Abstract

Process Economics Program Report 282

METHANOL TO GASOLINE
(December 2011)

Rising petroleum prices have once again focused global attention on using coal to
manufacture liquid transportation fuels that can displace petroleum-derived gasoline and diesel.
Interests in coal to clean transportation fuel technology will continue as an alternative to
petroleum refining. ExxonMobil’s commercially proven Methanol-to-Gasoline (MTG) technology,
coupled with established commercial coal gasification and methanol technologies, provides an
economically competitive and low risk option for the production of clean gasoline from coal.

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Current interest in coal-derived liquid fuels has concentrated on approaches known as
indirect liquefaction of which methanol to gasoline is a part. The other indirect technology for the
production of transportation fuels from coal is known as Fischer-Tropsch.

This report highlights all major aspects of production of diesel, and/or gasoline as a fuel,
along with long-term forecasts for the need for fuels on a global and U.S. basis. In addition to
presenting our traditional techno-economic analyses to look at the current standalone methanol
to gasoline and integrated options to produce gasoline from coal, we compare the integrated
methanol-based route to the Fischer-Tropsch process to convert synthesis gas produced from
coal gasification into a slate of fuel products including gasoline and diesel.

© SRI Consulting, IHS Inc. PEP Report 282

A private report by the

Process Economics
Program
Report No. 282

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METHANOL TO GASOLINE

by Ronald Smith

December 2011

Menlo Park, California 94025

 SRIC agrees to assign professionally qualified personnel to the preparation of the
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For detailed marketing data and information, the reader is referred to one of the SRI
Consulting programs specializing in marketing research. THE CHEMICAL ECONOMICS
HANDBOOK Program covers most major chemicals and chemical products produced in the
United States and the WORLD PETROCHEMICALS PROGRAM covers major hydrocarbons and
their derivatives on a worldwide basis. In addition the SRIC DIRECTORY OF CHEMICAL
PRODUCERS services provide detailed lists of chemical producers by company, product, and
plant for the United States, Western Europe, Canada, and East Asia, South America and Mexico.
 CONTENTS

GLOSSARY........................................................................................................................ XI

1 INTRODUCTION ........................................................................................................ 1-1

REPORT FOCUS ....................................................................................................... 1-4

2 SUMMARY ................................................................................................................. 2-1

OVERVIEW ................................................................................................................ 2-1

Markets ....................................................................................................................... 2-1

Enhanced Oil Recovery ......................................................................................... 2-5
Geologic Sequestration ......................................................................................... 2-5

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Water Requirements.............................................................................................. 2-6

Technology ................................................................................................................. 2-7

Constraints of The MTG process ............................................................................... 2-9

Advantages of The MTG Process .............................................................................. 2-10

ECONOMICS ............................................................................................................. 2-11

Cost Estimates ........................................................................................................... 2-11

Capital Costs ......................................................................................................... 2-12
Economics Summary............................................................................................. 2-13

Advantages of the MTG Option .................................................................................. 2-14

3 INDUSTRY STATUS .................................................................................................. 3-1

INTRODUCTION ........................................................................................................ 3-1

GLOBAL LIQUID FUELS OUTLOOK ......................................................................... 3-6

World’s Liquid Production ........................................................................................... 3-7

Liquids Production Modeling Approach ...................................................................... 3-8

Non-OPEC Production ............................................................................................... 3-8

Major Areas of Decline in Non-OPEC Production ................................................. 3-9
Major Areas of Growth in Non-OPEC Production ................................................. 3-10
Non-OPEC Unconventional Production ................................................................ 3-12

© SRI Consulting, IHS Inc. iii PEP Report 282

 CONTENTS (Continued)

World Oil Reserves..................................................................................................... 3-13

OPEC PRODUCTION ................................................................................................ 3-16

Oil Price Forecast ....................................................................................................... 3-18

World Liquids Supply/Demand Forecast .................................................................... 3-19

Unconventional Liquids .............................................................................................. 3-20

U.S. LIQUID FUELS OUTLOOK ................................................................................ 3-20

U.S. Liquid Fuels Consumption by Sector ................................................................. 3-21

U.S. Domestic Fuels Production by Source ............................................................... 3-22

U.S. Liquids Fuels Net Imports as a Share of Total Liquids Fuels Consumption ...... 3-23

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U.S. Motor Gasoline and Diesel Fuel Consumption .................................................. 3-24

RECENT CTL PROJECT ACTIVITIES USING EXXON/MOBIL’S MTG

TECHNOLOGY .......................................................................................................... 3-25

China .......................................................................................................................... 3-26

Australia—Queensland .............................................................................................. 3-26

Process Overview....................................................................................................... 3-27

Surface Water Management ................................................................................. 3-30
Ground Water Management .................................................................................. 3-30

U.S.—Wyoming .......................................................................................................... 3-30

U.S. – West Virginia ................................................................................................... 3-31

4 TECHNOLOGY REVIEW ........................................................................................... 4-1

INTRODUCTION ........................................................................................................ 4-1

METHANOL TO GASOLINE BY THE EXXON/MOBIL PROCESS ........................... 4-3

Basic Chemistry.......................................................................................................... 4-3

Kinetics ....................................................................................................................... 4-4

Basic Production Scheme .......................................................................................... 4-5

Gasoline Product Characteristics ............................................................................... 4-7

HALDOR TOPSOE TIGAS PROCESS ...................................................................... 4-7

© SRI Consulting, IHS Inc. iv PEP Report 282

 CONTENTS (Continued)

Syngas Production ..................................................................................................... 4-8

Oxygenate Plant ......................................................................................................... 4-9

Gasoline Synthesis ..................................................................................................... 4-9

Effects of Hydrogen in the Integrated Loop ................................................................ 4-9

Olefins......................................................................................................................... 4-10

Durene ........................................................................................................................ 4-10

Octane Number .......................................................................................................... 4-11

Gasoline Yield ............................................................................................................ 4-11

Conclusion .................................................................................................................. 4-11

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Conversion of Syngas from Coal Gasification to DME via the TIGAS Process ......... 4-11
Decoupled Methanol Dehydrogenation Route ...................................................... 4-12
Direct Synthesis Route .......................................................................................... 4-12

Haldor Topsoe Indirect Integrated Process for Production of Gasoline from Coal .... 4-12

Summary .................................................................................................................... 4-15

NEW TECHNOLOGY FROM CONOCOPHILLIPS .................................................... 4-16

FEEDSTOCK INTEGRATION .................................................................................... 4-17

5 METHANOL TO GASOLINE BY THE EXXON/MOBIL MTG PROCESS ................. 5-1

INTRODUCTION ........................................................................................................ 5-1

INTEGRATED COAL TO METHANOL ...................................................................... 5-2

Gasification ................................................................................................................. 5-2

Water Gas Shift .......................................................................................................... 5-2

Acid Gas Removal ...................................................................................................... 5-3

Sulfur Recovery .......................................................................................................... 5-3

Methanol Synthesis .................................................................................................... 5-3

DESIGN BASIS AND ASSUMPTIONS ...................................................................... 5-4

PROCESS DESCRIPTION ........................................................................................ 5-7

Gasoline Synthesis (Section 100) .............................................................................. 5-12

© SRI Consulting, IHS Inc. v PEP Report 282

 CONTENTS (Continued)

Gasoline Refining (Section 200)................................................................................. 5-13

Heavy Gasoline Upgrading (Section 300) .................................................................. 5-13

Product Blending (Section 400).................................................................................. 5-14

PROCESS DISCUSSION .......................................................................................... 5-18

Materials of Construction ............................................................................................ 5-18

Catalysts ..................................................................................................................... 5-18

Gasoline Synthesis Catalyst .................................................................................. 5-18
Hydrotreating Catalysts ......................................................................................... 5-18

Gasoline Fuel Product Blends with Methanol ............................................................ 5-20

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COST ESTIMATES .................................................................................................... 5-22

Capital Costs .............................................................................................................. 5-22

Production Costs ........................................................................................................ 5-26

6 INTEGRATED COAL TO GASOLINE ....................................................................... 6-1

INTRODUCTION ........................................................................................................ 6-1

INTEGRATED COAL TO GASOLINE VIA THE EXXONMOBIL MTG PROCESS .... 6-2

Cost Estimates ........................................................................................................... 6-2

Capital Costs ......................................................................................................... 6-2
Production Costs ................................................................................................... 6-4

INTEGRATED COAL TO GASOLINE VIA F-T SYNTHESIS ..................................... 6-7

COST ESTIMATES .................................................................................................... 6-7

Capital Costs .............................................................................................................. 6-7

Production Costs ........................................................................................................ 6-9

INTEGRATED PROCESSES TO PRODUCE GASOLINE FROM COAL –

CONCLUSIONS ......................................................................................................... 6-12

Standalone ExxonMobil MTG Process ...................................................................... 6-12

Integrated Coal to Gasoline via ExxonMobil MTG Technology ................................. 6-12

Integrated Coal to Gasoline via High Temperature Fischer-Tropsch Technology..... 6-12

© SRI Consulting, IHS Inc. vi PEP Report 282

 CONTENTS (Concluded)

APPENDIX A PATENT SUMMARY TABLES ................................................................ A-1

APPENDIX B DESIGN AND COST BASES .................................................................. B-1

APPENDIX C CITED REFERENCES ............................................................................. C-1

APPENDIX D PATENT REFERENCES BY COMPANY ................................................ D-1

APPENDIX E PROCESS FLOW DIAGRAMS................................................................ E-1

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© SRI Consulting, IHS Inc. vii PEP Report 282

 FIGURES

1.1 ExxonMobil’s MTG Technology Process Flow Schematic .................................... 1-2

1.2 Lurgi’s Methanol to Synfuels Technology Process Flow Schematic ..................... 1-3

3.1 IEA 2011 Global Oil Production Forecast, Million Barrels per Day ....................... 3-1

3.2 The Prospects for Oil Production .......................................................................... 3-3

3.3 World Liquid Fuels Production History and Forecast (1990–2035) ...................... 3-4

3.4 Non-OPEC Liquids Production by Region (2008–2035) ....................................... 3-4

3.5 World Total Liquid Fuels Production History and Forecast (1990–2035) ............. 3-7

3.6 Average Annual World Oil Prices History and Forecast ....................................... 3-18

3.7 World Liquids Supply and Demand by Region (2009–2035) ................................ 3-19

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3.8 Unconventional Resources as a Share of Total World Liquids Production
(2009–2035) .......................................................................................................... 3-20

3.9 Short-Term History and Forecast of Average U.S. Retail Gasoline Prices
versus Crude Oil Prices (January 2007—November 2012) .................................. 3-21

3.10 U.S. Liquid Fuels Consumption by Sector History and Forecast .......................... 3-22

3.11 U.S. Domestic Liquids Production by Source (2009–2035) .................................. 3-23

3.12 Net Import Share of U.S. Liquid Fuels Consumption History and Forecast .......... 3-24

3.13 U.S. Motor Gasoline and Diesel Fuel Consumption History and Forecast ........... 3-25

3.14 AMBREctl Project Coal-to-Gasoline Process Block Flow Diagram ...................... 3-28

4.1 Various Processes for Conversion of Coal-to-Liquid Fuels .................................. 4-1

4.2 Fischer-Tropsch Indirect Process to Produce Fuels from Coal ............................ 4-2

4.3 Gasoline Components Product Distributon Profile as a Function of Fixed Bed

Reaction Space Time ............................................................................................ 4-4

4.4 Fixed Bed MTG Process ....................................................................................... 4-5

4.5 Haldor-Topsoe TIGAS Process for Conversion of Natural Gas to Gasoline ........ 4-8

4.6 Production of Gasoline from Coal Haldor-Topsoe Single Step Integrated

Process Block Flow Diagram ................................................................................ 4-13

4.7 Comparative Equilibrium Conversion of CO as a Function of Pressure ............... 4-14

4.8 Effect of the H2/CO Ratio on Equilibrium Production Distribution for Combined
Methanol/DME Synthesis ...................................................................................... 4-14

5.1 Integrated Coal to Gasoline via ExxonMobil’s MTG Process ............................... 5-1

© SRI Consulting, IHS Inc. viii PEP Report 282

 FIGURES (Concluded)

5.2 ICI Synetix Process Flow Schematic Methanol Synthesis Loop ........................... 5-4

5.3 Methanol-to-Gasoline ExxonMobil Technology

Process Flow Diagram .......................................................................................... E-3

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© SRI Consulting, IHS Inc. ix PEP Report 282

 TABLES

1.1 Coal to Transportation Fuels Yields ...................................................................... 1-1

2.1 Total Capital Costs—U.S. Gulf Coast ................................................................... 2-12

2.2 Economics Summary............................................................................................. 2-13

4.1 MTG Gasoline Yields............................................................................................. 4-7

4.2 MTG Process Gasoline Product Characteristics ................................................... 4-7

4.3 TIGAS Process Gasoline Product Characteristics ................................................ 4-16

5.1 Gasoline from Methanol

Design Bases ........................................................................................................ 5-6

5.2 ExxonMobil Methanol-to-Gasoline Technology

Stream Flows ......................................................................................................... 5-8

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5.3 Expected versus Simulated MTG Gasoline Yields—vol% from Second-
Generation MTG Process Technology .................................................................. 5-12

5.4 Methanol-to-Gasoline ExxonMobil Technology

Major Equipment ................................................................................................... 5-15

5.5 Methanol-to-Gasoline ExxonMobil Technology

Utilities Summary ................................................................................................... 5-17

5.6 Comparison of Methanol and Gasoline Fuel Properties ....................................... 5-21

5.7 Methanol-to-Gasoline ExxonMobil Technology

Total Capital Investment ........................................................................................ 5-23

5.8 Methanol-to-Gasoline ExxonMobil Technology

Capital Investment by Section ............................................................................... 5-24

5.9 Methanol-to-Gasoline ExxonMobil Technology

Production Costs ................................................................................................... 5-27

6.1 Coal-to-Gasoline via Methanol Route Exxonmobil Technology

Total Capital Investment ........................................................................................ 6-3

6.2 Coal-to-Gasoline via Methanol Route Exxonmobil Technology

Production Costs ................................................................................................... 6-5

6.3 Gasoline from Coal by High-Temperature Fluidized-Bed F-T Technology

Total Capital Investment ........................................................................................ 6-8

6.4 Gasoline from Coal by High-Temperature Fluidized-Bed F-T Technology

Production Costs ................................................................................................... 6-10

© SRI Consulting, IHS Inc. x PEP Report 282

 GLOSSARY

Symbol or Term Definition

AGR Acid Gas Removal
BOE Barrel of Oil Equivalent
Btu British Thermal Unit
CCS CO2 Capture and Storage
CTL Coal to Liquid
CTG Coal to Gasoline
Claus Sulfur Recovery Unit
DME Dimethyl Ether
DOE/US DOE U.S. Department of Energy
DVE Diesel Value Equivalent
EIA Energy Information Agency

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E&C Engineering and Construction
EOR Enhanced oil recovery
FEED Front End Engineering Design
F-T Fischer-Tropsch
GTG Gas to Gasoline
GTL Gas to Liquid
GTM Gas to Methanol
HC Hydrocracking
HDT Hydrotreating
HT Haldor-Topsoe
HTFT High Temperature Fischer-Tropsch
IEA International Energy Agency
LHSV Liquid hourly space velocity
LPG Liquefied petroleum gas
MENA Middle East/North Africa
MOGD Mobil Olefins to Gasoline and Distillate
MON Motor octane number
MTG Methanol to gasoline
MTS Methanol to Synfuels
ROIBT Return on investment before tax
RON Research octane number
SCOT Shell Claus Off-Gas Treating
TIGAS Topsoe Integrated Gasoline Synthesis
WGS Water Gas Shift
ZSM-5 Zeolite Catalyst

© SRI Consulting, IHS Inc. xi PEP Report 282

 1 INTRODUCTION

Soaring prices for the primary fuels oil and gas are currently driving demand for alternative
energy sources with the aim of limiting dependency on expensive energy imports. At the same
time, thought is being given on a national level as to how far the utilization of domestically
available energy resources, which have in the past lost appeal, can now be re-intensified.
Starting with coal, this fossil fuel source can be subjected to a number of process steps to obtain
a variety of end products such as fuels, chemicals and electricity. Once coal has been gasified
the syngas conversion to high quality products takes place in further process steps based on
commercially proven technologies which will be described in further detail in this report.
Table 1.1 below shows several pathways to convert coal to transportation fuels using both
direct and indirect routes.

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From this table it can be seen that three competing indirect alternative routes to produce
transportation fuels from coal include ExxonMobil’s MTG technology. The two Fischer-Tropsch
routes produce syncrude directly from syngas, then upgrade and refine the syncrude
hydrocarbons into a slate of liquid fuel products including gasoline and diesel. The integrated
coal-to-gasoline (CTG) technology first produces methanol from syngas, and then converts
methanol directly into gasoline. The direct liquefaction route is shown in this table for comparison,
but is not of current commercial interest anywhere in the world except China.

Table 1.1
COAL TO TRANSPORTATION FUELS YIELDS
VOL%

Low Temperature High Temperature

Process Products F-T F-T MTG Direct Liquefaction
CTL Fuel Gas 6 15 Not Reported
LPG 6 23 11 Not Reported
Naphtha 19 36 36.7
Gasoline 87
Distillate 22 16 43.3
Fuel Oil/Was 46 5 20.0
Oxygenates 1 5 0.1 0.34
Refinery Naphtha Polymerization Naphtha Reforming
Reforming (Polygas)
HDT/HC* Naphtha Reforming HDT
Dewax HDC/HC* HDT/HC
Product Recovery
* HDT/HC = Hydrotreating/Hydrocracking

© SRI Consulting, IHS Inc. 1-1 PEP Report 282

 At the moment, the majority of methanol produced around the world (except China) is
produced by converting natural gas to synthesis gas (CO and H2) via steam reforming and/or
partial oxidation, followed by vapor phase conversion of synthesis gas to methanol. But methanol
is also produced from coal in both China and the United States. In this report, for integrated
production of fuels from coal, we have selected the high temperature Fischer-Tropsch process
route for comparison to the integrated MTG process to produce gasoline, because following
syncrude refining, it produces more gasoline than diesel at the same overall fuels capacity.
The application of one or the other F-T route depends mainly on the market application of
the product. CTL is in the spotlight due to significant growth in the diesel market, and the
increasing stringency of environmental regulations for fuel product, which has opened up a large
market potential for ultraclean synthetic F-T diesel. CTG, on the other hand, is of major interest in
gasoline-dominated markets such as China, especially in remote locations where CTG can
supply high-quality gasoline directly to the local market. Another very interesting option for CTG is
the possibility for flexible production (coproduction) of methanol or gasoline, thus allowing
optimized adjustment of plant operation to the prevailing market environment.
Therefore, both technologies are viable alternatives in efficiently utilizing coal reserves for
the production of high-quality fuel production. The large amount of projects for indirect coal
liquefaction in the U.S., China, and Australia, and potentially also in Europe, will eventually lead

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to large and modern production plants and a new era of efficient coal utilization.
Throughout the 1980s and 1990s the spotlight turned away from MTG processing due to the
prevailing low price for crude oil. However, events since 2006 led to a sharp and apparently long-
term price increase in crude oil prices, and attention has once again turned to MTG/CTG
technology. MTG technology developed by Mobil Oil was demonstrated during the 1980s in a
commercial plant in New Zealand that was shut down in 1990 when oil prices sank to $15/barrel.
Figure 1.1 below shows a process flow schematic of ExxonMobil’s MTG technology with the
main equipment and products.

Figure 1.1
EXXONMOBIL’S MTG TECHNOLOGY PROCESS FLOW SCHEMATIC

© SRI Consulting, IHS Inc. 1-2 PEP Report 282