CHEMICAL PROFILE: Propylene

26 June 2006 00:00  [Source: ICB]

 

 

 

 

 

 

 

Uses

Propylene consumption is dominated by polypropylene (PP), which accounts for about 60% of global demand and has been the fastest growing of all the major propylene derivatives. Other important derivatives are acrylonitrile, oxo alcohols, propylene oxide, cumene and acrylic acid.

Smaller uses are in oligomers, isopropanol and fine chemicals

Supply/demand

European producers say demand was good overall in 2005 in a balanced to tight market. Last year, import levels into Europe reached high levels, about 600 000–700 000 tonne, as domestic plants were hit by production problems. Strong Asian markets also pulled product out of Europe. Compared with the previous year, 2005 turned in growth of about 4% in western Europe, according to one supplier. This year, however, is looking slower, with consumption lower than expected and lengthier supply. Demand for spot volumes also remains thin.

Propylene production in western Europe last year was 15.5m tonne, with consumption reaching more than 15.7m tonne, according to the Association of Petrochemicals Producers in Europe (APPE). This compares to production of nearly 15.2m tonne and demand of 15.4m tonne in 2004. The APPE said west European propylene output in the first quarter of 2006 was 3.89m tonne.

Two propylene consuming units closed in Germany last year. These were BASF’s 200 000 tonne/year 2-ethylhexanol plant at Oberhausen and European Oxo’s 100 000 tonne/year butanol plant in Marl.

Pricing

An initial third-quarter contract has settled at €830/tonne, a small increase of €5/tonne on quarter two’s (Q2) level of €825/tonne. Early indications are that the rest of the market will follow the number. The rise is in recognition of higher naphtha values compared with when contracts were settled in Q2. Producers say that margins have deteriorated in Q2 with the dramatic rise of feedstock costs. Propylene’s ratio to ethylene was stronger in 2005 but its share of the cracker margin has dropped this year.

European spot prices have stayed fairly stable this year at around the €820/tonne mark. Current levels are quoted in the range €800–810/tonne FD but in a thinly traded market.

Technology

The two main sources of propylene are as by-products from the steam cracking of liquid feedstocks such as naphtha, and from off-gases produced in fluid catalytic cracking (FCC) units in refineries. Propylene is also co-produced in the steam cracking of gas oil and condensates, and to a lesser degree from cracking propane and butane. The cracking of liquid feedstocks is predominantly carried out in Europe and Asia and less so in the Middle East and North America.

With propylene demand growing faster than ethylene, on-purpose technologies are increasingly being used. The main on-purpose process is propane dehydrogenation but this is only economically viable in cases where a low-cost supply of propane is available, such as in the Middle East.

Much work is directed at increasing propylene output from liquid steam crackers and FCC units, for example by metathesis which is the catalytic conversion of ethylene and butene-2 into propylene. But, these units need access to large C4 streams that are free of isobutylene and butadiene.

The Superflex process, originally developed by Arco Chemical, converts light hydrocarbons in the C4–C8 range into a propylene-rich stream. Deep catalytic cracking developed by China’s Sinopec produces light olefins from heavy vacuum gas oils and de-asphalted oils. ExxonMobil has developed an olefins interconversion technology that converts C4s, light pygas and light naphtha into propylene and ethylene.

The methanol-to-olefins process, while usually seen as a way to boost ethylene output, can allow for propylene production to increase to 45% of total output. In addition, Lurgi is developing a route that converts methanol to propylene and operates a pilot plant in Norway with Statoil.

Health and safety

Propylene is a colourless, flammable gas that forms explosive mixtures with air. It is usually handled commercially in liquid form and will cause freezing burns if it comes into contact with the skin or eyes. The gas is an asphyxiant in high concentrations.

Outlook

Demand for propylene has been consistently outpacing that for ethylene and investments in ethylene production, as well as in refineries, have not been able to keep pace.

Several PDH and metathesis plants are due onstream in the next five years, says CMAI. Most new plants are in the Middle East (in refineries or using alternative technologies) or in Asia, to meet the region’s high demand. During 2006–2011, more than 10m tonne/year additional capacity has been announced in Asia, and nearly 8.6m tonne/year in the Middle East and Africa. CMAI also expects some investments in gas-to-olefins, high severity catalytic cracking, and olefin cracking technologies.

Tight global availability is expected to stay through to the end of 2007, but CMAI predicts that by 2010 propylene prices will fall on the expectations of a looser supply/demand balance as new capacity goes online.

In Europe, limited investment will restrict supply and CMAI says that it will become a net importer by 2010. Sabic Europe has postponed its cracker expansion at Geleen, the Netherlands, because of escalating project costs.

European Propylene Capacity  ’000 tonne/year
Company Location Capacity
Angarsk Petrochemical Angarsk, Russia 140
AP Feyzin Feyzin, France 180
Basell Wesseling, Germany 475
Berre, France 255
BASF Antwerp, Belgium 440
Ludwigshafen, Germany 370
Borealis Porvoo, Finland 190
Sines, Portugal 180
Stenungsund, Sweden 250
BP Gelsenkirchen, Germany 690
Münchmünster, Germany 205
Chemopetrol Litvinov, Czech Republic 250
Copenor Dunkirk, France 210
Dow Chemical Böhlen, Germany 225
Tarragona, Spain 260
Terneuzen, Netherlands 850
ExxonMobil Fawley, UK 100
ND de Gravenchon, ?France 300
Fina Antwerp Olefins Antwerp, Belgium 600
HIP-PetroHemija Pancevo, Serbia 85
Huntsman Wilton, UK 400
Ineos Cologne, Germany 610
Grangemouth, UK 420
Karpatneftekhim Kalush, Ukraine 125
Kazanorgsintez Kazan, Russia 160
Lukoil Neftochim Burgas, Bulgaria 82
Naphtachimie Lavéra, France 500
Nizhne-?kamskneftekhim Nizhnekamsk, Russia 220
Noretyl Rafnes, Norway 85
NSP Olefins Antwerp, Belgium 520
Omsk Kauchuk Omsk, Russia 52
OMV Schwechat, Austria 315
PKN Plock, Poland 350
Polimeri Europa Brindisi, Italy 230
Gela, Italy 150
Porto Marghera, Italy 245
Porto Torres, Italy 130
Priolo, Italy 440
Sarroch, Italy 90
PropanChem Tarragona, Spain 350
Repsol YPF Puertollano, Spain 155
Tarragona, Spain 290
Sabic Europe Geleen, Netherlands 675
Salavat-nefteorgsintez Salavat, Russia 170
Shell & DEA Oil Heide, Germany 60
Wesseling, Germany 280
Shell Chemicals Moerdijk, Netherlands 500
Pernis, Netherlands 250
Sibur-Khimprom Perm, Russia 45
Sibur-Neftekhim Dzerzhinsk, Russia 130
Stavrolen Budyennovsk, Russia 140
Tomskneftekhim Tomsk, Russia 150
Total Petrochemicals Antwerp, Belgium 215
Carling, France 330
Gonfreville, France 270
TVK Tiszaujvaros, Hungary 305
Ufaorgsintez Ufa, Russia 185
* excludes output from refineries
Source: ICIS




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