG plant to supply
natural gas for our utility. This location is near to the sea so easy to find cooling

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water supply. We didn’t need to make site preparation because the area has been
preparate by tho owner of KIE.

5.3 Plant Layout

Our plant lay out will be served in 2D and 3D. The 2D layout contains
overall plant layout, equipment layout, plant area, and escaping area.

Overall Plant Layout

Our plant composed of main process, utility, supporting facilities, waste

treatment, and office. Overall plant layout is serve in figure 5.2

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Figure 5.2 Overall Plant Layout

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Equipment Layout

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Figure 5.3 Overall Equipment Layout

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Plant Area
Our plant layout is made by considering these following factors:
 The available space must be enough for the whole plant and its supporting
facilities.
 The spacing between process instruments is managed by the Inside Battery
Limit (IBL) rule while the supporting facilities spacing is managed by the
Outside Battery Limit (OBL) rule.
 Safety is the main priority in the making of plant layout
The total area of our plant in KIE is 4480 m2 which can be seen on the
Figure 2.3. Our plant consists of several main areas such as production area, waste
treatment area, utility area, administration area, supporting area, and evacuation
area.
a. Production Area
The production process in MTO plant will be done outdoor. The main
equipment in production area are methanol heater, compressor, MTO reactor,
heat exchanger, water separator, and deethanizer column. The production area
should be placed near to utility area for refrigeration needs, cooling water
need, and power generation needs. The production line in production area can
be seen on the Figure 2.4.
b. Utility Area
The utility area is located near to the sea and production area. Utility area
should be near both the sea and production area to reduce the pipe and cable
length so it will save us production cost and maintenance cost. The main
utility area consist of refrigerant, cooling water, and power generation.
Refrigerant used are propane and MCR, cooling water used is sea water, and
power generation steam and gas supplied are from water separator and flue
gas.
c. Waste Treatment Area
This area holds waste water treatment area and flue gas waste treatment area.
The main equipment in waste water treatment area are stripper, utility,
equalization basin, neutralization tank, coagulation tank, flocculation tank, air

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flotation unit, incinerator, aeration basin, and final check basin. Meanwhile,
the main equipment in flue gas waste treatment area is only Molten Carbonate
Fuel Cell (MCFC).
d. Administration Area
This area holds the office, park, parking zone, etc. The buildings or structures
in this area is built to be the place where plant administration activities are
done. We put this area a bit far from the production area because the
administration area should be safe the whole time, as it is filled up with
company directors and many clients.
e. Supporting Area
This area holds the structures which supports the daily activities of our plant
employees such as mosque, canteen, etc. We try to keep the balance in our
employees’ daily life thus they will feel comfortable.
f. Evacuation Area
This area holds the crucial structures to keep the plant in its safe zone.
There is one assembly point in our plant which can be seen on the Figure 5.2. We
also provide fire station and water hydrants in case of fire emergency because of
the high flammability in our materials. The evacuation route can be seen on the
Figure 5.4 as the red line. The evacuation route must be short and not
complicated. So, when the accident happened, all the workers can gather in
assembly point

Escaping Route
Escaping route is the safe route for worker or people whose in the plant when
some accident happen. This escaping route help people to going out from process
area to assembly point. Escaping route is serve in figure 5.4.

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Figure 5.4 Escaping Route

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Figure 5.5 3D Overall Layout

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Figure 5.6 3D breakdown (From left to right; Main Process, Steam and Electricital Utility, Refigerant Utility,
Cooling Water Utility)

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6 CHAPTER 6
HEALTH, SAFETY, AND ENVIRONMENT

6.1 Emission Limit

Emission is substances, energy and other components resulted by an activity
enter or entered into ambient air that have or have not potential as contamination
element. Quality standard of emission sources is emission limits in contamination
still can tolerated in ambient air.
Gas waste produced in this methanol to olefin plant is including ethylene,
propylene, and methanol that cannot be separated from water and carbon dioxide
that produced from combustion reaction in boiler. Ethylene, propylene, and
methanol will be recovered in the stripping tower in the waste water treatment
unit and returned to the process. Meanwhile, CO2 from the boiler will going to gas
waste treatment to reduce the contain of CO2.

6.2 Hazard Identification (HAZID)

Hazard Identification (HAZID) is an analysis of hazard prevention on
industrial installation by observing whole aspects. Aspect in industrial installation:
 Information data of industrial installation (PFD, P&ID, lay out,
meteorological data, social cultural community around data, record of
events)
 Location (operating g facilities, supporting facilities)
 Risk (human resource, environment, and asset)
 Trigger factor of danger (operation process, transportation, geography and
meteorology, social cultural)
 Hazard potential (huge fire and explosion, drown, environmental
contamination)
In hazard identification the analysis considering hazard effect and hazard
frequency (level of hazard possibility). HAZID parameters in considering hazard
effect are listed in table below.

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Table 6.1 HAZID Parameters in Considering Hazard Effect

Parameter Minor Major Severe
Human The accident was not
No accidents Fatal accident
resources fatal
Losses between U.S. $
Losses less than Losses in excess of
Asset 100,000 s.d. U.S. $
U.S. $ 100,000 U.S. $ 1,000,000
1,000,000
No environmental Minor damage to the Damage to the
Environment
damage environment environment
HAZID parameters in considering hazard frequency (level of hazard possibility)
are listed in table below
Table 6.2 HAZID Parameters in Hazard Frequency

Parameter Most Likely Unlikely

Frequency more than 10 times between 1 until 10 Less than 1 time in
danger in the 10 years times in 10 years 10 years

The HAZID Analysis for our plant is listed in the Table 6.3.

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Table 6.3 HAZID Analysis

Location Description Causes Potential Hazard Hazard Effect Frequency Prevention
Raw Material To store Nature of the Vapor of the
Minor Unlikely Using PPE
Storage methanol material material

High Regular checking and temperature

Fire and/or
temperature Major Likely control provision and place the
explosion
operation reactor inside
To convert
MTO Reactor methanol into
olefins
Regular checking and pressue
High pressure Fire and/or
Major Likely control provision and place the
operation explosion
reactor inside

To separate High
Fire and/or Regular checking and temperature
Separator water from temperature Severe Likely
explosion control provisioning
olefins operation

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Table 6.3 HAZID Analysis (Cont’d)

Location Description Causes Potential Hazard Hazard Effect Frequency Prevention

High pressure Fire and/or

Distillation ethylene Regular checking temperature
and low explosion and Major Likely
Column purification and pressure control provisioning
temperature frostbite

Tank/Vessel Olefins storage Over capacity Leakage Minor Likely Check storage level periodically

High
Heat For heating Fire and/or Regular checking and
temperature Severe Likely
Exchanger and cooling explosion temperature control provisioning
operation

Noise pollution
Loud Surfacing tools that generate
Unit for that can damage
Compressor Operation Major Most noise with a silencer, and oblige
flowing gas the hearing of
Noise the use of earplug
workers

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Table 6.3 HAZID Analysis (Cont’d)

Location Description Causes Potential Hazard Hazard Effect Frequency Prevention
High
Pressure and Routine inspections and
Steam Utility Blowout and high
To produce gas High Major Likely controller instrumentation for
Unit thermal exposure
Temperature temperature and pressure
in Process

Noise due to Noise pollution

Surfacing tools that generate
Steam Utility operation unit that can damage
To produce gas Major Likely noise with a silencer, and oblige
Unit to produce the hearing of
the use of earplug
steam workers

As fuel for
Fuel Utility Frequent monitoring and
steam Corrosion Pipe leakage Major Likely
Unit maintenance
generation
Over
The contain of the
Capacity of Minor Likely Level Control System
Water Area for pool will spill
Pool
Treatment treating the
waste Leakage of Environmental
Minor Likely Checking periodically
Pool Pollution

Unit for
Electricity Electricity
generate Electrical shock Severe Likely Using PPE and make barrier
Generator current
electricity

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Table 6.3 HAZID Analysis (Cont’d)

Location Description Causes Potential Hazard Hazard Effect Frequency Prevention

Piping To distribute Corrosion, Damage and Protect the piping network and
Major Likely
Network fluid in process Failure leakage of pipe control periodically

Improve training and move

Someone Slip Minor Likely
carefully
Laboratory Quality control Spill
Area assessment Chemical
Substances Do not bring any fire source and
Flame Severe Unlikely
provide some fire exthinguisher

Provide training to the operator

To control Errors in
Control System will be about the working procedure and
operation in operating Major Unlikely
Room shut down oblige supervisors to perform
the plant procedures
daily briefing before work

Slippery floor Slipped Minor Most Providing slippery floor sign

Office and
Main Office plant
administration Frequent monitoring and
Short-circuit Fire Major Likely
maintenance

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6.3 Hazard and Operation Study (HAZOP)

Hazard and Operability Study (HAZOP) is a structured, systematic
examination of a process or operation that took place and is still in the planning
stages in which aims to identify and evaluate problems that may pose a danger
to the individual employees, equipment operation, or efficiency of the process
operation. HAZOP is the identification of irregularities / deviations that occur in
the operation of an industrial installation, along with the consequent undesirable
effects concerning safety, operability and environment. The possible deviations
are generated by rigorous questioning, prompted by a series of standard
‘guideword’ applied to intended design. HAZOP is done on planning stage for
new installation and before doing equipment modification/adding new
installation. HAZOP is usually called systematic analysis for industry critical
installation design, the effects, and potential deviations that occur together with
possible hazard potential occurrence. The goals after doing HAZOP are:
1. Identify safety, hazard, & operational problems that related with process
which are immediately threatens workers’ safety/operation.
2. Determine the severity of identified problem effect.
3. Identify and evaluate the engineering and procedural safeguards.
4. Recommend additional engineering and procedural safeguards if needed.
HAZOP is performed by a group of experts from multiple disciplines and
led by an experienced safety specialist or training consultants. The main HAZOP
main procedures are (Peters and Timmerhaus, 1991):
1. Collecting all process lineation for each process in the plant
2. Process breakdown into little and more detail sub-process. To clarify the
breakdown of sub-process is given nodes in upper-ends of each sub-process.
There’s no particular rule about limiting the distance of process
3. Searching all possibilities of deviation in each process through uses of
systematic questions (HAZOP model for question is made by using keywords,
intended to make the analysis process easier)
4. Scoring for each negative effects that caused by every deviation mentioned
before. The criterion of harmful degrees for those negative effects is determined
by safety and efficiencies operational condition of the plant in normal

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condition.
5. Determination of overcome action to every deviations happened.
Emphasizing question systematic in HAZOP procedure apparently in the using
two groups of keywords, those are:
 Primary Keywords
All words that related to condition/parameter of a process, for example:
flow, pressure, temperature, viscosity, corrosion, erosion, level, density,
relief, composition, addition, and reaction
 Secondary Keywords
All words when it is merged with primary keywords will show
probability of deviation that could be happened, for example: no, more,
less, reverse, and as well as.
The HAZOP analysis for olefin production from methanol can be seen on the
Table 6.4.

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Table 6.4 HAZOP Analysis

Equipment/
Equipment
Operation Parameter Guideword Possible Causes Consequences Action Required Safeguards
Code
Unit
Temperature
The stream controlling and
Production does not
Low temperature is monitoring the
run well
too small performance of
heat exchangers Temperature
Pipes - Temperature
Temperature Control
Production does not
The stream controlling by
run well and labours
High temperature is install the
are possible to get
too high insulator outside
injured
of pipes

Pressure drop in
The reaction does Pressure
pipe before
not go well since the controlling by Pressure
MTO Reactor R - 101 A/B Pressure Low entering
optimum condition install the safety Control
methanol
is not maintained valve
sythesis reactor

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Table 6.4 HAZOP Analysis (Cont’d)

Equipment/
Equipment Possible Action
Operation Parameter Guideword Consequences Safeguards
Code Causes Required
Unit
Pressure drop
Pressure
in pipe after
Explosion possibility controlling by Pressure
Pressure High entering
due to excess pressure install the safety Control
methanol
valve
sythesis reactor

The reaction does not

The cooling
MTO Reactor R - 101 A/B go well since the
Low water stream is
optimum condition is
too high Temperature
not maintained
controlling by Temperature
Temperature
install the safety Control
valve
The cooling
Explosion possibility
High water stream is
due to excess pressure
too low

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Table 6.4 HAZOP Analysis (Cont’d)

Equipment/
Equipment Possible
Operation Parameter Guideword Consequences Action Required Safeguards
Code Causes
Unit
The water
Low stream outlet Level controlling by
is too high Mechanical
install the safety
Level Floating
The water valve inwater outlet
Control
High stream outlet stream
is too low Separation
Water
V-101 process doesn't
Separator The cooling work well
Low water stream Temperature
is too high controlling by install Temperature
Temperature
The cooling the safety valve in Control
High water stream cooler stream
is too low
C-101
The gas Pressure controlling
C-102 Will damage the Pressure
Compressor Pressure Low stream flow by install the anti
C-103 compressor Control
is too low surge controller
C-104

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Table 6.4 HAZOP Analysis (Cont’d)

Equipment/
Equipment Possible
Operation Parameter Guideword Consequences Action Required Safeguards
Code Causes
Unit
The cold Heat exchanger
E-101 Low stream is to duty will be
Temperature
low excessive
Heat controlling by Temperature
E-102 Temperature
Exchanger The cold Heat exchanger install the input and Control
E-103
High stream is too duty will be output valve
E-104
low overloaded
E-105
The liquid
level inside Liquid will carry
Low Level Control
the column is out with the vapor Level and pressure
Distillation too high controlling by
V-102 Pressure
Column The liquid install the output
level inside Fire and/or valve Pressure
High
the column is explosion Control
too low

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Table 6.4 HAZOP Analysis (Cont’d)

Equipment/
Equipment Possible
Operation Parameter Guideword Consequences Action Required Safeguards
Code Causes
Unit
The ethylene The condenser will
outlet stream have high pressure due
Low
flowrate is to to no liquid inside the
Level controlling
high column
by install the safety Level
Condenser V-103 Level
valve in condenser Control
The ethylene
Fire and/or explosion outlet stream
outlet stream
High due to leakage on the
flowrate is to
condenser column
low

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6.4 Hazard Communication

Below is the hazard communication sign summary for harmful materials in
our plant:
Table 6.5 Hazard Communication

Hazard Communication
No. Material
Sign

1 Methanol

2 Propylene

3 Ethylene

4 Methane

5 Ethane

6 Propane

7 Nitrogen

6.5 Main Hazard in Plant

Methanol and ethylene produced from the plant, hydrogen, carbon
monoxide, and carbon dioxideare the chemicals used in the plant which poses any
significant workplace or environmental hazard used in whole plant. Other
potential emergency situations which may arise in the workplace are : fires,

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natural or man-made disasters, and medical emergencies. The hazard of each

chemical such as:
 Methanol is extremely flammable gas. Slightly hazardous in case of skin
contact (sensitizer). The substance may be toxic to blood, kidneys, liver, brain,
peripheral nervous system, upper respiratory tract, skin, central nervous
system (CNS), optic nerve.
 Ethylene gas is highly flammable and explosive. Exposure to the gas can
cause you to feel dizzy, lightheaded, and to pass out. Contact with liquid
Ethylene could cause frostbite. Ethylene may cause suffocation. Excessive
amounts in the air in an enclosed space will decrease the amount of
oxygen.The health effects caused by exposure to Ethylene are much less
serious than its fire and explosion risk.
 Propylene gas is highly flammable and explosive severe fire hazard.
Vapour/air mixtures are explosive above flash point. The vapour is heavier
than air. Vapours or gases may ignite at distant ignition sources and flash
back. Electrostatic discharges may be generated by flow or agitation resulting
in ignition or explosion.
 Methane is highly flammable and explosive. When involved in a fire, this gas
will ignite and produce toxic gases including carbon monoxide and carbon
dioxide. Extinguish fires of this gas by shutting off the source of the gas.
Contact with cryogenic liquid or rapidly expanding gases (which are released
under high pressure) may cause frostbite.
 Ethane is extremely flammable gas. In a fire or if heated, a pressure increase
will occur and the container may burst, with the risk of a subsequent
explosion. Eye and skin contact with rapidly expanding gas may cause burns
or frostbite.
Propane gas is extremely flammable. In a fire or if heated, a pressure
increase will occur and the container may burst, with the risk of a subsequent
explosion. Propane should be stored in a segregated and approved area, away
from direct sunlight in a dry, cool and well-ventilated area, away from
incompatible materials.

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6.6 Personal Protection Equipment

To ensure workers safety in the plant, there are several personal protections
equipment (PPE) that should be wore by labourer, such as:
Table 6.6 PPE
Equipment Function Picture
Eye Protection
Employees can be exposed to a large number of hazards that pose danger to their eyes and
face. OSHA requires employers to ensure that employees have appropriate eye or face
protection if they are exposed to eye or face hazards from flying particles, molten metal,
liquid chemicals, acids or caustic liquids, chemical gases or vapours, potentially infected
material or potentially harmful light radiation.
Tight-fitting eye protection that
completely cover the eyes, eye sockets,
and the facial area immediately
Google
surrounding the eyes and provide
protection from impact, dust, and Figure 6.1 Google
splashes. (Source: sksafetyproduct.com)

Face Protection
These transparent sheets of plastic extend from the eyebrows to below the chin and across
the entire width of the employee's head. Face shields used in combination with goggles or
safety spectacles will provide additional protection against impact hazards.

Face shields protect against nuisance

dusts and potential splashes or sprays of
Face shield hazardous liquids but will not provide
adequate protection against impact
hazards. Figure 6.2 Face Shield
(Source: sksafetyproduct.com)

Head Protection
Protecting employees from potential head injuries is a key element of any safety program. A
head injury can impair an employee for life or it can be fatal. Wearing a safety helmet or hard
hat is one of the easiest ways to protect an employee's head from injury.

Hard hats can protect employees from

Safety Helmet impact and penetration hazards as well as
from electrical shock and burn hazards.
Figure 6.3 Safety Helmet
(Source: olympicworkwear.com)

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Table 6.6 PPE (Cont’)

Equipment Function Picture
Foot and Leg Protection
Employees who face possible foot or leg injuries from falling or rolling objects or from
crushing or penetrating materials should wear protective footwear. Also, employees whose
work involves exposure to hot substances or corrosive or poisonous materials must have
protective gear to cover exposed body parts, including legs and feet. If an employee's feet
may be exposed to electrical hazards, non-conductive footwear should be worn. On the other
hand, workplace exposure to static electricity may necessitate the use of conductive footwear.
Safety shoes have impact-resistant toes
and heat-resistant soles that protect the
feet against hot work surfaces common in
roofing, paving and hot metal industries.
The metal insoles of some safety shoes
protect against puncture wounds. Safety
Safety shoes
shoes may also be designed to be
electrically conductive to prevent the
build-up of static electricity in areas with
the potential for explosive atmospheres or Figure 6.4 Safety Shoes
(Source: dorenlee.com)
nonconductive to protect workers from
workplace electrical hazards.
Hand and Arm Protection
Potential hazards include skin absorption of harmful substances, chemical or thermal burns,
electrical dangers, bruises, abrasions, cuts, punctures, fractures and amputations. Protective
equipment includes gloves, finger guards and arm coverings or elbow-length gloves.
Chemical-resistant gloves are made
with different kinds of rubber or various
Chemical and
kinds of plastic. As a general rule, the
Liquid
thicker the glove material, the greater the
Resistant
chemical resistance but thick gloves may Figure 6.5 Chemical
Gloves Resistant Gloves
impair grip and dexterity, having a
(Source: zoro.com)
negative impact on safety.

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Table 6.6 PPE (Cont’)

Equipment Function Picture
Body Protector
Employees who face possible bodily injury of any kind that cannot be eliminated through
engineering, work practice or administrative controls, must wear appropriate body protection
while performing their jobs.

Coverall protect against certain chemicals

and physical hazards. When chemical or
physical hazards are present, check with
Coverall
the clothing manufacturer to ensure that
the material selected will provide
protection against the specific hazard.

Figure 6.6 Coverall

(Source: dickiesworkwear.com)

Apron protects the body from exposure to

Apron hazardous welding, against dry heat and
flames.

Figure 6.7 Apron for Welding

(Source: alatteknik-makmurjaya.com)

Cotton uniform protects the body from

Cotton uniform
exposure to hazardous electrostatic.

Figure 6.8 Cotton Uniform for

Electrostatic
(Source: alibaba.com)
Ear Protector
Determining the need to provide hearing protection for employees can be challenging.
Generally, the louder the noise, the shorter the exposure time before hearing protection is
required.
Ear plug protects the ears from sounds
that are too loud and noisy. Ear plug must
Ear Plug
be individually fitted by a professional and
can be disposable or reusable. Reusable Figure 6.9 Ear Plug

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plugs should be cleaned after each use. (Source: coopersafety.com)

Table 6.6 PPE (Cont’)

Equipment Function Picture
Earmuffs used when a perfect seal around
the ear needed. Glasses, facial hair, long
Earmuffs hair or facial movements such as chewing
may reduce the protective value of
Figure 6.10 Earmuffs
earmuffs. (Source: bunnings.com)

Respiratory Protector
Respiratory protection equipment especially useful in an emergency, for example, employee
should help other employee who suffer accidents or when must escape from a sudden
atmospheric air composition changes such that endanger his soul or when should repair
machinery or equipment where very high level contaminants.

Dust Masker Prevent inhalation of dust

Figure 6.11 Dust Masker

(Source: popeyethewelder.com)

Breathing Prevent inhalation of harmful inert and

Apparatus general gases
Figure 6.12 Breathing
Apparatus
(Source: weiku.com)

Prevent inhalation of harmful chemical

Cartridge
gases
Figure 6.13 Catridge
(Source: aliimg.com)

Fall Protector
Falls are among the most common causes of serious work related injuries and deaths.
Employers must set up the work place to prevent employees from falling off of overhead
platforms, elevated work stations or into holes in the floor and walls. OSHA requires that fall
protection be provided at elevations of four feet in general industry workplaces, five feet in
shipyards, six feet in the construction industry and eight feet in long shoring operations. In
addition, OSHA requires that fall protection be provided when working over dangerous
equipment and machinery, regardless of the fall distance.

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Table 6.6 PPE (Cont’)

Equipment Function Picture

Prevent a fall from a high place or protect

Safety Belt from impact due to accidents while driving
in the plant.

Figure 6.14 Safety Belt

(Source: ecw.com)

Prevent falling objects from high places

Safety Net
which is under construction

Figure 6.15 Safety Net

(Source: catari.net)

(Source: OSHA, 2003, etc.)

6.7 Plant Emergency Response

The Emergency Action Plan (EAP) discussed here is based on
Occupational Safety and Health Administration (OSHA). EAP is a written
document required by particular OSHA standards [29 CFR 1910.38(a)]. The
purpose of an EAP is to facilitate and organize employer and employee actions
during workplace emergencies. Well-developed emergency plans and proper
employee training (such that employees understand their roles and
responsibilities within the plan) will result in fewer and less severe employee
injuries and less structural damage to the facility during emergencies. A poorly
property plant will likely lead to a disorganized evacuation or emergency
response, resulting in confusion, injury, and property damage. The plan does not
need to be written and may be communicated orally if there are 10 or fewer
employees [29 CFR 1910.38(b)]. Based on Model Emergency Response Plan by
N. C. Department of Labour (NCDL) Division of Occupational Safety and
Health (OSH), there are 7 points in EAP procedures explain as follow.
a. Emergency Reporting
Employees shall immediately pull the fire alarm pull boxes (or telephone
Plant Security) for all emergencies, even small fires. Plant Security personnel

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shall locate the emergency on the alarm control panel and dispatch via radio
an “All Points Bulletin” giving details on the emergency. Emergencies
involving chemical, fire, and/or natural/man- made hazards shall be handled
in accordance with their specific emergency procedures.
b. Plant Evacuation
Whenever the fire alarm sounds, the entire plant will evacuate by designated
routes to predetermined assembly areas. Whenever the gas alarm sounds, the
entire plant, will evacuate by designated routes to predetermined assembly
areas. Upon the “all clear” signal, you may return to your work stations
unless you are given different instructions from your local supervisor or
manager. Once an evacuation is begun it will be carried to completion even if
it is known to be a false alarm. Re-entry will not be permitted until the “all
clear” signal is sounded.
c. Emergency Escape Procedures and Emergency Route Assignments.
In the event of an emergency, employees shall activate fire pull stations
without exposing themselves to serious hazards and leave the affected work
area as soon as practical via the emergency route assignments posted in your
immediate work area. Employees shall normally leave their work areas
through the primary route assignments unless the route is blocked by the
emergency and not safely passable. An alternative route remote from the
emergency incident shall be designated by the local manager or supervisor
and shall be used for emergency egress. All primary emergency escape routes
and designated meeting locations shall be provided to each employee by
departmental managers as part of the emergency planning process. These
primary route and designated meeting locations must be approved by the
plant manager.
d. Critical Plant and Process Operations
If there are any critical plants or process operations that need to be shut
down or inactivated before total evacuation is completed, then department
managers must designate such processes and the employees to accomplish the
shutdown in advance. Emergency shutdown procedures must be
conspicuously posted on each machine or at each process where appropriate.

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If a critical operation or process cannot be shut down or requires a substantial

time delay, then the plant manager/incident commander must be so notified as
soon as possible with the full particulars of the situation.
e. Accountability of All People Post Evacuation
Once everyone has evacuated the facility and arrived at their
designated meeting places, a head count must be taken as soon as possible.
Each manager or supervisor is responsible to perform the head count and to
account for any missing people. The unit manager, supervisor, or unit warden
shall take the sign in/out log with them to the designated meeting location.
f. Rescue and Medical Duties
If anyone is trapped and/or injured in the emergency or during the
evacuation, then the situation and location shall be noted and communicated
to the plant manager/incident commander as soon as possible. Rescue, first
aid, and remaining behind with a trapped or injured person by company
employees is voluntary and is governed by the rules of common sense.
g. Preferred Means of Reporting Fires and Emergencies
Pull the fire or gas alarm box levers as appropriate, then call plant security and
communicate the particulars of the incident as soon as possible. If plant security
cannot be reached, then dial 112 and give the particulars of the emergency

6.8 Waste Management

Every industry have waste from the process. Waste from the plant must be
managed because it can damaged the environment. To manage the waste of our
plant, we have to identify it first. Waste from our plant can be seen below :
 Waste Water
 Methanol
 Ethylene
 Propylene
 House Hold Waste
 Carbon Dioxide
 Sludge

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All of these wastes can be directly discarded, recycled, or used again to

main process. We have grouped all of the waste based on the type or phase. There
are liquid waste, gas waste, and solid waste.
1. Liquid Waste
Liquid waste of methanol to olefin plant is including waste water from
production and utility process and house hold waste from domestic water. Waste
water from production and utility process comes from dehydration reaction of
methanol and utility activity in order to cooling the process. The government have
a standard parameter of waste water that produced from petrochemical industry
based on Peraturan Menteri Negara Lingkungan Hidup No. 08 Tahun 2007 that
can be seen below:
Table 6.7 Government standard pramater of waste water in petrochemical industry

Parameter Maximum Contain Unit

BOD 100 mg/L
COS 200 mg/L
TSS 150 mg/L
Oil and Grease 15 mg/L
Fenol 1 mg/L
Cr 1 mg/L
Cu 3 mg/L
Zn 10 mg/L
Ni 0.5 mg/L
pH 6–9
Maximum Quantity of 0.6 m3 / tonne raw
Waste Water material
(Source: Peraturan Menteri Negara Lingkungan Hidup No. 08 Tahun 2007)

For house hold waste water or domestic water comes from the activity in the
pantry and sanitation. The government have a standard parameter of domestic
waste water based on Undang-Undang Kementrian Lingkungan Hidup No. 112
Tahun 2003 that can be seen below:

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Table 6.7 Government standard pramater of domestic waste water

Parameter Maximum Contain Unit
BOD 100 mg/L
COD 100 mg/L
TSS 100 mg/L
pH 6–9
(Source: UU Kementrian Negara Lingkungan Hidup No. 112 Tahun 2003)

2. Gas waste
Gas waste of methanol to olefin plant is including ethylene, propylene, and
methanol that cannot be separated from water and carbon dioxide that produced
from combustion reaction in boiler. Ethylene, propylene, and methanol will be
recovered in the stripping tower in the waste water treatment unit and returned to
the process. Meanwhile, CO2 from the boiler will going to gas waste treatment to
reduce the cointain of CO2

3. Solid Waste
Solid waste of methanol to olefin plant is sludges that produced from utility
activities and house hold activities. Sludges will separated from waste water in the
air flotation unit and it will burned in the incinerator.

6.9 Waste Treatment

1. Waste Water Treatment

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Waste water from
water utility
Equalization Neutralization Coagulation
Stripper Utility
Basin Tank Tank

Ethylene,
Propylene, and Waste water from
Methanol Acid Injection Coagulant Injection
house hold

Acid and Caustic

Soda Injection Flocculation
Tank

Sludge

Air Flotation
Incenerator
Unit

Nutrient and Air

Aeration Basin

Final Check
Basin

Figure 6.1 Block flow diagram of Waste Water Treatment

Waste water treatment process is used to reduced the emission gas (ethylene
and propylene), methanol, COD, and BOD in waste water. Waste Water
Treatment Unit is one of the alternative processes that could be used for the
efficient use of raw materials and minimize the amount of waste that will be
formed. Waste minimization is done by the recovery of gases which still contains
ethylene and propylene. Ethylene and propylene will be stripped by the stripper
and return to the production process. The treatment process is monitored daily. As
for the process output (output) routinely checked 1 time in a week.
Water treatment results that have met the required specifications to be cooling
agent will transferred to the utility plant. Then, waste water from utility plant met
waste water from house hold in the equalization tank. Waste water from
equalization tank will moved to the neutralization tank. The function of
neutralization tank is to reduce pH of caustic waste water with acid injection.
From neutralization tank, the liquid waste transferred to coagulation tank.
Coagulation process is the binding of colloidal particle by the coagulant that aims
to separate soluble material from waste water. The coagulant that usually used is
PAC (Poly Alumunium Chloride). After that, the liquid waste transferred to
flocculation tank to produce bigger particle with slow mixing process.

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Sludges that produced from coagulation and flocculation tank transferred to

air flotation unit to separate sludges from waste water. Then, sludges burned in
the incinerator at temperature 800oC – 900oC and waste water transferred to
aeration unit to reduce BOD and COD contain of waste water. If the specification
met the regulation by government, waste water transferred to final check basin
and go to the sea. This processing can reduce the volume of waste water
discharged and also minimize the amount of raw material production, which can
also reduce production costs.

2. Flue Gas Waste Treatment

This process can reduces CO2 content using fuel cell. The process of gas waste
treatment can be seen on figure below:

CO2 treatment sampling the gas

release the gas
using fuel cell by post treatment

Figure 6.2 Gas waste treatment process

One of fuel cell type that can be used is Molten Carbonate Fuel Cell. The
MCFC is placed in the flue gas stream of the gas turbine. From literature, the
result obtained the use of Molten Carbonate and can reduce CO2 emission by
73%. Fuel that used Hydrogen, natural gas, methanol or biogas. On cathode side,
a mixture of oxygen and carbon dioxide is required. After the gas emission met
the maximum requirement of gas emission that can be released, CO2 can be
released by venting it into the air. The government, with Peraturan Menteri
Negara Lingkungan Hidup No. 13 Tahun 1995, determine about quality standards
stationary source emission is 5000 ppm.

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7 CHAPTER 7
CAPITAL EXPENDITURE

7.1 Basis of Economical Calculation

In chapter 7 – 9, we will do the economic analysis including capital
expenditure (CAPEX) calculation, operational expenditure (OPEX) calculation,
profitability analysis (IRR, NPV, PP), and sensitivity analysis. Some assumptions
used in this economic analysis are as follow.
1. The value of Chemical Engineering Cost Index (CEPCI) is the same for all
equipment type, and the CEPCI data is based on Access Intelligence LLC
(January, 2015).
2. Plant construction is 3 years (Total project), started from 2016.
3. Plant lifetime is 20 years, started from 2019.
4. Plant working time is 24 hours in a day and 330 days in a year.
5. Plant production capacity is 66,000 ton ethylene per year and 120,000 ton
propylene per year.
6. Currency used is Rp 13,000/USD.
7. Inflation is neglected.
8. Raw material price influenced by crude oil price.
9. Production cost of ethylene equals to propylene because its produced
simultaneously, joint cost.
10. The loan ratio between bank and investor is 2/3.

7.2 Cost Index

The cost index data (Table 7.1) is based on Access Intelligence LLC (2015)
from 2006 to 2013 published in Chemical Engineering magazine.
Table 7.1 Chemical Engineering Plant Cost Index
Year CEPCI
2006 499.6
2007 525.4
2008 575.4
2009 521.9
2010 550.8
2011 585.7

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Table 7.1 Chemical Engineering Plant Cost Index (Cont’d)
Year CEPCI
2012 584.6
2013 567.3

(Source: chemengonline.com/PCI, 2015)

CEPCE Estimated
CEPCI Poly. (CEPCI)

700.0
600.0
500.0
CEPCI

400.0 y = 0.419x6 - 5051.5x5 + 3E+07x4 - 7E+10x3 + 1E+14x2 - 8E+16x + 3E+19

300.0 R² = 0.9482

200.0
100.0
0.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Year

Figure 7.1 Chemical Engineering Plant Cost Index

(Source: Reproduced from chemengonline.com/PCI, 2015)
The value of cost index in 2020 obtained by extrapolating graph on the Figure 7.1,
which result 641.2 (Table 7.2).
Table 7.2 Estimation Value of CEPCI
Year CEPCI
2014 577.3
2015 587.5
2016 597.8
2017 608.4
2018 619.1
2019 630.0
2020 641.2

7.3 Fixed Cost

Equipment Cost
The step to calculate equipment cost can be seen on the Figure 7.2.

Equipment Cost in Equipment Cost in Bare Modul Cost of

Year Basis 2020 Equipment in 2020

Figure 7.2 Step to Calculate Equipment Cost

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The equipment cost in the present (𝐶𝑃𝐵 ) calculated based on Product and Process
Design Principles handbook by Seider et al (2003). This cost is depend on
material, operating condition, capacity, size, and type of equipment. The detail
calculation of each equipment using Seider’s parameter and equation can be seen
in the Excel file. The equipment cost in 2020 predicted by cost index value
calculated before (641.2). The bare module cost of an equipment is calculated by
multiplying Free on Board (FOB) price as the bases cost of the equipment with
bare module factor (specific for each equipment type) based on Product and
Process Design Principles handbook by Seider et al (2003). The overall formula
to calculate equipment cost can be seen on the Equation 7.1.
𝐼
𝐶𝐵𝑀 = 𝐶𝑃𝐵 ( ) (𝐹𝐵𝑀 + (𝐹𝐷 𝐹𝑃 𝐹𝑀 − 1)) 7.1
𝐼𝐵
𝐶𝐵𝑀 = Present cost of the equipment
𝐶𝑃𝐵 = Original cost of the equipment
𝐼 = Index value at present time
𝐼𝐵 = Index value at time original cost was obtained
𝐹𝐵𝑀 = Bare-module factor
𝐹𝐷 = Equipment design factor
𝐹𝑃 = Pressure factor
𝐹𝑀 = Material factor
The list of equipment cost in 2020 can be seen on the Table 7.3.

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Table 7.3 Equipment Cost

Price Total Price Bare Module Cost Installation Factor Installation Cost Purchased Equipment
Code QTY Spare Bare Module Factor
$/Unit $ $ % $ $
Reactor
R-101 1 1 425,400 850,800 3.0 2,552,400 30 765,800 1,786,600
Distillation Column
Deethanizer 1 1 493,000 986,000 4.1 4,042,600 30 1,212,800 2,829,800
Water Separator
Water Separator 1 1 97,900 195,800 2.3 450,400 20 90,100 360,300
Centrifugal Pump
P-101 1 1 16,600 33,200 3.2 106,300 30 31,900 74,400
P-201 1 1 21,400 42,800 3.2 137,000 30 41,100 95,900
P-301 1 1 16,100 32,200 3.2 103,100 30 31,000 72,100
P-401 10 10 28,700 574,000 3.2 1,836,800 30 551,100 1,285,700
Heat Exchanger (Shell and Tube)
E-101 1 1 158,800 317,600 3.1 984,600 20 197,000 787,600
E-102 1 1 131,600 263,200 3.1 816,000 20 163,200 652,800
E-103 1 1 112,900 225,800 3.1 700,000 20 140,000 560,000
E-104 1 1 112,600 225,200 3.1 698,200 20 139,700 558,500
E-105 1 1 135,100 270,200 3.1 837,700 20 167,600 670,100
E-106 1 1 135,300 270,600 3.1 838,900 20 167,800 671,100
E-201 1 1 160,400 320,800 3.1 994,500 20 198,900 795,600
E-301 1 1 160,400 320,800 3.1 994,500 20 198,900 795,600
E-302 1 1 160,400 320,800 3.1 994,500 20 198,900 795,600
E-303 1 1 160,400 320,800 3.1 994,500 20 198,900 795,600
E-304 1 1 160,400 320,800 3.1 994,500 20 198,900 795,600
Compressor
C-101 10 10 236,900 4,738,000 3.2 15,161,600 35 5,306,600 9,855,000
C-102 10 10 240,900 4,818,000 3.2 15,417,600 35 5,396,200 10,021,400
C-103 10 10 170,300 3,406,000 3.2 10,899,200 35 3,814,800 7,084,400
C-104 10 10 192,500 3,850,000 3.2 12,320,000 35 4,312,000 8,008,000
C-301 1 1 181,600 363,200 3.2 1,162,300 35 406,900 755,400
C-302 1 1 181,600 363,200 3.2 1,162,300 35 406,900 755,400
C-303 1 1 181,600 363,200 3.2 1,162,300 35 406,900 755,400
C-304 1 1 181,600 363,200 3.2 1,162,300 35 406,900 755,400
Expander
EX-301 1 1 181,600 363,200 2.1 762,800 35 267,000 495,800
EX-302 1 1 181,600 363,200 2.1 762,800 35 267,000 495,800

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Table 7.3 Equipment Cost (Cont’d)

Price Total Price Bare Module Cost Installation Factor Installation Cost Purchased Equipment
Code Quantity Spare Bare Module Factor
$/Unit $ $ % $ $
Storage
TK-101 2 2 104,000 416,000 1.3 540,800 20 108,200 432,600
TK-102 1 1 61,500 123,000 1.3 159,900 20 32,000 127,900
TK-103 1 1 66,900 133,800 1.3 174,000 20 34,800 139,200
TK-201 1 1 69,600 139,200 1.3 181,000 20 36,200 144,800
TK-202 1 1 69,600 139,200 1.3 181,000 20 36,200 144,800
TK-203 1 1 69,600 139,200 1.3 181,000 20 36,200 144,800
TK-301 1 1 66,900 133,800 1.3 174,000 20 34,800 139,200
TK-302 1 1 66,900 133,800 1.3 174,000 20 34,800 139,200
TK-303 1 1 81,100 162,200 1.3 210,900 20 42,200 168,700
TK-304 1 1 66,900 133,800 1.3 174,000 20 34,800 139,200
Turbine
ST-201 1 1 290,400 580,800 2.15 1,248,800 35 437,100 811,700
GT-201 1 1 306,700 613,400 2.15 1,318,900 35 461,700 857,200
Burner
B-201 1 1 266,300 532,600 1.86 990,700 20 198,200 792,500
JT Valve
JT-301 1 1 69,600 139,200 1.73 240,900 15 36,200 204,700
JT-302 1 1 69,600 139,200 1.73 240,900 15 36,200 204,700
Water Treatment
S-401 10 10 21,400 428,000 1.73 740,500 15 111,100 629,400
S-402 10 10 29,500 590,000 1.73 1,020,700 15 153,200 867,500
S-403 10 10 29,500 590,000 1.73 1,020,700 15 153,200 867,500
TK-401 10 10 21,400 428,000 1.3 556,400 20 111,300 445,100
EC-401 1 1 267,400 534,800 3 1,604,400 30 481,400 1,123,000
Total Purchased Equipment Cost ($) 90,183,200 28,294,600 61,888,600

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Piping, Insulation, and Controller Cost
7.3.2.1 Piping and Insulation Cost
The need of pipe is based on P&ID. The cost of piping determined from
material and weight. The cost of pipe and insulation determined from weight. The
detail cost of piping and insulation can be seen on the Table 7.4.
Table 7.4 Piping and Insulation Cost
Requirement Length Total
Length Price Insulation Cost
Nominal Density Weight
Material Schedule
Pipe m kg/m kg $/kg $ $
Carbon
4 40 73.80 16.08 1,186.70 6.57 800 7,800
Steel
Carbon
6 40 97.70 28.26 2,761.00 6.57 1,900 18,200
Steel
Carbon
10 40 34.80 60.29 2,098.09 6.57 1,400 13,800
Steel
Carbon
20 40 39.80 117.15 4,662.57 6.57 3,100 30,700
Steel
Carbon
30 40 53.80 176.85 9,514.53 6.57 6,300 62,600
Steel
Stainless
10 40 681.70 60.40 41,174.68 37.28 153,500 1,534,800
Steel
Total Cost of Piping and Insulation 1,667,900

Elbow cost determined from material weight. The length of elbow cost
determined from diameter equivalent, Le/D, which is 35 inch. The detail
calculation of elbow cost can be seen on the Table 7.5.
Table 7.5 Elbow Cost
Requirement Length Total
Length Cost
Nominal Density Weight
Type Schedule Quantity
Pipe m kg/m kg $
Elbow 90 4 40 12 1.80 0.42 0.75 100
Elbow 90 6 40 14 7.20 1.88 13.56 100
Elbow 90 10 40 12 10.80 2.80 30.24 100
Elbow 90 20 40 12 54.00 6.10 329.4 1,000
Elbow 90 30 40 12 25.20 9.67 243.6 800
Elbow 90 10 40 24 72.00 18.00 1296 3,900
Total Cost of Elbow 6,000

The valve calculated assumed as globe valves. The detail calculation of valve can
be seen on the Table 7.6.
Table 7.6 Valve Cost
Price Cost
Type Quantity
$/Unit $
Globe Valve 96 1,100 105,600

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7.3.2.2 Controller Cost
The need of controller is based on P&ID. The detail calculation of
controller can be seen on the Table 7.7.
Table 7.7 Controller Cost
Price Cost
Type Quantity Spare
$/Unit $
Level 8 5 900 11,700
Flow 9 5 800 11,200
Pressure 11 5 2,000 32,000
Temperature 11 5 1,500 24,000
Total Cost of Controller 78,900

Offsite Facility Cost

Offsite facility cost can be calculated using Equation 7.2 which result $
6,816,300.
𝐶𝑜𝑓𝑓𝑠𝑖𝑡𝑒 = 5% 𝐶𝑇𝐵𝑀 + 𝑢𝑡𝑖𝑙𝑖𝑡𝑦 𝑐𝑜𝑠𝑡 7.2

Utility cost including steam, electricity, cooling water, refrigerant, and process
water. The detail calculation of utility cost can be seen on the Table 7.8.
Table 7.8 Utility Cost
Price Cost
Utility Unit Amount
$/Unit $
Steam lb/hr 85,612.80 50 4,280,700
Electricity kW 2,175.87 203 441,800
Cooling Water gpm 5,906.09 58 342,600
Refrigerant gpm 441.61 1,330 587,400
Process Water ton - 347 -
Total Cost of Utility ($) 5,652,500

Supporting Equipment Cost

Supporting facilities are the equipment needed to support production
process in the entire area of plant site. The plant site consists of several area and
buildings i.e. production area, administration area, etc. The amount of supporting
equipment is determined from the number of employees in the specific area and
their needs. The detail calculation of supporting equipment can be seen on the
Table 7.9.

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Table 7.9 Supporting Equipment Cost
Price Total Cost
No. Supporting Equipment Quantity
$/Unit $
1 Computer 15 500 7,500
2 Photocopy + scanner + printer machine 3 1,000 3,000
3 Clock 10 3 30
4 Office stationary 1 200 200
5 Table 15 60 900
6 Chair 15 25 375
7 Cabinet 4 150 600
8 Sofa 1 200 200
9 Meeting room set 1 1,500 1,500
10 Pantry utensils 1 300 300
11 Dispenser 5 30 150
12 PPE 20 300 6,000
13 Lamps 50 1 50
14 Recycle Bin 20 2 40
15 Generator 10 10 100
16 Telephone 16 250 4000
17 Television 10 400 4,000
18 Air Conditioner 20 100 2,000
19 CCTV 1 600 600
20 Laboratory equipment 20 75 1,500
21 Fire Extinguisher 15 500 7,500
Total Cost of Supporting Equipment 33,045

Additional Cost
Additional cost here is the market research cost. This is the cost needed by
our marketing team to make a research from the consumer about the market
activity which is directly controlling the demand of olefin, especially in Indonesia.
The method of market research is to have a service from a consultant company.
This method will be used to determine our plant’s production capacity. We do the
market research analysis once before we begin the production and after several
years of production when we see that our production capacity doesn’t fulfil the
demand in Indonesia. The role of market research analysis is to identifying and
evaluating potential market, identifying the strength and weakness of competitors,
identifying consumer activities, further planning based on the conditions or
changes which affect our product sales. The detail calculation of additional cost
can be seen on the Table 7.10.

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Table 7.10 Additional Cost
Cost
Component
$
Water Installation 8,500
Telephone Installation 5,000
Electricity Installation 6,500
Internet Network Installation 1,700
Hydrants Installation 4,500
Total Cost of Additional Cost 26,200

Site Development
Site development typically making land surveys, dewatering and drainage,
surface cleaning, rock blastering, addition sidewalk and road, and fire protection
facilities. Since the land in KIE is fit to be built, we don’t need to making land
surveys, dewatering and drainage, surface cleaning and rock blastering. The site
development cost detail can be seen on the Table 1.11 and Table 1.12
1 Table 7.11 Site Administrative Cost
Price Cost
Component Quantity
$/Unit $
Government licensing 10 4,600 46,000
Government inspection 10 4,200 42,000
Society Licensing 10 6,300 63,000
Administrative - 187,500 187,500
Financing - 79,200 79,200
Total Cost of Site Administrative 417,700
Table 7.12 Land Preparation Cost
Price Cost
Component Unit
$/Unit $
Land Area m2 150 9,100
Road Area m2 20 4,900
Parking Area m2 20 660
Total Cost of Land Preparation 1,473,600

Total of site development cost is the sum of site cost and land cost. The total cost
of site development is $ 1,891,300.

Building
Building cost is a cost to build all of the building (USD 110/m 3) including
building foundation. The detail calculation of building cost and foundation cost
can be seen on the Table 7.13 and 7.14.

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Table 7.13 Building Cost
Size
Volume Area Cost
Building Length Wide Height
m m m m3 $
Compressor Housing
22.26 18.9 4 1,682.86 185,200
(Process and Utility)
Mosque 10.5 11.85 5 622.13 68,500
Cafeteria 11.85 8.05 5 476.96 52,500
Office 24.125 8.045 10 1,940.86 213,500
Fire station 24.85 17.25 8 3,429.30 377,300
Maintenance 8.5 8 5 340.00 37,400
Workshop 8.5 8 5 340.00 37,400
Laboratory 7 4.96 5 173.60 19,100
Control room 8.25 5 5 206.25 22,700
Security 5 3.3 5 82.50 9,100
Training center 11.25 8.045 5 452.53 49,800
Total Cost of Building 1,072,500
Table 7.14 Foundation Cost
Size
Area Cost
Building Length Wide
m m m3 $
Compressor Housing
22.26 18.9 420.71 16,900
(Process and Utility)
Mosque 10.5 11.85 124.43 5,000
Cafeteria 11.85 8.05 95.39 3,900
Office 24.125 8.045 194.09 7,800
Fire station 24.85 17.25 428.66 17,200
Maintenance 8.5 8 68.00 2,800
Workshop 8.5 8 68.00 2,800
Laboratory 7 4.96 34.72 1,400
Control room 8.25 5 41.25 1,700
Security 5 3.3 16.50 700
Training center 11.25 8.045 90.51 3,700
Total Cost of Foundation 63,900

Total building cost is the sum of building cost and foundation cost. The total
building cost is $ 1,135,500.

Contractor’s Fee
Contractor need to assist plant construction. The contractor’s fee can be
estimated using Equation 7.3 which result $ 2,227,900.
𝐶𝐶𝑜𝑛𝑡𝑟𝑎𝑐𝑡𝑜𝑟 = 3% 𝐶𝐷𝑃𝐼 7.3

𝐶𝐷𝑃𝐼 = Cost of Direct Permanent Investment

CDPI consist of total cost of bare module (CTBM), site preparation cost (CSite),
building cost (CBuilding), and utility cost (CUtility).

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Contingency Cost
Contingencies are unanticipated costs incurred during the construction of a
plant. The contingency cost can be estimated using Equation 7.4 which result $
4,746,800.
𝐶𝐶𝑜𝑛𝑡𝑖𝑛𝑔𝑒𝑛𝑐𝑦 = 15% 𝐶𝐷𝑃𝐼 7.4

7.4 Working Capital Investment

Working capital funds, CWC, are needed to cover operating cost required for
early operation of the plant, including the cost of inventory and funds to cover
accounts receivable. In general, working capital is funds, in addition to fixed
capital and start-up funds, needed by a company to meet its obligations until
payments are received form others for goods they have received. It is fairly
standard to provide working capital for one-month period of plant operation,
because those buying the product are usually given 30 days to make their
payments, while the company has 30 days to pay for raw materials. Inventories of
product may be much less than 30 days. Here, 7 days is assumed. Working capital
is fully recoverable and, therefore, is not depreciated. If we apply the definition of
working capital to the operation of a chemical plant, working capital can be
defined by Equation 7.4 which result 13,838,000.
𝐶𝑊𝐶 = 0.176 × 𝐶𝑇𝑃𝐼 7.5

𝐶𝑇𝑃𝐼 = Cost of Total Permanent Investment

CTPI consist of direct permanent investment cost (CDPI), contractor’s fee
(CContractor), contingency cost (CContingency), total cost of depreciable capital (CTDC),
land cost (CLand), royalty cost (CRoyalty), and plant start-up cost (CStart-Up).

7.5 Total Capital Expenditure

Total Capital Expenditure (CAPEX) or Total Capital Investment (TCI) is
sum of direct cost, indirect cost, additional cost, and working capital. Direct cost
consist of total bare module cost, site development cost, and offsite facility cost.
Indirect cost consist of engineering and supervision cost, construction cost,
contractor’s fee, and contingency cost. The summary of total capital expenditure
can be seen on the Table 7.15 and Figure 7.3.

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Table 7.15 Capital Expenditure Breakdown
Cost Cost
Component Symbol Explanation Note
Type $
CTBM Purchased Equipment 61,888,600 Calculated
Process Equipment
Installation Cost 28,294,600 Calculated
CBulk Piping, Elbow, Valve 1,779,500 Calculated
Bulk Material
Controller 78,900 Calculated
CSite Site Administrative 417,700 Calculated
Direct Site Development Cost
Cost Land Preparation 1,501,500 Calculated
CBuild Building 1,072,200 Calculated
Building Cost
Foundation 63,300 Calculated
CService Offsite Facility 10,161,700 Calculated
Service Facility Supporting Equipment 73,900 Calculated
Additional Cost 26,200 Calculated
Total Direct Permanent Investment CDPI Total Direct Permanent Investment 105,358,100 (CDPI = CTBM + Cbulk + Csite + Cbulid + Coffsite)
Engineering and
CEng Engineering and Supervision 5,268,000 (5% CDPI)
Supervision
Indirect Construction Expenses CContruction Construction Expenses 6,321,500 (6 % CDPI)
Cost
Contingency CContingency Contingency 15,803,800 (15% CDPI)
Contractor CContractor Contractor 3,160,800 (3 % CDPI)
Total Depreciable Capital CTDC Total Depreciable Capital 135,912,200 (CTDC = CDPI + Ceng + Ccontruction + Ccontingency + C contractor)
Additional Royalty CRoyal Royalty 2,718,300 (2% CTDC)
Cost Plant Start-Up CStartup Plant Start-Up 13,591,300 (10% CTDC)
Total Permanent Investment CTPI Total Permanent Investment 152,221,800 (CTPI = CTDC + Croyal + Cstart up)
Working
Working Capital CWC Working Capital 26,791,100 (CWC = 17.6 % CTPI)
Capital
Total Capital Investment CTCI Total Capital Investment 179,012,900 (CTCI = CTPI + CWC)

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Capital Expenditure
3%
5%
4%

8% Process Equipment
Bulk Material
1% Site Development Cost
2%
2% Building Cost
Service Facility
Engineering and Supervision
Construction Expenses
Contractor
75%

Figure 7.3 Capital Expenditure Breakdown

Based on Figure 7.3, the highest percentage is process equipment (75%) followed
by service facility (8%). These two parameter will be considered as parameter for
sensitivity analysis.

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8 CHAPTER 8
OPERATIONAL COST

8.1 Manufacturing Cost

Direct Production Cost
8.1.1.1 Raw Material Cost
In this plant, we need methanol as raw material of our plant. From the
data, we calculate the amount of raw material cost needed on Table 8.1.
Table 8.1 Raw Material Cost

Need per Year Price per Unit Price per Year

Raw Material Unit
Unit/Year $/Unit $/Year
Methanol 330,000 Tonne 410 135,300,000
SAPO-34 7,200 kg 350 2,520,000

Catalysts in our plant have 5 years’ lifetime, so raw material cost in each year is
different. Cost for raw materials in each year is shown Table 8.2.
Table 8.2 Raw Material Cost Overall

Catalyst Additional Total Cost Per

Year
SAPO-34 Cost (US $) Year (US $)
1 2,520,000 231,840,000
2 - 229,320,000
3 - 229,320,000
4 - 229,320,000
5 - 229,320,000
6 2520000 231,840,000
7 - 229,320,000
8 - 229,320,000
9 - 229,320,000
10 - 229,320,000
11 2520000 231,840,000
12 - 229,320,000
13 - 229,320,000
14 - 229,320,000
15 - 229,320,000
16 2520000 231,840,000
17 - 229,320,000
18 - 229,320,000
19 - 229,320,000
20 - 229,320,000

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8.1.1.2 Utility Cost
Utility cost for this MTO plant consist of electricity, fuel, and refrigerant
utility. The total utility cost for the plant is $ 5,578,800. The utility cost
breakdown can be seen on the Table 8.3.
Table 8.3 Utility Cost in OPEX

Need Price per Unit Price per Year

Utility Unit
Unit/Process Unit/year $/Unit $/Year
Electricity 15,443.215 59287900 kWh 0.07 4,154,500
Natural Gas 2,946 972180 kg 0.74 795,700
Refrigerant 100,300 115.345 kg 5.45 628,600
Water 141,420 - kg 0 0
Total Cost of Utility in OPEX 5,578,800

8.1.1.3 Operating Labour Cost

Operating Labour or also called direct labour is people who work directly
connected to the process in the field. In our plant we have main process and utility
in the field. To Determine the number of labours, we should first consider the
number of shift of the process and the labour needs in every shift. In our plant we
use continuous process so we decided to have three shift in a day. Table 8.4 is the
table of operators and number of shift.
Table 8.4 Number of Operators and Operator Shifting
Number of
Total
Unit Plant Unit Operation Operators Unit Shift
Operators
Needs/unit/shift
Reactor (continous) 1/2 1 4 2
Main
Distillation Column 1/2 1 4 2
Process
Separator 1/4 1 4 1
Compressor House 1/4 1 4 1
Refrigerant
MCR Mixer + Rerfigerant
Utility 1/2 1 4 2
Component Tank
Steam + Turbine 1/2 1 4 2
Electricity Generator 1/2 1 4 2
Utility Fuel + Burner 1 1 4 4

Table 8.4 Number of Operators and Operator Shifting (Cont’)

Unit Plant Unit Operation Number of Unit Shift Total

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Operators Operators
Needs/unit/shift
Cooling Electrolysis Cell 1/4 1 4 1
Water
Pump and Filter (Screen) 1/4 6 4 6
Utility
Waste Clarifier 1/4 1 4 1
Treatment Aeration Tank 1/4 1 4 1
Total 25
We decided to give same salary to all operators in our company. The direct
labour cost can be seen on Table 8.5
Table 8.5 Direct Labour Cost
Salary per year
Total Cost per
Department Qualification Amount per person
year (US$)
(US$)
Production + Utility +
Operator 25 5,539 138,462
Waste Treatment

8.1.1.4 Maintenance
Maintenance can be define as an activity to maintain any condition of
facilities or equipment and made repairs or displacement to maximize the process
performance as before. Maintenance process is performed in three parts such as
major equipment maintenance, plant and office maintenance, and supporting
equipment maintenance. We can calculate the cost of maintenance by Equation
8.1.
𝑇𝐶𝐼
𝑀𝑎𝑖𝑛𝑡𝑒𝑛𝑎𝑛𝑐𝑒 𝐶𝑜𝑠𝑡 = 10% 𝑥 ( ) 8.1
𝑙𝑖𝑓𝑒 𝑡𝑖𝑚𝑒
𝑈𝑆$ 157,198,698
𝑀𝑎𝑖𝑛𝑡𝑒𝑛𝑎𝑛𝑐𝑒 𝐶𝑜𝑠𝑡 = 0,1 𝑥 = 𝑼𝑺$ 𝟕𝟖𝟓, 𝟗𝟗𝟑. 𝟒𝟗
20
Fixed Cost
8.1.2.1 Insurance Cost
Insurance is cost that paid by our company to the insurance company that
cooperate with us. Insurance is a way to protect company assets, both movable
and fixed. For calculating the insurance, we have some assumption based on PP
No 84 Year 2010, that is stated the assumption on the Table 8.6.
Table 8.6 Insurance Cost

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Insurance Specification Cost (US$/year)
Worker Insurance 1% of Worker Salary 5,545.33
Building and Plant Insurance 2% of TPI 4,877,979.43
Raw Material 2% of total raw material cost 4,636,800
Total 9,520,324.77

Plant Overhead Cost

Plant Overhead cost is about operating overhead which contain safety and
protection, Plant and Payroll Overhead, Control Laboratory, Packaging, Storage
Facility. Control Laboratory has been calculated in the Laboratory Charge. For the
packaging, we didn’t package our product but we load it to a truck for each
propylene and ethylene and distribute it to Kalimantan and to Java by shipping.
The calculation of storage facility has been calculated as raw material stock in the
raw material cost and the raw material tank has been calculated in equipment cost.
So the Plant Overhead Cost is only containing safety and protection, and payroll
overhead.

8.1.3.1 Safety and Protection

Every Company always come with safety first. In this breakdown cost,
safety and protection is about personal protection equipment (PPE), Fire
Extinguisher, Fire Suppression System. The details of safety and protection cost
can be seen on Table 8.8

Table 8.7 Safety Protection Cost

Total
Type of Safety
Place Unit Cost/unit (US$) Cost
Equipment
(US$)
PPE
Safety Helmet Barrack Operator + Office 100 5 500
Coverall Barrack Operator + Office 100 15 1,500
Safety Shoes Barrack Operator + Office 100 12 1,200
Eyeshield Barrack Operator + Office 100 25 2,500
Earmuff Barrack Operator + Office 100 4 400
Earplug Barrack Operator + Office 100 1 100
Gloves Barrack Operator + Office 100 5 500
Gas Filter Masker Barrack Operator + Office 100 5 500
Fire Extinguisher
DCP Main Process + Utility 30 4 120

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Hallon All Building 20 6 120
Foam Electrical utility 1 2,500 2,500
Fire Suppression System
Fire Suppression
Generator 1 10,000 10,000
System
Total 19,940

8.1.3.2 Payroll Overhead

It is about the estimation of overtime fee and freelancer fee and also
about bonus. We consider to estimate the overtime and freelancer fee about 10%
of Direct Labour Cost. The for the bonus, the direct and indirect labour will
achieve 3 (three) times of their monthly salary each year if the target is
accomplished. We also provide the holiday allowance and bonus at the end of the
year each 1 times of their monthly salary
Table 8.8 Plant and Payroll Overhead Cost
Cost/year
Type of Overhead Formula
($)
10% of Operating
Overtime & Freelancer Fee 13,140.6
Labour Cost
Bonus target Accomplished 3 times monthly salary 138,633.7
Holiday Allowance 1 times monthly salary 55,453.3
Bonus end of year 1 times monthly salary 55,453.3
Total 262,680.9

Total plant overhead cost is shown in Table 8.10 below

Table 8.9 Plant Overhead
Plant Overhead Cost (US$/year)
Safety and Protection 19,940
Payroll 262,680.9
Total 282,620.49

8.2 General Expenses

Administrative Cost
Aministrative cost is the cost of operating administration such as
Excecutive and clerical wage, engineering and legal cost, and communication.
This expenses breakdown aims to support the operation indirectly.

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8.2.1.1 Executive Salary and Clerical Wage
Executive and Clerical wage is worker in office. The executive such as
President Director, Vice President Director, Manager, and Head of Department.
Clerical Wage is person work in office other than executive. We classified this
indirect worker to several departement. As shown in table 8.10.

Table 8.10 Executive Salary and Clerical Wage (Indirect Labour)

Salary per year Total Cost per

Department Qualification Amount
per person (US$) year (US$)

President Director 1 46,154 46,154

Directors Vice President Director 1 36,924 36,924

Secretary 1 5,539 5,539

Manager 1 18,462 18,462

Secretary 1 5,539 5,539

Head of MTO Process 1 13,847 13,847

Department of 13,847 13,847
Head of Utility 1
Production
Process Engineer 3 8,308 24,924

Facilities Engineer 2 8,308 16,616

Electrical Engineer 2 8,308 16,616

Manager 1 18,462 18,462

Department of
Secretary 1 5,539 5,539
Health, Safety,
and Safety Engineer 2 8,308 16,616
Environment
Environmental Engineer 2 8,308 16,616

Manager 1 18,462 18,462

Secretary 1 5,539 5,539

Head of Human 13,847 13,847

1
Department of Resource
HRD Head of Human 13,847 13,847
1
Development
HR Staff 2 5,539 11,077

HD Staff 2 5,539 11,077

Department if Manager 1 18,462 18,462

General
Secretary 2 5,539 11,077
Support and

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Service Security 8 2,308 18,462

Receptionist 1 4,616 4,616

Cleaning Service 2 2,308 4,616

Laborant 1 4,616 4,616

IT Specialist 1 7,385 7,385

Manager 1 18,462 18,462

Department of Secretary 1 5,539 5,539

Planning, 8,308 8,308
Industrial Engineer 1
Controlling,
and Supplying Accountant 1 7,385 7,385

Sales 1 7,385 7,385

Total 49 445,863

8.2.1.2 Engineering and Legal Cost

Engineering and Legal Cost is about consultant of engineering and law.
Sometimes, we need problem in engineering we can’t solve and need some expert.
And also in Law, we consultate any problem that connected to law in every aspect
to a law consultant
Table 8.6 Engineering and Legal Cost
Cost/hour Estimation time Cost/year
Consultant
(US$) (hour/year) (US$)
Engineering 300 120 36,000
Legal 300 120 36,000
Total 72,000

8.2.1.3 Communication
Communication cost is all about communication tools cost every year in
plant such as internet, telephone, HT (Handy Talk). The price of installation and
equipment of internet and telephone have been calculated in additional cost. So in
this breakdown cost, we just calculated the yearly internet and telephone service
Table 8.7 Communication Service Cost

Communication Unit Cost/unit (US$) Cost/year (US$)

Telephone 16 - 6,000
Internet 2 - 12,000

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HT 100 20 500
Total 18,500

For the telephone in internet we calculate the service each year and for HT, we
considered to buy new every five years

Marketing, Distribution, and Selling

8.2.2.1 Sales Office
In order to sell our product, we need to rent a sales office that used for
our centre information about our corporation. Our sales office is located at Bakrie
Tower Floor 21, South Jakarta. The sales office cost can be seen on the Table 8.13
below:
Table 8.8 Sales Office Cost
Sales Cost
Specification
office $/Year
140 m2, Bare Floor, Facility: Mid zone 6 unit passenger elevators & 1 unit
Bakrie service elevator, designated floor access card, concierge with SDB, 24-hour
51,504
Tower security and parking, clinic, mini mart, bank, musholla, 5-star restaurant at
lobby

8.2.2.2 Marketing and Advertising

The purpose of marketing is to sell our product to the consumers. We
create website for advertisement to the consumer so that they will gain some
informations regarding our product and make proposals to the other corporation to
expand our business. The calculation of marketing cost can be seen in Table 8.14
below:
Table 8.9 Marketing Cost
Cost
Type of Marketing
$/Year
Website Development 400
Proposal 200
Total 600

8.2.2.3 Shipment
We distribute our product to Kalimantan and Java. We are going to use
distribution service to deliver our product to our client. We use tanker for
distribution service to Java and cryogenic truck for distribution service to

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Kalimantan. We will distribute our product once every month. The calculation of
distribution cost can be seen in Table 8.15 below

Table 8.10 Distribution Cost

Cost
Distribution Service
$/Year
Tanker 1,037,473.92
Total 1,037,473.92

Research and Development

Research and development cost is the cost which is alocated to perform
some researches to develop the process in the plant. From rule of thumb, research
and development cost is about 1% from CAPEX. The cost of Research and
Development can be seen in Table 8.16 below:
Table 8.11 Research and Development Cost
Cost
Research and
$/Year
Development
1,571,987

8.3 Total Operational Cost

Our total operational expenditure can be seen on the Table 8.17 and Figure
Table 8.12 Total Operating Cost
Cost
Parameter
$
Manufacturing Cost
(1) Raw Material Cost 231,840,000
(2) Utility Cost 5,579,027
(3) Labour Cost 584,325
(4) Insurance 8,933,825
(5) Plant Overhead Cost 282,878
General Expenses
(6) Administrative Cost 94,800

(7) Marketing, Distribution, and 52,200

Selling
(8) Research and Development 1,572,000

Total 248,939,037

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Operating Cost Breakdown

1
2
3
4
5
6
7
8

Figure 8.1 OPEX Breakdown

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9 CHAPTER 9
ECONOMIC EVALUATION

9.1 Product Price

Product result from MTO plant are ethylene and propylene. Based on
chapter 1, the production capacity of our plant are 66,000 tonnes ethylene / year
and 120,000 tonnes propylene / year. Ethylene and propylene are varying each
year, so we have to determine and forecasting the sales price because our plant
will begin its first production in 2019. The price of ethylene and propylene can be
determined by benchmarking its price in the market projected to 2019. The price
of ethylene and propylene trend history can be seen on the Figure 9.1, taken from
Platts, McGraw Hill Financial (2015).

Figure 9.1 Price Trend of Ethylene and Propylene

(Source: www.platts.com)
Based on Figure 9.1, the price of olefin is varying and very fluctuate. This is
because the price of petrochemical is closely related to oil price. Based on
Independent Chemical Information Services (ICIS, 2015), the correlation between
oil price and ethylene price is 95% and the correlation between oil price and
propylene price is 97%. So, with crude oil prices down, there really was not
anywhere for petrochemical prices to go but lower (Foster, 2015). The monthly
average price of olefin in 2015 can be seen on the Figure 9.2.

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Figure 9.2 Olefin Price Trend in 2015

(Source: www.platts.com)
Based on Figure 9.2, propylene slipped 5% to USD 533/ton in October 2015,
down USD 26 from September. But ethylene climbed 1% to USD 767/ton in
October 2015, up USD 6 per ton from September. From October 2015, ethylene
and propylene price started to climb again. Some expert predicted that the oil
prices will started to climb in 2017 (Ook Heryanto, 2015). Therefore, the
estimated production price of ethylene and propylene in 2019 are about USD
1000-1200/ton.

9.2 Cash Flow

Cash flow consists of income and outcome flow. Income flow consists of
revenue, before tax income, after tax income, and salvage value. Outcome flow
consists of capital cost, operational cost, loan payment, and interest payment.
Before Tax Cash Flow (BTCF) and After Tax Cash Flow (ATCF) result can be
seen on the Figure 9.2. Before calculate cash flow, we have to determine equity,
WACC and IRR, and depreciation first.

Equity
Before starting our plant’s production, we need to provide funds can fulfill
the capital expenditure requirement to build our plant. The funds are obtained
from investment of the investors and debt from bank, with the ratio 60% funds
from investors and 40% funds from debt. Besides paying loan during the
production of our plant, we also need to pay for interest which we obtained funds
from. We are choosing bank with the most minimum rate of interest. The interest
rates of bank loans are usually around 12.3% with payback period less than 6
years. The banks are Bank BNI, PT. Bank Central Asia Tbk, Bank Mandiri, that
have rate of interest 10.75% per year, 10.25% per year and 10.50% per year.
Owner may extend the contract if they are not able to pay off the loan from the

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bank. The higher the interest, investors will be more interested in investing, but
investors are constrained by the high interest rate bank loan. Investor’s rate of
interest or equity rate is calculated using Equation 9.1.
𝐸𝑞𝑢𝑖𝑡𝑦 𝑟𝑎𝑡𝑒 = 𝑅𝑖𝑠𝑘 𝑓𝑟𝑒𝑒 𝑟𝑎𝑡𝑒 + (𝑟𝑖𝑠𝑘 𝑝𝑟𝑒𝑚𝑖𝑢𝑚 × 𝛽) 9.1
From data in Market Risk Premia per October 2015, Chemical Industry in
Indonesia has risk premium 2.6%, risk free rate 8.8%, and unlevered beta 1.01.
So, our equity rate is 11.43%.

Weighted Average Cost of Capital (WACC)

MARR can be determined in two ways, which is from objectivity of the
company and from search results of WACC value. To get more accurate, then we
use WACC way. When WACC > deposit shows that the project is feasible. The
projects that have a good IRR value at least equal to the MARR large. The greater
the value of IRR compared to MARR the project more attractive to run. If the IRR
of a project under the MARR, the project is not economically viable. The
difference with a positive value between IRR and MARR is the margin of the
company. Equation 9.2 can be used to determine WACC or MARR calculation.
𝑊𝐴𝐶𝐶 = (𝑒𝑞𝑢𝑖𝑡𝑦 𝑟𝑎𝑡𝑒 × 𝑒𝑞𝑢𝑖𝑡𝑦 𝑟𝑎𝑡𝑖𝑜) + (𝑑𝑒𝑏𝑡 𝑟𝑎𝑡𝑒 × 𝑑𝑒𝑏𝑡 𝑟𝑎𝑡𝑖𝑜)(1 − 𝑡𝑎𝑥 𝑟𝑎𝑡𝑒) 9.2
As mention in previous chapter, our capital share is 40% of investor and 60% of
Bank. From BNI, Mandiri and BCA website, they have average interest rate
10.5% per 2 December 2015. Tax rate for companies is depends to the country
where the plant is located. From tradingeconomics.com also mention that a flat
rate of 25% is applied to companies reside in Indonesia. Based on those data, our
WACC value is 9.3%.

Depreciation
Depreciation is the reduction in value of an asset. The method used for
depreciation an asset is a way to find out the decreasing value of the asset and to
represent the diminishing value of capital funds invested in it. Salvage value is the
estimated value of the asset at the end of the useful life. The salvage value, S
expressed as an estimated dollar amount or as a percentage of the first cost, may
be positive, zero, or negative due to dismantling and carry-away costs. To

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calculate the depreciation of an asset, we can use several methods but in this case
we use declining balance method (Equation 9.3).
𝑑𝑘 = 𝐵(1 − 𝑅)𝑘−1 (𝑅) 9.3
Where:
𝑑𝑘 = Depreciation cost for year k
𝐵 = Book value in year k-1
𝑅 = Depreciation rate (used value 0.1)
𝑘 = Year
Table 9.1 Depreciation and Salvage Value
Depreciation Salvage
Year
$ $
1 13,528,200 76,688,100
2 11,600,900 65,087,900
3 9,860,900 55,227,800
4 8,381,800 46,846,600
5 7,124,700 39,722,600
6 6,056,000 33,667,200
7 5,147,700 28,520,200
8 4,375,700 24,145,200
9 3,719,400 20,426,400
10 3,161,600 17,265,500
11 2,687,400 14,578,700
12 2,284,400 12,294,900
13 1,941,800 10,353,700
14 1,650,600 8,703,700
15 1,403,100 7,301,100
16 1,192,700 6,109,000
17 1,013,900 5,095,700
18 861,800 4,234,300
19 732,600 3,502,200
20 629,000 2,873,700

Depreciation value affect fixed cost and salvage value. After we end our
production we can get back the money from our assets which are called salvage
value.

Before Tax and After Tax Cash Flow

Based on income and outcome calculation in the previous section, the cash
flow of our plant can be seen on the Figure 3.2. In the cash flow calculation, we
assume that we will sell ethylene and propylene 100% of production capacity
from the first year because our product is a commodity product. The after tax cash

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flow is the cash flow calculation including tax, so the value will be lower than
before tax cash flow. The income tax value is 25%, based on Direktorat Jenderal
Pajak (2013). The calculation in profitability analysis is used after tax cash flow.

BTCF and ATCF

USD 100,000,000

USD 50,000,000

USD 0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Cash Flow ($)

-USD 50,000,000

-USD 100,000,000

-USD 150,000,000

-USD 200,000,000
Year

ATCF BTCF

Figure 9.3 Cash Flow: BTCF and ATCF

Based on cash flow calculation result from Excel, to obtain IRR 5% higher than
MARR, we have to sell ethylene and propylene at about USD 1,000-1,100 / ton
each. This value is in accordance with product price estimation in Chapter 9.1.

9.3 Profitability Analysis

Analyzing performance of the plant from the economic side requires the
profitability to be considered. There are four methods which could be used to
analyze the profitability of this plant, which are by checking the internal rate
return (IRR), return of investment (ROI), net present value (NPV), and the
payback periods.

Internal Rate of Return (IRR)

Internal rate of return (IRR) is the rate paid on the unpaid balance of
borrowed money, or the rate earned on the unrecovered balance of an investment,

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so that final payment or receipt brings the balance to exactly zero with interest
considered. The internal rate of return or rate of return (ROR) is expressed as a
percent per period. Internal rate of return is the interest rate that makes the present
worth or annual worth of cash flow series exactly equal to 0. Equation 3.3 used
for calculating the IRR.
𝑛=𝑇 𝐶𝐹𝑛
𝑁𝑃𝑉 = ∑ − 𝑇𝐶𝐼 = 0 9.4
𝑛=1 (1 + 𝑟)𝑛
Where r value in the formula is value of IRR. The other simple formula can be
seen on the Equation 3.4.
𝑃𝑊𝑖 ∗ (+ 𝑐𝑎𝑠ℎ 𝑓𝑙𝑜𝑤𝑠) – 𝑃𝑊𝑖 ∗ ( − 𝑐𝑎𝑠ℎ 𝑓𝑙𝑜𝑤𝑠) = 0 9.5

Where i* is the value of IRR.

Based on rule of thumbs, IRR is 2 – 10% higher from MARR. As the calculation
before, MARR is equal to WACC. We assumed that IRR is 5% hiher than
MARR. So, our IRR 14.3%.

Return of Investment (ROI)

Rate of Return (ROR) is a stocks return on the investment made by
investor. Composition of Rate of Return (ROR) calculation is capital gain (loss)
and yield. Capital gain represents the difference between the profit and loss as the
difference of price is now higher or lower than the price in the previous period of
time. Yield is the percentage of the periodically cash receipts towards the
investment price in a specified period. For stocks, yield represents the dividend’s
percentage towards the stock price in the previous time, whereas for obligation,
yield represents the percentage of loan’s interest towards the previous obligation
price.
ROR is way to analyse the performance of capital investment. ROR is
comparison between annual profit and investment, or in the other word could be
defined as simple index of invested money (Sinnot, 1993). Method to analyse
Return of Investment (ROI) used in this MTO plant design is average rate of
return (ARR). Average rate of return is also known as accounting rate of return or
accounting return to investment. ARR is investment appraisal method that tries to
show the ratio of net profits towards investment’s value which is required to make

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profit/gain. It could be calculated with investment’s value (initial investment) or
with average of investment (average investment).
Based on the calculation done, the ROI is obtained 21.72%. This value is
calculated by dividing the NPV with total income in year 0. That total income is
the sum of capital loan from bank and investor. This ROI value shows that the
depreciation value is pretty low, which means that the shrinkage process is slow.
To be noted that infestation which has a high depreciation value will be resulted to
lower net profit and increase the cash flow unilaterally. Increase of cash flow is
not because the cash outlay, but it is due to the depreciation. Therefore, could be
said that ROI value will make this plant potentially obtain great profit.

Net Present Value (NPV)

Way to know whether this MTO plant generates profit or not is by
checking the net present value. NPV is obtained by summing up all the present
worth value from year 2019 until year 2039. Present worth value is based on the
IRR value and cash flow for each year. As mentioned in the previous sub-chapter
that MARR is obtained as 9.30%. And IRR is 14.3%, then the NPV value will
change and also the product price. As present worth means the sum of money at
the present time which is the equivalence of cash flow for the certain period of
time with a specified minimum acceptable rate of return (MARR), so that if the
value of NPV is positive, it means that the plant is feasible to establish.
Table 9.2 NPV
NPV
Year
$
0 -180,000,000
1 43,919,297
2 38,927,829
3 34,115,072
4 29,885,086
5 26,163,430
6 22,900,949
7 20,015,150
8 18,218,108
9 16,594,960
10 15,126,253
11 13,795,194
12 12,587,260
13 11,489,762
14 10,491,601
15 9,582,995

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16 8,755,290
17 8,000,802
18 7,312,669
19 6,684,771
20 6,111,864
Total 180,678,341

Payback Period (PP)

Payback period is period of time which tells about how long will be this
MTO plant obtain its capital value back. Payback period is obtained by plotting
year vs present worth value of each year, then there will be the line’s equation of
the graph. The year when the present worth is valued as zero is the payback
periods. In this polypropylene plant, the payback period obtained is 4 years. So
that after about 4 years, this MTO plant will obtain the capital back.

Cummulative Cash Flow

700,000,000
600,000,000
500,000,000
Cummulativ Cash Flow ($)

400,000,000
300,000,000
200,000,000
100,000,000
0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
-100,000,000
-200,000,000
-300,000,000
Year

Cummulative Cash Flow

Figure 9.4 Payback Period

9.4 Sensitivity Analysis

Sensitivity analysis is conducted to show the fluctuation of several factors
of our plant. Those factors will always be unstable, like production rate, cost,
profit, loss, etc. The variables we take to see the effect of fluctuations toward the
cash flow are selling price, raw material cost, and utility cost. We choose raw
material cost and utility cost as the variable because those two are the main

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contributors in the operational cost. Although there are other costs, it rarely
fluctuates compared to raw material cost and utility cost is the most contributing
factor which affects the cash flow. Some changes applied in it are selling price
fluctuation, operating expenses fluctuation, and raw material cost fluctuation.
Parameters used in the sensitivity analysis are NPV, IRR, and Payback Period.
Sensitivity Parameter Determination
The parameter used in sensitivity analysis can be determined by merging
all component cost in CAPEX and OPEX which can be seen on the Table 9.3.
Table 9.3 Sensitivity Parameter Determination
Cost
Component Percentage
$
CAPEX
Purchased Equipment 90,183,200 33.12%
Piping, Elbow, Valve 1,779,500 0.65%
Controller 78,900 0.03%
Site Administrative 417,700 0.15%
Land Preparation 1,501,500 0.55%
Building 1,072,200 0.39%
Foundation 63,300 0.02%
Offsite Facility 10,161,700 3.73%
Supporting Equipment 73,900 0.03%
Additional Cost 26,200 0.01%
Engineering and Supervision 5,268,000 1.93%
Construction Expenses 6,321,500 2.32%
Contractor 3,160,800 1.16%
OPEX
Raw Material 137,820,000 50.61%
Operating Labour 138,600 0.05%
Utilities 5,579,027 2.05%
Maintenance 786,000 0.29%
Laboratory Charge 13,900 0.01%
Insurance Cost 4,926,900 1.81%
Safety and Protection 20,000 0.01%
Payroll 2,936,100 1.08%
Total 272,329,000 100.00%
Based on Table 9.3, the parameter cost that will be used as sensitivity parameter
are product price, raw material price, equipment cost, and offsite facility cost.

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Sensitivity Parameter Fluctuation
Interval of fluctuation used are -10%, -5%, 5%, and 10%. This value
considered based on methanol, ethylene, and propylene fluctuation price (highest
and lowest value as the maximum and minimum interval). The detail calculation
of sensitivity parameter fluctuation can be seen on the Table 9.4.
Table 9.4 Fluctuation of Sensitivity Parameter
Raw Material Price
Deviation Raw Material Price NPV IRR PP
-10% 124038000 276,709,200 0.2006 3.18
-5% 130929000 228,583,200 0.1721 3.59
0% 137820000 143,108,300 0.1433 3.50
5% 144711000 132,174,500 0.1134 4.82
10% 151602000 84,040,100 0.0812 5.79
Product Price
Deviation Product Price NPV IRR PP
-10% 1980 38,779,600 0.0450 7.12
-5% 2090 109,395,000 0.0985 5.24
0% 2200 143,108,300 0.1433 3.50
5% 2310 250,625,800 0.1853 3.38
10% 2420 321,241,200 0.2276 2.86
Offsite Facility
Deviation Offsite Facility Cost NPV IRR PP
-10% 9145530 182,574,000 0.1458 4.07
-5% 9653615 181,642,900 0.1446 4.09
0% 10161700 143,108,300 0.1433 3.50
5% 10669785 180,678,400 0.1434 4.12
10% 11177870 179,713,400 0.1422 4.14
Equipment Cost
Deviation Equipment Cost NPV IRR PP
-10% 81164880 209,506,100 0.1875 3.34
-5% 85674040 195,259,200 0.1639 3.72
0% 90183200 143,108,300 0.1433 3.50
5% 94692360 165,803,400 0.1262 4.50
10% 99201520 151,552,200 0.1115 4.88

Based on Table 9.4, some point that can be taken are as follow.
1. NPV obtained will be higher by decreasing raw material price, offsite facility,
equipment cost, and by increasing product price.
2. IRR obtained will be higher by decreasing raw material price, offsite facility,
equipment cost, and by increasing product price.
3. Payback period will be faster obtained by decreasing raw material price,
offsite facility, equipment cost, and by increasing product price.

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Sensitivity Parameter to Profitability Analysis
Profitability parameter used to observe sensitivity parameter effect are
NPV, IRR, and payback period. The sensitivity analysis graph can be seen on the
Figure 9.5 – Figure 9.7.

NPV
-10% -5% 0% 5% 10%

Raw Material Price

1.5
1
0.5
0
-0.5
Equipment Cost -1 Product Price

Offsite Facility

Figure 9.5 Sensitivity Parameter Fluctuation to NPV

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IRR
-10% -5% 0% 5% 10%

Raw Material Price

0.6
0.4
0.2
0
-0.2
-0.4
-0.6
Equipment Cost -0.8 Product Price

Offsite Facility

Figure 9.6 Sensitivity Parameter Fluctuation to IRR

PP
-10% -5% 0% 5% 10%

Raw Material Price

1.2
1
0.8
0.6
0.4
0.2
0
Equipment Cost -0.2 Product Price

Offsite Facility

Figure 9.7 Sensitivity Parameter Fluctuation to Payback Period

Based on Figure 9.5 – 9.7, it can be seen that raw material price give highest
influence to NPV, IRR, and payback period followed by product price. This is
because the production capacity of our plant is large. Raw material price give the
same influence value with product price because both of them are very influenced
by oil price fluctuation.

Strategy
The sensitivity analysis from previous subchapter gives us the information
about the most sensitive parameter that can affect profitability parameter i.e. NPV,
IRR, and payback period. The most sensitive parameter based on previous
analysis are raw material price and product price because they have the steepest

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slope in every parameter test. It means that a slight change/fluctuation of the raw
material price and product price value will change the NPV, IRR and payback
period significant enough than the other parameter. The third most sensitive
parameter is equipment cost followed by offsite facility cost. Therefore, we must
maintain the value of variable in order to produce economically stable industry.
We have to do some strategies to maintain the sensitive parameter. The
strategy to overcome raw material price or methanol price is by buying methanol
from non-fossil source such as coal and synthetic gas. So the methanol price is not
influence by oil price. Then the strategy to overcome product price or revenue that
will be obtained is by maintaining production capacity of ethylene and propylene.
This is can be done by maintaining personnel and performance of each equipment.
Then the strategy to overcome equipment price is by anticipating inflation. For
example, we prepare cost needed to buy pump at tenth year of production since
the first year of production. The last strategy to overcome offsite facility cost or
utility cost is by maintaining production performance to prevent losses such as the
refrigerant make up.

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10 CHAPTER 10
OUTSTANDING ISSUE

10.1 Technical Aspect

The process of ethylene and propylene production at this plant through
Methanol to Olefin (MTO) process. Ethylene and propylene is obtained from the
synthesis methanol. This method has been developed by Lurgi since several years
ago. Lurgi MTO itself has made a commercial project in Europe and China.
Methanol is an intermediate product which produced from coal or natural
gas. This methanol convert to olefin with 60% conversion. Now days existing
plant still use petroleum to produce ethylene and propylene.
MTO process has lower operating pressure is certainly safer for workers and
the environment. In addition, utilities in the form of cooling medium can also be
suppressed at the needs.
Since MTO does not require thermal cracking, the energy required to produce a
kilogram of ethylene is also smaller when compared to the production of ethylene
made from petroleum. That process need many equipment and unit, such as
fischer-tropsch, treatment, distillation section and ethylene or propylene
production section. Complexity means how easy the process to convert raw
material to be ethylene. It also related to the much amount of equipment involve
on the process. MTO is the simplest process.

10.2 Economical Aspect

If we analyze the rate of Internal Rate of Return (IRR), it is about 15%
which means 3% above minimum atracted rate of return (MARR). we believe the
value of IRR we propose can attract many investor. In addtion, we have the
payback period only 3 year. Other petroleum base ethylene and propylene, with
the same IRR, they have 7-15 year payback period.

This MTO Process is very simple. So the equipment required is less

compared to petroleum based of ethylene and propylene production. It means, the
capital investment is fewer. We compared the total capital investment with total
operating cost each year, we found the ratio is 1:1,7 which means the operating

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cost is dominated. The dominated of operating cost came from raw material cost.
We spent money to purhcase methanol each year about 231 million USD. So,
thats why we have fast payback period. And what about the raw material
resources? After we search around the world and benchmark with petroleum
based of ethylene and propylene production, methanol demand is low to compared
with petroleum.

Figure 10.1 Global petroleum demand Figure 10.2 Global methanol demand
(Source: US Energy Information (Source: Methanex)
Administration)

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11 CHAPTER 11
CONCLUSION

11.1 Conclusion
Some points that can be concluded from this preliminary design of methanol
to olefin plant are as follow.
1. Introduction
 Our Plant will be built in Kalimantan Industrial Estate (KIE) in 2019.
 Our Plant lifetime is 20 years
2. Market
 We decided to supply 330,000 tonnes of methanol every year from PT.
Kalimantan Methanol Industry to produce 66,000 tonnes of ethylene and
120,000 tonnes of propylene every year and will be supply to polymer
plant which use olefin for example PT Chandra Asri Tbk.
 Using CAGR method, the demand of ethylene and propylene predicts will
be increasing 0.6% and 7.2% per year in 2018. So, we have chance to
produce ethylene and propylene as much as the import with methanol as
raw material.
3. Technical Aspect = UMAY

4. Economy
 The Capital Expenditure (CAPEX) is USD 180,000,000 or USD 968 /
ton olefin produced.
 The Operational Expenditure (OPEX) is USD 155,000,000 or USD 830 /
ton olefin produced.
 The product price in 2019 is USD 1,100 / ton ethylene and USD 1,000 /
ton propylene.
 The profitability result are as follow. IRR 14.3%, ROI 21.72%, NPV
USD 180,679,300, BEP 744,000 ton, and Payback Period (PP) in 4 years
of production.
 The most sensitivity parameter are raw material price, product price,
equipment cost, and offsite facility cost.

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 The loan ratio of investor to bank is 40% to 60% with interest rate
11.43% and 10.5%.
 The economical aspect from our plant have been compared to other MTO
project such as in China and United State.

11.2 Recommendation
Some points that can be recommended for further development of MTO
plant are as follow.
1. Introduction
 To have more income, try to enlarge the capacity by considered the price
of methanol import. And, be brave to export the product.
 Supply the product to other company which use olefin not only to
polymer plant company.
2. Technical Aspect = UMAY

3. Economy
 To overcome raw material price or methanol price, we could buy
methanol from non-fossil base such as coal and synthetic gas. So the
methanol price is not influence by oil price
 To overcome product price or revenue that will be obtained, we could
maintain production capacity of ethylene and propylene. This is can be
done by maintaining personnel and performance of each equipment.
 To overcome equipment cost, we colud anticipate inflation. For example,
we prepare cost needed to buy pump at tenth year of production since the
first year of production.
To overcome offsite facility cost or utility cost, we could maintain production
performance to prevent losses such as the need of refrigerant make-up.

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REFERENCE

Branan, Carl. 2002. Rules of Thumb For Chemical Engineers. Houston : El-
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Brownell, Lloyd E and Edwin H. Young. 1959. Process Equipment Design. John
Wiley & Sons, inc.
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Butterworth-Heinemann.
Coulson & Richardson. 1983. Chemical Engineering Design. Oxford : El-Sevier.
Chemical And Process Design Handbook. New York : McGraw-Hill.
Kern, D. Q., 1965, Process Heat Transfer, McGraw-Hill Book Company, Japan.
K Whitely, T Heggs, H Koch, R Maner and W Immel. 2005. Ullman’s
Encyclopedia of Industrial Chemistry 6th Edition. USA: Wiley-VCH.
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Equipment, 3ed, McGraw-Hill, New York.
Ludwig, E. E. 1997. Applied Process Design for Chemical and Petrochemical
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Wiley & Sons.
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Selection and Process Design, Elsevier Ltd., Burlington, Great Britain.
Trendhelm. 2006. Control Structure Design For Methanol Process. USA: John
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Sons.

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12 APPENDIX
B.1. ECONOMIC STUDY
B.1.1. Equity
Table B.1 Investor to Bank Loan Ratio
Total Loan
Capital Expenditure USD 180,000,000
335,000,000
Operational Expenditure USD 155,000,000
Investor to Loan Ratio
Capital Share
Capital Source Percentage
USD
Bank 60% 201,000,000
Investor 40% 134,000,000

Table B.2 Loan Payment Mechanism to Bank

Bank
Annual Loan Loan Paid
Year Loan Salvage
Interest Paid with Interest
0 201,000,000 0 0 0 201,000,000
1 201,000,000 21,102,500 33,600,000 54,700,000 167,400,000
2 167,400,000 17,598,500 33,600,000 51,200,000 133,800,000
3 133,800,000 14,094,500 33,600,000 47,700,000 100,200,000
4 100,200,000 10,490,500 33,600,000 44,100,000 66,600,000
5 66,600,000 6,986,500 33,600,000 40,600,000 33,000,000
6 33,000,000 3,482,500 33,600,000 37,100,000 -600,000
Total 73,755,000 201,600,000 275,400,000

Table B.3 Loan Payment Mechanism to Investor

Investor
Annual Loan Loan Paid
Year Loan Salvage
Interest Paid with Interest
0 134,000,000 0 0 0 134,000,000
1 134,000,000 15,300,000 22,300,000 37,600,000 111,700,000
2 111,700,000 12,800,000 22,300,000 35,100,000 89,400,000
3 89,400,000 10,200,000 22,300,000 32,500,000 67,100,000
4 67,100,000 7,700,000 22,300,000 30,000,000 44,800,000
5 44,800,000 5,100,000 22,300,000 27,400,000 22,500,000
6 22,500,000 2,600,000 22,300,000 24,900,000 200,000
Total 53,700,000 133,800,000 187,500,000

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B.1.2. Cash Flow
Table B.1 Cash Flow
Ethylene Propylene
Ethylene Propylene Capital Operational Maintenance Cash All Gross Net Profit Net Profit Cumulative
Production Production Production Revenue Depreciation Income Tax Cash Flow NPV
Year Price Price Investment Cost Cost Expenses Expenses Profit Before Tax After Tax Cash Flow
Year Capacity Capacity
Ton/Year Ton/Year USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD
2019 0 180,000,000 -180,000,000 -180,000,000 -180,000,000
2020 1 66,000 120,000 1,117 1,084 203,791,800 155,000,000 790,000 13,528,200 155,790,000 205,720,700 48,001,800 -1,928,900 0 -1,928,900 48,001,800 -131,998,200 43,919,400
2021 2 66,000 120,000 1,117 1,084 203,791,800 155,000,000 790,000 11,600,900 155,790,000 197,789,400 48,001,800 6,002,400 1,500,600 4,501,800 46,501,200 -85,497,000 38,927,900
2022 3 66,000 120,000 1,117 1,084 203,791,800 155,000,000 790,000 9,860,900 155,790,000 189,945,400 48,001,800 13,846,400 3,461,600 10,384,800 44,540,200 -40,956,800 34,115,100
2023 4 66,000 120,000 1,117 1,084 203,791,800 155,000,000 790,000 8,381,800 155,790,000 182,362,300 48,001,800 21,429,500 5,357,400 16,072,100 42,644,400 1,687,600 29,885,100
2024 5 66,000 120,000 1,117 1,084 203,791,800 155,000,000 790,000 7,124,700 155,790,000 175,001,200 48,001,800 28,790,600 7,197,700 21,592,900 40,804,100 42,491,700 26,163,500
2025 6 66,000 120,000 1,117 1,084 203,791,800 155,000,000 790,000 6,056,000 155,790,000 167,928,500 48,001,800 35,863,300 8,965,900 26,897,400 39,035,900 81,527,600 22,901,000
2026 7 66,000 120,000 1,117 1,084 203,791,800 155,000,000 790,000 5,147,700 155,790,000 160,937,700 48,001,800 42,854,100 10,713,600 32,140,500 37,288,200 118,815,800 20,015,200
2027 8 66,000 120,000 1,117 1,084 203,791,800 155,000,000 790,000 4,375,700 155,790,000 160,165,700 48,001,800 43,626,100 10,906,600 32,719,500 37,095,200 155,911,000 18,218,100
2028 9 66,000 120,000 1,117 1,084 203,791,800 155,000,000 790,000 3,719,400 155,790,000 159,509,400 48,001,800 44,282,400 11,070,600 33,211,800 36,931,200 192,842,200 16,595,000
2029 10 66,000 120,000 1,117 1,084 203,791,800 155,000,000 790,000 3,161,600 155,790,000 158,951,600 48,001,800 44,840,200 11,210,100 33,630,100 36,791,700 229,633,900 15,126,300
2030 11 66,000 120,000 1,117 1,084 203,791,800 155,000,000 790,000 2,687,400 155,790,000 158,477,400 48,001,800 45,314,400 11,328,600 33,985,800 36,673,200 266,307,100 13,795,300
2031 12 66,000 120,000 1,117 1,084 203,791,800 155,000,000 790,000 2,284,400 155,790,000 158,074,400 48,001,800 45,717,400 11,429,400 34,288,000 36,572,400 302,879,500 12,587,300
2032 13 66,000 120,000 1,117 1,084 203,791,800 155,000,000 790,000 1,941,800 155,790,000 157,731,800 48,001,800 46,060,000 11,515,000 34,545,000 36,486,800 339,366,300 11,489,800
2033 14 66,000 120,000 1,117 1,084 203,791,800 155,000,000 790,000 1,650,600 155,790,000 157,440,600 48,001,800 46,351,200 11,587,800 34,763,400 36,414,000 375,780,300 10,491,700
2034 15 66,000 120,000 1,117 1,084 203,791,800 155,000,000 790,000 1,403,100 155,790,000 157,193,100 48,001,800 46,598,700 11,649,700 34,949,000 36,352,100 412,132,400 9,583,000
2035 16 66,000 120,000 1,117 1,084 203,791,800 155,000,000 790,000 1,192,700 155,790,000 156,982,700 48,001,800 46,809,100 11,702,300 35,106,800 36,299,500 448,431,900 8,755,300
2036 17 66,000 120,000 1,117 1,084 203,791,800 155,000,000 790,000 1,013,900 155,790,000 156,803,900 48,001,800 46,987,900 11,747,000 35,240,900 36,254,800 484,686,700 8,000,900
2037 18 66,000 120,000 1,117 1,084 203,791,800 155,000,000 790,000 861,800 155,790,000 156,651,800 48,001,800 47,140,000 11,785,000 35,355,000 36,216,800 520,903,500 7,312,700
2038 19 66,000 120,000 1,117 1,084 203,791,800 155,000,000 790,000 732,600 155,790,000 156,522,600 48,001,800 47,269,200 11,817,300 35,451,900 36,184,500 557,088,000 6,684,800
2039 20 66,000 120,000 1,117 1,084 203,791,800 155,000,000 790,000 629,000 155,790,000 156,419,000 48,001,800 47,372,800 11,843,200 35,529,600 36,158,600 593,246,600 6,111,900
Total 593,246,600 180,679,300

Universitas Indonesia