Metallurgical

 1. Introduction to the Project

1.1 Project Background

1.1.1 Product Introduction

Acrylonitrile is a colorless, inflammable and volatile liquid, with the special almond odor. It is slightly soluble in water. Its low-concentration water solution is very unstable and it is easy to soluble in a common solvent. In hydrolysis, it is generated to propylene. In reduction, it is generated to propionitrile. It is easy to polymerize and it can also be copolymerized with some monomers such as acetic acid ethylene and vinyl chloride, etc.

Propylene has 2 main sources. One is reclaimed from the refinery gas of the cracking unit of the oil refinery; the second is made in the cracking of petroleum hydrocarbon to produce ethylene. Most of propylene has come from the oil refinery all the time. In recent years, because of the rapid construction of the cracking unit, the output of propylene has also been rapidly improved.

Similar with ethylene, because the propylene molecule contains double bonds and α-active hydrogen, it has the high chemical reactivity. In the industrial production, the addition reaction, oxidizing reaction, carboxylation, alkylation and polymerization, etc. of propylene can be made use of to obtain a series of valuable derivatives.

Acrylonitrile is the important monomer of three major synthetics. At present, it is mainly used to produce polyacrylonitrile fibre (commodity name: “acrylon”). Second, it is used to produce ABS resin (copolymer of acrylonitrile- butadiene-styrene) and synthetic rubber (acrylonitrile-butadiene copolymer). Acrylic acid available in hydrolysis of acrylonitrile is the monomer of synthesizing the acrylonitrile resin. Adiponitrile made from electrophoresis, hydrogenation and coupling of acrylonitrile is the material of producing nylon-66. Acrylonitrile is also used in other organic synthetic and medicine industries and used as fumigant of cereals, etc. In addition, acrylonitrile is also a non-protonic polar solvent.

1.1.2 Market Prospects

1Supply and demand in the international market and forecasting

In 2006, the capacity of acrylonitrile in the world is 6.17 million tons/year and the output is 5.53 million tons; by 2011, the capacity of acrylonitrile in the world has been about 6.95 million tons and the output has been about 5.98 million tons. In 2006-2011, the annual average growth rate of the capacity of acrylonitrile is 2.4% and the annual average growth rate of the output is 1.7%. It is predicted that the capacity of acrylonitrile in the world will have been 7.034 million tons, the output will have been 6 million tons and the utilization of capacity will have been 85% by 2013.

In recent years, the acrylonitrile market of the developed countries has declined and the capacity of acrylonitrile in the world has been transferred to Asia. See Table 2 for the major acrylonitrile manufacturers and capacities in the world.

In 2011, the acrylonitrile consumption in the world is 5.98 million tons, mainly used to produce ABS/SAN resin, acrylon, acrylamide, adiponitrile/hexanediamine and nitrile butadiene rubber, etc., of which the first two are the most important lower-stream consumption fields, accounting for about 40% of the total acrylonitrile consumption. See Table 3 for the acrylonitrile consumption structure in the world in 2010.

Viewed from the supply and demand in the world, the acrylonitrile capacity in the world will continue growing and the growth of supply and demand will be still centralized in Asia.

2Supply and demand in the domestic market and forecasting

In 2006, the acrylonitrile capacity of our country is 1.15 million tons, the output is 0.942 million tons and the consumption is 1.257 million tons; in 2011, the capacity is 1.257 million tons, the output is 1.109 million tons and the consumption is 1.651 million tons. In 2006-2011, the annual average growth rate of the capacity of our country is 1.8%, the annual average growth rate of the output is 3.3% and the annual average growth rate of the consumption is 5.6%. Viewed from the data, the growth of the domestic acrylonitrile enterprises has been slow in recent years, which brings about that the supply of acrylonitrile has not been able to meet the demand for many years and the import dependence has been more than 30%.

Note: In January-September, 2012, the domestic apparent demand is 1.137 million tons, including the import volume of 0.407 million tons and the domestic output of 0.73 million tons.

At present, there are 9 major acrylonitrile manufacturers in our country. In 2012, the capacity reaches 1.286 million tons and the annual utilization of capacity is about 76%. See Table 2 for details.

Viewed from the lower-stream demand, the stable stability will be kept in the future years. The acrylonitrile products of our country are mainly used to produce some products of acrylon, ABS resin, acrylamide and polyether glycol, etc. In 2011, the consumption structure is that the demand for acrylon accounts for 47.7%, the demand for ABS resin accounts for 28.1%, the demand for acrylamide accounts for 14.7%, the demand for polyether glycol accounts for 4.7% and the demand for other products including nitrile butadiene rubber accounts for 4.8%.

Viewed from the medium and long terms, the domestic demand for acrylonitrile in acrylon may be kept to be stable, the demand from ABS will keep growing (the new annual capacity of ABS in 2012 is 0.95 million tons). In addition, the domestic nitrile butadiene rubber industry has also been rapidly developed. It is predicted that the demand for acrylonitrile of our country will grow at the annual average rate of 7-8% in the future years and it will have been nearly 1.9 million tons by 2015.

Viewed from the import, the import volume of acrylonitrile of our country is 0.3164 million tons in 2005, it is 0.4355 million tons in 2007 and it is 0.5417 million tons in 2011, an increase of 21.51% than that in 2010. The customs statistics show that the import of acrylonitrile of our country in January-September, 2012 has been increased by 40.69% than that in the same previous period, reaching 0.59 million tons.

Therefore, it is predicted that the capacity of acrylonitrile of our country will have been 2.1 million tons/year and the import will have been about 0.35 million tons by 2015, so the development space will have been big.

3Analysis and forecasting of the acrylonitrile market price

In 2012, the high point in the acrylonitrile market is nearly 18000 yuan/ton, it touches 11100 yuan/ton, the minimum point in the last ten days of June and the price is about 14800 yuan/ton in December. Viewed from the development trend, the output and demand will be basically balanced and the annual average price will be kept to be more than 15000 yuan/ton in the future 3 years.

12 Year

 

11 Year

 

10 Year

 

1.1.3 Technical Analysis

The main acrylonitrile production methods are ethylene chlorohydrin-sodium cyanide method, acetylene method, propene ammoxidation method and propane ammoxidation method. In the first two methods, not only the toxicity of the production materials is big but also the production cost is also higher than that in the latter. The propene ammoxidation method has some advantages such as cheap and easy available materials, low production cost and simple production process, etc., so it has become the main method of acrylonitrile at home and abroad. At present, more than 95% of the devices take the propene ammoxidation method (also called sohio method) created and developed by BP in the world, taking propene and ammonia as the materials to produce acrylonitrile, with the by-products, that is, acetonitrile and hydrocyanic acid. 

A new bright spot in the development of the acrylonitrile industry is the new propane acrylonitrile technology. The low cost is expected to improve competitiveness of the lower-stream products. By now, BP and Asahi Kasei Co., Ltd. have completed the pilot-test phase and Asahi Kasei Co., Ltd. has realized industrialization.

The project is planed to take the propene ammoxidation technology of BP.

1.1.4Advantageous Conditions of Project Construction

1Policy conditions

The petrochemical industry is one of the pillar industries of Jilin Province. During the 12th Five-Year Plan, Songyuan City will carry out some projects of oil and natural gas development, natural gas purification of Sinopec, 0.5 million tons of synthetic ammonia and 0.8 million tons of urea of Sinochem Changshan, etc., restore the capacity of the original Qianguo Refinery, make efforts to reach the capacity of 5 million tons and build itself into the 10-million-ton-level refining base. Songyuan Municipal Government has attached great importance to the invitation of investments from overseas and established a series of relevant policies of attracting the investments from overseas. It is mainly to give some preferences in some aspects such as tax collection, land leasing and good-quality service, etc. and keep the continuity and stability of the policies. And especially for the gas and chemical industrial projects, the Opinions of Songyuan Municipal People’s Government on Accelerating the Development of the Petrochemical Industry (SZF (2011) No. 15) has been promulgated, giving more preferences and supports in some aspects such as land and tax collection, etc.

2Resource and industrial advantages

In Songyuan, there are sufficient materials to develop the lower-stream products of propylene. There are also rich oil and natural gas resources. The prospective reserve of oil is 2.7 billion tons and the explored reserve now is 1.42 billion tons, the reserve of natural gas is 1.4 trillion m3 and the explored reserve is 300 billion m3, the annual oil gas output of Songyuan City is 5 million tons. Depending on the oil resources of our city and the 1.5-million-ton/year refining device of the original Qianguo Oil Refinery of PetroChina Jilin Oilfield Co., Ltd., Songyuan City has introduced the 1 million tons propylene project of Changchun Zhongcheng Investment Group has been carried out steadily.

3Personnel advantages

Songyuan College of Vocational Technology can cultivate 8000 technicians every year. There are a lot of colleges and universities in some cities around Songyuan City such as Changchun, Harbin and Dalian, etc., which can provide more than 0.5 million personnel. Songyuan Municipal Government has signed the personnel and scientific and technological cooperation framework agreement with Beijing Branch, Shenyang Branch and Changchun Branch of the Chinese Academy of Sciences, which has provided the scientific and technological support for the development of the enterprises. In addition, the original Qianguo Petrochemical Co., Ltd. and Songyuan Petrochemical Co., Ltd. have the rich reserves of oil gas chemical personnel.

1.2 Content and Scale of Project Construction

1.2.1 Product scale

The project has the annual output of 0.1 million tons of acrylonitrile and annual operating time of 8000 hours and the device needs 150 staff members.

1.2.2 Project Construction Content

The project builds an acrylonitrile device and auxiliary facilities, with the scale of 10×104t/a. The device, including 5 production systems of reaction, recovery, refining, refrigerating and process sewage treatment, etc., covers an area of 10000 m2.

1.3 Total Investment and Funds Raising of the Project

The total investment of the project is 1050 million yuan, of which the fixed-assets investment is 800 million yuan.

Table 8: Summary Table of the Total Investment of the Project

Unit: 10 thousand yuan RMB

No.Expense Name

Amount of Investment

Proportion

in the Total Investment %

Remarks

1

Construction investment

75000

71.5

 

2

Interest in the construction period

5000

4.7

Capitalized interest

3

Current fund

25000

23.8

 

 

Total investment of the project1+2+3

105000

100.00

 

1.4 Financial analysis and social evaluation

1.4.1 Main financial indexes

After the project reaches the output, the annual sales income will be 1540 million yuan, the profit will be 226.62 million yuan and the investment recovery period will be 6.85 years (after the tax, including the construction period of 2 years), the internal financial yield rate will be 17.5% and the investment profit rate will be 21.6%.

Table 9: List of the Main Financial Benefits Forecasting Indexes

No.

Name

Unit

Index

Remarks

1

Sales income

10 thousand yuan/a

154000

Normal years

2

Total profit

10 thousand yuan/a

22662

Normal years

3

Internal financial yield rate of the total investment

%

17.5

After the income tax

4

Net financial present value

10 thousand yuan

38062

After the income tax (operating period: 10 years)

5

Recovery period of the total investment (after the tax)

a

6.85

Including the construction period of 2 years

6

Investment profit rate

%

21.6

 

Note: “10 thousand yuan” in the table refers to RMB.

1.4.2 Social evaluation

After the project is built, it will be favorable to build the complete industrial chain, promote the industrial upgrading, promote the lower-stream industry to develop and increase the local employment, play the good role of promoting the local social development and also promote the progress of the pillar industry of Jilin City.

1.5 Ways of Cooperation

Sole investment of the investor

1.6 What to be Invested by Foreign Party

Funds, equipment and technology

1.7 Construction Site of the Project

Jilin Songyuan Oil Chemical Industry Circulating Economic Park

1.8 The On-going Condition of Project

The cooperative proposal of the project has been established

2. Brief Introduction of the Cooperator

2.1 Basic Conditions

Name: Songyuan Oil Chemical Industry Circulating Economic Park

Address: Songyuan Oil Chemical Industry Circulating Economic Park

Legal representative: Li Yan

2.2 Overview

Songyuan Oil Chemical Industrial Circulating Economic Park is a provincial-level industrial development zone, with the total planned area of 4.64 km2, is now planned to be expanded to 28 km2. As one of the two special chemical industrial parks of Jilin Province, depending on the local rich oil, natural gas and biomass resources, the park orients the dominant industries into the three industrial blocks, that is, oil and gas chemical engineering, biological chemical engineering and fine chemical engineering. During the “13th Five-Year Plan”, the park, focusing on the building of the three major industrial blocks, implements the strategy of the leading projects for promotion, makes efforts to promote the businessmen invitation ,capital attraction and project construction and try to establish the 30-50 billion output value scale. By now, the 0.1-million-ton propylene project, of Zhongcheng Group and the 0.2-million-ton biomass synthetic oil project of Yangguang Group have settled in the development zone and the investment construction has been started.

2.3 Contact modes:

Postal code: 138000

Contact person: Yu Zhengyang

Tel: 0438—2960097

Fax: 0438—2960098

E-mail: shihuayuanqu1818@163.com

 

Contact person of the city (prefecture) of the project: Han Baidong

Tel: 0438-2706617   13514384757

Fax: 0438-2706617

E-mail: 870550387@qq.com

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