Convert Tail gas from Hydrogen Reformers to Ethanol to boost Gasoline pool and Reduce Energy Import

?Overview

The world at large is currently seized with the problem of establishing a balance between environmental friendly technologies, and to minimize the impact of fossil fuel based processes which are instrumental in adversely impacting the environment. Several measures across the globe are being adopted, giving way to disruptive technologies for ushering in environmental friendly solutions to circumvent the energy related problems at hand. In this connection renewables have found considerable favor in the past four or five years in particular, to take the advantage of steep decline in prices of renewable energy for realizing green hydrogen led revolution, which perhaps, could be instrumental in providing a cleaner, energy efficient and economy friendly solution to fulfill the energy requirements of countries. EVs have already made way and are beginning to show results, gradually with the expected moderation of cost of the batteries, hopefully, the EV technology will be a good supplement to various other technologies engaged in moderating/ reducing fossil fuel consumption.

Both Green hydrogen and EVs will have a likely role to play, in terms of serving the heavy vehicular movement, as well as the lighter vehicles, to reduce the diesel and gasoline consumption respectively. ?Both these technologies show tremendous promise in terms of being able to support the total energy basket for sustaining a gradual reduction in usage of fossil fuels. India certainly, with its high solar intensity, has the opportunity of making headway in this arena, particularly in the Green Hydrogen segment. No wonder, that a mega program has already been launched in the country by the Hon’ble PM, with green hydrogen as focus.

For a large country like India, the energy requirements are enormous and therefore, all sectors which can contribute towards its growth indigenously are bound to find favor. In addition to Green Hydrogen and EVs therefore, bio technologies also have an important role to play, in terms of supplementing the energy basket requirements for the country. ?Since the agricultural waste, municipal waste is available in very large quantity there is huge potential for these to be exploited as source of supplementing the energy basket. Enhanced production of bio-gas to supplement the natural gas requirement, as well as ethanol to supplement the gasoline pool have already gained momentum in the country and are slowly finding space in the energy basket of the country. This segment is likely to grow steadily, with bio ethanol, bio CNG contributing substantially to the energy requirements of the country.

However, all these new technologies will have a gestation period before they begin to yield substantive results this is notwithstanding the fact, that the first steps forward to realize the benefits from these technologies are already underway. There is good reason to believe that at least 5 to 10 years would be required, before bio fuels, green hydrogen, electrical vehicles etc make a deep in-road into the energy basket in supporting the country to reduce the import of fossil fuels substantially.

It is the interim period a strategy needs to be in place to circumvent not only to cater to the burgeoning energy deficits but also to evolve a concrete plan to contend with geo political developments in the globe which from time to time upset the applecart for the country.?Every time the crude prices begin to rise, there is exigency like situation in the country as the economy is adversely affected and the common man is unable to shoulder the burden.?Government too, is likely to have a fiscal gap on account of the significant additional foreign exchange that will have to be provided for to cater to the market volatility led by escalating crude and gas prices.?While in the past few years the prices of crude had been relatively moderate and fluctuated between 50 to 65 $/barrel, the country had begun to find itself in a near convert zone, where the energy bill was somewhat moderate, and therefore the prices of the gasoline and diesel was within a reasonable range of Rs.55 to Rs.75 band across the country. With the current crisis led by war in Ukraine, things have changed dramatically and the country finds itself again in a boil.

To circumvent the problem, many areas of energy conservation, utilization of available raw materials have been discussed from time to time. On a larger scale, the inception of Gasification Technology for conversion pet coke/coal to syn gas for producing fertilizers and refinery blenders such as methanol, ethanol, DME have been discussed from time to time.?Since 2016 several papers on the subject have been shared with higher authorities and Niti Aayog. The problem in the country of course is, that the decision making process to provide fillip to mega initiatives such as gasification, has been languishing for a while. It is only just a couple of days ago that encouragingly, a message was noticed wherein the Hon’ble FM has announced plans of gasification of about 100 MMTPA of domestic coal by 2030. This is fantastic news and even if belatedly, will provide succor to an energy starved Nation and enable it with an avenue to utilize the domestic reserves of coal to be converted into valuable Chemicals, Fertilizers and liquid blenders to Refinery distillates. ?

This certainly can be one supplementary solution to achieve a certain degree of domestic coal/pet coke based technology to enable reduction of natural gas and crude import. Refineries such as Panipat, HMEL, CPCL, Mangalore, Paradip, Haldia, Barauni which are located in the immediate proximity of the fertilizer plants with Delayed Coker facilities, offer a huge opportunity, wherein pet coke from the refineries and indigenous coal with high as content could be blended as feedstock to the gasification units located strategically, such that the syn gas production from the same could be utilized in the existing fertilizer plants to enable displacement of natural gas, which is currently being used as feedstock/fuel in existing fertilizer complexes and is essentially imported as LNG.?

Additionally, methanol, ethanol, DME produced from the Gasification complex could help in complete sequestering of CO2 while producing gasoline, LPG and Diesel blenders to enable reduction of crude import in the country. It may be noteworthy, that for a large country like India, Energy support from all quarters will be required to obviate the Energy deficit and reduce the rising import bills. There is space for all technologies to work in tandem and therefore, green hydrogen, EV, bio fuels, large scale utilization of the domestic coal/coke through environmental friendly technology, will all have space to help the cause. Talcher is one such Plant which has taken initiative of this direction, but on account of pandemic/strategic shift of selection of EPC contractor, the project is likely to be delayed.

It is in perspective of the above, another important technology used for conversion of waste gases into ethanol from the tail gases of the hydrogen generation plants in the country is of significance, and will be discussed herein.

Overview of Technology to PSA off gases from Ethanol

During 2016-17 various studies were carried out along with Lanzatech to try and examine as to how based on their technology the tail gases from the PSA units forming part of the?hydrogen plants in various refineries in India could be utilized?for conversion to ethanol. Dr Jennifer Holmgren CEO Lanzatech along with her team had been kind enough to have prolonged discussions with us and our team, to chalk out a major strategy for conversion of Tail gases to ethanol in various refineries in the country.

Typically, on account of non availability of natural gas in the country light naphtha is utilized to produce hydrogen in the refineries, which is a necessary component for ensuring quality of the distillates produced from the refineries, to adhere to various stringent norms and specifications specified before the products can be utilized as fuel or the automobile sector.?

Most of the refineries have very large hydrogen capacities, the sizes for which are increasing by the day on account of deep hydro-processing and residue?hydro-cracking incorporated in various refineries to augment the distillate pools. On an average, for a typical refinery between 9 to 15 MMTPA capacity the hydrogen plant capacities could range between 80 to 150 KTPA, depending upon the configuration adopted in the refinery. The other added aspect is the fact, that the hydrogen required for the process units, needs to be of extremely high purity ranging from 99 to 99.95% purity. Most of the hydrogen plants in the refineries utilize the reforming process to produce hydrogen in the reformer followed by a shift section to maximize the production of hydrogen. On an average between 81 to 84% recovery of hydrogen is typical where light naphtha or natural gas is used as feedstock.

Purity level of hydrogen to suit the process requirements from the raw hydrogen produced from steam reformers is achieved through PSA systems, wherein across multiple adsorbent beds, the impurities are selectively removed and Hydrogen of the desired purity level as required in the process is produced. During the pressure swing the from the absorber beds the tail gas is recovered.?Since this tail gas has some fuel value it is utilized as fuel in the reformers.

The important part is the composition of the tail gases produced from the PSA which varies from with the type of feedstock utilized to produce hydrogen. The typical Tail gas from PSA is as below:

?From the above, the following important inferences were drawn along with Lanzatech.

1.????The typical composition mentioned above are somewhat similar to the syn gas which is typically produced in various other gasification processes, though the composition could vary.

2.????The critical component is the Hydrogen to CO ratio which is essentially the feedstock to the Lanzatech process for conversion of tail gases into ethanol.

?3.????The hydrogen: CO ratio does not change very significantly with the type of feedstock utilized to produce hydrogen. There could however be a significant variation in CO2 content of these streams. While Hydrogen and CO are the key constitutes utilized in the Lanzatech process to convert these into ethanol, the CO2 content has preferably to be below 50% for efficient performance of the process. Consequently, for a Lanzatech facility to be located at the back end of the PSA tail gases, a tail gas conditioning unit would be required wherein CO2 could be selectively removed.

?4.????Amines or low process PSAs could be utilized to remove CO2.

?5.????The Tail Gases from the PSA are typically received at low pressure somewhat around ambient condition. The lower the pressure of the tail gas the higher can be hydrogen recovery. However importantly, since the tail gases are to be utilized in the fuel gas pool, a cost benefit analysis is always to be carried out, wherein for a very low pressure of the tail gases, Tail gases pressure may be required to be boosted to allow the tail gases to be routed to the fuel gas pool.

?6.????Since this is an energy consuming facility, often to eliminate the compressors at the back end, PSAs are operated at moderate pressure and therefore, may take the penalty of hydrogen slip into tail gases. This is always a critical parameter/objective function of every Hydrogen Plant facility. Invariably, it is preferred not to consider a back end compressor on the tail gases for routing them into the fuel gas pool. The idea is to avoid using rotating equipment in the circuit. Consequently, the tail gas composition are somewhat as mentioned in the table above.

?7.????To produce ethanol from the syn gases, Lanzatech uses microbes to produce ethanol from gases that contain carbon monoxide and hydrogen, or contain CO2 and hydrogen, thereby offering a unique solution for carbon capture and re-use. The microbes are utilized to convert the waste gases into ethanol through a fermentation process. The process utilizes proprietary microbes wherein, relatively moderate pressure of about 7 bar or so, would suffice for the entire process of conversion of tail gas into ethanol including upfront conditioning, fermentation and product purification.

Potential

India being a large country most of the refineries are well spread out across the Nation. While most of these refineries were relatively small till 1991, however subsequent to liberalization of the economy, most of the refineries have achieved a fair degree of scale and higher level of integration swinging the product pattern from gasoline to Petrochemicals.

From upfront analysis carried out, it was observed that between 80 to 85 Kg of ethanol could be produced from about 1000 NM3 of syn gas. Therefore, upon installing a Lanzatech based facility on the PSA tail gases, ethanol could be produced for safely blending into gasoline pool and thereby also ?provide a carbon capture/optimal re-use facility in the complex.

A brief analysis of the various Hydrogen Plants located/being implemented in PSU Refineries indicates that a considerable quantity of ethanol could be produced. A brief analysis has been carried out to examine the potential of the ethanol production from the PSA tail gases of the Hydrogen plants in operation/under implementation in Paradip, Haldia, Barauni, MRPL, CPCL, Vizag, Kochi, Nagapattinam, HMEL, Panipat, Mathura, BORL (Bina) excluding North east and Mumbai Refineries from which the following major inferences were drawn:

The ethanol so produced would be able to displace as much and more naphtha, or augment the gasoline pool with high octane ethanol. Ethanol produced from the refineries mentioned as above with direct blending into gasoline would constitute to about 4.5% of net ethanol bending in the gasoline pool of these refineries. This is significant, considering that no additional feedstock is required and only tail gases are used to produce ethanol.

Economics

For brief economics towards the above reveals that a total capex of close to RS.22,000 crores ( $2.9 bn) would be required to set up equivalent Lanzatech facilities at ?the back end of the Hydrogen Plant in the existing/ refineries under implementation. The net operating margin from the refinery itself, based on the revenue generated considering Rs.55,000/MT as gasoline price would be equivalent to about Rs.5100 crores pa ($ 680 Mn) i.e. a pay back period of about 4 years over the investment.

The significant operating cost for the Lanzatech facilities include annual costs of trace media and microbes, bulk media, power, other utilities and additional fuel or natural gas to make up for the loss of PSA tail gas fuel value on account of conversion of significant quantum of the PSA tail gases into ethanol. It is however, worthy of notice that the residual tail gases from the Lanzatech facilities could continue to be used as fuel notwithstanding the reduced calorific value and significantly low carbon footprint from the flue gases emanating from the Hydrogen Plant Reformer Stacks.

Horizontal Diversification

As mentioned above, Hydrogen and CO are the key components required for production of ethanol from waste/tail gases. The immediate other facility which indicates a precise quantum of potential for production of ethanol from waste gases are the steel mills. In fact, most of the early origins of this technology rest around the experience acquired by Lanzatech in steel mills. The typical composition of the waste gases from the steel plant (blast furnaces, coke oven of gases and steel purification) comprise of a fair amount of Hydrogen and CO, which can facilitate production of large quantum of ethanol. Again, a back end Lanzatech facility in the steel plants could enable waste gas conversion into valuable products and re-use of the same in the Hydrocarbon pool.

It is assessed that if all the steel plants in India could be equipped with a waste gas conversion facility into ethanol perhaps additional 10% ethanol blending into gasoline pool could easily be achieved. Even if one were to consider 50% of the total opportunities safely 5-6% of additional ethanol could be secured from the steel mills. Together with Lanzatech facilities located at the back end of the PSA plants of the Hydrogen plants in the refineries therefore, 10-11% of the total ethanol blending into gasoline pool could be achieved easily.?The balance ethanol can be made up from bio-fuels and (1G, 2G) ethanol facilities, ?as well as ethanol from rice, wheat husk which could all together quickly facilitate the target of meeting E-20 target as set up Hon’ble Prime Minister of India.

Needles to mention, that with 20% blending of ethanol into the gasoline pool pre-dominantly from waste gases and agri wastes, a very significant step forward could be made towards the energy security of the country along with directional reduction of energy import bills. For higher value adds, possibility of capping the gasoline, as currently exists and targeting the balance displaced naphtha from the gasoline pool to be routed to petrochemicals for even higher value add could be examined. Our study reveals that even if 50 % of the ethanol produced from the refineries is routed to petrochemical facilities the payback period would dramatically reduce to less than three years. A 20% ethanol blending in gasoline pool could safely enable displacement of naphtha for setting up at least one or two World scale size Olefin plants, with naphtha, LPG and kerosene as major feedstock.

The logic can be further extended to other waste gases, solid waste, bio-mass, wherein, as through various technologies syn gas can be created and correspondingly ethanol could be recovered as a potential blending stream to gasoline.

The advantages of ethanol blending are clearly evident, as they facilitate in reduction of particulate emissions and increased octane content of the gasoline pool. They also facilitate conversion of waste gases into products, thereby reducing the effective combustion requirements and consequently end up in a reduced carbon foot print, which is also one of the key objective functions of achieving an environmental friendly approach.

Strategy

For all these environmental friendly projects to be successful, the critical aspect is the implementation strategy. It is important that the projects are implemented on fast track basis, such that the lead time between the initiation of the project and its completion/commissioning does not have a gestation period of more than 18-24 months.

Since most of these plants are expected to be set up in operating facilities it is highly advisable that a modularization approach be adopted, such that, multiple skids could be transported to various sites, depending on the logistics and location of the facility, for enabling the projects to be set up at a much faster pace. Since most of the projects range between 70-280 KTPA Hydrogen Plant capacities various modules could be designed for standardization of the facilities such that standard modules could be configured for bulk production to achieve economies of scale and therefore further reduced capex. At best two or three varieties of skid arrangement could be considered and for larger capacities, the plants could be built in trains. For instance single train capacity of 70-100 T capacity could be considered to cater to all the projects and facilitate standard modules and designs, for optimal and fast track implementation. In fact with additional emphasis and standardization project schedules of 16-20 months can also be considered.

From order of magnitude analysis, it is observed that a manufacturing potential of Rs.12,000 ( $1.6 bn) to Rs.14000 crores ( $1.86 bn) is foreseeable which should be extremely attractive for the Indian manufacturers. The site work could be restricted mostly to supply of modules, hook up, bolting up modules and integration of facilities. Since Hydrogen Plant is a very critical facility of every Refinery, shutdown for the same would not be available or perhaps will have to be scheduled with the normal turnaround of the refinery. Facilities could be planned strategically to cater to this requirement as well.

For a country which is dependent on significant amount of energy import, possibility of recovery of liquid distillates from waste streams should be a very attractive idea. This will not only be an extremely economically viable and environment friendly proposition. This will also enable the possibilities of quickly achieving the E20 target by Government of India while making a huge stride forward to reduce the energy bills and make the gasoline available to the consumers at relatively lower costs!?