Methanol is a common industrial chemical that has been used as an alternative blended liquid transportation fuel and under consideration for wider use. In the USA its application profile in 1998 was MTBE, 36 percent; formaldehyde, 24 percent; acetic acid, 10 percent; solvents, 6 percent; chloromethanes, 4 percent; methyl methacrylate, 3 percent; miscellaneous, including methylamines, glycol methyl ethers, dimethyl terephthalate, antifreeze and fuels, 17 percent. In many countries, notably in Asia, methanol is almost exclusively used to produce the intermediate chemical formaldehyde as input to urea formaldehyde composite wood adhesive.

Methanol is projected to be increasingly used as a fuel, so a comparisons to LNG could be made. Like LNG, methanol is manufactured from natural gas with higher capital costs per unit of energy than LNG but it is cheaper to transport.[1] Compared with LNG and other fuels, it has a lower energy content: equivalent to around 66 per cent of the gas consumed in its production. Its main appeal is therefore as a potential clean-burning fuel suitable for gas turbines, gasoline engines and in new fuel cell technologies. The lower energy content of methanol compared to LNG, can be offset by lower transport costs so at larger distances, methanol is competitive, creating opportunities for its manufacture in gas-rich regions. While world-scale methanol plants typically have production capacities of one million tonnes per year (2 700 metric tons per day), they use only 75 to 90 million cubic feet (80 to 97 terajoules) of natural gas per day. Accordingly, methanol projects are not an alternative to LNG projects to promote gas field development. Indeed, in many gas-rich countries, they are complements to LNG sharing facilities to reduce production costs so that many gas-exporting countries have at least one methanol plant. On a world-wide basis, with low oil prices or environmental requirements for alternative transportation fuels, the methanol market presents a relatively small, specialised market such as for chemicals and fuel cells, rather than the large fuel-oriented market.


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World demand for methanol is around 32 million tonnes per year and increasing modestly by about 2 to 3 per cent per year but with significant changes in the profile of industry. Since the early 1980s, less-efficient small facilities are being replaced by larger plants using new efficient low-pressure technologies. The industry has also moved from supplying captive customers, especially for the production of formaldehyde that typically represents one-half of world demand and serving primarily the home market, to large globally oriented corporations. Demand patterns too have been changing such as in Europe where methanol was once blended into gasoline when its value was around one half that of gasoline, but now uncompetitive with lower oil prices. Offsetting this was the phasing out of leaded gasoline in developed countries that required the use of reformulated gasoline as in the US that promoted the use of MTBE derived from methanol.page content goes here


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The two major processes currently employed for methanol production use either high‑pressure or low‑pressure technology. Each process uses pressurized synthesis gas‑a mixture of carbon monoxide, carbon dioxide, and hydrogen‑that is usually made by steam reforming of natural gas.

- In the high‑pressure process, the reaction of the components occurs at pressures of about 300 atm.

- In the low‑pressure process, the reaction is catalysed with a highly selective copper‑based compound at pressures of only 50‑100 atm.

The low‑pressure process route has replaced the higher pressure process route due to lower natural gas feedstock requirements and significantly lower operating costs.

Naphtha and residual fuel oil can also be feedstocks, but neither is currently as economical to operate as natural gas based methanol units. Although residual fuel oil is relatively inexpensive, plant capital costs are much higher.

Haldor Topsoe, a major supplier of methanol technology, has developed a two-stage reforming process for capacities between 700 000 to 1.5 million tonnes per year that reduces operating and capital costs compared with the traditional straight tubular reformers. With total energy consumption at about 30 gigajoules per tonne, including energy for oxygen production, implies an energy conversion efficiency of 66 per cent. Topsoe has also developed technology for single-train capacities to of up to 3.6 million tonnes per year, based on oxygen-blown Autothermal Reforming (ATR) with a low steam to carbon ratio.

Topsoe has also developed a Convective Reformer technology that avoids an air separation unit. This has particular relevance to off-shore methanol production which has not been competitive due to the unfavourable weight and plot area to offset the benefit of avoided gas pipelines to shore while the hazards and the costs of off-shore oxygen production. With this new gas turbine based process integration, overall feedstock efficiency is claimed to be typical of an on-shore plant and cost competitive with onshore development. This offshore technology could therefore be most relevant for small-scale gas fields.

Integration is also providing opportunities for reducing costs and even enabling small-scale production. Petronas Fertiliser has become the world's first grassroots plant to coproduce methanol with ammonia in 1999 at Kedah, Malaysia. The facilities have the flexibility to vary methanol production at between 0 to 200 tonne per day (0 to 73 000 tonnes per year) and ammonia output from 1125 to 1350 tonne per day (400 000 to 500 000 tonnes per year) depending on need.

Methanol production should therefore be considered with ammonia linked by the requirement for syngas and, normally, an air separation unit.[2]

Raw Materials

Natural Gas

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Residual Fuel Oil

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[1] Some 32 to 44 percent of the energy input is consumed in making the methanol. Thus, about three such plants would be required to deliver the same energy as a 1-million-ton-per-year LNG train. Methanol is typically transported in specialised chemical products tankers, but it could be cheaply transported in bulk in slightly modified petroleum products tankers. See U.S. Department of Energy, Office of Domestic and International Energy Policy, Assessment of Costs and Benefits of Flexible and Alternative Fuel Use in the U.S. Transportation Sector: Technical Report Three: Methanol Production and Transportation Costs (Washington, DC, November 1989).

[2] The need for an air separation unit will of course depend on the derivatives intended to be produced from the syngas. In other words, depending on the relative requirements for hydrogen and carbon (monoxide) which in turn influence the reformer technology – viz. autothermal or steam reformer.