06 March 2012 16:55 [Source: ICIS news]
HOUSTON (ICIS)--Propylene supplies from US crackers and refineries are tightening, pushing producers to consider making the monomer from propane, an executive with Chevron Phillips Chemical said on Tuesday.
Formosa Plastics was the latest company to announce plans to build an on-purpose propylene plant in the US, which would produce the monomer through propane dehydrogenation (PDH).
Formosa's PDH unit will have a capacity of 600,000 tonnes/year, joining a new cracker and low density polyethylene (LDPE) plant at its complex in Point Comfort, Texas.
Dow Chemical already has plans to build up to two PDH plants. PetroLogistics operates the sole PDH plant in the US.
More companies will likely consider on-purpose propylene plants because of growing supplies of propane and tightening supplies of propylene, said Mark Lashier, executive vice president of olefins and polyolefins for US-based Chevron Phillips Chemical, on the sidelines of the CERAWeek energy conference.
The advent of shale gas has increased supplies of feedstock natural gas liquids, which is encouraging producers to crack them instead of oil-based naphtha. As a result, US crackers are producing less propylene.
Refineries, the other major source of propylene, are contending with constrained gasoline demand, Lashier said.
On the east coast, some companies have shut down refineries, limiting supplies of propylene.
Meanwhile shale gas is increasing supplies of propane, which PDH plants would use as a feedstock.
"You will see PDH investigated," Lashier said. "There are consumers out there who will take the propane risk."
Plus, companies in the propylene chain need feedstock, he said.
CERAWeek ends on Friday.
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