3.

0 Feasibility Study

3.1 Introduction

The aim of the project is to design a methanol processing plant with an output of 150,000
MTA. Thus, a feasibility study on the design will determine all perspectives on the plant design. A
feasibility study is an assessment tool used in the industry to determine if a proposed product,
service, or business will be successful. It is an analysis conducted in the initial design stage of a
project to determine its practicality and uncover its strengths and weaknesses. In this section, the
process technology, market data, and cost estimation for the plant will be analyzed and
demonstrated to achieve the objective of the methanol production process. All issues are to be
identified and defined in order to ensure the efficiency of the plant to process and work stably. Every
perspective of the project’s equipment, raw materials used and any matter involving the plant will be
elaborated and discussed deeply.

3.2 Process Technology

Methanol has been processed since a long time ago and various types of process have been
implemented to obtain the most efficient way in procuring the said substance. Deep research has
been done and thorough consideration was considered to determine the best and efficient way to
produce methanol. The process technology that will be used in the plant is the hydrogenation of
carbon dioxide process.

3.2.1 Hydrogenation of Carbon Dioxide

The process of turning carbon dioxide (CO2) into methanol (CH3OH) using hydrogen gas (H2)
is known as hydrogenation of carbon dioxide to make methanol. This procedure is important because
CO2, a key greenhouse gas that contributes to global warming, can be used to make fuels and
chemicals, potentially reducing the environment's damage. Methanol has been produced
catalytically with lower temperature and pressure by using the catalyst Cu/Zn/Al2O3 (CZA). The
production of methanol by hydrogenation has been studied and it can be concluded that there are
two types of conversion that may happen in the process which is the one step conversion and two
step conversion (Van-Dal, 2013). When CO2 are reacted with H2, two viable results which is
conversion straight to methanol which is the one step conversion. The two-step conversion converts
hydrogenation of CO2 to CO and H2O which is the Reverse Water Gas Shift (RWGS) reaction and will
be hydrogenated again to produce methanol. Both reactions are the possible outcome in the reactor
thus recycle stream will be sent back to process the CO and H2O to methanol in the reactor. There
are other methods that can be used to produce methanol such as photochemical, electrochemical,
and photo-electrochemical techniques but hydrogenation of CO2 has been deemed the most
practical and efficient way. It is eco-friendly as it uses CO2 and H2 which can be obtained easily from
the environment. Most CO2 can be collected from flue gas output from plants such as a coal power
plant. By capturing and using this method, the release of CO2 to the environment can be decreased
and the nature can be preserved. Furthermore, H2 can be processed easily by water electrolysis.
There are a few byproducts that are produced upon the reaction which is dimethyl ether and methyl
formate that can be collected and sold for profit. Methanol has been sought as an alternative for the
next renewable energy and it has been implemented in various sections such as maritime and
offshore plants.

3.2.2 Catalyst

The hydrogenation of CO2 uses Cu/Zn/Al2O3 (CZA) as its catalyst. CZA is commonly used as
the catalyst for industrial methanol synthesis due to the strong metal support interactions (SMSI)
(Ahmed O. Elnabawy, 2022). This interaction causes ZnO to partially cover the surface of Cu, creating
a favorable synergy between Cu and Zn species that leads to higher methanol synthesis activity.
Studies have also shown that ZnO acts as a physical spacer between Cu nanoparticles, dispersing the
Cu phase and preventing sintering. Further research has been conducted to gain insight into the
interaction between Cu and Zn, as well as their chemical state and structure under methanol
synthesis conditions. While other catalysts may be used for methanol synthesis, CZA has proven to
be a reliable and effective option for industrial applications (Divins, 2021).

3.2.3 Separation Process

The production of methanol uses a few stages of separation process to remove all unwanted
byproducts and recycle unreacted gases from the product. 2 knockout drums and a flash tank are
used to serve the purpose of separating these unwanted substances. The unreacted gases consist of
CO and H2O which will be purged partly and the other will be sent to recycle stream to process the
reaction using the knockout drum. This is where the two-step conversion happens, and more
methanol can be produced this way besides lessening the materials that can be used. Purging a part
of the stream is implemented to reduce the formation of byproducts in the reaction (Ding, 2001).
Another knockout drum will be placed at the last process to collect liquid methanol at the bottom
outlet and unwanted gases and byproducts at the top outlet. A flash tank separator functions to
separate liquid and vapor phase substances by pressure control. The pressure of the contents will be
reduced allowing liquid to expand, separating it from vapor at the bottom section (Karthikeyah,
2020). Vapors at the top section will be purged. In the reaction, the methanol that will be collected is
in liquid phase, using a flash tank separator liquid methanol can be collected and unwanted gases
can be removed.

Hydrogenation of CO2 produces methanol and water as its reaction. Thus, water will be
removed by using the separation units and a distillation unit. Distillation is a common purification
method for liquids, and it works by exploiting differences in boiling points between the components
of a mixture. In a distillation unit, the crude methanol is boiled in a distilling flask, and the vapors
travel to the condenser, causing them to condense and form a purified liquid product. Using a
distillation unit has been proved to inquire a better grade of methanol with low water content up to
90%. This would improve the quality, which is very advantageous for the business (Nichols, 2017).
3.3 Market data

3.3.1 Methanol Market Background

Methanol, a simple alcohol with the chemical formula CH3OH, finds extensive usage in
industrial and commercial applications. It is a vital building block in the production of several
everyday products such as plastics, paints, car parts, and construction materials. Methanol is also an
eco-friendly energy resource, which is used to power a variety of vehicles, including cars, trucks,
buses, ships, and even cook stoves. With the world's growing focus on clean energy, the demand for
methanol-based products has been increasing significantly. As a result, the global methanol market
has witnessed substantial growth in recent years. This growth is attributable to the growing use of
methanol in various applications, including alternative fuel, chemicals, and construction. The Asia-
Pacific region is the largest consumer of methanol globally, accounting for more than half of the
global consumption. North America and Europe follow closely behind in methanol usage.

3.3.2 Methanol Global Market Survey

The global methanol market has been growing steadily over the past few years, and it is
expected to continue growing in the coming years. According to a global market survey on methanol,
the market size was valued at USD 27.95 billion in 2020, and it is projected to grow to USD 39.18
billion by 2028, at a CAGR of 4.5% during the 2021-2028 period (Methanol Market Size, Share &
Trends | Analysis Report [2028], 2021). One of the major driving factors for the growth of the global
methanol market is the growing demand from the automotive industry. Methanol is used as a fuel in
racing cars, and it is also being used as a fuel for passenger vehicles in some countries. Additionally,
methanol is used as a feedstock for the production of chemicals such as formaldehyde, acetic acid,
and methyl methacrylate, which are used in a wide range of applications including plastics,
adhesives, and coatings.

Other than that, the COVID-19 pandemic has had a significant impact on the methanol
market, as it curtailed industrial activities due to government bans and restrictions in 2020 and the
first half of 2021, limiting the growth of the market. However, the market is expected to recover as
the world returns to pre-pandemic levels. Overall, the global methanol market is expected to grow
steadily in the coming years, driven by increasing demand from the automotive industry and the
chemical industry (Methanol Market Size & Share Analysis - Industry Research Report - Growth
Trends, 2023). The increasing demand for chemicals in the Asia-Pacific region, as well as the use of
methanol as a fuel component in the automotive industry, are some of the driving factors behind this
growth. The COVID-19 pandemic did have an impact on the methanol market, but it is expected to
recover and return to pre-pandemic levels in the coming years.

Figure 3.1 Global Market Analysis of Methanol from Statista

3.3.3 Market Demand

Methanol has various uses and applications in nowadays industry. Acetic acid and formalin
are examples of the consumption of methanol. It is used mostly in pharmaceutical and homeware
industry. Acetic acid has been used in the manufacture of various items such as plastics, polymer,
dyes and insecticides for agriculture sectors. Formalin in the pharmaceutical section, it is used as an
industrial disinfectant in labs and factories. Other than that, it also serves as a crucial item in
preservatives in food products. It helps in increasing the shelf life of a food, making our food source
more sustainable and lessening waste. Methanol serves as a raw material in the production of
various products. Another use of methanol is as an antifreeze agent, especially in windshield washer
fluids, as it has a lower freezing point than water. It is also applied to the oil and gas industry in which
to increase the gasoline octane rating, increasing its quality.

Moreover, methanol is sought to be an alternative for a potential renewable energy source.

Methanol is highly combustible, and it flames cleanly without any emission of greenhouse gases. It
serves as an eco-friendly substitute for fossil fuels (Carvalho, 2018). The usage of methanol as a
replacement has been implemented in maritime uses. The maritime OEMs have started the research
on building a methanol-compatible engine in the solution of decarbonization. Furthermore, in 2022
various huge industrial shipbuilders’ companies have started taking orders on dual-fueled cargo ships
that are capable of using fossil fuel and methanol as its energy source (Junot, 2023). Methanol surely
has been scouted as the next revolution in the world but due to its low energy produced from its
combustion, engines and innovation that can turn the idea into realization is still pending.

Figure 3.2 Pie Chart on World Methanol Demand

3.3.4 Target Market

Methanol is one of the most crucial raw materials in manufacturing new products that are
used worldwide. As described in the previous section, there are various sections that use methanol
in its production. Therefore, they would surely require methanol in order to keep the business
running. Thus, these companies are our target market in selling our product. It is highly
recommended to survey our target market to keep the company running. Table 3.1 presents a few
names that are listed as our potential customers for both local and international companies (Group,
2017) (Bhd, 2021) (NIPSEA, 2015).

Table 3.1 Local and International Target Market

Local International
Company Formal Chemical (M) Toray Plastics Nippon Paint Co. Saudi Aramco Co.
name Sdn. Bhd. (Malaysia) Sdn.
Bhd.
Address Lunas, Kedah, Perai, Pulau Tokyo, Japan Dhahran, Saudi
Malaysia Pinang, Malaysia Arabia
Application Production of formal Plastic products Paint Gasoline
 of Methanol products e.g., resins manufacturer manufacturer blending
and urea-
formaldehyde

3.3.5 Product Competitors

In a business, there are surely competitors that manufacture the same product as our
company. Methanol is not a rare name in the industrial world meaning that there would be a lot of
companies that offer the same service locally or globally. Thus, competition in business cannot be
avoided. In order to be prepared, product competitors must be surveyed so that we would not be left
behind in the industry. Surveying rivals allows us to set the product production rate, price, and
quality. By doing this, we can compete with big companies that monopolize the market and grow
more in the industry. Table 3.2 shows the survey of the competitors that we need to overcome
(Methanol in Malaysia, Methanol Manufacturers & Suppliers in Malaysia, 2017).

Table 3.2 Local Company Competitor

Company name BNJY Enterprise Laira Universe Sdn Bhd

Address Kuching, Sarawak, Malaysia Kuala Lumpur, Malaysia
Supply capacity 1000 metric tons per month N/A
Production quality High-class product (according High-class product (according
to the national standard) to the national standard)
Price RM 3571.20 per metric ton RM 2785.60 per metric ton

3.4 Economic Analysis

3.4.1 Raw Materials and Product Price

The budget for raw materials is very important and needs to be considered to determine the
financial status of production as these items are crucial in manufacturing the highest quality of
product. The current market price needs to be surveyed to expect and calculate the cost for each
production and the materials to be purchased. Table 3.3 shows the analysis that has been done n the
current market price for both raw materials and the product that will be used.
 Table 3.3 Raw Materials and Product Analysis

Raw Materials and Product Market Price (RM)

Carbon Dioxide 1550 per metric ton
Hydrogen 8860 per metric ton
Cu/Zn/Al2O3 catalyst 133 per kg
Methanol 3322 per metric ton

The production target annually is 150,000 metric tons. Referring to this value, calculation on
production rate to achieve the objective is calculated. The ratio of CO2 and H2O for the process is
88:12 and the catalyst to be filled in the packed bed reactor is 45,500 kg (Van-Dal, 2013). The
expected yield for the product is 64:36 for CH3OH:H2O. Table 3.4 and 3.5 show the production rate
and price for the process.

Table 3.4 Methanol Production Rate

Product Production rate Price Expected Annual Income

Per year Per month Per day (RM/MT) without capital (RM)
Methanol 150,000 MT 12500 MT 417 MT 3322 498.3 million

Table 3.5 Expected Cost for Production of Methanol in 1 Day

Raw Materials Amount Price (RM)

Carbon Dioxide 616 MT 954,800
Hydrogen 84 MT 744,240
CZA Catalyst 45,500 kg 6.05 million
Total 7.75 million
Total Cost (excluding catalyst) 1.7 million

In table 3.5, catalysts are excluded in the total price because they can be used continuously
and not a one-time use material. Therefore, the total cost for a day process can be concluded to RM
1.7 million. The annual cost for a year would be RM 620,500,000 with expecting the process to be
conducted every day without stopping or lost workdays. Fair to mention, the above price cost
assessment is not precise as the mass balance calculation has not been done yet. Therefore, this is
merely expectation with assumptions on the project planning.
3.4.2 Water Supply Tariff

Water is crucial in a plant design. Having abundant clean water is a necessity for both the
plant and the resident involved in the production plant. Water tariff refers to the price charged by a
public utility for the supply of water through a piped network to its customers. This price is not
charged for the water itself, but rather to recover the costs associated with water treatment, storage,
transport, and collection from customers The plant will be located at Kuantan, Pahang therefore the
water will be supplied by Pengurusan Air Pahang Berhad (PAIP) ((PAIP), 2022). Table 3.6 shows the
water tariff for the said area.

Table 3.6 Water Supply Tariff

Category Quantity of water (m3) Charge per m3 (RM)

Non-Domestic 0-35 1.80
>35 2.10

3.4.3 Electricity Supply Tariff

Electricity is the most crucial part in a production plant. Without electricity,

production cannot be done. The energy source from the plant location is provided by Tenaga
Nasional Berhad (TNB). Figure 3.3 shows the electricity tariff provided by the electric company TNB.
Fair to mention, the cost for electric charges cannot be completed due to lack of energy balance
calculation.
 Figure 3.3 Electricity Supply Tariff

3.4.4 Equipment Cost

Each piece of equipment will need to be purchased for the process purpose. The cost of
equipment will be listed as the capital cost of the plant design. The plant’s main equipment consists
of 5 compressors, 5 heat exchangers, 2 knockout drums, 1 distillation unit, 1 flash separator tank and
1 packed bed reactor. Table 3.7 shows the total cost for each piece of equipment.

Equipment Cost (RM) Quantity Total Cost (RM)

Centrifugal Gas 191,033 5 955,165
Compressor
Industrial Heat 44,530 5 222,650
Exchanger
Knockout Drum 40,077 2 80,154
Distillation Unit 2,533,757 1 2,533,757
Flash Separator Tank 356,240 1 356,240
Packed Bed Reactor 222,650 1 222,650
Total Cost 4,370,616