What is a ethylene glycol project report?
An ethylene glycol project report is a detailed project report (DPR) for a plant that turns ethylene into ethylene oxide and then into mono ethylene glycol (MEG). DEG and TEG come out as co-products. The report sets out the process route, equipment, feedstock, market, project cost, means of finance, five-year projections, DSCR and break-even.
Chemical, refinery and ethanol groups use it to test a glycol project before committing capital, and lenders use it to judge whether the plant can repay.
Also known as: MEG plant project report, mono ethylene glycol project report, project report on ethylene glycol, ethylene glycol business plan, MEG feasibility report.
Ethylene glycol manufacturing plant cost in India: sample economics
Our sample report models a compact 15 MT per day glycol unit that runs 330 days a year, rising from 60% of capacity in Year 1 to 80% in Year 5. MEG is priced at ₹60,700 per MT ex-factory, and full output is 4,950 MT a year.
| Land and site development | 106.90 |
|---|---|
| Building and civil works | 257.19 |
| Plant and machinery | 506.87 |
| Other fixed assets | 80.75 |
| Contingencies | 38.20 |
| Preliminary and pre-operative | 24.75 |
| Working capital margin | 70.30 |
| Total | 1,084.96 |
| Promoter's contribution (25%) | 271.24 |
|---|---|
| Term loan from bank (75%) | 813.72 |
| Cash credit limit (separate) | 210.89 |
| Total project cost | 1,084.96 |
Read the scale correctly: the sample is sized to show the report format. Commercial MEG plants are usually much larger and built next to an ethylene source, so a real project is sized from assured feedstock first and capacity second.
Term loan at 10.5% with a 6-month moratorium and 54 monthly instalments; the lowest DSCR is 1.53 in Year 2. All figures are illustrative.
Ethylene glycol manufacturing process, step by step
Nearly all MEG is made from ethylene oxide (EO), and the EO and glycol sections normally sit in one plant because EO is toxic, flammable and hard to store in bulk.
- Ethylene oxidation
Ethylene and oxygen pass over a silver catalyst in a multitubular reactor at about 200–280 °C; part of the ethylene burns to carbon dioxide instead of forming EO.
- EO absorption and stripping
Reactor gas is scrubbed with water to absorb EO, which is then stripped out, while unreacted ethylene is compressed and sent back to the reactor.
- Carbon dioxide removal
A side stream of recycle gas goes through a carbonate absorber so carbon dioxide does not build up and slow the catalyst.
- Hydration
EO is mixed with a large excess of water, roughly 20 moles per mole of EO, and reacted at about 190–200 °C to form glycols.
- Evaporation
A multi-effect evaporator boils off the excess water and returns it to hydration; this is the plant's largest steam user.
- Vacuum distillation
Crude glycol is dried and split under vacuum into fibre-grade MEG, DEG and TEG, with MEG checked for UV transmittance before release.
- Storage and dispatch
Glycols are held in tanks under a nitrogen blanket to keep out moisture and air, then dispatched by road tanker or in drums.
Which route to choose: ethylene, carbonate or ethanol?
The route fixes your feedstock, your MEG yield and your steam bill, so it is the first decision in an ethylene glycol project report.
| Direct EO hydration | The conventional route. The high water ratio gives roughly 88–90% MEG, with the rest as DEG and TEG. Removing that water takes a lot of steam. |
|---|---|
| EO through ethylene carbonate | EO reacts with carbon dioxide to ethylene carbonate, which is hydrolysed to MEG. Yield of MEG is close to 99% and steam use is lower, but the catalyst technology is licensed. |
| Bio route from ethanol | Ethanol is dehydrated to ethylene, which then follows the EO route. India Glycols makes MEG this way; profit depends on the gap between MEG and ethanol prices, and the product can be sold as bio-based MEG. |
| Coal or syngas route | Used mainly in China, through oxalate hydrogenation. It needs cheap coal and very large scale, so it rarely suits an Indian project. |
Yields are typical values from published process literature. Technology licensors quote their own guarantees.
Raw materials for ethylene glycol production
In theory a tonne of MEG needs 0.45 tonne of ethylene; real plants use more because some ethylene burns to carbon dioxide in the EO reactor. The silver catalyst is changed every few years and the silver is recovered.
| Raw material | Share of cost | Year 3 (₹ lakh) |
|---|---|---|
| Ethylene | 80% | 960.42 |
| Oxygen | 12% | 144.06 |
| Silver catalyst and process chemicals | 5% | 60.03 |
| Demineralised water and treatment chemicals | 3% | 36.01 |
| Total | 100% | 1,200.52 |
Raw materials are 57.1% of sales in the illustrative sample. A real project uses quoted ethylene or ethanol prices for its site.
Machinery for an ethylene glycol plant
The EO reactor is the largest item in the sample, followed by the vacuum distillation train that sets product quality.
| Equipment | What it does | Sample cost (₹ lakh) |
|---|---|---|
| Multitubular EO reactor with silver catalyst | Oxidises ethylene to EO | 111.51 |
| Cycle gas compressor and recycle system | Returns unreacted gas to the reactor | 50.69 |
| EO absorber and stripper columns | Recover EO from reactor gas | 60.82 |
| Carbon dioxide removal system | Keeps carbon dioxide out of the recycle loop | 40.55 |
| Glycol hydration reactor | Converts EO and water to glycols | 40.55 |
| Multi-effect evaporator | Removes and recycles excess water | 50.69 |
| Vacuum distillation columns | Separate MEG, DEG and TEG | 70.96 |
| Boiler, cooling tower and nitrogen system | Steam, cooling and tank blanketing | 40.55 |
| Tank farm, pumps and DCS controls | Storage, transfer and plant control | 40.55 |
| Total plant and machinery | 506.87 | |
Costs are the sample report's estimates for a 15 MT per day plant. Get licensor and vendor quotations before you finalise.
Utilities and manpower for a glycol plant
A glycol plant runs round the clock, and its utilities are sized for continuous duty with standby equipment.
| Steam | The largest utility, used by the evaporators and distillation reboilers. Heat from the EO reactor is usually recovered as steam to cut boiler fuel. |
|---|---|
| Power | Drives the cycle gas compressor, vacuum systems and pumps. Power and fuel are 5.3% of sales in our sample report. |
| Cooling water | Removes reaction heat and condenses column overheads, so cooling tower capacity limits summer output. |
| Nitrogen | Blankets glycol and EO tanks and purges equipment before maintenance. |
| Demineralised water | Feeds the hydration reactor and boiler; poor water quality shows up as off-spec colour in MEG. |
| Manpower | 46 people in the sample: 7 in management and supervision, 16 skilled operators and 23 semi-skilled or unskilled workers, across three shifts. |
Licences and approvals for an ethylene glycol plant
| Environmental clearance | Prior clearance under the EIA Notification 2006. The Ministry of Environment's guidance manual places ethylene oxide and ethylene glycol under petrochemical based processing. |
|---|---|
| Pollution board consent | Consent to establish and operate from the State Pollution Control Board. Organic chemicals and petrochemicals manufacturing are in the red category. |
| Hazardous chemicals | Ethylene oxide is listed under the Manufacture, Storage and Import of Hazardous Chemical Rules. Holding 5 tonnes or more brings site notification and emergency plan duties; 50 tonnes or more adds a safety report. |
| Pressure vessels | A PESO licence under the Static and Mobile Pressure Vessels Rules to store compressed or liquefied gas such as ethylene in vessels. |
| Product standard | IS 5295, Specification for Ethylene Glycol. The Quality Control Order that made BIS marking compulsory from 2023 was withdrawn in November 2025; buyers still test against it. |
| Business registration | Udyam (MSME) and GST registration, a factory licence and a fire NOC under state rules. |
Checked as of October 2026. Rules and thresholds change, so confirm with the state departments before applying.
Who buys ethylene glycol in India?
Polyester is the main outlet. Fibre, filament yarn and PET resin makers buy fibre-grade MEG in tanker loads on contract, and they check UV transmittance, colour and moisture before approving a supplier.
Domestic producers, mainly Reliance Industries, Indian Oil and India Glycols, do not cover demand, so a large share is imported and domestic prices move with Asian import parity. Coolant, resin and gas processing buyers take smaller lots of MEG, DEG and TEG.
- Polyester fibre and filament yarn spinners
- PET bottle and film resin makers
- Coolant and antifreeze blenders
- Resin, paint and chemical manufacturers
- Natural gas processors using TEG for dehydration
- Chemical traders and distributors
Plan for approval time: a polyester mill trials a new supplier's MEG on its own line before signing a contract. Plan first-year sales for slower offtake.
Mistakes that weaken an ethylene glycol project report
- Testing only today's price spread
MEG profit is the gap between MEG and ethylene or ethanol prices, and that gap swings with Asian supply. Show DSCR at a narrower spread, not just current prices.
- Selling every tonne at the MEG price
Hydration also makes DEG and TEG, which sell at different prices. Revenue must follow the product split of your route.
- Assuming ethylene will be available
Without a pipeline link or long-term supply contract, lenders treat the plant as unbankable. Name the source and the contract terms.
- Under-costing steam
Evaporation and distillation use most of the plant's energy. Leaving out heat recovery or fuel price changes overstates profit.
- Leaving out catalyst and safety costs
Silver catalyst change-outs, EO detection, flare and emergency systems are large items that also decide approval timelines.
How NPCS helps with an ethylene glycol project
- Route and capacityCompare the EO hydration, carbonate and ethanol routes against your feedstock and budget.
- Feedstock and market studyMap ethylene or ethanol supply, MEG import prices and polyester buyers near your site.
- Bank and investor reportProjections, spread sensitivity, DSCR and working capital in the format your lender wants.
- Approvals and layoutPlant layout, hazard zoning and the clearances list for your state.
NPCS's client list records 269 specialty chemical assignments, including one for ethylene glycol. The NPCS project team, led by founder Ajay Kumar Gupta, has prepared techno-economic reports for chemical plants since 1994.
What's inside the ethylene glycol sample report
- Introduction
- Uses and applications
- Market potential
- Manufacturing process
- Raw materials
- Plant and machinery
- Land, building and utilities
- Manpower
- Licences and approvals
- Project cost and means of finance
- Working capital
- Projected profitability
- Cash flow statement
- Projected balance sheet
- Depreciation
- Term loan repayment
- Debt service coverage
- Break-even analysis
- Financial ratios
- Key assumptions
- Conclusion
- Monthly loan repayment schedule
19 pages, five-year projections, illustrative figures.
Open sample reportFree sample or a report for your project?
| What you get | Free sample | NPCS report for your project |
|---|---|---|
| Capacity and location | Typical unit | Your capacity, site and state |
| Figures | Illustrative | Built on current prices and quotations |
| Machinery suppliers and quotations | No | Yes |
| Market survey for your region | No | Yes |
| Bank or scheme format (PMEGP, term loan) | No | Yes |
| Use for a loan application | No | Yes |
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Ethylene Glycol project report: frequently asked questions
How much does it cost to set up an ethylene glycol plant in India?
Our sample report models a compact 15 MT per day unit at ₹1,085 lakh, including ₹507 lakh of plant and machinery and ₹70 lakh of working capital margin. Commercial MEG plants are usually far larger and tied to an ethylene source, so their cost is much higher. Your project report works out the cost for your capacity, route and site.
What raw materials are needed to make ethylene glycol?
Ethylene and oxygen are the main inputs, with a silver catalyst in the ethylene oxide reactor and demineralised water for hydration. In our sample report ethylene is 80% of raw material cost and oxygen 12%. Ethylene comes by pipeline from a cracker or is made from ethanol, so feedstock supply decides where a plant can be built.
How is ethylene glycol manufactured?
Ethylene is oxidised over a silver catalyst to ethylene oxide, which is absorbed, stripped and then hydrated with a large excess of water. The water is evaporated off and recycled, and vacuum distillation separates fibre-grade MEG from DEG and TEG. Some newer plants convert ethylene oxide through ethylene carbonate to raise the MEG yield.
What is the difference between MEG, DEG and TEG?
They are glycols made in the same hydration step. MEG (mono ethylene glycol) is the main product and goes into polyester and coolants. DEG (diethylene glycol) and TEG (triethylene glycol) form when ethylene oxide reacts with glycol already formed; DEG is used in resins and solvents, and TEG mainly for drying natural gas. More water in the reactor means less DEG and TEG.
Is an ethylene glycol plant profitable?
In our illustrative sample, the 15 MT per day unit reaches a 21% return on investment in Year 3. It breaks even at 38% of capacity and pays back in about 3.7 years. A real MEG plant earns on the gap between MEG and ethylene or ethanol prices, which moves with Asian supply, so the report must test a narrower spread.
Is BIS certification mandatory for ethylene glycol?
Not as of October 2026. The Ethylene Glycol Quality Control Order made BIS marking under IS 5295 compulsory from 2023, but it was withdrawn in November 2025. Polyester and resin buyers still test against IS 5295 or their own fibre-grade specification, so the plant needs a laboratory that can run those tests before dispatch.
Is the sample report free and can I use it for a loan?
The sample is free to view and download. It is an illustrative report that shows the format and depth of an NPCS report. Its figures are representative, not from a real project, so do not submit it to a bank. For a loan or investor review, NPCS prepares a report for your own capacity, route and location.
Sources and references
- Ethylene Glycol (Quality Control) Order, 2022 (S.O. 6109(E))Department of Chemicals and Petrochemicals, Government of India, checked Oct 2026
- Ethylene Glycol (Quality Control) Amendment Order, 2023 (S.O. 1407(E))Bureau of Indian Standards, checked Oct 2026
- Technical EIA Guidance Manual for Petrochemical Based ProcessingMinistry of Environment, Forest and Climate Change, checked Oct 2026
- Manufacture, Storage and Import of Hazardous Chemical Rules, 1989Inspectorate of Factories and Boilers, Government of Goa, checked Oct 2026
- Categorisation of industrial sectors under Red as per CPCB criteriaState Pollution Control Board, Odisha, checked Oct 2026
- FAQ on the Static and Mobile Pressure Vessels RulesPetroleum and Explosives Safety Organisation, checked Oct 2026
The NPCS project team, led by Ajay Kumar Gupta
This page and its sample report are prepared and reviewed by the NPCS project team, which has written techno-economic feasibility studies and detailed project reports since 1994.
Ajay Kumar Gupta founded Niir Project Consultancy Services (NPCS) and leads the organisation. With 40 years of experience in MSME project consulting, he has built the team that has delivered more than 28,000 project reports for clients worldwide, helping entrepreneurs plan and finance profitable manufacturing businesses.
- Published
- Last updated
- Next review
- Oct 2027
- Reviewed by
- NPCS project team
This page is reviewed every 12 months, or sooner when scheme limits, GST rates, BIS rules or pollution categories change. The sample report is illustrative: its figures are generated from industry-typical ratios for a unit of this size, checked so every statement balances, and are not taken from any client project.