Page 136 - CW E-Magazine (3-12-2024)

Point of View

and monochloroacetic acid. In the latter the main use is the manufacture of PTA – the key raw material for polyesters. It is pertinent
to point out here that the list of large-volume AA end-uses includes two with sizeable import volumes – VAM (385-kt) & PTA (1.5-mt).

When the new AA plant is commissioned in about four years, India’s AA demand will be close to 1.8-mt, which implies that domestic
production will still serve less than 50% of demand. There is thus scope for further expansion from a market perspective at least. New
builds in China and in other parts of the world are now in the range of 1.0-mtpa, and while GNFC’s current scheme is smaller it can
serve as a platform on which to further build upon – both by expansion and integration to AA derivatives.

While AA production from the new plant will prioritise the Indian market, the partnership with INEOS Acetyls could allow access to
other markets as well. Global producers take regional and global views on demand-supply (that was one reason why both BP and Celanese
were reluctant to license the technology to Indian companies) and are known to rationalise capacities in response to market signals –
shutting down unviable capacities or cutting operating rates – and the partnership may benefit from this when the going gets tough.

Styrene project of IOC
The conventional method for producing SM is the alkylation of benzene with ethylene followed by dehydrogenation of the ethylbenzene
(EB) produced to give SM. An alternate ‘SM-PO’ route co-produces SM and propylene oxide (PO), and is now a mature technology and
important source of SM. The popularity of the route with PO producers is due to better process economics and environmental benefits
compared to the conventional chlorohydrin process. Consequently, most PO is now made by co-product routes (SM or tertiary-butyl
alcohol), or by directly reacting propylene with hydrogen peroxide (HPPO process). Although PO demand controls the siting and capacity
of co-product plants, the primary output is SM by a weight ratio of 2.4 to 1.
IOC has, however, chosen to go with the conventional route to SM (via EB), and the two feedstocks required – ethylene and
benzene – will be available on site at its Panipat (Haryana) refinery-cum-petrochemical complex. Though the project will be welcomed
by user industries, its economics may be challenged due to its smaller scale (387-ktpa) – limited by ethylene availability – compared
to new builds elsewhere that go up to 720-ktpa.

When completed (sometime in 2026-27), it will be the first in India, not accounting for some small capacities that operated in the
past, but closed due to poor competitiveness.

Toluene projects from IOC and HMEL
The major application for toluene – accounting for 55% of total demand – is directly as solvent. The balance 45% is used for derivatives
including toluene diisocyanate (TDI), demand for which use is rising at about 7% CAGR; chloro- & nitro-toluenes (for which sizeable
capacity have been added in India); isobutylbenzene (the key intermediate for the anti-inflammatory drug, ibuprofen); cresols; and other
uses (saccharin, benzoic acid, toluenesulphonic acids, dyes & drug intermediates).

India does have toluene production from naphtha crackers and refineries (aside of small quantities from steel plants), but it is
nowhere close to requirement, hence rising imports. Furthermore, only cracker-based toluene – from Reliance Industries Ltd. – makes
the cut for TDI production.

Both IOC and HMEL are evaluating plans to isolate toluene from refinery streams, instead of blending it into gasoline for improving
octane rating. This relatively low-capex investment has a quick payback considering the chemical value of toluene is at least twice as
much as its value as a fuel blend. The focus should be on production of high-quality material, as it commands a small premium from
discerning consumers in the TDI, printing inks and pharmaceutical industries.

More needed
This column has often lamented the lack of investments in India for making several large volume chemicals, and why the unsustainable
trend of rising imports must change. Their ability to spur downstream development is probably the most important reason, as is supply
chain security that comes from local production.

Each of the three projects highlighted above, while welcome, will still serve only a part of the market even as it exists now. More
are needed if the needs of tomorrow are to be met!
Ravi Raghavan

136 Chemical Weekly December 3, 2024

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