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Special Report - Solution for the Feedstock Reshuffle: Technology and Economic Analyzer

Leverage IHS knowledge and database to provide project optimization assessments, often leading to “bankable” project feasibility studies.

Do you need to evaluate the ever-increasing investment options for ethylene and its derivatives?

As more geographical regions emerge with low cost feedstock and new technologies are developed to allow conversion of more feedstocks to basic chemicals, companies need to determine where to focus for future investments. This special report aims to provide companies with a reliable, independent and efficient solution to evaluate the ever-increasing number of investment options for ethylene and ethylene derivatives. This report will provide a live cash flow model fully populated with IHS data, analytics and methodology, which:

  • Captures the impact of feedstock/product price changes over the lifetime of the investment
  • Takes into account the impact from capital investment
  • Offers a direct and normalized view of a pro forma project returns on investments
  • Provides the cornerstone for a preliminary feasibility study

The following feedstock and location combinations are available for selection in the model.

Feedstock Reshuffle Study Matrix
Scope of Work

The heart of the study is an interactive Excel cash flow model that will allow evaluation of various investment options along the ethylene value chain.

Customizable Fields

In the interactive Excel cash flow model, clients of this study will be able to make selections for the following fields. Client can choose pre-set values for:

Customizable fields

The table below shows the feedstock/location combinations that will be available for selection in the model:

Feedstock Reshuffle Study Matrix

IHS Chemical will provide the data for the following fields based on extensive research by experts in several programs. Users will also be able to input their own values as desired for more customized results.

  • Feedstock price
    • Natural gas
    • Methanol
    • Ethane
    • Naphtha
    • Coal
    • Biomass
  • Product price
    • Ethylene
    • High-density Polyethylene (HDPE)
    • Ethylene Glycol (MEG)
  • Utility price
    • Electricity
    • Fuel
    • Water
    • Other
  • Capital cost
  • Debt Equity Ratio
  • Interest Rate
  • Plant Capacity

Fixed Fields

The cash flow model will make the following assumptions:
  • Yield factors for each technology
  • Scale factors for each technology
  • Operating life – 15 years
  • Operating rates – 90 percent
  • Start-up year – 2020
  • Location factors
  • Transportation costs per location
  • Duties/Tariffs per location
  • Construction Period of 4 years
  • Tax rate by location
  • Owners cost
  • Working capital
  • Depreciation
Deliverables

Each client to this study will receive the cash flow model in Excel.

A PowerPoint file containing the study objective, methodology, cash flow and financial basis, and key input data will also be included with this study. Key case studies will also be analyzed in this document. User support will be available to help run this model.

Sample Analyis

Cash Flow Model Output

  • Internal rate of return (IRR) and Net Present Value (NPV) Calculations
  • Cash flow statement for 4 years of construction and 15 years of operation (see below)
  • Graphics for side by side comparison of multiple case (see below)

Cash Flow Model Output Comparison
Note: all years will be provided in the actual model deliverable (years omitted here to improve readability). Detailed breakdown of each item in the cash flow statement is also provided. For example, detailed feedstock costs calculations will be shown.


Investment Option Comparison

Examples of investment options the model can evaluate

  • Polyethylene in east coast China through
    • MTO (methanol to olefins) using merchant methanol sourced locally
    • MTO (methanol to olefins) using imported methanol from US priced at US market price plus freight
    • Integrated CTO (coal to olefins) polyethylene plant in Western China - product shipped by rail to East Coast China
    • Integrated ethane steam cracker polyethylene plant in the US - shipped to East Coast China
  • Polyethylene in Western Europe through
    • Integrated naphtha cracker polyethylene plant in Western Europe
    • US ethane shipped to Western Europe to feed ethane cracker in Western Europe
    • Polyethylene produced in the US with ethane - product shipped to Western Europe
    • Integrated ethane cracker polyethylene plant in Russia - product shipped to Western Europe
Download Prospectus

Feedstock Reshuffle: "Solution for the Feedstock Reshuffle: Technology & Economic Analyzer"
The emergence of new feedstocks and technologies has significantly impacted the strategic outlook for capital investments. This study provides a cash flow model that allows the evaluation of various investment options along the ethylene value chain. This study provides an interactive Excel model that evaluates ethylene and ethylene-derivative investment opportunities in major global regions from the following feedstocks: methane, methanol, ethane, naphtha, coal and biomass. It covers the following technology options: natural gas to olefins, methane to olefins, methanol to olefins, ethane cracking, naphtha cracking, coal to olefins, coal to MEG, and biomass to ethylene, allowing user input for a number of key variables, including product/utility prices, product destination and capital costs.

Download Prospectus (PDF, 915 KB)

Experts
  • Raul Arias – Director, Chemical Consulting
  • Pam Giordano – Managing Director, Chemical Consulting
  • Jesus “Jesse” Tijerina – Director, Chemical Consulting
  • Paul Pang – Vice President IHS Chemical China
  • Raymond Will – Director, Chemical Consulting
  • Masa Yoneyama – Director, Chemical Consulting
  • Juay Tong Goh – Director, Chemical Consulting
  • Dr. Richard Charlesworth – Director, Chemical Consulting
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