Page 133 - CW E-Magazine (16-7-2024)

Point of View

Recent developments in the ethylene oxide and

derivatives industry in India

The business of ethylene oxide (EO) and its derivatives (EODs) is a staid and commoditized one that seldom makes the news (save for recent
headlines related to residues in spices). In the last couple of months however, the business has some significant developments: a beginning in
supply of EO by pipeline and safer road transport; an international collaboration that aims to leverage complementary strengths of the partners to
offer products with improved sustainability profile; and, most recently, an acquisition of an incumbent to build better integration.

Petrochemical route to EO
EO is mainly produced (from ethylene and oxygen) as an intermediate that mostly goes into the manufacture of monoethylene glycol (MEG),
along with small amounts of higher glycols (diethylene & triethylene in the main). But small quantities are upgraded in quality, and this highly
purified EO (PEO) is used in the manufacture of a host of EODs, including, but not restricted to, ethoxylates of fatty alcohols, alkylphenols,
etc.; ethanolamines; glycol ethers; dye & pharmaceutical intermediates; rocket propellants; pesticides; and industrial sterilants. In all, more
than 300 chemicals are produced from EO, though their scale varies.

Globally, EO is mostly produced in large petrochemical plants downstream of ethylene-producing crackers. In India, EO and PEO are produced
via this route solely by Reliance Industries Ltd. (RIL). While a large chunk of the EO produced serves the company’s seemingly insatiable appetite
for MEG to feed into the polyester value chain (for fibre, bottle and film), RIL does supply PEO from four locations – Vadodara, Dahej and Hazira
(all in Gujarat) and Nagothane (in Maharashtra). These feed the entire merchant market for PEO, and are optimized to lower the distance it has to
be freighted before reaching the customer.
One of the constant laments of the PEO-consuming industries is that it is reliant on a single supplier for a critical feedstock that cannot
be imported in the quantities needed (for reasons of safety). But this state of affairs is not RIL’s fault, and to its credit it has over the years
nurtured a fairly large downstream industry that not only serves the domestic market but has had fair bit of success in aiding exports of some
value-added products.

Bio-based EO
There is an alternate route to EO and PEO and this is from bio-based ethanol. India Glycols Ltd. (IGL), located in Kashipur in Uttar Pradesh,
takes this route, but all of the EO produced was consumed captively to make EODs and MEG, but the PEO is now supplied to a joint venture
with speciality chemicals company, Clariant, located at the same site. None of the PEO makes its way into the merchant market for others
to consume.

International consortium for sustainable polyester
IGL’s MEG has a ‘bio’ tag, and the company was amongst the first globally to offer this to the PET bottle industry. The eponymous soft
drink company, Coca-Cola, touted the virtues of its PlantBottle – a PET bottle with only partially renewable content, as the para-xylene (PX),
needed to make purified terephthalic acid (PTA), still had petrochemical origins. While this product gained some traction and the markets
occasionally offered IGL a premium in pricing, it was neither substantial nor steady, and bio-MEG stayed a small niche in the context of the
much larger market for its petrochemical avatar.

Given the limitations, a recent announcement (see inside news pages of this issue), that IGL and six other companies – Finland’s Neste,
South Korea’s SK Geo Centric, Thailand’s Indorama Ventures and Japan’s Mitsubishi Corporation, Chiyoda Corporation and Goldwin – have
come together to establish a supply chain to replace fossil materials with renewable, bio-, and captured carbon feedstock in polyester fibre
production, is noteworthy. Unlike earlier, the collaboration will ensure access to bio-based PX as well, setting the stage for a fully bio-based
polyester (albeit on a mass balance basis) that will eventually be used by one of the partners in the consortium – Goldwin – for the manufacture
of the well-known ‘The North Face’ range of outdoor clothing in Japan.

Pipeline supply
Till recently, all of India’s PEO supplies to consumers was done through road tankers. But change is afoot here.

As reported a couple of weeks ago, pipeline supplies of PEO have commenced from RIL’s Dahej site to a major EOD producer, Sterling
Auxiliaries. This is a welcome initiative, though it comes with significant upfront costs, as it makes for efficient and, more importantly, safer

Chemical Weekly July 16, 2024 133

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