AZANE COMPANY

Group Members:
1. Azer Tapdigzade (Team Leader)
2. Sabina Hesretli
3. Nurlan Iskenderov
4. Ehtiram Seyidov
5. Zaur Mahmudov
6. Ilkin Ibrahimli

BAKU HIGHER OIL SCHOOL

Contents
1. Introduction.......................................................................................................................................... 2
2. Process Description ........................................................................................................................... 4
2.1 Desulfurization ............................................................................................................................. 4
2.2 Reforming ..................................................................................................................................... 5
2.3 Shift Conversions .......................................................................................................... 8
2.4 CO2 Removal ................................................................................................................ 9
2.5 Methanation and Compression .....................................................................................12
2.6 Ammonia synthesis.......................................................................................................15
3. Material Balance ............................................................................................................................... 17
4. Economics ......................................................................................................................................... 22
5. Marketing ........................................................................................................................................... 31
6. Safety ................................................................................................................................................. 36
7. Environmental Impacts .................................................................................................................... 42
8. Sustainability ..................................................................................................................................... 43
9. Conclusion ......................................................................................................................................... 48
10. References ........................................................................................................................................ 50
11. Appendix............................................................................................................................................ 52

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 1. Introduction
Energy is the most essential issue for the existence of life in the world, so governments and
people consider and try to find various sources in order to get the economically friendly energy
nowadays and in the future. As the dependence on energy increases daily, searching for new
alternative energy sources has been one of the most essential issue about the insurance of
supplying future generation with enough energy.
There some energy sources in the world which serves to supply various places with energy.
Nowadays the mostly used energy sources are the solar, wind, geothermal, tidal, wave,
hydroelectric, biomass, nuclear power, hydrogen and fossil fuel energies. As the sunshine has
energy in itself it can be converted into electric energy via using solar panels. The energy of
sunshine can also be used to supply the personal houses with hot water besides electric energy.
Another energy source- wind energy is get by transforming the mechanical energy of the sun into
electric energy by means of wind turbines. Additionally, as we know the temperature of inner
layers of the Earth rises as moving toward the magma. So in some plants this high temperature
is used to heat up the water and the mechanical energy of the water vapor is converted into
electric energy. The mechanical energy of the upward and downward motions of tides can create
the electric energy while close working principle belongs to the conversion of mechanical energy
of waves into electric energy in wave turbines. Looking through some countries which are wealthy
of water sources such as rivers, lakes, it can be seen that they countries have the hydroelectric
energy stations which is the main energy supplier of country. In this stations the potential energy
of the falling water mass transforms into kinetic energy and via rotating the turbines creates
electric energy. The more familiar energy to us is biomass energy which is widely used between
people. By burning the trees, plants, wood chips or animal wastes we generally get the high
temperature which is used for heating the houses, objects or the required substances in the
industry. One of the familiar principle energy source with biomass energy is the fossil fuel energy.
It is also produced by using the burning energy of fossil fuels which is the destructive to the
environment. The nuclear energy is one of the mainly used energy sources which is manufactured
by nuclear reactions. Although it is mostly used in the world, it has some damages to the
environment because of produced wastes.
Despite there are various energy sources that can be used, most of them create hardship
when transported and stored. Also their utilization process may need inconvenient conditions
such as high temperature, pressure, uncommon catalysts.
Hydrogen is one of the energy sources which stores energy efficiently and is convenient
and harmless for transportation and utilization. As the majority part of the Earth consists of water

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 sources such as oceans, to get the hydrogen is very obtainable. In addition, usage of the
hydrogen in order to get the energy occurs without any damages and any toxic wastes to
environment. But hydrogen itself can encounter with hardship in storage because of the low
volumetric energy density. Via some chemical elements hydrogen can be combined and stored
as ammonia which is the material that able to store hydrogen efficiently, processed on
technologically relevantly and has good economical progressing.
The Ammonia (NH3) alkaline is second mostly manufactured substance in the world. It
stores the hydrogen more than the organic hydrogen carriers (methanol, ethanol) with 17.8
weight%. Ammonia can be stored in ordinary pressure packages, in which LPG is kept, in ambient
temperature (20°) and low pressure (0.87 MPa). In any emergency case, the leak of ammonia
arises to atmosphere because its density is lower than air.
Looking as the energy consumption, ammonia is able to be used in various fields, such as
a liquid fuel in the internal combustion engines, space heating and power generation. Besides the
energy consumption, approximately 90% of ammonia is used as the main ingredient in the
manufacturing of ammonium nitrate fertilizer. These produced fertilizers are widely used in the
food manufacturing plants in order to keep the plants and harvests healthy. Another important
field of ammonia usage is to produce the household cleaning products. It can be used both as
ingredient and solely in the cleaning, so this field is also one of the main consumption part of
ammonia. Additionally, ammonia can be used as the water purifying treatment, neutralizer in
plenty of industries such as food and paper production units, also as the building block in the
plastics and fabrics producing plants.
Also as the hydrogen carrier in fuel cells, ammonia’s great role will be undeniable in the
future. However ammonia demonstrated all of the perfect specifications of hydrogen, it has some
superiorities, such as having lower combustion velocity because of lower burning limit in the equal
volume. Hydrogen can be produced from ammonia by electrochemical process, thermal
decomposition and etc. Additionally, NH3 itself is manufactured with various methods, but
commonly by Haber-Bosch method, electrochemical processes or membrane reactor. However
both electrochemical processes and membrane reactor are more effective methods because of
lower energy consumption during the synthesis process, they haven’t got the relevant usage in
ammonia production yet. In Haber-Bosch method, the manufacturing process requires the
pressure and temperature to be high (400-600⁰ C and 30MPa) in order to break the triply bonded
nitrogen atoms. Additionally, we need N2 and H2 for this process, so nitrogen exists normally in

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 the air and can be got by air separation, but hydrogen should be produced from different
natural sources by reforming.

2. Process Description
The ammonia is produced by Haber-Bosch method, which happens in high pressure
and temperature when triple nitrogen bonds are broken. This method involves the
reaction of nitrogen and hydrogen atom. So we need nitrogen and hydrogen sources as
reactants in the ratio of 1:3. As we know nitrogen occurs in the atmosphere naturally, so
using some physical methods we can separate the nitrogen from air. But there is no any
hydrogen atom in air of the Earth in normal conditions. So we should get the hydrogen
firstly in order to react and produce ammonia. In order to produce hydrogen firstly, some
raw materials are used nowadays such as natural gas, petroleum gases or naphtha.

Figure 1.0 Process description

2.1 Desulfurization
The light hydrocarbon raw material has the sulfur and little amount of heavy metals. In
ammonia production process, there are various catalysts which are utilized in order to some
reasons. Obviously, catalysts that contains Nickel in itself are very sensible to sulfur and sulfuric
compounds. That is why, one of the main issue is to purify the feedstock from sulfuric compounds
which ruin and deactivate the catalysts in next steps. In order to purification, the raw materials are
sent to hydro-desulfurizer at 30 bar pressure to react with hydrogen and produce hydrogen sulfide
gases.

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 RSH + H2 → H2 S(g) + RH

In hydro-desulfurization process system is cleaned from sulfur compounds by the means of

Co-Mo-ZnO catalysts combination. When the amount of sulfur is over the normal then Ni-Mo
catalyst can also be used for purification. Feedstock substances should be cleaned up maximum
as can be possible from the sulfur compounds. For this, the feed gas is heated up to around 350-
400 ℃ and then given to the desulfurization vessel to be cleaned.

𝐻2 𝑆 + 𝑍𝑛𝑂 → 𝑍𝑛𝑆 + 𝐻2 𝑂
2.2 Reforming
2.2.1 Primary reforming
After desulfurization process, the gas should be mixed with the steam and the mixture of
steam and gas is heated up to 500-600 ℃ in the convection section via heat exchanger before
enter to the primary reformer. The reforming catalyst which include nickel place in the heated
pipes and this primary reforming aims to get the partial conversion, such usually the feed that has
65% methane leaves the primary reformer with 14% methane.

0
𝐶𝐻4 + 𝐻2 𝑂 → 𝐶𝑂 + 3𝐻2 ∆𝐻298 = +206 𝑘𝐽/𝑚𝑜𝑙

As well, in the fields, feed gas saturation also stores some parts of the steam for process.
The steam amount for the process should be given to carbon moll ratio (steam/carbon) and this
ratio number can be dependent on some various parameters like feedstock quality, primary
reformer capacity, shift operation, steam balance of the plant and purge gas recovery. Nowadays,
in the modern fields, the steam/carbon ratio amount is lower than 3. As the volume increases in
reforming process, in order to get the efficiency in the energy on compression, the pressure should
be kept higher. But to keep the pressure higher decreases the methane conversion, so in order
to balance it the temperature is kept higher via higher S/C ratio. Besides to get the energy savings,
higher value of S/C ratio has some additional advantages too. It inhibits the carbon overthrow on
the surface of catalysts, which could create the pressure drop and decrease the activity of catalyst.
Additionally, besides preventing the carburization of pipes, it prepares the steam which is used in
shift conversion. Primary reforming is enriched with high-nickel chromium alloy tubes which are
fulfilled with catalysts containing nickel substance. The reaction for the primary reforming is
actually endothermic and there is a need to additional heat for raising the temperature to around
800℃. This heat is delivered by means of burning natural gas or other fuel gases in the burners.
The flue-gas leaving the radiant box has temperatures in excess of 900°C, after supplying the

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necessary high level heat to the reforming process. Thus only about 50-60% of the fuel’s heat
value is directly used in the process itself. The heat content (waste heat) of the flue-gas is used
in the reformer convection section, for various process and steam system duties. The fuel energy
requirement in the conventional reforming process is 40-50% of the process feed gas energy.

Figure 1.1 Diagram of ammonia production process (in aspen plus)

Table 1.0 Table of mole flow

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 Table 1.1 Table of mole flow

Table 1.2 table of special conditions

2.2.2 Second Reforming

The secondary reformer is set placed after the primary one and is employed as a synthesis
of ammonia. The main function of this step is to produce the hydrogen and nitrogen gases and
complete the reforming of the hydrocarbon gases totally. Up to 60% of reforming of the
hydrocarbon feed has been completed in the primary reformer. After that, the feed gas enters to
the secondary reformer from the top part to be reformed totally. For this purpose, nitrogen is
added to the secondary reformer and the temperature should be increased with the purpose of
enhancing of conversion. The reaction in the secondary reformer is adiabatic as distinct from the
first one, so the heat which is needed to occurring of reaction is achieved by simply combusting
of the hydrocarbons with the process air which also provides the synthesis gas with the nitrogen.
The reactions happen in two sections of the secondary reformer which are combustion zone
(upper part) and catalyst zone (bottom part). Actually, three basic operations are done in the
secondary reformer.

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 ▪ Mixing of the process air with the gases
▪ Combustion of hydrocarbons
▪ Conversion of methane by reforming of the steam methane

After compressing process air to the reformer pressure, it is introduced onto the combustion
zone via the nozzle at high velocity to mix with the gases. Here, the oxygen in the composition of
the air is burnt, and the heat which is needed for the adiabatic reaction is released. The
combustion zone should be designed that there must be an appropriate distant from the walls of
the vessel. After this step, the air temperature is increased till around 600℃ and nitrogen gases
(𝑁2 ) are produced. Subsequently, the oxidized gases enter to the catalyst section of the reformer
(bottom section) by passing through the catalyst bed. In this section, hydrogen gases (𝐻2 ) are
formed, and it is provided with the catalyst which is based on nickel. The nickel based catalyst is
not poisoned according to the high temperature inside the reformer and is very strong. However,
the nickel content in the secondary reformer catalysts is lower than the primary ones because of
their low activity at the high temperature. The normal operating conditions for the secondary
reformer are 996.2℃ and 35.3 bar in terms of temperature and pressure respectively. In this case,
the reformed gases leave the secondary reformer at the temperature of around 1000℃ from the
bottom part of the reformer and it can be said that almost 99% of the hydrocarbon feed gases are
converted. After this step, the residual content of methane has been approximately 0.2%-0.3%.
The temperature of the gas after leaving the secondary reformer is decreased up to 360℃ in the
waste heat boiler. The mole ratio of the hydrogen to nitrogen is considered as 3:1.

2.3 Shift Conversions

After the process gas quits from the secondary reformer, it is given to the water gas shift
conversion (WGS) reactors in order to purify the reformed gas and prevent any poisoning of
catalysts. Before it enters to the shift conversion reactors, it covers around 12%-15% CO. The
reason of sending it to the WGS reactors is to convert most part of the carbon monoxide (CO)
into the form of carbon dioxide (CO2 ). The function of these convertors is based on removing the
carbon monoxide which is formed in the secondary reformer and convert it to the carbon
monoxide. The reaction to do that is exothermic and shown below:

CO + H2 O → CO2 + H2 ∆H = −9.8 kcal/mol.

The shift conversion process plays very essential role in the production of ammonia because
unchanged CO can consume the hydrogen gases and as a result of that in the methanator CH4

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can produce which reduces the feedstock efficiency. Moreover, the inert content in the synthesis
loop can also be increased due to formed CH4 .

In this step of the whole process includes two basic parts that in the first part High
Temperature catalysts are applied whereas in the second one the Low Temperature catalysts are
utilized. In the HTS (high temperature shift) the process gas passes through a bed of catalysts
which contains iron oxide/ chromium oxide. The temperature condition is considered as 400℃,
and also these types of reactors in the industry mainly operate at from atmospheric pressure up
to 8375 kPa. After this step, all the carbon monoxide cannot be removed completely. That is why,
additional purification step is needed to achieve the maximum residual content as much as
possible. After HTS, the content of CO is decreased up to 3%. Subsequently, after cooling, the
process gas enters to the LTS (low temperature shift) convertors at around 200℃. In this part of
the step, copper oxide/zinc oxide is used as a catalyst. Actually, the catalyst which is based on
copper oxide is applied due to increase the conversion in which the zinc oxide is applied for
removing any sulfur contaminants. One of the advantages of LTS catalysts is an ability of
operating at higher pressure values. After passing through the convertors, CO content could be
decreased up to less than 1% of the total volume, so that the final content of that are 0.2%-0.4%
dry gas bases. As it is known that the residual content of the gas is very important and should be
low in terms of the process efficiency, so that 0.2%-0.4% is taken into account as a low content
value.

After all of these, the temperature of the shift reactor effluent is decreased up to 40℃. Next,
the process gas can be condensed out and sent to the CO2 absorption system. The released heat
in the processes of cooling and condensation can be applied in the regeneration of CO2 .

2.4 CO2 Removal

In this step of the process, the main function is based on separating the CO2 gases from
the feed stream in the ammonium production. Why the CO2 gases should be removed from the
feed stream is preventing the poisoning the iron catalyst which is founds in the downstream.

Actually, CO2 gases are produced in the process of gasification and shift conversion. Then,
the formed CO2 is needed to be extracted after chilling and scrubbing with the assistance of some
solvents. The removal of CO2 gases can happen in two ways which are chemically and physically.
In the physical absorption process, the CO2 gases are dissolved by means of the physical
solvents (such as glycol dimethylethers, methanol and propylene carbonate) out of producing

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chemical compound. As distinct from the physical process, in the chemical process there is a
chemical compound which is formed. The solvents in the chemical process are the aqueous
solutions of the primary and secondary amine solutions, potassium carbonate and so on.
Chemical solvents are useful in terms of their additional activators and inhibitors which increase
the mass transfer and prevent the corrosion. There is no heat consumption in the physical
process, whereas chemical absorption process requests the heat because the mechanical energy
should be considered. The general energy saving for the chemical absorption process is 30-60
MJ/kmol CO2 per 0.8-1.9 GJ/t ammonium.

The selected solvent for the absorption of the CO2 is highly important factor for the process.
MEA or DEA (monoethanolamine and diethanolamine) and potassium carbonate are the mostly
used solvents. However, in the comparison with each other, potassium carbonate can absorb
more CO2 than MEA and DEA that is why potassium carbonate is the most preferred solvent in
the new designed plants nowadays. Moreover, the potassium carbonate is more economical than
the others. In addition to this, the safety factor is another main parameter for the selection of the
right solvent.

Absorber-Stripper process can be applied for extracting the CO2 gases. The unit is needed
to be established between the shift conversion and methanation units. In the process of removing
CO2 gases, the solvent which is selected for absorption moves down in the absorber, while the
feed gas flows up. After that, the regeneration of the rich solvent takes place at the stripper in the
condition of the low pressure and furthermore, it is recycled back to the absorber in order to
complete the cycle. Subsequently, the water is condensed out of the CO2 gases which are
removed at the stripper.

There are lots of reactions that take place in the absorber. First of all, the dissolving of the
potassium carbonate occurs:

K 2 CO3 → 2K + + CO3 2−

After that, three equilibrium reactions of the carbonate acid happen:

H2 CO3 + H2 O → H3 O+ + HCO3 −

HCO3 − + H2 O → H3 O+ + CO3 2−

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 CO2 + 2H2 O → H3 O+ + HCO3 −

The third reaction is the reaction that defines the absorption of the CO2 in the feed stream
and later, the forming bicarbonate also reacts with the potassium ion like that below:

K + + HCO3 − → KHCO3 −

As it is mentioned above, for competing this step successfully, the two units which are
absorber and stripper are utilized. All the chemical reactions happen in the absorber and as well,
the solvent with the water enter to the bottom part of the absorber. The solvent enters to the
absorber in the form of liquid, whereas the feed stream is a gas. Both of the solvent and the feed
gas move into the absorber at the same condition of 250 ℃ and 50 bar. After absorber, it is
entered to the first flash chamber for reducing the temperature and pressure conditions. This is
done for simplifying of entering of the stream to the stripper. Here, vapor stream is formed which
involves water and CO2. Subsequently, the stream enters to the stripper from the top part of it.
Here, there are some reactions occur that these reactions are the reverse ones of those in the
absorber. The CO2 is separated from the solvent as a vapor in the top of stripper unit. In that
case, the remaining of the solution consisting of K + and CO3 2− ions are gone back to the absorber
in order to be able to use again. There is no pressure drop in the stripper unit in which the top
part contains 2 bar while the pressure in the bottom part is equal to 1.8 bar. The temperature
change also is not so significant (at the top 141℃ and at the bottom 147℃). The separation of the
CO2 from the water is accomplished in the final flash unit. The CO2 and the stream are sent to
the final flash tank from the stripper and the first flash tank. The temperature and pressure are
10℃ and 5 bar respectively. The CO2 gases are extracted and the water is needed to be liquefied
in order to be used in the different places of the plant.

The main function of this step is to purge the CO2 from the feed stream due to avoid catalyst
poisoning. As it is said that CO2 is extracted from the feed stream by means of absorption in the
hot liquefied potassium carbonate solution in which there is around 30% potash (K 2 CO3) which is
converted onto KHCO3. The reason of using hot aqueous solution is just increasing the reaction
rate. Moreover, in the absorber, the pressure is kept at the high level in order to enhance the
solubility of the process gas in the solution. Potassium carbonate is chosen as a chemical solvent
because of some advantages over the amines. MEA or DEA monoethanolamine and
diethanolamine respectively, request more energy for the process of regeneration than potassium
carbonate.

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 2.5 Methanation and Compression
2.5.1 Methanation
Catalytic hydrogenation of oxide and carbon dioxide to methane is usually used to purify
small residual amounts of these compounds (not more than 2%) in gas streams after removing
the bulk of them by other methods. The method is used especially often in cases where the
presence of methane does not worsen the conditions for further processing or use of gases. A
typical example of the application of this process can be the removal of carbon oxides from
hydrogen after conversion of CO and absorption of CO2 by liquid processes. The residual content
of carbon oxides in refined gas is several ten thousandths of a percent. At the same time, free
oxygen is removed if it presents in the gas.

Preferably, the concentration of carbon monoxide (CO) in the feed fuel chamber should be
less than 100 ppm, preferably less than 50 ppm. However, the initial CO concentration obtained
from the fuel processor may exceed 1% by weight. Therefore, further reduction of CO
concentration is required. Some of the conventional methods for reducing CO concentration are
selective catalytic oxidation of CO, short-cycle freeze adsorption, membrane hydrogen separation
and CO methanation.

Similarly, in ammonia plants, the presence of CO in the ammonia synthesis reactor is also
extremely undesirable, and the concentration of carbon monoxide should normally be reduced to
5-10 parts per million by volume.

The reaction of methanation of carbon oxides:

CO + 3H 2 = CH 4 + H 2 O ∆𝐻 = −206 𝑘𝐽/𝑚𝑜𝑙;

CO 2 + 4H 2 = CH 4 + 2H 2 O ∆𝐻 = −165 𝑘𝐽/𝑚𝑜𝑙

The commercial catalyst contains 76-78% N0 and 20-22% Al 2 O 3. Also, Nickel based
catalysts can be used. It is manufactured, as in the previous case, in the form of tablets. Catalyst
life is several years.

The gas after the ethanolamine cleaning column from CO 2 is first heated in the heat
exchanger by the heat of the methanation products, and then to 260-270 ° C in the furnace. The
heated gas passes down through the catalyst bed from top to bottom, is cooled in a heat
exchanger and in the end cooler, then it goes to the synthesis of ammonia or is used for other
purposes. Due to the adverse effect of high temperatures on the equilibrium of the reaction and
the stability of the operation of the catalyst, the operating conditions in the reactor are controlled

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so that the temperature of the gas leaving the reactor does not exceed 440 °C. The process is
highly exothermic: the temperature in the reactor is increased by 56 °C for each percent of the
carboxylic acid contained in the gas. This prevents the use of this process for gases containing
more than 2% oxygen, oxide and carbon dioxide in the sum.

Methanation reactions are first order in carbon oxides, but do not show a first-order
dependence on total pressure due to diffusion and other slowing effects. The overall dependence
of the reaction rates on pressure is approximately proportional to the pressure in the degree
between 0.2 and 0.5, and for this catalyst, it seems to be the same for both methanation reactions.
Required pressure to carry out methanation reaction is changing over the range between 20-80
bar. Most preferably, the pressure can be between 30-60 bar, for example 30 bar is suitable for
this process. As can be obviously seen the graph given below, at 30 bar, conversion of CO2 to
CH4 is high at low temperature.

Figure 1.2 Relationship between the CO2 conversion rate, pressure and temperature during
methanation of a stoichiometric reactants mixture

The most striking example of the use of the methanation reaction can be the process of
purification of the nitrogen-hydrogen mixture (synthesis gas) from carbon oxides in large-tonnage
synthetic ammonia plants, which are the most stable and cost-effective in the chemical
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industry. Typical for these industries is the use of catalysts, quality
indicators, which determine the performance, stability and technical and economic characteristics
of the ammonia synthesis unit. Catalytic hydrogenation of carbon oxides allows for a fine
purification of hydrogen and hydrogen-containing gases from carbon oxides, which are catalytic
poisons in many organic synthesis processes, provides protection of the environment from
quantities into the atmosphere carbon oxides emitted in large quantities into the atmosphere.

2.5.2 Compression
More recently, another method for washing synthetic gas with liquid ammonia has been
proposed, according to which gas flushing is performed between the first and second stages of
the gas compressor used to compress gas (pressurizing gas at the reactor inlet to 80-150 bar),
or between the second and third stages of a three-stage compressor (increasing the gas pressure
at the reactor inlet to 150-250 bar). Typically, these stages of the compressor are called
compression stages of the "fresh" synthesis gas, behind which is the last compression stage,
which is called the recirculation stage, since it is used not only to compress fresh gas, but also to
compress and feed recycle gases that have not entered the reactor reaction in the synthesis
section. In this process two-stage compressor has been used.

The first stage of the process is the compression of the nitrogen-hydrogen mixture to the
pressure under which the ammonia synthesis process is carried out. At present, in the production
of synthetic ammonia, pressures from 100 to 1000 atm. The energy consumption for the
compression of the mixture increases insignificantly with increasing pressure, since the
compression work is approximately proportional to the logarithm of the ratio of pressures.

The second stage of the process in a number of ways of synthesizing ammonia is an

additional purification of the nitrogen-hydrogen mixture from poisons: carbon monoxide, oxygen
and water vapor. Recall that the mixture obtained by the methods described above, contains
these impurities in quantities, measured in thousandths or hundredths of a percent. Additional
cleaning is carried out catalytically.

The next operation is the separation of ammonia from the gas by condensation. The
temperature to which it is necessary to cool the gas in order to condense ammonia depends on
the pressure.

The amount of ammonia remaining in the gas at a given condensation temperature is

inversely proportional to the total pressure, which makes it possible, using ammonia pressure
750-1000 atm, to remove 80-90% of ammonia from the gas by cooling it in water coolers. At lower

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pressures, the gas must be cooled additionally in ammonium
refrigerators to a temperature of 0 ° to -55 ° C (depending on the pressure). In the ammonia
refrigerator, liquid ammonia produced on the plant is used, which, after evaporation, is sent in
gaseous form to the processing shops.

Released to some extent from ammonia, the nitrogen-hydrogen mixture after adding fresh
gas to it is returned to the synthesis column. For circulating gases, circulating pumps are used in
most cases to compensate for the pressure drop in the system (pressure drop is measured at 10-
20 atm). In high-pressure systems, injectors are sometimes used instead of circulating
pumps. The fresh gas is supplied to the injector at a pressure exceeding the pressure of the
circulating gas, at 10 to 15 atm.

This object is achieved by the inventive method for producing ammonia by catalytic reaction
of a synthesis gas that is compressed a suitable multi-stage compressors, each stage having an
inlet and an outlet for synthesis gas, in which the synthesis gas is purified with liquid ammonia
from the water contained therein and carbon dioxide, and which is characterized in that when
purifying the synthesis gas from water, a gas-liquid mixer is used which is connected on the one
side to the outlet of the first or intermediate stage of the compressor, on the other hand, with the
input of the stage which is located behind the first stage or the intermediate stage, and has a
section of a certain length in the axial direction with a decreasing cross-section, a syngas stream
is withdrawn from the first in the axial flow.

2.6 Ammonia synthesis

The main method for the manufacturing of ammonia is Haber-Bosch process which is
improved from German chemist who is Fritz Haber. In general, the demand of process is the high
pressure and temperature besides that the process happens in the continuous flow. The Haber-
Bosch process is the paramount since it was the primary method improved that enable people to
manufacture ammonia. In addition to this, this process makes it possible our plant to be most
economical in terms of fixation of nitrogen. Main resource of hydrogen can be considered
methane which is obtained from natural gas while nitrogen can be acquired from air for Haber-
Bosch process. Nitrogen reacts hardly since it has triple bond which keeps molecules closer.

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2.6.1 Synthesis Loop
As it is illustrated diagram of ammonia production process, after methanation, mixture of
gases is send to for ammonia synthesis .As raw material, synthesis gas is used and this gas
contains mainly nitrogen and hydrogen with ratio of 3:1,
however, there are some inerts which are methane,
argon. The contaminated synthesis gas is combined with
recycle stream, before compressing, with the presence of
cooling process to 5℃ and then enters separator S-01
separator in which liquid ammonia is removed from
system using of P-01 pump. The essential gas stream is
divided into recycle and purge stream which is used for
controlling of inert gas or removing of inert gases in order
to prevent increasing amount of inert gases in the recycle
stream. Unconverted synthesis gas is recycled and
converged with feed stream (S-36) and then compressed
together to 275 bars by means of multistage centrifugal Figure1.3.Ammonia synthesis
reactor
C-02 compressor in which interstage cooling process
exits.
There is significant pressure loss because of influence of Joule –Thompson in the
refrigeration section. The C-02 compressor is operated with the help of steam turbines that
produced in plant. The synthesis gas is compressed in order to decrease temperature of gas
among stages. After compression of recycle stream and S-36 stream together, they are heated
up by means of HE-12 approximately and then it enters reactor (ammonia convertor) which
comprises three adiabatic catalyst beds and it is illustrated in the Figure 1.3
For our plant, we select adiabatic quench cooling reactor which is divided into three parts or
beds that can be called first quench, second quench, and third quench. Catalyst beds are
separated by means of unconverted synthesis gas. The temperature rises when gas mixture
passes to first bed so temperature condition of first bed is 400℃. Gas leaving first bed is cooled
by means of first flow of quench hence temperature of outlet gas reduces. Furthermore, the outlet
gas leaves each bed after mixing flow of quench.
Temperature condition second bed is 450℃, and third bed is 470℃. The exothermic reaction
happens in the ammonia convertor as following. Approximately 15 % of nitrogen and hydrogen is
changed into ammonia.

Page 16 of 54
 𝑁2 (𝑔) + 𝐻2 (𝑔) ⇄ 2 𝑁𝐻3𝑔 + ℎ𝑒𝑎𝑡 ∆𝐻 = −92.4 𝐾𝐽/𝑚𝑜𝑙

Above reaction happens at the temperature 400-500 ℃ with the pressure of 200
atmosphere pressure with the presence of iron catalyst. After the reaction, gas mixture is cooled
by heating of feed stream of reactor and then gas mixture enter to S-01 separator and again
liquid ammonia and purge gas is taken away from system ,unconverted gas is given to recycle so
in this way ammonia synthesis loop continues until 97% total yield of reactant gases for whole
pass is obtained. Purge stream is utilized as fuel gas since it involves high valuable hydrogen
which is distracted unintentionally from ammonia synthesis loop .Produced ammonia is
paramount feed stock for urea production. The reaction is indicated below:

𝑁𝐻3 + 𝐶𝑂2 (𝑁𝐻2 ) → 𝐶𝑂 + 𝐻2 𝑂

3. Material Balance
First of all, there is a need for feed materials in order to start process and main feed materials
are hydrogen, steam, air and natural gas. The natural gas stream is S-01 with 27.755 t/h mass
flow rate. S-01 consists of different components but main one is methane (CH4) because it is
used in process to get hydrogen for synthesis of ammonia and the composition is 66 % (18.344
t/h) that 440.3 t/day methane is required. The next feed is hydrogen given with S-02 stream to
process and mass flow rate is 126.7 kg/h. The hydrogen is needed to convert organic sulfur
compounds to hydrogen sulfide but there is less amount of hydrogen sulfide, approximately 0.38
kg/h, and that is why it has not been described in table. The steam is main feed that it helps to
convert methane to hydrogen in reforming section and it is supplied to system with 102 t/h mass
flow rate (S-06 stream). The S-09 stream shows that the amount of hydrogen increases from
126.7 kg/h to 7509.61 kg/h after first reformer. The next feed is air which is included to system
with 68.5 t/h mass flow rate after first reformer. The composition of air is 75 % nitrogen, 23 %
oxygen, and 2 % carbon dioxide. It is evident from table that there is not carbon monoxide (CO)
until reformer section. The reforming section causes generation of carbon monoxide which is
removed with the help of shift conversion section. The carbon monoxide is converted to carbon

Page 17 of 54
dioxide and hydrogen that the amount of carbon dioxide and hydrogen
increases while that of carbon monoxide decreases and it is obvious from S-14, S-15, S-16, S-
17, and S-18 streams in the table above. There is need also to remove this generated amount of
carbon dioxide from system that 247.59 kg/h carbon dioxide is achieved to remove. The remaining
carbon dioxide and carbon monoxide are converted to methane with the help of hydrogen. The
mass flow rate of methane is increased from 471 kg/h (S-24) to 1158.7 kg/h (S-25). This stream
is mixed with recycle stream (S-35) and generate S-36 stream which is enter to separator. 8542.2
kg/h methane (S-37) is removed from this separator. After this separator, synthesis gases,
nitrogen and hydrogen, are going to reactor with 97.6 t/h and 16.9 t/h mass flow rate respectively.
The product stream is going to refrigeration section to condensate ammonia produced and after
this, 53.951 t/h liquefied ammonia (S-33) is removed with the help of separator. The gas stream
from top of separator is split into S-34 (purge gas) and S-35 (recycle) streams with 66.6 t/h and
99.9 t/h mass flow rate.

Streams S-01 S-02 S-03 S-04 S-05 S-06

Temperature (C) 45.00 116.00 47.00 344.00 325.00 360.00
Pressure (bar) 38.00 38.00 38.00 32.30 51.00 35.00
Components
CO2 0.00 0.00 0.00 0.00 0.00 0.00
CO 0.00 0.00 0.00 0.00 0.00 0.00
H2 0.00 126.74 126.74 126.74 126.74 0.00
N2 837.79 67.20 904.99 904.99 904.99 0.00
CH4 18344.50 0.00 18344.50 18344.50 18344.50 0.00
ARGON 0.00 10.03 10.03 10.03 10.03 0.00
NH3 0.00 0.00 0.00 0.00 0.00 0.00
H2O 0.00 0.00 0.00 0.00 0.00 102041.00
O2 91.28 0.00 91.28 91.28 91.28 0.00
C2H6 7605.06 0.00 7605.06 7605.06 7605.06 0.00
C3H8 561.34 0.00 561.34 561.34 561.34 0.00
SULFUR 0.00 0.00 0.00 0.00 0.00 0.00
H2S 0.00 0.00 0.00 0.00 0.00 0.00
N-butane 49.37 0.00 49.37 49.37 49.37 0.00
N-hexane 73.20 0.00 73.20 73.20 73.20 0.00
N-pentane 192.62 0.00 192.62 192.62 192.62 0.00
Total (kg/h) 27755.17 203.97 27959.14 27959.14 27959.14 102041.00

Table 1.3 Streams, components, conditions, and mass balance

Page 18 of 54
 Streams S-07 S-08 S-09 S-10 S-11 S-12
Temperature
347.90 502.50 790.50 33.00 133.10 462.30
(C)
Pressure (bar) 35.30 35.30 30.70 3.00 32.30 32.30
Components
CO2 0.00 0.00 26332.50 31.22 31.22 31.22
CO 0.00 0.00 14667.00 0.00 0.00 0.00
H2 126.74 126.74 7509.61 0.00 0.00 0.00
N2 904.99 904.99 904.99 51687.50 51687.50 51687.50
CH4 18344.50 18344.50 9450.18 0.00 0.00 0.00
ARGON 10.03 10.03 10.03 897.38 897.38 897.38
NH3 0.00 0.00 0.00 0.00 0.00 0.00
H2O 102041.00 102041.00 71145.80 0.00 0.00 0.00
O2 91.28 91.28 0.00 15881.90 15881.90 15881.90
C2H6 7605.06 7605.06 0.00 0.00 0.00 0.00
C3H8 561.34 561.34 0.00 0.00 0.00 0.00
SULFUR 0.00 0.00 0.00 0.00 0.00 0.00
H2S 0.00 0.00 0.00 0.00 0.00 0.00
N-butane 49.37 49.37 0.00 0.00 0.00 0.00
N-hexane 73.20 73.20 0.00 0.00 0.00 0.00
N-pentane 192.62 192.62 0.00 0.00 0.00 0.00
Total (kg/h) 130000.14 130000.14 130020.10 68498.00 68498.00 68498.00

Streams S-13 S-14 S-15 S-16 S-17 S-18

Temperature
977.60 380.00 447.70 210.00 232.70 40.00
(C)
Pressure
28.70 28.70 28.00 27.70 26.50 26.50
(bar)
Components
CO2 27607.90 27607.90 58277.20 58277.20 72126.80 72126.80
CO 29098.50 29098.50 7245.23 7245.23 764.02 764.02
H2 8850.18 8850.18 9875.20 9875.20 10889.40 10889.40
N2 52592.50 52592.50 49962.90 49962.90 52592.50 52592.50
CH4 736.86 736.86 700.02 700.02 736.86 736.86
ARGON 907.41 907.41 862.04 862.04 907.41 907.41
NH3 0.00 0.00 0.00 0.00 0.00 0.00
H2O 78734.90 78734.90 61678.70 61678.70 60511.20 60511.20
O2 0.00 0.00 0.00 0.00 0.00 0.00
C2H6 0.00 0.00 0.00 0.00 0.00 0.00

Page 19 of 54
 C3H8 0.00 0.00 0.00 0.00 0.00 0.00
SULFUR 0.00 0.00 0.00 0.00 0.00 0.00
H2S 0.00 0.00 0.00 0.00 0.00 0.00
N-butane 0.00 0.00 0.00 0.00 0.00 0.00
N-hexane 0.00 0.00 0.00 0.00 0.00 0.00
N-pentane 0.00 0.00 0.00 0.00 0.00 0.00
Total (kg/h) 198528.25 198528.25 188601.29 188601.29 198528.19 198528.19

Streams S-19 S-20 S-21 S-22 S-23 S-24

Temperature
30.00 30.00 30.00 60.00 60.00 280.00
(C)
Pressure
26.50 26.50 26.50 1.00 1.00 26.50
(bar)
Components
CO2 819.29 725769.00 0.00 478.18 247.59 819.29
CO 700.70 63.32 0.00 59.89 3.42 700.70
H2 10889.40 0.00 0.00 0.00 0.00 10889.40
N2 49209.10 3383.45 0.00 3210.23 173.22 49209.10
CH4 471.08 265.79 0.00 235.73 30.05 471.07
ARGON 780.85 126.56 0.00 119.17 7.39 780.85
NH3 8.59 30.64 1627.50 1.45 29.10 8.59
H2O 214.25 197812.00 9222.50 570.55 197242.00 214.25
O2 0.00 0.00 0.00 0.00 0.00 0.00
C2H6 0.00 0.00 0.00 0.00 0.00 0.00
C3H8 0.00 0.00 0.00 0.00 0.00 0.00
SULFUR 0.00 0.00 0.00 0.00 0.00 0.00
H2S 0.00 0.00 0.00 0.00 0.00 0.00
N-butane 0.00 0.00 0.00 0.00 0.00 0.00
N-hexane 0.00 0.00 0.00 0.00 0.00 0.00
N-pentane 0.00 0.00 0.00 0.00 0.00 0.00
Total (kg/h) 63093.26 927450.75 10850.00 4675.19 197732.77 63093.25

Streams S-25 S-26 S-27 S-28 S-29 S-30

Temperature
280.00 5.00 180.00 444.00 240.00 84.00
(C)
Pressure
26.50 275.00 292.00 284.00 281.00 278.00
(Bar)
Components
CO2 0.00 0.00 0.00 0.00 0.00 0.00
CO 0.00 0.00 0.00 0.00 0.00 0.00

Page 20 of 54
 H2 10408.20 16960.37 16960.37 16297.80 16297.80 16297.80
N2 48717.00 97632.17 97632.17 88606.60 88606.60 88606.60
CH4 1158.76 7493.48 7493.48 24885.70 24885.70 24885.70
ARGON 773.04 10323.49 10323.49 19701.90 19701.90 19701.90
NH3 0.00 8052.80 8052.80 71182.00 71182.00 71182.00
H2O 0.00 0.00 0.00 0.00 0.00 0.00
O2 0.00 0.00 0.00 0.00 0.00 0.00
C2H6 0.00 0.00 0.00 0.00 0.00 0.00
C3H8 0.00 0.00 0.00 0.00 0.00 0.00
SULFUR 0.00 0.00 0.00 0.00 0.00 0.00
H2S 0.00 0.00 0.00 0.00 0.00 0.00
N-butane 0.00 0.00 0.00 0.00 0.00 0.00
N-hexane 0.00 0.00 0.00 0.00 0.00 0.00
N-pentane 0.00 0.00 0.00 0.00 0.00 0.00
Total (kg/h) 61057.00 140462.31 140462.31 220674.00 220674.00 220674.00

Streams S-31 S-32 S-33 S-34 S-35 S-36 S-37

Temperature
39.00 34.00 33.60 15.00 16.00 245.00 245.00
(C)
Pressure
275.00 30.00 30.00 30.00 30.00 29.00 29.00
(bar)
Components
CO2 0.00 0.00 0.00 0.00 0.00 0.00 0.00
CO 0.00 0.00 0.00 0.00 0.00 0.00 0.00
H2 16297.80 16297.80 6.18 6516.65 9774.97 20183.17 3222.80
N2 88606.60 88606.60 43.82 35425.11 53137.67 101854.67 4222.50
CH4 24885.70 24885.70 90.84 9917.94 14876.92 16035.68 8542.20
ARGON 19701.90 19701.90 21.15 7872.30 11808.45 12581.49 2258.00
NH3 71182.00 71182.00 53951.00 6892.40 10338.60 10338.60 2285.80
H2O 0.00 0.00 0.00 0.00 0.00 0.00 0.00
O2 0.00 0.00 0.00 0.00 0.00 0.00 0.00
C2H6 0.00 0.00 0.00 0.00 0.00 0.00 0.00
C3H8 0.00 0.00 0.00 0.00 0.00 0.00 0.00
SULFUR 0.00 0.00 0.00 0.00 0.00 0.00 0.00
H2S 0.00 0.00 0.00 0.00 0.00 0.00 0.00
N-butane 0.00 0.00 0.00 0.00 0.00 0.00 0.00
N-hexane 0.00 0.00 0.00 0.00 0.00 0.00 0.00
N-pentane 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total (kg/h) 220674.00 220674.00 54112.99 66624.40 99936.61 160993.61 20531.30

Page 21 of 54
 4. Economics
4.1 Fixed capital investment
The first calculations should be done on fixed capital investment when it is planned to start
operation of any plant or company. The fixed capital investment of our plant is calculated as 267
million $. The erection of plant consists of several steps requiring this capital that the most of it
(approximately 71 million $) is spent to purchase of equipment. This is 27 % of fixed capital
investment. The cost of each equipment has been determined by CAPCOST excel program by
entering parameters of equipment (program can be found from internet). The below diagram gives
information about equipment cost.

Diagram 1: Equipment costs

1525286 10140000 4066000

4638501 10400000
273000
501801 3380000
215690 3380000
31570000
629068

Heat Exchanger Compressor Absorber

Stripper Reactor Mixer
Splitter Separator Pump
Storage tank Furnace Distillation column

Figure 1.4 Costs of equipment

It can be seen that the big pie belongs to reactors because 7 reactors are needed in this
plant. The name, price, and number of equipment have been listed in Appendix 1.

After determining this step which is important, the next steps depending on equipment costs
are easy to determine. The table 1 gives information about steps and capital separated for them.

Table 1.4 Costs of fixed capital investment

Steps of plant construction Cost ($)

Installation 35,359,673
Piping 28,287,738
Instrumentation 14,143,869
Auxiliary buildings 7,071,935
Laboratory buildings 7,071,935

Page 22 of 54
 Land area 1,900,000
Office equipment 7,071,935
Registration of company 7,071,935
Engineering and design cost 21,215,804
Contingency allowance 21,215,804
Contractor`s fees 10,607,902
Electricity 14,143,869
Insulation of pipes and heat-sensitive units 7,071,935
Process buildings 7,071,935
Site development 7,071,935
Total 196,378,201

As you see from this table that 35.3 million $ is cost of installation taken as 50 % of
equipment cost. The installation consists of foundation of plant, construction, construction
materials, and labor of Construction Company. The next big cost belongs to piping including costs
of pipes, valves, and valve fittings. The cost of piping has been taken as 40 % of equipment cost.
This compliance is the same with other parts that cost of each one has been determined as
percentage of equipment cost. The percentage numbers are also described in table 1. The
exception is cost of land area that it depends on location of plant. The location is panned to be
Azerbaijan, Sumgait region where the price of each square meter of land is approximately 12.5
AZN or 7.6 $ and in order to construct this plant, 250,000 m2 area is needed that it will cost us
1.9 million $.

The life time of plant is planned to be 15 years, 3 years for construction and 12 years for
production of ammonia. The fixed capital investment will be divided as 20 %, 70 %, and 10 %
which will be spent in 1st, 2nd, and 3rd years of construction respectively.

4.2 Working capital investment

The working capital investment of our plant is planned to be 25 % of fixed one, 67 million $.
This capital is needed for start-up of plant and it will be invested in initial production years. This
capital will be spent in initial 4 production years as 30 %, 30 %, 20 % and 20 % of it respectively.
The cost of working capital will be subtracted from sales income when cash flow is calculated.
The working capital is considered recoverable at the end of project. Thus, the summation of
working and fixed capital investments will give us total investment needed to start project. The
total investment is approximately 334 million $.

Page 23 of 54
 4.3 Operating cost
The most important part of economic calculations is determining of operating cost. This is
cost which determines how much money is spent to produce one ton of product and different
projects can be selected by knowing this cost. The operating cost is divided into two parts: fixed
and variable costs.

4.3.1 Fixed operating cost

This operating cost does not have any dependency on production rate of plant which it
should be paid. Let`s define the subdivisions of fixed operating cost.

1. The first and important one is determination of operating labor which is

divided into plant labor and office labor. This cost is calculated annually after determining
the number of plant and office workers. The salary of each worker is determined by
considering position of each worker, working hours, holidays, and weekends. Although, it
is fixed operating cost, the annual operating labor cost is planned to increase by 5 % after
4 production year when positive cash flow is observed. The more information about
workers has been given in Appendix 1.
2. The plant overheads is calculated as 50 % of operating labor and includes
general expenses such as advertisement, medical, canteen, safety, and security. This
cost is also planned to increase annually by different percentages.
3. 10 % of fixed capital investment, 26.7 million $, is considered for costs of
capital charges.
4. The next important cost is about insurance which is taken as 2 % of fixed
capital investment.
5. The product of plant (ammonia) should be checked every two-four hours in
laboratory to be sure about quality of product. And of course this requires capital that 30
% of plant labor cost is separated for laboratory and research expenses. These expenses
are planned to be increased by 1 % yearly.
6. The equipment needs some control and care to work non-stop and
efficiently and therefore, some cost should be separated for maintenance of equipment.
However, there is need less materials in initial years because all equipment are new and
well-designed. The cost of it is taken as 5 % of fixed capital investment in initial 4 years
and after that time cost is planned to be increased by 8 % yearly. The expenses of
materials and labor of equipment engineers are included in this cost.

Page 24 of 54
 7. There are some local taxes expenses which are
considered to be 1 % of fixed capital investment.
8. As the production increases, there is need more new employees and it is
crucial to give some trainings to these employees. The company is also thought about
summer internship programs for university students. These expenses are planned to pay
from separated capital of 25 % of insurance.

The expenses of all subdivisions above have been given in Appendix 1 for each year
respectively.

4.3.2 Variable operating cost

This cost does depends on production rate of plant, so that if the rate of product increases,
the variable operating cost will increase. This cost has also subdivisions given below:

1. The first and important one is cost for raw materials that there are three
raw materials needed in this plant: natural gas, hydrogen, and some catalysts for
reactors. 149687 ton natural gas is required yearly for maximum production of ammonia
by considering 340 working days. This will cost us 14.9 million dollar. Moreover, 2.3
million dollar is planned to spend for 1028 ton of hydrogen annually. There is need for
some amount of catalyst in reactors that 10 % of price of reactor is separated for cost
of catalyst (451,000 $). It is evident from description that besides of ammonia some
amount of methane and hydrogen are also produced that this will decrease need for
raw materials. Therefore, considered cost for raw materials is not planned to change
when production increases.
2. The next one is cost for utilities consisting of high pressure steam, water
for cooling, fuel for furnace, and electricity of overall plant. The cost for utilities is
considered 72 million dollar for the 1st production year and it will increase by 5 % each
year.
3. The cost of miscellaneous materials is another subdivision of variable
product cost that it embraces costs for cleaning materials, safety clothing, and
instrument accessories. 10 % of maintenance cost, 1.3 million dollar, is planned to
separate for this.
4. Storage and transportation cost is taken as 120 $ per ton of ammonia and
it will be 5.6 million dollar in first production year and will increase by 10 % per year.
The reason of high cost is that storage of liquid ammonia requires very low temperature
which means high energy.

Page 25 of 54
 The details of variable product cost have been given in
Appendix part.

The overall operating cost is equal to sum of fixed and variable costs. In order to get
product cost for per ton of ammonia, this summation is divided by annual production rate. It is
planned to catch maximum production rate of plant in 2025. In this year, overall operating cost
will equal to 234 million $.

$ 234,000,000 $ $
𝑃𝑟𝑜𝑑𝑢𝑐𝑡 𝑐𝑜𝑠𝑡 ( )= = 502
𝑡𝑜𝑛 466560 𝑡𝑜𝑛 𝑡𝑜𝑛

This means that in order to produce 1 ton of ammonia, 502 $ will be spent.

4.4 Sales income

There are different products of this plant, such as hydrogen, methane, carbon dioxide, and
main one is ammonia. The produced amount of hydrogen and methane meets the demand for
raw materials and they are not planned to send to market. The selling price of ammonia differs
year by year but the current price is around 750 $/ton. However, this price is predicted to increase
by 1 % per year, except initial three years, by considering changes of last decade. The predicted
selling prices of ammonia for each year are given in table below:

Table 1.5: Selling prices of ammonia

Production Selling
year price ($)
2022 750.00
2023 750.00
2024 750
2025 757.50
2026 765.08
2027 772.73
2028 780.45
2029 788.26
2030 796.14
2031 804.10
2032 812.14
2033 820.26

Page 26 of 54
 As regards the production rate of ammonia, the maximum
capacity of this plant is 470,000 ton per year. However, it is planned to bring 70 % of maximum
production to market in first year by taking market needs into account. The maximum production
rate is increased by 2025, 466,560 ton. The below diagram give detailed information about
production rate.

Graph 2: Ammonia production rate

500000
Amount of ammonia (ton)

400000

300000

200000

100000

0
1 2 3 4 5 6 7 8 9 10 11 12
Production years

Ammonia production rate

In 2025, expected production rate of ammonia is 466,560 ton and predicted selling price is
761.25 $ per ton, so sales income will be 355,168,800 $. The detail information of sales income
for each year has been given in Appendix 1.

4.5 Cash return

The cash return means pure profit of company from product. The cash return is obtained
after subtraction of expenses of taxes and product cost from sales income. The detailed
information about cash return has been given in Appendix 1 and according to provided data, cash
return profile has been plotted and given below:

Page 27 of 54
 Graph 3: cash return profile
150000000

100000000

50000000
Cash Return ($)

0
2018 2020 2022 2024 2026 2028 2030 2032 2034
-50000000

-1E+08

-1.5E+08

-2E+08

-2.5E+08
Years

It is obvious from graph that the cash return for initial three years are minus due to
construction, there is not any production. However, cash flow begins to become positive from
2022 which is first production year. As it can be seen, there is a small increase in cash return in
each year. The reason is that selling price and production rate of ammonia increase year by year.
The decline in the last year alarms that it is time to think about development of plant and company.

The following diagram represents cumulative cash return profile which gives more
information about economic condition of plant.

Graph 4: Cumulative cash return profile

1E+09
Cumulative cash return ($)

800000000

600000000

400000000

200000000

0
2018 2020 2022 2024 2026 2028 2030 2032 2034
-2E+08

-4E+08
Years

Page 28 of 54
 4.6 Economic parameters
There are some parameters that define acceptability of project or plant. The first and
important one is rate on investment (ROI). The ROI defines ratio of profit of project to invested
capital. It can be defined from cumulative cash return profile that values at high point and low
point of curve are needed. If high point and low points can be defined as H and L, the equation
will be like below:

𝐻
𝑅𝑂𝐼 (%) = ∗ 100%
𝐿 ∗ 12

The high point defines cumulative cash in last year, the low point defines fixed capital
investment, and here 12 is life time of our project. The ratio of H to L gives us 3.25 in our case,
so it means that this project earns 3.25 $ money per invested dollar. Thus, ROI of our project is
27 % which is acceptable and real number.

The next parameter is payback time defining how much time project needs to earn invested
money. When invested money is paid back, cumulative cash return becomes positive that from
graph time needed for this project is 5.6 years. Our project is small-scale according to other same
projects in different countries, thus PBT is 5.6 years.

The net positive value (NPV) shows value of invested capital of this project by considering
inflation of capital, 2 % for dollar. It can be normally 2-2.5 times more than fixed capital investment.
The NPV of our project is obtained 677 million $, 2.5 more than fixed capital investment of this
project, by using excel spreadsheet.

Another parameter describes value of project is internal rate of return (IRR) that higher one
is more desirable. We get 23 % IRR for our project which if inflation reaches this value, NPV of
this project will be zero. 23 % IRR is both acceptable and desirable number.

Table 1.6: Project viability measures

ROI (%) 27 %

PBT (years) 5.6 years

NPV ($) 676,689,059 $

IRR (%) 23 %

Page 29 of 54
 4.7 Funding
The capital can be borrowed from several banks, investors, and government. The overall
capital investment of this project is 334 million $ which is high enough for one source only. The
banks in Azerbaijan give money with interest rate of 10-15 %, so it is not desirable to borrow all
money from banks. Another best choice is funding agencies which have capability of giving such
investment. For example, SOCAR being national oil company of Azerbaijan can invest for this
project with low interest rate because this company can also sell its natural gas product to this
plant and buy ammonia for its fertilizer production companies. This will create chance to get 75
% of investment from funding agency and 25 % from banks. The money borrowed from banks is
planned to return yearly, but not at once, after payback time when plant gets positive cumulative
cash returns.

4.8 Sensitivity analysis

The sensitivity analysis is done to become sure about acceptability of project and know
borders of project. This analysis is done by considering three cases: best, projected, and worst
cases. There are some factors which can be various from predicted. For example, selling price of
ammonia is 750 $/ton and it increases 1 % after 3 years. This is projected condition for selling
price but there can be both increase and decrease in selling price and it is evident that increase
is best case or vice versa. These conditions can be related to cost of raw materials, utilities, plant
overheads, equipment, or rate of production. It is not always possible to sell all product. For best
case sensitivity analysis, we increased selling price 3 %, decreased demand for raw materials by
10 %, and increased production rate by 15 %. We did the same thing on the contrary for the worst
case. We calculated economic parameters again for these cases to see borders of project. The
following table gives information about sensitivity analysis:

Table 1.7: Sensitivity analysis

Projected
Best case Worst case
case

ROI (%) 37 % 16 % 27 %

PBT (years) 4.5 years 7.4 years 5.6 years

NPV ($) 934,587,400 $ 313,663,659 $ 676,689,059 $

IRR (%) 28 % 12 % 23 %

Page 30 of 54
 5. Marketing
5.1 The 5P`s of Marketing
5.1.1 Product
Increasing demand on the consumption of energy, fertilizer in agricultural industry and etc.
creates great opportunity in the market scale for ammonia production. Our product is constituted
by three hydrogen and one nitrogen atoms and can be segmented into three-powder, liquid and
gas forms in terms of product form in market. The mostly utilized form of the product is liquid
which is mainly preferred in household and industrial cleaning and additionally, fertilizer industry
as well. Apart from that it may be utilized as refrigerant due to its some properties such as
environmentally friendly, higher efficiency, smaller size of pipe and better heat transport and etc.
Environmentally friendly refrigerants do not own any Global Warming and Ozone Depletion
Potential as it is considered as group of natural refrigerants. Better heat transfer of the ammonia
enables to utilize it widely than other types of chemical refrigerants that lead to lower operating
and construction costs off system and plant, accordingly. In addition, the application of ammonia
in metallurgical processes, food and beverages, textiles, pulp and water, pharmaceutical, leather
and other fields may be observed as can be noticed form following diagram. Thus, our product
with the larger application areas is planned to transport foreign countries such as Kazakhstan and
Ukraine which are on the top of list of agricultural producing countries and domestic regions as
well to be sold.

Figure 1.5 Illustrates the application fields percentages

Page 31 of 54
 5.1.2 Price
The company is estimated to manufacture 470000t ammonia per year. It is obvious that at
the beginning period the plant accomplishing maximum efficiency in rate of sales cannot be viable.
Thus, roughly half of the production, approximately 50-55%, is considered to be sold to
agricultural countries such as Kazakhstan and Ukraine located in Middle East and Eastern
Europe. Nearly, 20-25% from the rest part of products will be assumed to be provide local demand
in agriculture, energy and any other sectors. Within the first 12 years of company, it is estimated
that a ton of ammonia is produced with the net value of 492$ and by taking into consideration all
the expenditures such as acquiring equipment and devices, raw material, salaries of work force
and etc. it is planned to sell the tone of the product to nearly between 750-820$. The same
component is sold in the market by rival companies such as PotashCorp, CoalChem, BASF SE,
China Petroleum & Chemical Corporation, CF Industries Holdings and so on to approximately
between 750-1000$. Hence, lower price of our product may be the factor that draws the attention
of potential clients at the initial periods of our plant.

5.1.3 Place
In market analysis the fundamental point is that where the plant of company has to be
located. The location of factory is to be examined in a more detailed way in terms of safety,
economical, sustainability and surely strategical issues in order to accomplish convenient zone
for the plant that reduces the extra costs and gives opportunities in sales and marketing as well.
It cannot be deniable that gas emissions, waste of unwanted components may lead to pollution
of atmosphere and environment in any case. That`s why, plant has to be constructed far from the
center of city as much as possible. Besides that in order to achieve comfortable transportation of
workforce the location has to be selected next to sea and basic transportation roads. Additionally,
it is also apparent that in an attempt to operate the whole procedures occurred within the plant
utilities which are electricity, gas, sewerage system, water and etc. have to be provided to the
location.

Page 32 of 54
 After some deeper
investigations on location of plant, it
has been concluded that the zone of
“Sangachal” can be the wise decision
for our company due to 3 and 48 km
distance from the Caspian Sea and
central part of city, relatively. In this
way, any problem in transportation of
workforce and besides that even
acquiring the raw material via Sea
and some other ways cannot be
noticed. Existing other companies Figure 1.6 Distance between plant and sea and city
there is also reason that the place center

which is fully equipped with required

utilities may be suitable choice for us. The plant will be built up on the roads called “Silk Way”
which enable to sell and export the manufactured components to other neighbor countries,
additionally, Caspian Sea may empower to transport products to middle east via the lower price
way. It is also planned for the future that in case of increasing rate of production, the capacity of
the plant will be able to be expanded as well where adequate empty places are available for that.

It is widely known that in order to carry research, marketing and selling matters,
development, and etc. besides from the plant area, some offices which are located in street of
“28May”, near to metro stations of “Nariman Narimanov” and “Elmler Akademiyas” and
additionally, two in the foreign-capital cities Kiev (Ukraine) and Astana (Kazakhstan) are planned
to rent.

5.1.4 Promotion
Impression of organization presented in public is significantly depending on the
potent promotion and advertisement. They can be characterized in two types as online
and offline. Online one is the type of promotion that use the advertising the certain product
through the internet which can be professional and unprofessional sites, news websites,
social networks and so on. The practice displays that most of companies have their own
social networks and websites that contains information about what they do, what is their
products and their recently updated news. Companies are also investing money on
boosting their product, namely, draw their advertisement to the foreground in social

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networks. Example for offline promotion is to utilize the journals
and newspapers related to proper news field. Additionally, some articles and brochures
which contain informative data about both products and company are published monthly
and weekly while appearing on TV news channels. Our company has am idea to
participate in organized business & technology day and career day events, for attracting
the attention of clients. It is obvious that for achieving in good results, money should be
correctly invested and focused to promote the company in relevant places.

5.1.5 People
In an attempt to enhance the boundaries of sales, make clients fortunate that all result in
accomplishing required profile of our company in the sector the significant part of the people in
marketing strategy has to be underlined. Carefull and attanetive attitude to present and wannabe
costumers contitutes the root of sustain and targeted business relatonships. The company may
organize events on special days in order for meeting with clients and besides that some bonus
cards, gifts and etc. may be presented to them to demonstrate how the people is valuable for
company.

Alongside with costumers, the position of work force also must be taken into account. In
order to meet the demands of employees the whole needed conditions has to be supplied in the
zone of work place, plant and officess. To realize the attitude, thoughts, suggestions of workers
on company some anonymous queries are able to be carried out at least per month. What is
more, some awards, certificates, prizes may be given to personal especially in organized events
in particular days, holidays and etc. that can increase the rivaliry between people by inspiring
them.

Page 34 of 54
 5.2 SWOT Analysis
SWOT analysis is one the crucial methods that empowers to find out the strategic decision
in marketing by analyzing the whole aspects of the project as illustrated below:

Strengths Weaknesses Opportunities Threats

Owing better 16-25% Rising demand and Fluctuating prices of
heat transfer as concentration growth in fertilizer major feedstock-natural
chemical ammonia vapors industry gas
refrigerant lead to explosion
and fire
Being Hygroscopic nature Acting as storage and The market has been
environmentally- leads to severe transportation for widely explored
friendly burn injuries on the nitrogen and hydrogen
refrigerants body, eyes, skin
and etc.
Pungent odor Toxic nature of Key raw material for nitric New governmental rules
makes leaks ammonia acid further utilized in and permits can
easily detectable explosive productions complicate preclude the
development

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 6. Safety
Properties of both ammonia and its solution in water [1]
Formula of Chemical
compounds
Name Ammonia
Physical state, appearance
Physical properties
Chemical features, impacts
and hazards
𝐍𝐇𝟑
Ammonia is a colourless gas or
liquified gas. It has a prominently
sharp odour and it can easily
undergo a reaction with water and
form ammonium hydroxide in a
normal condition.
Boiling temperature= 240 K
Freezing temperature=195.45K
Vapour density relative to air=0.6
Steam pressure at 300 K =10 atm.
Solubility in 𝐻2 𝑂 (𝑤𝑎𝑡𝑒𝑟) at 300 K
=54g 𝑁𝐻3 per 100ml 𝐻2 𝑂
Lower explosive limit=16%
Upper explosive limit=25%
Autoignition temperature=924 K
Ammonia shows the same chemical
properties as strong bases and can
easily go into a reaction with acidic
feature compounds as a corrosive
reactant. In addition, it can
strenuously react with both
halogens and oxidants. As cited,
ammonia has a corrosive property
and it can cause corrosion of
aluminium, zinc, copper and their
alloys if any contact happens.
Ammonia has a high solubility rate
in water and during the dissolving
process great amount of heat is
produced. Ammonia has optimal
properties in the temperature range
between 223 and 283 K. The only
drawback is that ammonia is
considered dangerous.
Undoubtedly, it is toxic and
combustible. Ammonia burns, but
does not explode. It burns if its
concentration in air is above 15%.
Furthermore, ammonia is a natural
product, but it is very toxic in high
concentration. It has irritating effect
on the mucosa of the eye, nose,
throat and lungs.
𝐍𝐇𝟒 𝐎𝐇
Ammonium hydroxide
Ammonia is a colourless liquid and
has a prominently sharp odour. It is
unstable and shows the same
features with weak bases. It can
easily be decomposed to ammonia
and water in a normal condition.
Boiling temperature= 311 K (25%
solution), 52 K (32% solution)
Freezing temperature=215.65 K
(25% solution), 181.65 K (32%
solution)
Ammonium hydroxide can easily be
dissolved in water in any proportion.
As mentioned, ammonium
hydroxide demonstrates weak basic
properties and it can vigorously go
into a reaction with strong acids,
strong oxidants, silver oxide, silver
nitrate, mercury, hypochlorite,
halogens, some organic substances
such as acrylic acid, acrolein,
dimethyl sulphate and so on. As
ammonia, its solutions, ammonium
hydroxide as well have a corrosive
property and it can cause corrosion
of aluminium, zinc, copper and their
alloys if any contact happens.
Page 36 of 54
 Prior to taking some precautions of hazards may take place
during the ammonia production, it is necessary to indicate chemical and physical properties of
ammonia, and its impacts to humans and environment. The table given above shows those
properties and impacts.

6.1 Potential Hazards Related to Refrigeration systems [1]

Depending on chemical properties of refrigerants and also on key variables (temperature
and pressure in the refrigeration cycle), some possible hazards and accidents can occur. Any
negligence and irresponsibility can lead the following accidents and hazards related to
refrigeration systems to happen.

• The risk of flying particles can cause damage in fittings and if it is not prevented
on time, explosion of fittings can take place.
• Because of rupture in the system or another reason, refrigerant can leak out. It
happens usually due to wrong design, deficiency, repair or recharge of facilities,
inappropriate operation condition etc.
• As a result of leakage, fire risk increases if leaking refrigerant is combustible or
explosive.

In refrigeration equipment, the refrigerant can impact materials both physically and
chemically along with the result of temperature and pressure changes if the refrigerant has
hazardous features. Anhydrous ammonia and its compounds with other substances can directly
and indirectly put the workers, facilities and equipment, even population, and the environment in
danger.

In order to avoid the accidents and reduce the risk proportion, it is highly recommended to
follow the steps and safety instructions given below for protection against any hazard or accident.

❖ Training programs should be established that’s why it reduces the risk of

hazard if the refrigeration system and other equipment are operated and controlled by the
knowledgeable and responsible stuff participated in the training programs and knows all
safety rules and regulations.
❖ In order to safeguard refrigeration equipment, barriers should be supplied
from impact in areas in which forklift are utilized, for example refrigeration coils, valves,
lines. As a result of forklift accident, ammonia leakage can take place.

Page 37 of 54
 ❖ For all parts of the refrigeration unit, maintenance program
should be developed as follows: [2]

a)Control valves

b)Condensers It is important to check

and list these parts of unit
c)Evaporators once a week, and
problematic parts must be
d)Compressors recorded and informed.
e)Pumps
f)Safety regulations for electricity usage-if any problem happens related to following
conditions during the operation, break the proper cutout and reset the process.

1)High temperature cutouts

2)High pressure cutouts
3)Low temperature cutouts
4)Low pressure cutouts
5)Automatic purge systems-eventual step for safety against any failure in
vacuum pump such as flooding or moisture build-up.
6)Low oil pressure cutouts

g)Emergency response equipment-all employees must use the equipment within

whole operation process

1)self-contained breathing apparatus(SCBA)

2)air monitoring equipment
3)air-purifying respirators
4)Level A suit

h) Ammonia detectors- is used to find and determine the location or unit part where
ammonia leakage occurs.

6.2 Risk analysis and Hazard identification [3]

Using this method, the objective is to get ahead of any accidents resulting in human and
property losses during the operation and management procedure, to make a safe and insecure
condition for all employees working in the process plant with anticipating, analysing all possible
risks, identifying all hazards systematically, and taking precautions for protection against any
danger. Risk analysis contains several important steps given below;

Page 38 of 54
 • Hazard Determination- in this part, all sources and
origins of accidents resulting in leakage and release of dangerous material and
refrigerants to air and their risk scenarios are determined.
• Result Estimation or Probability-this part mentions about probability of affects of
accidents and damages to plant equipment or other structures, as well as injury or loss of
human beings.
• Accident Frequency Evaluation- in this part, average value of accidents happened
in this plant with respect to optional time interval (monthly, yearly, during 10 years etc.)
are calculated.
• Risk Estimation- in order to get risk distribution all accident results and frequency
in and out of the process plant are combined. [4]
The following figure describes risk analysis schematically.

System Specification

Hazar Determination

Scenario Description

Result Estimation or
Outcomes of Accident
Probability of Accident

Risk Identification

Hazard
Edit or Change Design
and/or Risk
Validation

Operate and/or Build system

Page 39 of 54
Identification of Hazards and Risk Assessment layout. [5]

Risk of exposure-can happen usually unexpectedly and suddenly. Anhydrous ammonia

can leak out from the valves or transfer hose throughout transferring it from the tank to the
applicator or it can happen due to malfunctions of valves or faulty in connection.

Injury and Death rate- Anhydrous ammonia has a pungent odour ant it can be easily
detected by human nose in concentration of 5 parts per million (ppm) In fertilizers, anhydrous
ammonia has a high concentration approximately 1000000 ppm and if its concentration is above
5000 ppm, can cause death. is widespread cause of chemical injuries, and it commonly happens
accidentally during the plants and predominantly these injuries happen in agricultural regions.
Each year, several farmers are injured because of exposure. Past three years, 55 people have
been exposed by anhydrous ammonia and 19 of them needed hospitalization. Third degree burns,
permanent loss of eyes can be counted in the most serious injuries. Anhydrous ammonia is
extremely harmful for respiratory system, integument, and eyes and it can cause lung damage,
burns, blindness and death. [6]

The following figure shows hazard degree of anhydrous ammonia

1
3 0
ALK

Health Ammonia has corrosive effect and it is

very dangerous and harmful for skin,
respiratory system and eyes
Fire Ammonia has specific flammable range,
it burns in a special condition, so it is
difficult to burn ammonia
Reactivity Reactivity capacity of ammonia is very
low ant it cannot react with lots of
substances violently
Specific property Ammonia has properties same with
alkaline and bases.

Page 40 of 54
Hazard value of anhydrous ammonia

6.3 Risk Matrix

The following table shows “risk assessment matrix”.
Likelyhood Consequences
Insignificant Minor Moderate Major Catastrophic
“Risk is easily “Delays up to 10% “Delays up to 30% “Delays up to 30% “Project
mitigated by of schedule. of schedule. of schedule. abandoned”
normal day to Additional cost up Additional cost up Additional cost up
day process” to 10% of budget” to 30%” to 30%”
Certain H H E E E
>90% chance
Likely M H H E E
50%-90% chance
Moderate L M H E E
10%-50% chance
Unlikely L L M H E
3%-10% chance
Rare L L M H H
<3% chance
Risk assessment matrix[7] E-Extreme; H-High; M-Moderate; L-Low

Consequences

Insignificant No serious incident occurs. Small impacts environment physically

and biologically.

Minor Slight effects on health that requires first aid. No effect to

ecosystem functions

Moderate Medium effects to health that needs medical help. Considerably

significant environmental impacts

Major Serious effects on health that needs hospital admission. Very

severe long term impacts to functions of ecosystem

Catastrophic Casualty, mortality, permanent loss of body parts and so on. Very
severe long term impacts to functions of ecosystem.

Explanation of consequences.

Page 41 of 54
 Likelyhood or Probability

Almost certain The accident happens on a certain yearly basis

Likely The accident has happened a few times or more during your
professional career.

Moderate The accident has happened only once within your professional career.

Unlikely The accident happens somewhere occasionally.

Rare Heard of something like this happening somewhere else.

Explanation of likelyhood

7. Environmental Impacts [8]

As mentioned before, from the properties of ammonia, it is obviously clear that ammonia is
a colourless, alkaline gas and water solubility of ammonia is very high. Also, ammonia is very
dangerous gas environmentally. Some environmental problems or disasters for instance
eutrophication and acidification are directly correlated to pollution of water and soil with ammonia
and it leads sensitive vegetation systems to damage, biodiversity to disrupt, and water quality to
reduce correspondingly. As can be clearly seen from the figure 5.1.1, the agricultural sector
makes up the highest proportion (93.3%) of overall ammonia emissions in the European Union
(EU) and approximately 59% of these agricultural ammonia emissions involve livestock manure
management (accumulating, shopping, disseminating on land) whereas rest of agricultural
emissions (about 34%) are covered by agriculture soils.

Page 42 of 54
Ammonia emissions, EU, 2013, European Environment Agency.
Birds themselves in a poultry house make ammonia. If nitrogen is not used, urea(5%), uric
acid(80%) and ammonia(10%) are extracted. If ammonia gas is kept in a humid place, a basic,
abrasive solution named ammonium will be formed and this aqueous solution is very harmful for
birds. It erodes wing lining and respiratory tracts of the birds and causes paralyses or demolishes
the cilia located in the epithelial cells. In this case, with the aid of cilia, it is difficult to clean mucus
located on the mucosal surface of the trachea of respiratory system. Therefore, bacteria is
considered being trapped and when this bacteria is absorbed by lungs or air sacs, infection
appears.

To take human and animal health under protection against ammonia emission, in many
countries, exposure levels of ammonia is regulated to set to 20-25 ppm. Notwithstanding to this,
in practice, this level can be easily exceeded and especially in wintertime, concentration of
ammonia is changes between 30-70 ppm in some broiler houses.

If ammonia concentration in air is high enough, it will directly impact to birds’ health. As a
consequence of high atmospheric ammonia rate, birds’ immunity and intestinal histomorphology
will be under a threat. It can be resulted in dying out of some birds’ kind.

8. Sustainability
Environmental sustainability
There is important role of ammonia in the agriculture utilized as synthetic fertilizers hence
ammonia production is required considerably. For ammonia production, we select natural gas as
feedstock since it is more efficient than other feedstock such as coal, heavy oil. For example,
there is ammonia production plant in China where coal is used as feedstock that is why huge

Page 43 of 54
amount of greenhouse gases is released to nature. Nevertheless,
feedstock cannot prevent to emit some potentially hazardous compounds.

Table1.8 This table shows emission of 𝐶𝑂2 depending on fuel soruces

Releasing of 𝐶𝑂2 depending on fuel sources

Natural gas 130 lb/MMbtu
Crude oil 182.66 lb/MMbtu
Coal 253.88 lb/MMbtu
For instance in the catalytic steam reforming, carbon monoxide reacts with water to make
carbon dioxide which can be straightforwardly taken away from the system into atmosphere by
means of scrubbing.

Our plant has methods to prevent emission of carbon dioxide into nature, which it is used
as feeding for other process. In the manufacturing of ammonia, there are other compounds which
have harmful impact on the environment if emitted .These compound includes sulfur oxide,
hydrogen sulfide which is harmful for air and water. In addition these compounds, nitrogen oxides,
hydrocarbons, carbon monoxide decrease quality of air also. In order to provide the most
sustainable production, scrubbers, strippers are utilized in order to control air pollution by
eliminating hazardous chemicals, however, releasing of pollutants is inevitable. Safety of
ammonia compound is paramount due to its toxicity and extensive usage. Besides that ammonia
can make denser mixture than air in spite of its molecular weight.

Liquid ammonia has bad influence on eyes since it is irritating and can lead to severe
damage such as cryonic burns. There is an occurred accident because of ammonia spillage which
has detrimental impact in the environment. Dominant concern for ammonia production is
ammonia synthesis loop and reforming which causes fires and shut downs. In the last 3 decades,
according to obtained information, accident because of ammonia spillage has reduced. This
happened because of all features of plant are considered such as design, fabrication process,
following guidelines, checking-up equipment can stop lack of success and besides that can
develop performance of plant.

According to obtained data, the ammonia production causes 1% gas emission to green
house. In the future some measurement can be taken into account in order to have sustainable
ammonia production .For example, on-Thermal plasma process has ability to be performed at the
less temperature and pressure by using wind and solar energy

Page 44 of 54
 Economic sustainability
Ammonia is highly needed substance for our world. Pharmaceuticals, explosives, chemical
fertilizers utilize ammonia as crude material. In addition to these, as ammonia has significant
hydrogen proportion, it is harnessed like hydrogen carrier. Ammonia manufacture provide
chemical sector with energy which comprises 17 % of total.

A key point in order to get benefit is technology variance. However, ammonia industry has
developed significantly, it has dependency on one feedstock and one technology hence this
makes a considerable risk for future markets.

Figure 1.7 Ammonia technology development [1]

As it is illustrated on the global average graph, energy utilization of ammonia industry

decreased until 2015.According to future analysis, Haber-Bosch process will suggest decreasing
returns in terms of investment.7.78MWh shows that natural gas is affordable feedstock for today
utilizing best technology but there is problem for the future. Twenty five percent decreasing in
energy utilization is estimated. All these allow to state that Haber-Bosch process will not be
economical in the future. Following steps can be done for future ammonia production in order to
be more long-lived:

• As hydrogen source, water should be used since it is more sustainable compared to

natural gas, fossil fuel and taking away emission of carbon.
• Producing same quantity of ammonia consuming less energy.
• Using current technology in order to decrease operation and capital prices.
Our company will sell produced ammonia to Ukraine and Kazakhstan. The maximal
capacity of our plant is 470000 ton/year. Until 2015, the production rate reached to 466,560 ton.
As our project is in the small scale, the pay-back time is 5.6 years for our project. Price for
selling of ammonia for one ton is 750 $ .As it was mentioned above, net positive value for our
company is 677 million $.

Page 45 of 54
 Social sustainability
The main significance of social sustainability involves protection of environment, relationship
and rights of employees. Social sustainability includes equality, safety, and health. In order to
create more desirable life condition for our plant workers, following aspects can be taken into
account. Absence of social development, involving inequality, inadequate laws can restrict
business operations and growth. In the ammonia production plant, first thing is making aware
workers about safety rules in order to provide them better life condition in terms of safety. Another
point is providing pleasant relationship among workers and preventing discrimination cases.
Making friendly workplace raises efficiency of operation on the plant.

Each company has own ideas in terms of improving own business. For instance, our
company takes some measurement in order to improve social sustainability.

• Contributing to lives of employees providing them with living wages, proposing an

aggressive compensation and encouragement structure which ensure with long –term
carriers besides that it provide employees with healthy working condition
• Doing tactical social investments and encourage public policies which sustain social
sustainability.
• Cooperating with other business and combine strengths to create huge positive
influence.

Lack of social sustainability leads to risk in terms of brand and quality of product. Hazardous
and poor workplace can has bad influence on brand if word reaches to consumers. Sustainability
can improve business with different methods which are indicated below:

• Opening new markets

• Keeping major source of new methods and innovations
• Developing risk management
• Improving internal spirit and employees agreement

When doing enrolment process, proper vacancies is proclaimed and candidate, who is well-
educated, is preferred for the vacant places. In the future, it is estimated to set up “Training
Center” in which employees will develop experience, working ability, knowledge about operation.

Page 46 of 54
Cradle to Grave

Page 47 of 54
 9. Conclusion
Nitrogen compounds are of incomparable status for numerous industries and agriculture.
They are used up by the production of nitric acid, many mineral fertilizers, polymer materials,
explosives and rocket fuels, dyes, pharmaceuticals.

Ammonia is a main product for gaining plentiful nitrogen-containing materials used in

industry, agriculture and routine life. Based on ammonia, almost all nitrogen mixtures are
presently being produced, which are used as target products and semi-products of inorganic and
organic technology.

The current production of synthetic ammonia consists of a series of successive

technological stages concentrated in separate units: natural gas desulfurization, methane
conversion, CO conversion, synthesis gas purification from CO2, methanation, compression,
ammonia synthesis, combined in a technological way and, in addition, on energy - a single system
of the steam cycle.

In 1955, around 8 million tons of ammonia was produced worldwide, 20 million tons in 1965,
and 66 million tons in 1975, in 1980 - 100 million tons, in 1985 - 120 million tons.

Such a rapid development of the nitrogen industry is dictated primarily by the need to meet
the irresistibly growing population of the globe by the products of agriculture. Without mineral
fertilizers, and first of all nitrogen fertilizers, it is impossible to solve the problems of intensification
of agriculture. The production of nitrogen fertilizers and their bases, ammonia, has always been
a priority in our country.

The average annual growth rate of ammonia over the past 20 years was 10-19%. The
production of ammonia is known to be very energy intensive. The history of the development of
ammonia production can be considered as a struggle for increasing the useful use of electrical,
thermal, and mechanical energy.

At the first production facilities of ammonia production efficiency on exceeded 10-11%. The
use of natural gas in the production of ammonia increased the overall energy efficiency up to
40%. Modern energy-technological units of ammonia are practically autonomous and have a
capacity of 450-500 thousand tons per year and the total energy efficiency 50-52%.

Chemical science and the chemical industry are currently among the leading industries.
Their intensive growth requires the creation of a powerful production base. In this paper, an
analysis is given of the methods for producing ammonia, which is a key product for the production

Page 48 of 54
of numerous nitrogen-containing substances used in industry,
agriculture and everyday life. From the various variants of the synthesis of ammonia, the optimal
production scheme has been chosen. The improvement of industrial production of ammonia goes
in the following main areas:

• Cooperation in the production of ammonia with the production of basic organic

synthesis based on the use of natural gas and refinery gases;
• Creation of large units (up to 3000 tons / day) of unit capacity;
• The use of columns of synthesis with a fluidized bed of catalyst;
• Development of new catalysts resistant to poisons with a low (300°C) ignition
temperature, allowing the synthesis process to proceed without reducing the yield of
ammonia at low (10 MPa) pressures.

Thus, a progressive, economically efficient technological model for the production of

ammonia from the nitrogen-hydrogen mixture in medium pressure systems at a temperature of
450-550 ° C is developed in the course work, which ensures a sufficiently high process speed,
the simplicity of ammonia separation from the gas mixture, the simultaneous production of liquid
and gaseous products.

Page 49 of 54
 10. References
Process Description:
1. Best Available Techniques for Pollution Prevention and Control in the European Fertilizer
Industry Booklet No. 1 of 8: PRODUCTION OF AMMONIA 2000 EFMA European Fertilizer
Manufacturers’ Association Ave. E van Nieuwenhuyse 4 B-1160 Brussels Belgium
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carbon dioxide and carbon monoxide over nickel/alumina catalysts, Applied Catalysis, A:
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3. Kopyscinski, J., Production of synthetic natural gas in a fluidized bed reactor, Dissertation
ETH Zurich, 2010.
4. White, E.C. and Schu'tz, J.F Industrial and Chemical Engineering Chemistry 26, 95-7. (CO
shift conversion)
5. Modern Research in Catalysis 2012 Ali Ashour, AL-Dhfeery
6. Ned, Zed, and Associates and The Autobots. "Design and Economic Analysis of Ammonia
Production Plant," CENG 404 Project Report, Spring 1996.
7. Strelzoff, S. Technology and Manufacture of Ammonia. John Wiley & Sons, New York:
1981
8. J.R. Jennings (1991), Catalytic Ammonia Synthesis, 1st Edition, Springer Publishing

Economics

1. McCullough, B.D. (September 2007). "Got Replicability? The Journal of Money, Banking
and Credit Archive" (PDF). Econ Journal Watch. 4 (3): 326–337.
2. Jump up^ • Kennedy, Peter (2003). "21.2 The Ten Commandments of Applied
Econometrics". A Guide to Econometrics (fifth ed.). MIT Press. pp. 390–396. ISBN 978-
0-262-61183-1.
3. Jump up^ Whaples, R. (May 2006). "The Costs of Critical Commentary in Economics
Journals". Econ Journal Watch. 3 (2): 275–282. Archived from the original on 29 January
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Marketing
1. Aaker D. A., (2007). Strategic market segmentation. 7th edition, John Wiley &Sons Inc.
2. Cooper L., (2000). Strategic market planning for radically new products, Journal of
marketing, Vol. 64 Issue 1, pp. 1-15.
3. Kotler, P., mfl, (2005). Principles of marketing. 4th European edition, Prentice Hall
Europe.

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 4. Raaij, F W; Verhallen, T.M.M., (1994), Domain specific market
segmentation, European Journal of Marketing, Vol. 28 No. 10, 1994, pp 49-66.
Safety and Sustainability
1. Ammonia In Refrigaration Systems, WorkSafeBC
2. Oregon Safety and Health Division(OSHA)
3. Economic and sustainability aspects of chemical process industries by thermodynamics
analysis, university Nebraska-Lincoln, pdf
4. [1] Kocsis Z, Dobor J, Korodi Gy, Kuk E, Industrial Safety Analysis of Accidents involving
Ammonia,2015, Page 277-278
5. [2] EPA, Hazards of Ammonia Releases at Ammonia Refrigeration Facilities (update),
2001
6. [3] Risk Assessment of Ammonia Production Unit of a Fertilizer Plant, by Harish Mahawar,
7. [4] Guidelines for Hazard Evaluation Procedure, American Institute of Chemical
Engineers, New York, 1985
8. [5] Crowl and Louvar, 1990, The Hazard Identification and Risk Procedure
9. [6] The National Institute for Occupational Safety and Health, Centers for Disease Control
10. [7] Australian Standard/New Zealand Standard 4360: Risk Management (AS/NZS 4360).
11. [8] Mark Karimi, MSc, 5 Tips to Successfully Manage Poultry House Ammonia Levels

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 11. Appendix
Table 1.9: Number of equipment and cost of equipment

Equipment Number Price ($) Total Price ($)

Heat Exchanger 20 203,300 4,066,000
Compressor 5 2,080,000 10,400,000
Absorber 1 3,380,000 3,380,000
Stripper 1 3,380,000 3,380,000
Reactor 7 4,510,000 31,570,000
Mixer 4 157,267 629,068
Splitter 2 107,845 215,690
Separator 3 167,267 501,801
Pump 3 91,000 273,000
Storage tank 7 662,643 4,638,501
Furnace 2 762,643 1,525,286
Distillation column 3 3,380,000 10,140,000
Total 70,719,346

Table 1.9: Number of workers and salaries

Monthly Salary
Positions Numbers Monthly Total salary ($)
($)
Project CEO 1 10,000 10,000
General Manager 1 6,000 6,000
Specialist of contracts 1 5,000 5,000
Customer manager 2 4,000 8,000
Budget analyst 1 3,500 3,500
Head engineer 1 7,000 7,000
General foreman 6 4,200 25,200
Manager of plant 2 5,000 10,000
Specialist of management 1 4,000 4,000
Senior engineers 6 5,000 30,000
Human Resources 5 3,500 17,500
Foreman 72 3,200 230,400
Lawyer 1 4,000 4,000
Lawyer assistant 2 3,000 6,000
International relation
2 4,000 8,000
manager
Specialist of marketing 1 4,500 4,500
Assistant of marketing
2 3,000 6,000
specialist
Office administrator 1 2,000 2,000
Manager of website 1 3,500 3,500
Cleaner 6 1,200 7,200
Security 5 1,300 6,500
Total 120 404,300

Table 1.10: Fixed operating costs

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Years Fixed operating costs ($)
Operating Plant Capital
Maintenance
labor overheads charges
2022 4,644,000 1,686,000 13,354,877 26,709,755
2023 4,644,000 1,690,000 13,354,877 26,709,755
2024 4,644,000 1,690,000 13,354,877 26,709,755
2025 4,644,000 1,698,000 13,354,877 26,709,755
2026 4,876,200 1,700,000 14,022,621 26,709,755
2027 4,876,200 1,701,000 14,022,621 26,709,755
2028 5,120,010 1,701,000 15,144,431 26,709,755
2029 5,120,010 1,702,000 15,144,431 26,709,755
2030 5,376,011 1,703,000 15,144,431 26,709,755
2031 5,376,011 1,704,852 15,144,431 26,709,755
2032 5,376,011 1,705,852 12,019,390 26,709,755
2033 5,376,011 1,706,252 12,019,390 26,709,755
Table 1.11: Variable operating costs

Years Variable operating costs

Raw Miscellaneous
Utilities Transportation
materials materials
2022 71,963,112 17,753,627 55,987,200 1,335,488
2023 75,561,268 17,753,627 61,585,920 1,442,327
2024 79,339,331 17,753,627 67,744,512 1,557,713
2025 83,306,298 17,753,627 74,518,963 1,682,330
2026 83,306,298 17,753,627 74,518,963 1,816,916
2027 83,306,298 17,753,627 74,518,963 1,962,270
2028 83,306,298 17,753,627 74,518,963 2,119,251
2029 83,306,298 17,753,627 74,518,963 2,288,791
2030 83,306,298 17,753,627 74,518,963 2,471,895
2031 83,306,298 17,753,627 74,518,963 2,669,646
2032 81,640,172 17,753,627 73,028,584 2,562,860
2033 80,007,368 17,753,627 71,568,012 2,460,346

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 Table 1.12: Cash return calculations, production, and
product cost

Sales Cumulative Cash

Years Production Product cost Cash return
Income return
2019 0 0 0 -53,419,510 -53,419,510
2020 0 0 0 -186,968,283 -240,387,793
2021 0 0 0 -26,709,755 -267,097,548
2022 326,592 244,944,000 142,655,851 65,804,666 -201,292,881
2023 373,248 279,936,000 170,489,523 71,531,329 -129,761,553
2024 419,904 314,928,000 200,856,746 80,573,101 -49,188,452
2025 466,560 353,419,200 234,058,517 84,804,645 35,616,193
2026 466,560 356,953,392 235,105,469 97,478,338 133,094,531
2027 466,560 360,522,926 235,251,823 100,216,883 233,311,414
2028 466,560 364,128,155 236,774,424 101,882,985 335,194,399
2029 466,560 367,769,437 236,944,964 104,659,578 439,853,977
2030 466,560 371,447,131 237,406,121 107,232,808 547,086,785
2031 466,560 375,161,602 237,627,200 110,027,522 657,114,307
2032 443,232 359,967,558 219,698,683 112,215,100 769,329,407
2033 373,248 306,161,880 182,470,899 98,952,785 868,282,192

Note: When calculating cash return, 20 % tax expenses should be considered which it
is subtracted from sales income.

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