New DME plant planned

State-run Korea Gas Corporation (Kogas) is carrying out a feasibility study with Malaysia’s national oil and gas company, Petronas, to build a 1,000 t/d dimethyl-ether (DME) plant in Sabah State in East Malaysia, writes David Hayes. Petronas already owns a large methanol plant on Labuan island located off East Malaysia. The feasibility study will allow it to compare Kogas’ one-step natural gas-to-DME technology with Toyo Engineering’s methanol dehydration-to-DME process.

The proposed plant will supply part of its output to the local market and export the rest to South Korea for use as a low cost fuel additive to blend with LPG initially and eventually as a diesel fuel substitute.

‘The feedstock has not been fixed; maybe it will be natural gas from Petronas,’ said a Kogas source. ‘We think natural gas to DME is better as it’s much cheaper, while for Petronas they can sell their methanol at a market price to customers. If they supply methanol as DME feedstock they will have to lower their methanol price as otherwise it will be too expensive, so we think natural gas is better for both of us.’

Kogas has still to commercialise its DME process, which was developed seven years ago. The company originally planned to build a plant in Saudi Arabia to supply DME to South Korea, but was forced to abandon the project when the Saudi government declined to provide gas for the facility.

Meanwhile, several companies in the US are understood to be interested in adopting Kogas’ direct natural gas-to-DME technology, using shale gas and other natural gas feedstocks.

Interest in the US has grown following an announcement by Volvo USA that it will begin selling DME-fuelled heavy duty trucks from the end of 2015 as part of efforts to comply with California’s stricter vehicle exhaust emission regulations.

Oberon Fuels of San Diego has built a small DME plant to supply Volvo’s trucks. However, US fuel companies are interested in building larger DME plants to produce DME at a lower cost.