Price and market trends: Braskem America secures propylene, improves operations

07 December 2012 10:31  [Source: ICB]

Braskem secures long-term propylene agreement with Enterprise Products, which plans to build a PDH plant

Braskem America, having secured sources of feedstock propylene, will now continue to focus on improving the operations of its acquired polypropylene (PP) plants in the US, according to the head of the company.

Braskem acquired Dow Chemical's two PP plants in the US in 2011. In 2010, Braskem acquired Sunoco's three PP plants. Since acquiring the plants, one of Braskem's key goals was to secure a reliable source of feedstock propylene, said Fernando Musa, head of Braskem America.


Feedstock supply is now secured for this PP plant at Marcus Hook

Copyright: Braskem

In particular, Sunoco had shut down the main processing units at a refinery in Pennsylvania, which was a major source of propylene for Braskem's PP plant in Marcus Hook. Ultimately, Braskem struck a deal with Sunoco to acquire the propylene splitter at the refinery, which secured the supply of feedstock for the Marcus Hook PP plant.

"This was a very important achievement and provided a lot of comfort for our clients," Musa said. For its other PP plants, Braskem was facing another feedstock challenge from the advent of shale gas in the US. As natural gas production has risen, US crackers have shifted to lighter feeds, lowering propylene production.

Recently, several companies have announced plans to build propane dehydrogenation (PDH) plants to produce on-purpose propylene. Braskem has secured a long-term propylene agreement with one of them, Enterprise Products, which plans to build a 750,000 tonne/year PDH plant in Texas. Operations should start in 2015.

The deal should provide Braskem with a competitive, long-term supply of propylene from a strong and reliable producer, Musa said. With feedstock secured, Braskem America will continue to focus on improving operations at its US plants.

This year, Braskem has focused on integrating the US plants it has acquired from Dow, both in terms of customers and employees, he said. "That has been going well." Meanwhile, the company will continue to improve the reliability and productivity of its five US plants, Musa said.

Braskem will also continue to invest in research and development to develop and improve its portfolio of products. At the same time, the company will continue to strengthen its relationship with its customers, by providing them with both better products and services. "This will continue to be a priority for next year," Musa said.

The company does not plan to significantly increase PP capacity because the market would be unable to absorb the increased supply. "We do not see today the economic viability for a new polypropylene plant to be built in the US."

However, Braskem will continue to evaluate any opportunities in the US outside of the PP market, it said.

By: Al Greenwood
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