Economics of Ammonia Production and Distribution – International Symposium

START-UP PROBLEMS OF NEW LARGE AMMONIA PLANTS AND THE EFFECT ON THE AMMONIA MARKET.

Discussion of troubles at start-up

In plants constructed in the early 1950s the secondary reformers were lined with high-silica brick and in time the waste-heat boilers following these reformers became fouled up by a deposit of what were apparently silica compounds. Replacement of the silica bricks with high aluminium bricks overcame the problem of silica deposition. Apparently, as has been noted above, this particular problem was ignored in some earlier large capacity plants.

In the survey, the major constructors have all indicated and so, indeed, have some of the companies (mainly those operating the most successful plants) that highly specialised and well trained labour is required to operate the plants. Maintenance schedules are planned well in advance – up to a year prior to start-up in at least one case – and inspections are frequent, thus avoiding costly loss of production due to breakdown of faulty equipment. With no duplicates for the major items of equipment the failure of any one of these items of necessity means a complete shutdown for the plant. This appears to be especially true of the compressor section where failure of the single centrifugal compressors results in total shutdown and 100% loss of production, compared with a similar sized plant equipped with reciprocating compressors, where the failure of a single unit may result in, at the most, a 15% reduction in capacity.

For some contractors it has been the high pressure steam systems that have presented problems, particularly for those with no experience in power generating station design, where high pressures are commonplace. Faulty welding has often led to failures of the waste heat boilers after the primary and secondary reformers.

Admittedly these are not usually serious, providing that they are discovered in time, but, nevertheless are annoying and time-wasting.

Possibly the section giving rise to the most difficulties has been that of gas compression, for with the compressors and the turbine drives, especially where the combination of high speed and high power output has introduced a degree of unreliability. In many known instances turbine failures have shut down large ammonia plants for comparatively long periods of time while new parts are either made or transported long distances. The costs of keeping on-site spares for these sections appear to be excessively high, but if the cost of lost production in the event of failure was evaluated, the overall cost might not seem so high. Indeed, there has been a move in both the U.S.A. and in Western Europe to set up an organisation for spare-parts for ammonia plants but as yet nothing has been implemented.

Admittedly minimal costs with maximum productivity are the optima and bids are usually made on this basis. However, since experience over the first four years shows that reliability is nothing like 100%. the argument that a good plant should need no spare parts is not valid, since failures are inevitable.

The problem of silica and potassium carbonate carryover from the primary reforming catalyst and silica migration from the refractory of the secondary reformer has been overcome in the newer plants by designing the subsequent equipment to contain a certain amount of silica carryover and for installing traps to reduce the amount of material reaching the subsequent equipment.

The odd minor failures in small pumps, lines and instrumentation can be accepted as normal.

Daphne L Mermikedes, British sulphur Corporation, UK.

14 pages, 4 tables, 7 references.

EFFECT OF OPERATING RATE AS A PERCENTAGE OF DESIGN CAPACITY ON PROFITABILITY OF AMMONIA PLANT OPERATION

Summary:

Over-capacity in the ammonia producing industry in the United States has resulted in industry average operating rates of 75-80%. Rates above 90% are not expected to be achieved until 1972-1973

This situation together with operation forced reduced rates in some large single train plants has made people reconsider the merits of the large unit.

The large centrifugal compressor type plant has an undisputed cost advantage over the smaller reciprocating type unit at capacity operation and at reduced capacity operation that is so great as to eliminate consideration of the smaller plants. A two train centrifugal type plant, assuming equal component reliability, has statistically no reliability advantage over a single train unit and is at an economic disadvantage at both capacity and partial capacity operation. The industry should accept the benefits of the large plant and learn to improve it even though its present reliability is believed to compare favourably with that of the older type plants.

Analyses of operating problems have shown that most are caused by equipment and machinery deficiencies. These can be minimised by the development of and application of improved purchasing specifications, workmanship specifications, and review and inspection procedures both in the shop and field. These steps are being taken and the added cost to the industry should be quickly recovered when market demand allows higher operating rates.

Harry W Lambe, Chemical Engineering Section, Arthur D Little Inc.

20 pages, 4 figures, 7 tables, 6 references.

DISCUSSION FOLLOWING PREVIOUS TWO PAPERS (16 pages).

EFFECT OF ECONOMIC AND SITE FACTORS ON TECHNICAL DESIGN PARAMETERS IN AMMONIA PLANT DESIGN

Summary:

This paper starts from the supposition that the size and location of the plant have been settled by marketing considerations. The factors leading to the choice of natural gas as feedstock in the majority of cases, with the occasional use of heavy oil, naphtha or other feedstock, are briefly discussed. The majority of the paper is concerned with the choice of the most economic process stages to use with natural gas or light hydrocarbon feedstock. Particular attention is paid to the two most expensive areas of the plant, the reforming and waste heat recovery section and the syngas compression and ammonia synthesis. For maximum tube life and safe reliable operation, a top fired furnace design is shown to operate in a less severe manner than side fired designs. The benefits of operating the steam system at 100-120 kg/cm² and the ammonia loop in the pressure range of 250-330 kg/cm² are clearly demonstrated. In conclusion a description is given of a recently constructed ammonia plant which illustrates in one way or another most of the points raised elsewhere in the paper.

P M Sales and F C Brown, Humphries and Glasgow Ltd, London, UK.

21 pages, 6 figures, 4 tables, 1 reference. Discussion, 2 pages.

ECONOMIC COMPARISON BETWEEN STEAM REFORMING AND PARTIAL OXIDATION FOR AMMONIA PRODUCTION

Summary:

This paper compares economically the well known steam reforming process for ammonia production with the less widespread fuel oil partial oxidation process. Steam reforming is considered in the two cases of natural gas and naphtha, using the sequence most commonly applied: feed desulphurisation, steam reforming, high and low temperature shift reactions, CO₂ removal by activated hot potassium carbonate, methanation, compression and ammonia synthesis.

The process selected for partial oxidation uses a recently developed technique at high pressure by Texaco: air separation, synthesis gas generation at 80 kg/cm²g, shift conversion, CO₂ removal by methanol wash (Rectisol), CO₂ removal by liquid nitrogen wash, gas compression and ammonia synthesis.

In both cases, the comparison is based on a 1000 MT/D capacity, using steam turbine driven centrifugal compressors for all the major services: air, natural gas, nitrogen, synthesis gas and ammonia.

The comparison takes into account the investment and operating costs: raw materials, utilities, labour, maintenance, financial charges and insurance.

The relative prices of natural gas, or naphtha, and fuel oil appear to be the key factor in deciding which particular process is the most economical for a given application.

D L Banquy, Societé Foster Wheeler Francaise, Paris, France.

16 pages (including discussion), 1 table.

REVIEW OF ENERGY BALANCE CONSIDERATIONS FOR NAPHTHA-BASED AMMONIA PLANTS

Conclusion:

In modern single train high capacity production units, the very low cost of the manufactured product cannot be actually achieved unless the plant is running continuously at a sufficient load factor. Several reports have dealt with this economic problem during this meeting.

Our purpose has been to show first that integrated design of ammonia units requires consideration of the utilities in the same light as the process units. There is a strong case to be made for operating the auxiliary boiler at a pressure around 550 p.s.i.g. (medium pressure). The investment cost of the equipment must be balanced with the quality of their service not only in normal operation but also under the various unusual operations which may happen.

In plants of this kind, the need for smooth operation of the utilities must be obvious but it requires the same attention that is devoted to the design of the process circuits. May I suggest that even more attention is required in order to avoid over simplification. This smooth operation is so vital that it may lead to a decision in favour of dependability even if at the expense of a little efficiency.

M Bignon, Directeur Scientifique, Department Chimie et Petrole, S A Heurtey, Paris, France.

18 pages (including discussion), 5 figures, 2 tables.

STORAGE AND HANDLING COSTS FOR ANHYDROUS AMMONIA IN RELATION TO VARIABLE OFFTAKE AND STOCKHOLDING

Conclusion:

Three points clearly emerge from the data presented. Firstly, for large scale terminal operation, fully refrigerated tanks are the only type suitable for economic operation. Secondly, the size of terminal is indicated almost solely by the size of vessel employed for the ammonia transportation and thirdly, the choice of individual tank sizes and combinations does not affect the overall economics of the operation provided that the capacity of individual units is not less than 10-15,000 tonnes.

A M M Brown, Deputy Research Manager, Industrial Division, British Sulphur Corporation, London, UK.

15 pages (including discussion), 5 figures, 2 tables.

COMPARATIVE COSTS OF AMMONIA TRANSPORT

Conclusions:

1) Truck transport is considerably more costly than alternative modes and is economically viable only where the distances are relatively limited, i.e., in most cases less than 100 miles. However, it has the greatest flexibility of the several modes examined.

2) Rail costs in standard 11,000 gallon cars, while substantially lower than truck costs, are substantially higher in the medium- to long-range than barge or pipeline transport.

3) The efficient use of jumbo rail cars, particularly in multicar units, can bring rail transport into a much more competitive position vis-à-vis pipeline transport.

4) Efficiently utilised barge transport is probably the lowest cost mode of transport over medium to long distances, i.e., beyond 500 miles. However, this is the least flexible of the systems, tied as it is to navigable waterways.

5) Pipeline transport, when based on sufficient volume and well located terminal and loading facilities, is a highly competitive method of transport and one which appears to be commercially viable under current conditions.

6) There remains a high degree of complexity in an analysis of transport costs because of variations in equipment ownership or lease, variations in tariffs between traffic areas, and widely varying degrees of utilisation.

7) Transportation costs become inevitably associated with storage and distribution costs and, in many instances, cannot be arbitrarily separated from them. Consideration must be given to storage costs at intermediate terminals, particularly where a high degree of seasonality is involved.

George C Sweeney Jr., Senior Staff Member, Arthur D Little, Inc., USA.

14 pages, 1 figure, 7 tables, 5 references.

OCEAN SHIPPING OF AMMONIA – COSTS AND FORMS OF CONTRACTS

Conclusions:

Large scale ocean movements of anhydrous ammonia which has grown from a few thousand tons in 1967 to some 900,000 tons in 1970 and is projected to reach the height of 1.7 million tons in 1972 is the result of the following factors:

1) The development of large centrifugal type ammonia plants that greatly reduce the manufacturing cost of anhydrous ammonia compared to the old style reciprocating type plants.

2) The availability of low cost feedstocks such as natural gas in locations as the U.S. Gulf, Persian Gulf and Caribbean areas.

3) The construction in many nitrogen consuming countries of dry fertiliser plants based on imported ammonia as a feedstock.

4) The development of large, fast refrigerated ammonia carriers that can economically transport ammonia over great distances in short periods of time and the rates that lay down the imported ammonia at competitive prices and the flexibility of ship owners to use these vessels in other activities such as LPG during the fertiliser off season.

C Marner, Mundo Gas S.A., Bermuda.

9 pages, 4 tables.

DISCUSSION OF PREVIOUS THREE PAPERS (5 pages).

RECENT TRENDS IN PUBLISHED AMMONIA PRICES AND THEIR PROSPECTS FOR 1971 – 1975

Conclusions:

It is well known that ammonia prices in most regions of the world have undergone major reduction since the appearance in 1965 of the technology to build and operate large plants.

For 1972-1973, the ammonia price in the U.S.A. should approach the long term equilibrium price as determined in this paper. Meanwhile pressure on prices seems likely to continue over the same period elsewhere.

For 1975 and the longer term, the following equilibrium prices are anticipated:

USA, USD 34-36 per metric tonne.

Europe, USD 43-45 per metric tonne (even with some imports from N Africa).

Persian Gulf, USD 37 per metric tonne.

N Africa, USD 41 per metric tonne.

Japan, USD 44-46 per metric tonne.

India, USD 56 per metric tonne (problem of duties and possible import from Persian Gulf can arrive in India at USD 47 per metric tonne).

Nicolas P Smith and Michel E Barjon, Inorganic Chemicals and Metals Section, Applied Economics Department, Batelle Institute, Geneva, Switzerland.

26 pages (including discussion), 5 figures, 13 tables.