InterviewPDH unit to supply rest of US Eastman's propylene needs

27 June 2012 22:16  [Source: ICIS news]

A PDH plant

By Lane Kelley

HOUSTON (ICIS)--Enterprise Product's new propane hydrogenation (PDH) unit in Texas could allow Eastman Chemical to secure any propylene it does not already make on its own, an executive for the US-based specialty chemicals producer said on Wednesday.

“We make about two-thirds of the propylene that we need for downstream derivatives,” Eastman executive vice president Ron Lindsay said in an interview.

Lindsay added that Enterprise’s planned PDH plant would give Eastman the other third of its propylene needs when it begins operating in 2015.

“We like the dynamics long-term there,” Lindsay said.

In the past, much of the propylene produced in the US was a co-product of cracking oil-based naphtha. But when crackers switched to lighter feedstock ethane, they produced less propylene.

“Right now, we are net long on ethylene and just the opposite on propylene,” Lindsay said.

The advent of shale gas could change that, with a plentiful and cheap supply of propane for a PDH plant.

Eastman could obtain enough propylene to have a cost advantage in making derivatives the same way it has an advantage in making ethylene-based products.

Eastman will still be buying and not making its own propylene, while Dow Chemical plans to build a PDH unit at Freeport, Texas, the company said in April.

Freeport's PDH plant will provide feedstock for many of the downstream units that Dow acquired from its Rohm and Haas deal. Dow CEO Andrew Liveris said that one unit would begin running in 2015, and he said the company might build another one that would begin operating in 2018.

Eastman is taking a different course. Lindsay said Eastman is not making a capital investment in Enterprise’s PHD unit and wants to preserve its money for other uses.

By: Lane Kelley
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