PETROCHEMICALS 409

Technology-petrochemical industries are complex and will require experienced

personnel to assist on a foreign investment collaboration scheme.
Planning-economic-sized plants must be provided to compete on a world market
V basis for intermediate and end-product sales; planning must be coordinated to
provide the long-term requirements for raw materials, machinery and services.
in continued wastage of naphtha
Failure to implement these plans rapidly will result
SYNTHETIC ORGANIC fractions, which accumulate refineries, by use as low value fuel stock and the necessity of
CHEMICAL INDUSTRIES importing primary chemicals, practice which requires valuable foreign exchange. However, the
program for the organic chemical industry
in India has not been
task of formulating a development
because of the following factors:
easy of diverse raw material
Interprocess competition with the attendant complexity
requirements
organic chemical is a compound containing carbon a wide range of tonnage requirements
The definition of an
Diversityof end-products with
constituent elements. A Synthetic organic chemical, as wa , and Intermediate chemicals competition for consumer goods usage, e. g., competition
as principal
hydrogen
this chapter, is derived by one or more processes from the low molecular weight compounds in
raw materials such as coal, petroleum, or Darural gas. A Tew may also be obtained from natural
amongst plastics

products as pointed Chapler ill-or exampie, etnanoi by fermentation, glycerol hy

out in
chemicals usually have a fairly low molecular we Ya PETROCHEMICALS-THE KEY GROWTH AREA
hydrolysis. Synthetic organic feature when with
IVA.
relatively simple structure. This is a distinguishing compared natural product
Definition of Petrochemical
organics. 1.
Synthetic organic chemicals can be categorized as primary, intermediate, or end chemicals chemical compound or element recovered or derived partially or entirely from
A
according to one of the following definitions: petroleum or natural gas hydrocarbons and intended for chemical markets.
Primary chemical-a substance which is first isolated and reasonably pure. Prior
to this, it had been present in a raw material or
formed therefrom. Reasons for Studying Petrochemical Industries
2.
Intermediate chemical-derived from primary chemical;
a can be uilized as a As pointed out in the previous section, the future organic chemical industry of India wiil
but also undergoes further chemical reactions to produce a variety of materials.
product depend more and more on petroleum sources as raw

steel production which does not have

other chemicals. Aromatic raw materials from coal are geared to
End chemical-undergoes no further chemical change before usage, but may be sufficient growth rate to match the organics and ammonia-based fertilizer yearly percentage gain
either physically modified or used as part of a mixture. in production.
chemicals such
Prior to 1951 Indian organic chemical production was limited to primary It is uneconomic to expand the higher cost alcohol supplies.
as alcohol, acetone, benzene, and toluene.
Various other chemicals were imported and converted A second disadvantage of alcohol is the lack of consolidation of producing units with very
to end-products, principally drugs, dyes, and plastics. By the
end of the Second Plan (1961), a limited capacity. The availability of large bulk feedstocks at one location, i.e., a refinery to
number of organic chemical products were indigenously produced, notably DDT,
BHC, acetic size.
were based on industrial
supply a petrochemical-type plant, is a distinct advantage in terms
of critical economic plant
Different products such as ethylene, propylene, etc., being simultaneously produced in one
acid, acetic anhydride, polyethylene and polyvinyl chloride. These
calcium carbide.
alcohol, benzene from coal carbonization, and acetylene derived from Tefinery, enable integration of a number of consuming industries utilizing these various raw
the Third Plan (1961-1966), organic chemical industries showed growth prospects material streams.
During
and potential target achievements so that the conventional raw materials
cited above will no longer
suffice. Petroleum feedstocks took over as the major raw material in the Fourth Plan (1969-1974) 3. Petrochemical Industry Characteristics
and thus petrochemicals began to play a major role in Indian economy, a situation which exIsted
3.1. Size and Scope of Petrochemical Industry
made that 65%
in the U.S. and UK after World War II (1946 onwards). The prediction has been The production of basic petrochemicals in India made a modest beginning at a
would be derived from petroleum and the remaining 35% from non-petroleum products comparatively late stage during the sixties, A rather smali capacity naphtha cracker
The success of this
(fermentation alcohol, coke oven by-products, and calcium carbide). of 20,000 tons per annum (tpa)ethylene capacity was set up in 1966 by Union Carbide
prediction will depend on considerations such as: in Bombay. In 1968, a larger naphtha cracker of 60,000 tpa ethylene capacity was set
capitalized, hence up by National Organic Chemical Industries of the Mafatlal [Link] to that,
Financing-petrochemical industries are large and highly have sufficient
India does not small quantities of petrochemicals (mainly pBastic resins and intermediates) were being
IOreign capital and participation are required as produced based on alcohol, coal tar intermediates and calcium carbide as feedstock.
foreign exchange resources.
 ORGANIC
CHEMICAL
RIES
SYNTHETIC
came when
the Indian
PETROCHEMICALS 411
410 to the industry

The major
Corporation's
naphtha
thrust
cracker of
l.3 lakh

hardly witn
tpa
ethylene.
capacity was Petrochemi
pment
cals
Sioned at
by 2000 has spurred many firms to shift to
engineering and performance
Judging by the present trends, the imports into the country are likely to be asplastics.
The eighties of
in i1978.) (MGCC) for which
25% until 2000. With the present budget slashing the high as
Baroda

faharashtra
Gas
Cracker
Complex
clearance was given import duty on many
products from 65% to around 40%, the industry faces a constant threat of polymer
in 1984. petrochemicals
in india rose
from 11.4
rOse from
million tons from its South East Asian competitors. dumping
demand for lion tons by 1989-90 and is atthe end of
The
nearly
three million
soar to likely to be 5.4 Reliance Industries has put in motion plans to set up a 15 million ton refinery at
the Sixth
Plan to
2000 A.D., the
demand may
Soar eight milion mtion Jamnagar to cater to its ethylene demand, and a chlor-alkali plant for its caustic and
By terms
of per capita
in terms of tons. chlorine needs. With its blueprint for expansion into 2000, it promises to become a
Consumption, it isSuch
Lons.by1994-95. but
phenomenal,

increase may
appear
the wn
Compared to the world not completely integrated plant with world size capacities from naphtha to fabrics. The
an
difrerence. average of
going
make much
to
kg and 6.6 Kg
15.4
respectively, India's per capita plastics and
vely, India' threat of foreign competition has also spurred other petrochemical
majors to focus on
synthetic textiles at
respecti vely.)
Even if
Even if the
projected
demand is consumption backward integration in the 90's. If the plans laid down by IPCL are any indication,
Capita consumption kgplastics
d 2.5 of is expected to rise to only 2 ko in 1994-95met,
and the
2.6 Der
kg it is likely to weather the turbulent phase of import threats and tariff rates. It
is plans
to set up a two-phase 300,000 ton gas cracker at Gandhar to
by 2000 A.D.
produce ethylene and also
faced in 1995 by
the industry while derived intermediates and commodities. It is also laying emphasis on building its own
The major problem world glut in
trying to step up its port to import products and fedstocks from its joint ventures from Middle East. The
is petrochemicals. When the
exports, is that there a
petrochemical complexes with crack
had Government port which is likely to come up at Dahej, will be the biggest port between Dubai and
earlier sanctioned
eight large
emergence of a situalion ot glut was
the emergence
pacities of the Singapore.
to four lakh tons, considered
order of three red Petrochemical units are expanding their activities so
Complexes nave come up in Korea, Sa impressively that the
remote, But since then, large Arabia requirements of phthalic anhydride, linear alkyl benzene, polyester staple fiber and
(SABIC) and Europe.
nylon filament yarn are available fully from indigenous sources. The staple fiber units
In 1995, the Chemical
Weekly Annual tcatured a review of the historv and .

industry in India. They stated that with have surplus capacity and are obliged to effect exports for
maintaining production at
of the petrochemical the Indian chemical markets chemicals the desired rate. The deficit in carbon black
investments pegged at Rs. S0,000
crores,
ce
supplies is being gradually reduced with
the commissioning of new units. Only the output of
PVC, and TPA. With the sur in the polyethylene and polyvinyl
aglut in commodities like ethylene, propylene, chloride is not catching up with rising consumption and the situation is
polymer and textile sector, growing at 14 and 18% respectively, the capacities being expected to be
less uncomfortable after the new
skeptical
are about the performana plants commence production. The output of
planned seem logical. However, industry experts caprolactam, TPA, DMT and monoethylene glycol will be increasing significantly,
for a couple of the majors. The maior ISSue
ofthe Indian petrochemnical sector except withstand the threat
when the new projects under
implementation take shape. Supply and demand figures
smaller manufacturers to of imports ith the
is the ability of the are summarized in Table IVA-1.
international competition. Besides, poor economies of scalc af
markets opening up to

most Indian plants will

be a big deterrent to many Indian companies.
Table IVA-1
In the early 90's, nine huge petrochemical
projects were planned at a total
IPCL's Gandhar unit and
Petrochemicals: Demand/Supply Gap in 1994-95
20,000 crores out of which only two, i.e. ,
investment of Rs. (O00 tons)
on schedule. Other plants are still in planning stages
Reliance's Hazira unit, have been Petrochemicals Demand
been due to the 1991 balance of payment crisis and Supply Gap
and some are uncertain. This has Thermoplastics:
cost of capital goods made most of the projects
the inflation which followed. The high LDPE 482 208 274
threatened by imports from West Asia as ariffs HDP
unviable. The industry is essentially 375 92 283
are coming down rapidly. Apart
from Reliance Industries and IPCIL, none of the other Polypropylene
the 286 92 194
size plants and the capability for total integration considering PVC
players have global feature of the petrochemical sector 485 130 355
notable
present structure of the industry.
Another
number of foreign investments have
Polystyrene 82 22 60
is that unlike oil, finance, and telecom where a
attract any serious investments. Feedstock:
come in, the petrochemical sector has yet to
which has grown
The sunrise in the Indian scene is the polymer industry
industry Ethylene 1,371 424 947
has shot up by 13%. The rapid growth Propylene
at a poor rate of only 4.5% while the demand bound to push
600 249 351
of the automobile and consumer durable sector in India is Orthoxylene
engineering, 106 60 46
for commodity plastics far the existing capabilities
beyond manufacture to
demand to touch 2.1 lakh
tons
them. The transition to value-added polymers which is expected
 SYNTHETIC ORGANIC CHEMICAL INDUSTRIES
412
PETROCH1FEMICALS 413
Intermediates:
93
216 4. Auraiya Gas Cracker (omplev, U.P, (GAIL)
DMT/TPA
287 173
177 Feedstock: HB gas
LAB 301 235 Basic capacity ('X0 tons): Ethylene 3 ,
l14 propylene 156,
Proposed downstream (O00 tons): HDPE, 10); HDPE/LDPEand hutadiene 9.
Paraxylene

66 i60, styrene 30
Other Petrochemicals:
and polystyrene 40.
578 298 Planning stage.
Benzene 390 211
Polyester 280
Industrial Directory of India"(1994) 179 5. Vizag Craker
Source: "Kothari's Feedstock: Naphtha from HPCL
The following paragraphs give data on the present and Basic capacity ('00 tons): Ethylene 300, propylene 156; butadiene 47, C
in India, quoting from the Hindu proposed capacities of
-

raffinate 50.4; and benzene - 64.

major petrochemical plants Survey of Indian
for 1994. Industry 6 . Haldia Petrochemical Complex, West Bengal
Ltd. Basic capacity (C00 tons): Ethylene - 300; propylene- 150; and butadiene 53
1. Indian Petrochemicals Corp. Proposed downstream ('000 tons): LDPE - 150, HDPE 10; polystyrene 75;
(Nagothane gas cracker)
from ONGC, Uran, 51,000 tons of styrene 80; polypropylene - 150; benzene 65; and C, 37.
Feedstock: Ethane/propane The project is to be built in two stages. Planning for phase I is on.
propylene annually from
BPCL. propane and
Basic capacity ('000 tons): LDPE/HDPE - 135 (commissioned): ethu
7 . National Organic Chemical Industries Ltd. (NOCIL
5; ethylene glycol 50 and polypropylene 60. Expansion plane e Oxide -

cracker capacity by one lakh tons and HDPE by 80,000 tons. Basic capacity(°000 tons): Ethylene 300; propylene 140; -
butadiene 47; and
benzene and aromatics - 190.

Proposed downstream ('000 tons): Ethylene oxide- 120, polypropyiene 100,

2. Reliance Industrie Ltd., Hazira
synthetic butadiene rubber - 100; polystyrene 20.
Feedstock: NGL and naphtha.
Planning stage.
Basic capacity (^000 tons): Ethylene - 750; propylene 365; butadiene - 275:
benzene 235; toluene - 192; and xylene 165.
-

8. RPG-Linde Export Oriented Unit

Proposed downstream (000 tons): HDPE/LDPE - 440; polypropylene - 250:
Basic capacity (^000 tons): Ethylene - 425; propylene 2125; butadiene 75,
MEG 100 ethylene oxide - 110; styrene 100; polystyrene 40; synthetic and benzene 94.5.
butadiene rubber 100; acrylonitrile- 70; PVC - 300; terephthalic acid -350;
Proposed downstream (O00 tons): HDPE/LDPE 20: LDPE 200; and
60; and PET chips (bottle grade) 80 polypropylene 220.
-

PSF .

Downstream units of LDPE (160,000 tons)/HIDPE (110,00 tons) commissioned. Planning stage.
Other downstream units in planning stage.
9. Assam Gas Cracker Complex
IPCL's Gandhar Complex (Gujarat) Basic capacity ('000 tons): Ethylene 300; propylene 51; and butadiene - 16.
*3. Feedstock: ONGC gas from Gandhar fields. Proposed downstream (000 tons): LDPE - 100; HDPE 100; C, raffinate - 11;

Basic capacity ('000 tons): Ethylene 300; propylene 20; and butadiene 10. pyrolysis gasoline 44; and acetylene 1.50.
-

PVC 150; Planning stage.

Proposed downstream (000 tons): EDC 240; VCM 158;
-
-

EO/MEG 20; Alpha olefins 100; and alcohol ethoxylate 100.

-

10. Reliance Export Oriented Unit, Hazira

Remarks: Planning stage.
Proposed downstream (000tons):
Paraxylene 270; and terephthalic acid- 200.
Planning stage.
11. Saleempur Aromatic Complex, Aligarh, U.P.
Proposed downstream (000 tons): Benzene - 30; orthoxylene - 30; paraxylene

136; and terephthalic acid 200.

Planning stage.
 SYNTHETIC
ORGANIC
CHEMICAL INDUST CHEMICALS FROM C, COMPOUNDS 415
414
Aromatics Petrochemicals Corp.
& 1
('000 tons) Benzene 30;Complex, Manali, IVB. CHEMICALS FROM C, COMPOUNDS
National
12.
orthoxylene- 30; Madr
downstream
Proposed
acid 200. Madras (METHANE AND SYNTHESIS GAS)
136; and terephthalic
Preliminary workyet completed.
to be paraxylene -

of all petrochemicals produced in he U.S. The

This group supplies about 25 w. %
in this section will cover the organic chermicals, particularly methanoB,
Principal Raw Materials Drocesses studied IVB-1.
formaldehyde, and halogenated hydrocarbons. See Figure
4.
4.1. Natural Gas (largely methane)
.Major raw material in U.S., not available in
quantity in India. Could be Methanol
shipped economically by refrigerated tanker from Middle East.
(-4% in natural is
gas) the most valuable
Ethane product since Pertinent Properties of Methanol (CH,OH)
be produced by thermal cracking ethylene can Mol. wi. 32.04
Ethane Ethylene (75% yield) -97.8°C
cracking M.P.
However, most of the ethylene comes from refinery gases B.P 64.7°C
Density 0.78820°C
Liquefied Petroleum Gas (LPG)
4.2. Explosive limits Lower = 6.0 vol. % in air
Easily extracted from natural gas
Upper = 36.5 vol. % in air
Can be transported in tank cars or pipelines as a liquid
Toxicity limits 200 ppm
.Contains propane and butane which can be easily crackedto olefins Grades: pure (99.8%, acetone-free), CP (95%), USP (97%)
Refinery Off-Gases
4.3.
From catalytic and reforming operations
Consumption Pattern
.Paraffinic and olefinic fractions used for petrochemicals
Hydrogen used for NH, production Formaldehyde,the primary oxidationproduct of methanol, is the largest outlet for
methanol. Formaldehyde is an important monomer in the plastics industry.
. Sulfur by-product obtained from H,S by oxidation process (see Chapter IIA) The demand for methanol in India is projected to rise to 322,000 tons by 1994.95 and
4.4. Hydroforming of Petrochemical Stocks S18,000 tons by 2000 A.D. Approximately 50% of the demand will come from formaidehyde,
.Produces benzene, toluene, and xylene (BTX)
about 25% from DMT, and the balance from drugs, pesticides, and chemicals such as acetic acid,
Gives large quantities of hydrogen methyl amines, esters, solvents, etc.
4.5. Naphtha and Fuel Oil Worldwide demand for methanol is summarized in Table IVB-1.
Accumulate in large quantities in Indian retineries due to lack of end use
.Used to make (1) synthesis gas by catalytic reforming
or partial
combustion,
(2) petrochemical starting materials such as ethylene, acetylene, and propylene
Table IVB-1
World Consumption of Methanol and Forecasted Demand, 10° tons per year
by steam cracking
4.6. Petroleum Coke Description 1990 1991 1992 1993 1994 1995
Source of carbon for calcium carbide and acetylene or electrodes for
aluminum industry Consumption Total 18.35 19.5 20.5 21.5 22.65 23.9
Formaldehyde 7.03 .27 49 7.73 7.85 7.98
MTBE 2.42 2.95 3.57 4.05
5. Basis for Study Acetic Acid 4.70 .50
1.36 1.51
These raw materials contain one or several predominant hydrocarbons which can be Solvents 1.34 1.38
1.55 1.63 1.72 1.87
1.41 45 1.50 1.55
separated so that compounds are synthesized as follows: DMT 0.65 0.66 0.67 0.67 0.68 0.68
Chemicals From C, Compounds (Methane and Synthesis Gas) Methyl Methacrylate 0.49 0.54 0.57 0.59 0.61
Gasoline 0.26 0.27 0.20 0.23 0.24
0.63
B. Chemicals From C Compounds (Ethylene and Acetylene) Others 0.24
4.80 4.92 5.04 5.15 5.35 5.45
C. Chemicals From C, Compounds (Propylene)
D.
Jource: Global Trends in Chemical Products-Nandini (1994)
Chemicals From C, Compounds (Butanes and Butenes)
. Chemicals From Aromatics (Benzene, Toluene and Xylene)
Pesticides
G. Pharmaceutical Industry