IDA – The International DME Association

Prospects For DME As A Multi-Purpose Fuel

Dr. Theo Fleisch

BP Senior Advisor
Houston, Tx

_____________________________________________________________________
Presented at
IBC Gas to Liquids Conference
Milan, Italy – July 9, 2002
Outline

• Background – Role of:

• GTP in Gas Economy
• Oxygenates in GTP
• DME among Oxygenates
• DME
• Properties
• Manufacturing
• Markets
• Economics
• DME Organizations

• Key Messages
 2020 Vision – The Gas Economy
A World Powered by Gas

• Plentiful gas supply

• Desire for less carbon-
intensive fuels
• Liberalising markets
• Continued technological
innovation
• Gas use will increase in all
sectors:
• Heat and Power www.bpgaseconomy.com
• Transport
• Chemicals
www.bpgaseconomy.com
Role of Gas to Products (GTP)
1. Bring Remote Gas to Market
Pipelines
Power
Generation
LNG

Supply Markets
GTP
Gas by Wire

2. Create New Markets Transportation

•LPG Substitute as
Domestic Fuel
•Chemicals
•Fuel Additives
•Fuel cells
What is GTP?
CH4
Direct routes Direct routes
2010+? 2010+?

CO + 2 H2
“Synthesis Gas”

SYNCRUDE
HYDROGEN METHANOL

Acetic Fuel and

acid Additives
Ammonia Refinery Naphtha Formal
Products Diesel -dehyde DME
Jet Lubes
Olefins
“GTC”
“GTL”
Methanol is at the Heart of all GTL Oxygenates technology.
DME is a key new fuel and chemical intermediate product.

Syngas Production Syngas Conversion/Upgrade

Formaldehyde

Acetic Acid

MTBE

Dimethyl -
Ether
Natural Gas
Syngas Methanol
Fuel Cells

Power

Olefin
Feedstock
Transportation Fuels from Natural Gas

Otto Engine Diesel Engine Fuel Cells

(High Octane Fuels)
(Sources of
(High Cetane Fuels)
Hydrogen)

• Methanol • FT Diesel • Hydrogen

• MTBE • DME • Methanol/DME

• DMC • PDMM • FT Naphtha

• MTG (Gasoline) • FT Diesel*

• CNG
• LNG
• LPG

Oxygenates/derivatives of oxygenates
 The opportunity presented by GTL Oxygenates is
very large
…approximately 40 MMTPA of new methanol/DME demand by 2015

Fuel additives

Fuel cells
Methanol
Natural Gas Refinery Ethylene

Propylene

Fuel for Power

DME
LPG substitute

Fuel for Transport

…monetizing about 3 bcf/d of gas.

Outline

• Background – Role of:

• GTL in Gas Economy
• Oxygenates in GTL
• DME among Oxygenates
• DME
• Properties
• Manufacturing
• Markets
• Economics
• DME Organizations

• Key Messages
Molecules
Methanol

Methane

Propane

Water
Dimethyl-ether
Butane (DME)

Hydrogen Carbon Oxygen

Selected properties of DME
Property DME Propane Butane
Boiling Point (deg C) -24.9 -42.1 -0.5
Vapor Pressure @ 20 deg C 5.1 8.4 2.1
(bar)
Liquid Density @ 20 deg C 668 501 610
(kg/m3)
Specific Density (gas) 1.59 1.52 2.01
Lower Heating Value (MJ/kg) 28.4 46.4 45.7
Auto Ignition Temp @ 1 atm 235-350 470 365
(deg C)
Explosion/Flammability Limit in 3.4-17 2.1- 9.4 1.9 - 8.4
air (vol %)
Health, Safety and Environmental Issues

•Environmental
•Short half-life in troposphere
•No release into stratosphere

•Health
•Virtually non-toxic
•Not a carcinogen, teratogen or mutagen
•Safety
•Like LPG
•Heavier than air
•Visible flame
 How is DME produced?
DME can be manufactured from multi-feedstocks similar to
methanol production ...
Conventional Two Step Process

Coal Methanol
Dimethyl-ether
Natural Gas Syngas
(CO+H2) (DME)
Petroleum Coke “Direct”
Biomass Conversion
Process
HT Technology

• Today: Current suppliers for propellant market include Akzo Nobel,

DuPont, and Mitsubishi Gas Chemcials.
• Tomorrow: Future mega-plant technology providers include Haldor
Topsoe, Lurgi, Toyo Engineering, Mitsubishi Gas Chemicals, Kvaerner,
Synetix, NKK, etc
GTL-OX Plants under Consideration *

Oman Methanol Iran Methanol

5,000 MTPD 5,000 MTPD

Trinidad – (2) 5,000MTPD DME Int’l Corp.

India DME Project 2,500-4,500 MTPD
Atlas Methanol 5,000 MTPD
Methanol Holdings
Japan DME Inc
5,000 MTPD

5,000 MTPD Methanol

* Not including <5,000 MTPD Equivalent to:
methanol plants • 3,600 MTPD DME
• 14,000 B/D FT
DME Markets
• Multi-purpose fuel (flexibility)

• Gas-like in Power generation

• LPG-like for domestic applications
• Ideal diesel fuel
• Precursor for fuel additives
• Fuel cell fuel (hydrogen)
• Precursor for gasoline

• Chemical Feedstock (olefins)

DME as an LPG Alternative

• DME’s physical properties similar to LPG

• DME is already being used as cooking gas
• LPG market is large (180MMTPA in 2000) and
growing fast (260MMTPA in 2015)
• Regional supply/demand imbalances
• Attractive prices
• Developing countries (China, India) need portable
(bottled) fuel
• Strong quality of life improvement and
environmental driver
LPG/DME Interchangeability
• Industrial combustion systems
can likely use DME as a fuel
• 10% blend of DME with propane with
small system modifications
• pure DME requires burner tip, storage &
vaporizer modifications
• For pure DME systems:
• Storage: 20-35% increase in fuel
storage capacity or more frequent
delivery is required
• Vaporizer: Higher capacity needed
• Pumps: 20-35% increase in flow rate
capacity is required
• Material compatibility issues with
DME needs to be examined for A commercial gas stove can be
seals, gaskets, pressure used for DME without
regulator, etc modification.
• Gas flow meters need to be
modified or adjusted Picture courtesy of NKK Corp.
 BP-GE Cooperation for Power Generation

• GE pursues commercial
offerings of DME-fired E
class and F class heavy-
duty gas turbines.
• GE guarantees output, heat
rate and performance
• GE will also guarantee
MeOH combustion
contingent on future tests
• Oxygenates exhibit record
efficiencies and low
emissions!

Picture Courtesy of GE
DME—The Ultimate CI Fuel
• Completely SOOTLESS
(No smoke)
• 90% NOx reduction
• Meets/exceeds 2007
emission standards -
Heavy-Duty Emissions Estimates

• Quiet combustion 0.08

0.07 Diesel
• High Cetane

Particulate (g/bhp-hr)
0.06

• Engine/fuel system 0.05

0.04
lower cost than 0.03

conventional diesel 0.02

’01 DME
’95 DME
0.01
• Fuel Distribution: like 0
0 0.5 1 1.5 2 2.5 3 3.5 4
LPG NOx (g/bhp-hr)

Pictures Courtesy of Volvo Truck Corp Powertrain Technologies, Inc

and NKK Corp.
MTO Technology Prospects
Methanol to Olefins/Propylene (MTO/MTP) could act as a
growth engine for Methanol….
• Ethylene market currently ~90 MMTPA growing to +160 MMTPA
by 2015
• Propylene market currently ~50 MMTPA growing to +105
MMTPA by 2015
• Technology Developers
• MTO
• UOP/Norsk Hydro
• ExxonMobil
• MTP
• Lurgi

• Needs a Methanol price of less than $100/T with Ethylene price

$500/T and Propylene price $400/T
Outline

• Background – Role of:

• GTL in Gas Economy
• Oxygenates in GTL
• DME among Oxygenates
• DME
• Properties
• Manufacturing
• Markets
• Economics
• DME Organizations

• Key Messages
Relationship of Fuel Value and Price

Methanol DME
$/MMBTU $/ton $/ton

7.50 140 200 Historic

Price
5.50 105 150

4.50 85 120

3.50 65 95

Target
How can cost targets be reached?

• Low Cost Feedstocks (remote gas)

• Economy of Scale (2500tpd moving to
10,000tpd, equivalent to moving from 8,000
to 30,000bbl/day GTL-FT)
• Lower CAPEX and OPEX
• Moving from a Chemical Business to a Fuel
Business
• Value Chain Streamlining
• New Technologies
How Much Will DME Cost as Transport Fuel

Cost for Delivering DME vs Diesel

120
Cents/Diesel Gallon (ex taxes}

…DME is breakeven with diesel at $23/bbl oil

100

80
Station
Distribution
60
Shipping/Terminal
Manufacturing
40

20

-
DME 16 23 28
Diesel @ Brent Price
DME Plant: 5,000 T/day in Middle East location
DME Market: Europe
Manufacturing cost include operating expenses and the costs of gas and capital
DME Organizations
International DME Association (IDA)
• Formed, in early 2001, as a non-profit organization to
promote public awareness of DME and its uses.
• Currently membership includes 20+
companies/organizations from Europe, North America
and Asia.
• Next Meeting: Rome, December 12-13, 2002
• Website for more information: (www.aboutdme.org)
4th International
DME Association
Meeting
Lyngby, Denmark
April 29-30, 2002

Ruud Verbeek Theo Fleisch Spencer Sorenson

DME Organizations (cont’d)
Japan DME Forum (JDF)

• Formed in September 2000 through an alliance of

37 Japanese companies, two universities and
several trade organisations tasked with the
development of large-scale DME technology

• Currently 100 members

　JapanDMEForum
 Japan DME Forum (JDF)
• Three Study Groups:
1. Markets
2. Manufacturing
3. Codes and Standards

• Government Supported Efforts

• Feasibility Studies for DME Production Projects in Australia
• Production demonstration
• Distribution issues
• End-uses: LPG, power, diesel
• DME diesel application demos
• Total R&D spend: more than $50MM/year

　JapanDMEForum
Key Messages
The Oxygenate Perspective….

• Oxygenates have very large market potential

• Oxygenates are clean and high performing products
• Domestic Fuel: DME (synthetic LPG)
• Transportation: Fuel cells, fuel additives, DME
clean diesel, H2, MTG
• Power: CCGT (Methanol, DME)
• Chemicals: Olefins are the big prize!
• Oxygenates are the Heart of a Gas Refinery
• Cost reductions are important (technologies, economy
of scale)
• Market development is required

Consider Joining the International DME Association (IDA)