Braskem Works with Siluria to Make Ethylene From Methane

Braskem SA (BAK), Latin America’s largest petrochemical maker, agreed to help Siluria Technologies Inc. bring to market a novel process for making ethylene from methane, the largest component of natural gas.

Siluria is building a demonstration plant at Braskem’s site in La Porte, Texas, to show how oxidative coupling of methane, or OCM, can produce ethylene, the most used petrochemical and a key ingredient in plastics, the companies said today in a statement. The $15 million factory should open in the fourth quarter, Siluria Chief Executive Officer Ed Dineen said.

“This technology is on the leading edge of developments in our industry and is well designed to meet our needs for plentiful, affordable feedstock,” Fernando Musa, CEO of Sao Paulo-based Braskem’s U.S. unit, said in the statement.

Siluria’s OCM process costs $1 billion a year less than average costs at naphtha crackers that produce ethylene and $250 million cheaper than ethane cracking, based on feedstock costs since 2010, Dineen said in a phone interview. At the heart of the OCM technology are proprietary catalysts that turn methane and oxygen directly into ethylene and water without the high heat used in crackers.

“The use of natural gas as a direct feedstock has been a goal of the chemical-fuel industry for a long time,” Dineen said.

The technology works in existing ethylene plants and also can be added to gas processing plants, which separate methane from natural gas liquids, to turn unprocessed gas into gasoline, Dineen said. The technology would help gas processors and pipeline companies produce a higher value product, particularly when ethane or methane prices are low, he said.

Additional Partners

Dineen, who previously was chief operating officer at LyondellBasell Industries NV (LYB), said Siluria will announce additional non-exclusive partners in the first half of this year. By 2017, Siluria should have commercial units operating through licensing agreements or partnerships, setting the stage for an initial public offering, Dineen said.

Siluria in March said it had raised $66 million from investors including Alloy Ventures Inc., ARCH Venture Partners LP, The Wellcome Trust, Bright Capital, Kleiner Perkins Caufield & Byers, Altitude Life Science Ventures, Lux Capital and Vulcan Capital.

Honeywell International Inc. and Dow Chemical Co. are also developing catalytic conversion processes for natural gas.

To contact the reporter on this story: Jack Kaskey in Houston at jkaskey@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.