# Scale, capacity and feedstock: which chemical plants get built: How plant sizes grew, and what stops them growing

Source page: https://www.materialinsights.org/learn/chemicals/scale-capacity-feedstock/p2/

[Understanding Chemicals](https://www.materialinsights.org/learn/chemicals/) / [Module 7: Scale, capacity and feedstock: which chemical plants get built](https://www.materialinsights.org/learn/chemicals/scale-capacity-feedstock/) Part 2 of 5

## How plant sizes grew, and what stops them growing

From the 1950s to the early 1970s the largest new plants for ethylene, ammonia and other bulk chemicals grew several times faster than the markets they served. Then growth slowed sharply. This part puts numbers on the scale histories, sets out the technical, financial and safety limits to size, and explains why small plants still survive in some places.

### 2.1 For three decades the biggest plants grew faster than their markets

Brennan describes a self-reinforcing loop in a technology's growth phase: falling costs keep the market growing, a growing market justifies larger plants, larger plants cut costs further. For many major chemicals the largest plant capacity grew faster than demand (pdf p. 185). In the 1960s the largest new plants grew by about 13% a year for ethylene, 15% for ammonia, 17% for ethylene oxide and 26% for vinyl chloride monomer (pdf p. 227).

Ethylene shows the arc clearly. Wittcoff gives a typical cracker of 70 million lb/year in 1951 and 1 billion lb/year in 1972 (pdf p. 58). At 0.4536 kg per lb that is about 32,000 t to 454,000 t, a 14-fold rise in 21 years, close to 13% a year, which matches Brennan's 13.0% for 1950-70. Then the curve bent to 1.5% a year for 1970-85 (Brennan, pdf p. 195). Plants of 1.5 billion lb (about 680,000 t) appeared in the early 1990s and of 2 billion lb (about 907,000 t) in 2001 (Wittcoff, pdf p. 58).

Ammonia followed a similar path. Shreve gives the largest US plant in 1984 as 1,500 t/day, with designs to 1,650 t/day made possible by single-train construction and rotary compressors; energy use fell from 55.9 GJ/t in 1950 to 26 GJ/t in 1982 (pdf pp. 323, 325). By 2001, 2,000 t/day was common, and 3,000 t/day plants were being designed in 2002 (Kent, pdf pp. 902, 907).

Sulphuric acid started tiny: the first lead chamber of 1746 was 1.8 m2 (Kent, pdf p. 1012), and chamber plants were small units beside superphosphate works near farms (Shreve, pdf p. 345). A 2,800 t/day plant started in 1982 (pdf p. 358).

Data Milestones in plant scale

| Product | Year | Largest or typical new plant | Source |
|---|---|---|---|
| Ethylene | 1951 | 70 million lb/yr (about 32 kt/yr) | Wittcoff |
| Ethylene | 1972 | 1 billion lb/yr (about 454 kt/yr) | Wittcoff |
| Ethylene | early 1990s | 1.5 billion lb/yr (about 680 kt/yr) | Wittcoff |
| Ethylene | 2001 | 2 billion lb/yr (about 907 kt/yr), Port Arthur | Wittcoff |
| Ethylene | 2017 | Crackers up to 1,200-1,260 kt/yr (China, US) | IEA |
| Ammonia | early 1980s | Largest US plant 1,500 t/day; designs to 1,650 t/day | Shreve |
| Ammonia | 2001 | 1,000-1,500 t/day standard; 2,000 t/day common | Kent |
| Ammonia | 2002 | 3,000 t/day plants in design | Kent |
| Ammonia | 2016 | 0.85 Mt/yr, Louisiana, US$850 million | Brennan |
| Sulphuric acid | 1746 | First lead chamber, 1.8 m2 | Kent |
| Sulphuric acid | early 1980s | 1,800 t/day double absorption, about $25 million | Shreve |
| Sulphuric acid | 1982 | 2,800 t/day sulphur-burning plant | Shreve |

Pound-to-tonne conversions use 0.4536 kg per lb.
 Source: Wittcoff (2004) Ch 1; Shreve (1984) Ch 18-19; Kent (2012) Ch 22, 25; IEA (2018); Brennan (2020) Table 3.3, Wittcoff pdf p. 58; Shreve pdf pp. 323, 325, 347, 358; Kent pdf pp. 902, 907, 1012; IEA pdf pp. 41, 43; Brennan pdf p. 73  In the data

#### Different countries, different points on the curve

A technology can sit at different points on its curve in different places. Japan adopted ethylene and its derivatives about ten years after the United States, so Japanese production grew at about 35% a year at that stage against 11% in the United States (Brennan, pdf p. 192). Methanol shows a jump after a technology change: low-pressure copper catalysts took typical plants from under 1,000 t/day to over 2,500 t/day, with single trains of 5,000 t/day or more (Kent, pdf p. 385).

- Brennan (2020), Ch 7 and Ch 8 · pdf pp. 185, 192, 195, 227
- Wittcoff (2004), Ch 1 · pdf p. 58
- Shreve (1984), Ch 18 Nitrogen industries; Ch 19 Sulfur and sulfuric acid · pdf pp. 323, 325, 345, 347, 358
- Kent (2012), Ch 10, 22, 25 · pdf pp. 385, 902, 907, 1012

### 2.2 Equipment limits, capital, project risk and hazard put a ceiling on size

Why did the curves flatten? Brennan lists the forces in a mature technology (pdf p. 192). Each further increase in capacity brings a smaller gain in capital efficiency. Very large plants need capital that is hard to raise; Wittcoff puts the bare minimum to enter basic chemicals at $1 billion (pdf p. 61). Big projects are harder to manage, so delays and overruns grow. A huge plant loses heavily if utilisation falls, through a weak market or poor reliability. Compressors, reactors and furnaces have physical size limits. And larger plants hold larger inventories of hazardous material.

When equipment reaches its limit, designers stop scaling up and start scaling out, adding identical units in parallel. Smelter pots, chlor-alkali cells and ethylene cracking furnaces are built this way (pdf p. 189). Scale-out still gives some economies because units share piping, foundations, design and project management. In Brennan's heat exchanger estimates, two identical shells give an exponent of 1.0 on purchased cost but only 0.68 on installed cost (pdf pp. 190-191).

Scale-out has trade-offs. Each unit holds less hazardous material, so one failure releases less, and the plant can keep running at reduced output if one reactor fails. But more units mean more flanges, seals and relief valves, so more leak points and more monitoring (pdf p. 191). A single-train plant is cheaper but fragile: one failure stops everything.

Pratten described each vintage of plant as having its own scale curve, kinked just above the largest size anyone has built, reflecting the uncertainty of being first; the kink moves outwards as experience grows (pdf p. 185).

Data Scale-up versus scale-out for shell and tube heat exchangers (Australia, 2018)

| Option | Purchased cost ($m) | Installed cost ($m) | b, purchased | b, installed |
|---|---|---|---|---|
| Base: 1 shell, 300 m2 | 0.160 | 0.514 | - | - |
| Scale-up: 1 shell, 600 m2 | 0.263 | 0.756 | 0.71 | 0.56 |
| Scale-out: 2 shells, 300 m2 each | 0.320 | 0.826 | 1.0 | 0.68 |
| Scale-out: 3 shells, 300 m2 each | 0.481 | 1.060 | 1.0 | 0.66 |

Shared installation, piping and design keep installed-cost exponents below 1 even for identical units.
 Source: Brennan (2020), Tables 7.2 and 7.3, pdf pp. 190-191  Case

#### Bigger was available, but not always wise

In 1963 aluminium smelting cells of 130 kA were available, yet cells of 70 to 100 kA were thought most economical because of operating difficulties at higher currents, and 50 to 80 kA cells were recommended for developing countries because they were easier to run (Brennan, pdf p. 205). The largest possible unit is not always cheapest in practice. Operating skill and the risk of running something unproven count, and count most where experience is thin.

- Brennan (2020), Ch 7 · pdf pp. 185, 189-192, 205
- Wittcoff (2004), Ch 1 · pdf p. 61

### 2.3 Small plants survive where the market, freight, hazard or a feedstock protects them

Despite the pull of scale, plant sizes vary widely: European membrane-cell chlor-alkali plants range from about 20 to 650 kt/year (Brennan, pdf p. 189). Brennan gives four cases where a small plant can be justified: a limited quantity of cheap feedstock; a product whose transport cost is high relative to its price; a hazardous product whose transport is restricted, such as liquefied chlorine; and an innovation that cuts capital cost.

The ceiling on a local producer's price is import parity, the cost of landing the product from abroad. Brennan's example for a polymer shipped from Europe to Australia is 1,200 euros/t free on board, plus 120 duty, 160 freight and 20 landing: 1,500 euros/t (pdf pp. 35-36). A small domestic plant can live under that umbrella if its costs are low enough.

This is also why trade happens further down the chain. Of 180 Mt of ammonia made in 2016, only about 7% was traded, while trade in urea, a solid with more nitrogen value per tonne, was more than 300% higher (IEA, pdf p. 35). Sulphuric acid from a remote mine smelter is seldom saleable, because of the cost and safety of transport, so downstream options such as phosphoric acid and phosphate fertilisers have to be weighed (Brennan, pdf p. 236).

Market size sets the hardest limit. If the local market is small, even fast growth adds too few tonnes to fill a new plant of economic size, so expanding an old plant wins (pdf p. 220). At the far end, fine chemicals are made in batches in multipurpose plants; Kent's rule of thumb is batch below about 500 t/year and continuous above about 5,000 t/year (pdf p. 174).

Value chain Why some plants stay small

- **Small plant can compete**

  - **Limited cheap feedstock** A small parcel of low-cost gas or by-product
  - **High freight relative to price** Import parity protects a local producer
  - **Hazardous product** Transport of liquefied Chlorine restricted
  - **Small local market** Growth too small to fill a world-scale plant
  - **Many low-volume products** Batch, multipurpose plants for fine chemicals
  - **Capital-cutting innovation** New technology lowers cost at small size

 Source: Brennan (2020), Ch 7, Ch 2, Ch 8; Pollak (2011); Kent (2012) Ch 5, Brennan pdf pp. 35-36, 189, 220; Pollak pdf p. 74; Kent pdf p. 174  Case

#### The Pilbara: cheap gas was not enough

After large gas finds off north-west Australia, the Pilbara study looked at caustic soda for alumina refining, ethylene from ethane, and ammonia and methanol from methane. The obstacles were remote-site costs, the huge investment in a network of world-scale plants, and the chlorine that comes with caustic soda, which needed vinyl chloride and PVC plants that Australian demand could not absorb. For some 40 years the region exported salt, LNG and iron ore unprocessed, until ammonia and ammonium nitrate plants were built on the Burrup Peninsula (Brennan, pdf p. 233).

- Brennan (2020), Ch 2, 7, 8 · pdf pp. 35-36, 189, 220, 233, 236
- IEA (2018), Ch 2 · pdf p. 35
- Pollak (2011), Ch 5 Plant design · pdf p. 74
- Kent (2012), Ch 5 Green Engineering · pdf p. 174

### See it in the table
[Cu Copper](https://www.materialinsights.org/commodities/copper/)[Al Aluminium](https://www.materialinsights.org/commodities/aluminum/)[Fe Iron ore](https://www.materialinsights.org/commodities/iron_ore/)[NaCl Salt](https://www.materialinsights.org/commodities/salt/)[H2SO4 Sulphuric acid](https://www.materialinsights.org/chemicals/sulphuric_acid/)[H3PO4 Phosphoric acid](https://www.materialinsights.org/chemicals/phosphoric_acid/)[NaOH Caustic soda](https://www.materialinsights.org/chemicals/caustic_soda/)[Cl2 Chlorine](https://www.materialinsights.org/chemicals/chlorine/)[NH3 Ammonia](https://www.materialinsights.org/chemicals/ammonia/)[Ur Urea](https://www.materialinsights.org/chemicals/urea/)[AN Ammonium nitrate](https://www.materialinsights.org/chemicals/ammonium_nitrate/)[C2H4 Ethylene](https://www.materialinsights.org/chemicals/ethylene/)[MeOH Methanol](https://www.materialinsights.org/chemicals/methanol/)[EO Ethylene oxide](https://www.materialinsights.org/chemicals/ethylene_oxide/)

### Check your understanding

Wittcoff's ethylene crackers grew from 70 million lb/year in 1951 to 1 billion lb/year in 1972. What annual growth rate does this imply?
 A 14-fold rise over 21 years is about 13% a year, which matches Brennan's 13.0% a year for maximum ethylene plant capacity over 1950-70.

Why does scaling out with identical parallel units still give some economy of scale on installed cost?
 Brennan's purchased-cost exponent for identical shells is 1.0, but installed-cost exponents of 0.66-0.68 reflect shared installation, design and procurement.

Why is far more urea traded internationally than ammonia?
 The IEA notes that urea's higher nutrient value and solid form give it a transport cost advantage; its trade was over 300% higher than ammonia's in 2016.

[← Part 1: Economies of scale: why big plants make cheap tonnes](https://www.materialinsights.org/learn/chemicals/scale-capacity-feedstock/p1/)[Mark read · Part 3: Capacity planning, utilisation and the chemical cycle →](https://www.materialinsights.org/learn/chemicals/scale-capacity-feedstock/p3/)

## Other sections

- [Module overview](https://www.materialinsights.org/learn/chemicals/scale-capacity-feedstock/index.md)
- [Economies of scale: why big plants make cheap tonnes](https://www.materialinsights.org/learn/chemicals/scale-capacity-feedstock/p1/index.md)
- [Capacity planning, utilisation and the chemical cycle](https://www.materialinsights.org/learn/chemicals/scale-capacity-feedstock/p3/index.md)
- [Technology, learning and feedstock: where the cost floor is set](https://www.materialinsights.org/learn/chemicals/scale-capacity-feedstock/p4/index.md)
- [Integration, uncertainty, safety and sustainability: what decides what gets built](https://www.materialinsights.org/learn/chemicals/scale-capacity-feedstock/p5/index.md)
- [Key terms, quiz and sources](https://www.materialinsights.org/learn/chemicals/scale-capacity-feedstock/review/index.md)