Safety, regulatory questions tarnish China’s DME boom

Dimethyl ether has been one of the fastest-growing applications for methanol in the past few years. South Korea’s Kogas is now on the verge of building a large 300,000 t/a natural gas-based DME plant in Saudi Arabia to feed the burgeoning Korean market, while Chinese capacity has advanced by leaps and bounds to almost seven million tonnes per year, allowing them to transform domestic coal into an LPG substitute and cut down on their rising tide of petrochemical imports. DME can be blended into LPG at levels up to 10-20% without any need to alter distribution infrastructure, and as it was also cheaper and cleaner-burning than imported LPG, China took to it enthusiastically. According to the International DME Association (IDA), Chinese DME capacity quadrupled between 2006 and 2008 alone, although such massive overbuilding seems to have moved far in excess of the market, and actual production in 2008 was just 1.8 million t/a, just 30% of capacity.
However, China’s rush to DME has started to come unstuck, and the issue is a familiar one for DME – corrosion of rubber and plastic seals. DME attacks some types of rubber, and dissolves PVC. LPG containers for the Chinese domestic market often have rubber seals, and in 2008 the Chinese authorities began to become concerned about the potential for these to be corroded to the point where potentially devastating gas leaks could occur. The upshot was the issue of an advisory notice in March 2008 by the Chinese General Administration of Quality Supervision, Inspection and Quarantine that domestic LPG cylinders should not be filled with blends of LPG and DME.
The IDA says that at the levels that DME is blended in China its corrosive properties should present no problems, and that in its “informed view”, any problems reported were probably due to faulty valves, product contamination (eg with water) or inconsistent production and mixing standards. The organisation goes on to state: “there is a concern that some blenders have been tempted to use higher than recommended percentages of DME”, encouraged by the cost advantage of DME over LPG. Reportedly some filling stations were blending at levels of up to 35% DME, which is almost certain to cause corrosion problems. This to my mind goes to the heart of the issue, which is essentially one of standards, regulations and compliance. China does not have a happy history of companies complying with standards even where they are agreed and circulated – and another of the major issues for DME in China is that such standards have lagged behind consumer reality. The Chinese government has yet to set national standards for DME/LPG blends in areas such as storage, transportation and blending ratios.
And in spite of the March 2008 ban, companies continued to blend DME. Dongguan Jiufeng Energy, a major supplier in the southern Guangdong Province, was found to have been continuing to defy the ban after it was reported to the authorities by local media, and after a subsequent investigation it was forced to suspend operations for a week in January. The incident has prompted a major crackdown by the Guangdong Provincial authorities.
If the current crackdown on illegal blending has an upside, it is that it seems to have finally prompted movement by the Chinese government towards a national DME/LPG blend standard – work on which had been languishing since 2008 without formal agreement. In February it was reported that the government was consulting with industry over the establishment of a blend standard and this time was attaching “great significance” to the talks, pressing for a draft as soon as possible, according to Zeng Xiangzhao, a member of the LPG Cylinders Committee of the Standardisation Administration of China. Mr Zeng added that replacing the O-ring seals in LPG cylinders with ones resistant to DME would cost about two yuan each ($0.29).
With Chinese DME capacity still rising, agreement on a national standard cannot come soon enough.