28 March 2011 02:38 [Source: ICIS news]
SAN ANTONIO, Texas (ICIS)--During its development, the sole on-purpose propylene plant in the US had several unique factors in its favour, the owner of the unit said on Sunday.
US-based Petrologistics began working on the project in 2003, said Nathan Ticatch, president. Ticatch was speaking on the sidelines of the International Petrochemical Conference (IPC).
Petrologistics's reason for pursuing the project rested on the outlook for propylene, he said.
Propylene demand was growing faster than that for ethylene, Ticatch said. Also, at the time, companies were not investing in crackers in the US.
Meanwhile, refineries were not expected to expand, he said.
Refineries produce propylene in their fluid catalytic crackers (FCC), making them the main propylene source for the US.
Crucial for the project, Petrologistics wanted to build its on-purpose propylene plant on an existing site, Ticatch said.
ExxonMobil had an ideal site - a former cracker that it had mothballed, meaning all the hydrocarbons were removed from the plant, Ticatch said. Moreover, the former cracker had some unique characteristics that also lent itself to the propylene project.
Plus, the site was on the US Gulf coast. "As a pure merchant play, you can't beat the location," Ticatch said.
Petrologistics would ultimately buy the site, closing the deal in March 2008, Ticatch said.
However, the project was more involved than a simple conversion, said Hank Jeans, senior vice president, commercial, for Petrologistics. For example, the process equipment was new.
Still, Petrologistics avoided the costs associated with building a petrochemical plant from scratch. Production at the 544,000 tonne/year plant started in October.
Unless it can find a site similar to the ExxonMobil cracker, a company building a second on-purpose propylene plant in the US will unlikely have all of the savings that Petrologistics had for its project.
For more on propylene visit ICIS chemical intelligence
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