Acrylic acid is made from propylene, a hydrocarbon gas, that is a by-product of oil refineries. The BP refinery at Kwinana is capable of currently producing enough propylene to support a 90 000 tonne per year acrylic acid plant. Though most refineries supply propylene for petrochemical purposes, the absence of a nearby market for a gas that requires refrigerated transport, means the WA refinery converts it to automotive fuel. With only this low value application, it has been estimated that propylene could be available at internationally competitive terms. A low raw material cost helps underpin an acrylic acid plant in WA.
Currently some 4000 tonnes per year of acrylic acid are imported into Australia for the production of viscosity modifiers and flocculants. Western Australia's world scale mining and mineral processing industry has encouraged two flocculant manufacturersImdex Chemicals andOndeo Nalco) to establish in the State to supply close to half the national demand for liquid flocculants. Rapid growth and cooperation with the WA's world-class resource developers has encouraged the recent commissioning of Australia's first flocculant powder plant and facilities.
In addition to the availability of the raw material, skilled chemical process operators and a modest but growing local market (>2000 tpa), there are a number of features which support an acrylic acid facility in WA.
The two flocculant manufacturers and the BP refinery are both located in the Kwinana industrial precinct.
Within the Kwinana precinct there is fully serviced, comparatively inexpensive, vacant land adjacent to port facilities.
A 5 per cent import tariff applies to polymers of acrylic acid.
Australia's demand for acrylic acid based superabsorbent materials is estimated to double to 8000 tpa by year 2000.
This prefeasibility study has indicated that a 45 000 tpa acrylic acid plant, based on access to comparatively priced propylene feedstock from BP (Kwinana) could provide a commercially acceptable return on investment (IRR 16-17%) with a payback period of 5-6 years at acid prices of $A1810/tonne. Such a plant producing glacial acrylic acid is estimated to cost A$238 million in 1998, A$15 million of which is the estimated cost of propylene extraction units at BP.
The facility could provide greater returns (IRR + 20%) if constructed at a scale of 70 000 tpa at a cost of A$340 million.
components of comparative advantage. More details in full
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