2018 AIChE Design Report: Dimethyl ether for transportation

Abstract

Our team designed a process to produce 250,000 gallons per day of dimethyl ether (DME) from a methanol feedstock for sale as a diesel fuel alternative. The proposed design utilizes four parallel reactors containing a gamma-alumina catalyst operating at 500 psia and 536 degrees Fahrenheit to carry out methanol dehydration. The mixed reactor outlet is separated using two distillation operations to produce fuel-grade DME, methanol for recycle, and a wastewater stream.

The initial capital investment for the project is $70 million. Economic viability is highly contingent on the sale price of DME. As DME possesses half the energy density of diesel, DME must be sold at half the price of diesel to be competitive on the open market. With diesel around $3.00/gallon, DME should be targeted for $1.50/gallon, but this is not economically viable. At a sale price of $2.26 per gallon, the net present value (NPV) for the plant is $2.5 million and the rate of return (DCFROR) is 8.52%. If the DME sale price is reduced by 5%, however, the NPV drops to -$41 million.

Though there are a number of opportunities for increased revenue due to government initiatives to drive the adoption of renewable fuels, they are not expected to overcome the challenges of this market. Unless the current incentives are expanded, it is not recommended that this project is pursued into the detailed design phase.