26 March 2013 15:39 [Source: ICIS news]
SAN ANTONIO, Texas (ICIS)--Producers are unlikely to build all eight of the propane dehydrogenation (PDH) projects that have been announced for North America, an executive with Enterprise Products said on Tuesday.
However, predicting how many of the plants will be built is difficult because so many variables could affect demand for propylene, said Jerry Cardillo, senior vice president for petrochemicals and marine for Enterprise Products.
He made his comments on the sidelines of the International Petrochemical Conference (IPC), held by the American Fuel & Petrochemical Manufacturers (AFPM).
Enterprise itself is a major supplier of both propylene and propane through its splitters. The company currently has a propylene capacity of 4.9bn lb/year (2.2m tonnes/year).
Enterprise is among the producers that have announced plans to build on-purpose propylene plants.
The company plans to start production at its first PDH facility in the third quarter of 2015, bringing some 1.65bn lb/year of new polymer-grade propylene (PGP) capacity to the US market. This first PDH plant is sold out.
Customer reception has been very good for Enterprise's second proposed plant, Cardillo said. That project is still in the planning stage, with a target completion date of the first half of 2017 should Enterprise go through with it, he said.
In addition to Enterprise, Dow Chemical announced plans to build two PDH plants. Formosa, PetroLogistics and Ascend Performance Materials also announced plans for plants.
Williams plans to build a PDH plant in Canada, which will supply propylene to the US Gulf coast.?xml:namespace>
Companies are building PDH plants because of the advent of shale gas. US crackers are switching toward lighter, gas-based feedstock. Lighter feeds produce less propylene.
Shale gas, however, is also increasing supplies of propane, the feedstock for on-purpose propylene plants.
However, it is still unclear how many more crackers will switch to lighter feedstock.
The other major source of propylene in the US is the refining industry.
Future propylene output for refineries is also unclear since it is also affected by several variables.
Because the outlook for propylene demand has so many variables, it is difficult to predict how supply will respond, Cardillo said.
The AFPM conference lasts through Tuesday.
Additional reporting by Jeremy Pafford
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