NPRA '11: Costs to determine likelihood of second US C3 plant

27 March 2011 22:17  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS)--Costs and future demand will be among the many factors determining whether a producer will build the second on-purpose propylene plant in the US, the operator of nation's first one said on Sunday.

PetroLogistics's on-purpose propylene plant was a one-of-a-kind project because it incorporated the infrastructure of a former ExxonMobil cracker, said Nathan Ticatch, president of PetroLogistics.

Ticatch was speaking on the sidelines of the International Petrochemical Conference (IPC).

A second on-purpose propylene project will unlikely enjoy all of the advantages PetroLogistics had when it developed its plant.

Plus, a new project would require a lot of capital and a long development time, Ticatch said. "It's similar to any large-scale petrochemical project."

Nonetheless, producers are interested in developing such a plant, he said.

US crackers are switching to lighter feeds. As a result, they are producing less propylene.

The main US source of propylene, refineries, are unlikely to expand, Ticatch said.

At best, gasoline demand in the US will likely remain flat for years, eliminating the need for new refinery capacity.

Meanwhile, propylene demand is growing, as it generally follows GDP growth, Ticatch said.

In fact, growth in demand for propylene derivatives will likely exceed that for ethylene derivatives, he said.

Among US propylene end users, producers of acrylonitrile (ACN) and acrylic acid (AA), could benefit from exports, Hank Jeans, senior vice president, commercial, for PetroLogistics, said on the sidelines of the IPC.

Hosted by the National Petrochemical & Refiners Association (NPRA), the IPC continues through Tuesday.

For more on propylene visit ICIS chemical intelligence

By: Al Greenwood
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