Andhra Petrochemicals Oxo-Alcohols Facility Expansion, India


Andhra Petrochemicals' oxo-alcohols facility in Visakhapatnam, in the state of Andhra Pradesh, is the only producer of oxo-alcohols in India and accounts for 30% of the market. It produces isobutanol, 2-ethylhexanol and n-butanol.

The facility began its operations in 1994 with an initial capacity of 30,000mtpa. Over the years the company enhanced its production capacity to 39,000mtpa. The estimated investment in setting up the facility was about $50m.

"Andhra Petrochemicals invested about $65m in the expansion."

Plant expansion

In March 2007, Andhra Petrochemicals announced its plans to expand the capacity of the oxo-alcohols facility in Visakhapatnam. The expansion was completed in May 2010. The expansion plan increased the plant's production capacity from 39,000mtpa to 73,000mtpa.

Andhra Petrochemicals invested about $65m in the expansion.

Financing

The expansion project was carried out using loans, internal accruals and debt. About $44m is a term loan and the rest of the investment came from internal accruals and equity.

IDBI Bank, State Bank of India, State Bank of Hyderabad and Andhra Bank are some of the lenders for the project.

Process technology

In October 2007, Andhra Petrochemicals announced that it had chosen modern LP Oxo SelectorSM 30 Technology, from Davy Process Technology, a London-based supplier of proprietary process technologies. Davy's technology is considered the most efficient and economical method for the production of oxo-alcohols.

The LP OxoSM process technology is used to manufacture normal and iso-butyraldehydes from propylene. The normal and iso-butyraldehydes are further processed to convert them into plasticiser alcohol, 2-ethylhexanol and butanols for solvent uses.

The process involves reacting propylene with synthesis gas which produces normal and iso-butyraldehydes. The synthesis gas is a combination of carbon monoxide and hydrogen. The reaction is carried out at less than 100°C in the presence of a homogeneous modified rhodium catalyst. The conditions under which the reactions are carried out ensure effective utilisation of raw materials. It also results in low by-product formation and requires less energy.

Different variations of the technology are available depending on the requirements for the production of oxo-alcohols. The technology can also be used to produce higher alcohols such as C11 to C14 from olefins produced from Fischer-Tropsch synthesis.

Facilities

The Visakhapatnam plant has a storage facility for raw material and products, steam generation, diesel power generation, a sea water cooling tower and space for raw water storage. The plant also encompasses a significant green belt.

Products and feedstock

Isobutanol, 2-ethylhexanol and n-butanol are used in various applications. Isobutanol is used in plasticisers, amino resin, isobutyl, acetate, printing inks, nitro cellulose lacquers, urethane catalysts, pesticides, resins, pharmaceuticals, varnishes and rubber chemicals.

"The demand for oxo-alcohols in India is estimated at more than 100,000t/y."

2-ethylhexanol is used for surfactants, acrylates, lube and fuel additives, mining, solvent extractions, agro-chemicals and lubricants. N-butanol is used in plasticisers, adhesives, detergents and acrylates.

The facility uses naptha as feedstock. It is supplied by Hindustan Petroleum's (HPCL) Visakh refinery. HPCL will also meet the additional demand for feedstock after the capacity of the plant is increased through the expansion.

Market growth

The demand for oxo-alcohols in India is estimated at more than 100,000t/y. The demand is expected to increase in the future due to the growth of the Indian economy and particularly the petrochemicals sector.

As a result, the demand supply gap for oxo-alcohols is expected to be 7–8% per annum. This potential demand for oxo-alcohols is what triggered Andhra Petrochemicals to expand its plant capacity to tackle competition from increasing imports.