At first sight, large scale manufacturing processes such as chemical plants, rolling mills or cement works seem impossible to change once they are built. But a paper in the journal R&D Management by Jonathan Aylen of the University of Manchester asks how innovation continues once these plants are operating.

“Stretch” is the mechanism by which established capital equipment continues to improve in terms of process and product technology and make higher output and new products long after they are built.

A recently completed rebuild of one the world’s largest ethylene crackers at Wilton on Teesside, England completed in February 2017 shows how the “stretch” principle can be applied to dramatically improve the competitiveness of established process plants.

Change to cheaper feedstock

In common with other European ethylene crackers, the Wilton Olefins-6 plant of SABIC was largely reliant on expensive naptha, propane or butane as feedstocks. These oil-based feedstocks offer a route to an attractive range of downstream by-products such as propylene. But oil-based inputs cannot support a cost competitive process route in Europe. Feedstock accounts for some three-quarters of the cost of cracker operation.

Crackers with cheaper feedstock located in the Middle East and the US Gulf are more competitive. The USA, in particular, has seen a boom in petrochemical investment since 2012 on the basis of cheap natural gas feedstocks derived from shale oil wells. The Wilton plant on Teesside, first built in 1979, was struggling to compete in a commodity market.

SABIC’s solution for their Teesside plant in England was to re-engineer this established large scale cracker to take a cheap ethane feedstock from America.

The plant was “stretched” to take surplus shale gas ethane derived as a by-product from US fracking for oil. The front end of the plant was re-engineered to use the imported American ethane. All this was done while maintaining the plant in production.

Stretch to reduce costs 

This telling example of “stretch” involved changing all the heaters at the front end of the Olefins-6 plant plant to take ethane. Some 2,500 burners were also replaced to use hydrogen as a fuel. (Hydrogen is a by-product of ethane cracking). At the same time, the opportunity was taken to improve the instrumentation and digital control of the furnaces – adding new “bolt-on goodies” to enhance plant performance.

Unlike other shale gas arisings, ethane is hard to blend with other products and therefore cheap to buy in America. The ethane for Olefins-6 is shipped from the USA in two purpose-built liquefied gas tankers which take 14 days for their voyage from Houston to the River Tees. Here the ethane is stored in a newly built, giant refrigerated tank on the north side of the Tees, before being piped under the river as a feedstock for the Wilton works. The Wilton plant was helped by already having experience of cracking small amounts of ethane as a feedstock.

Stretch to reach new markets

Plants can be “stretched” in other ways too. A change in feedstock has system wide effects on downstream processing. Ethane feed precludes direct production of a wide range of aromatic by-products, such as propylene with the current plant configuration. But, at the same time, the Teesside Olefins-6 plant is now ideally placed to make low-density polyethylene products on a massive scale, with one of the world’s largest LDPE plants next door, rated at 400,000 tonnes per year capacity, to feed the growing plastics industry in emerging economies.

Nor is this an isolated example of “stretch” in the chemical industry. The giant INEOS plant at Grangemouth in Scotland is also switching to imported US shale-gas ethane and Liquified Petroleum Gas, using a new fleet of Dragon ships built for transatlantic gas shipments.

Stretch is a process of sequential problem solving

Largely driven by market opportunities and attempts to resolve production bottlenecks, it is not always clear how a plant will evolve as each bottleneck is removed.

Jonathan Aylen’s article argues that process plant needs a long term framework to identify possibilities for stretch, to develop solutions and to manage change.

One practical implication for management is to focus on cross-functional collaboration. Creative and unorthodox research personnel often need to work outside their comfort zone in routine areas such as maintenance or manufacture. The SABIC ethylene plant shows results orientated production managers need to accept risky interventions in production schedules to allow continuing innovation while the plant is still working.

Collaborative approach

“Stretch” implies a high level of in-house engineering know-how to support process developments. Consultants and equipment suppliers can help identify opportunities for stretch and often help implement solutions.

Consultants helped modify the Wilton ethylene cracker, for instance. But ultimately the owner of a process plant has to be alive to the continuing opportunities for innovation, even in a plant that is fully finished and performing well.

Guest post by Jonathan Aylen, Manchester Institute of Innovation Research, Manchester Business School, University of Manchester, Manchester, England

Read more:

Jonathan Aylen, “Stretch: how innovation continues once investment is made”, R&D Management, vol.43, issue 3, June 2013, pp.271-287 http://onlinelibrary.wiley.com/doi/10.1111/radm.12014/full

Ed Crooks, “Chemicals industry divided on case for second wave of US investment”, Financial Times, Wednesday 3 May 2017

Andrew Ward, “Ineos pumps €2bn into capacity expansion to reap benefits of cheap US gas imports”, Financial Times, Tuesday 13 June 2017