Price and market trends: Not all 8 N America PDH plants may be built – executive

05 April 2013 09:42  [Source: ICB]

Projects are planned by Enterprise, Dow Chemical, Formosa, PetroLogistics, Ascend Performance Materials and Williams

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 26 March.

 Variables will affect projects

Copyright: RexFeatures

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.

CONFERENCE
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).

The company also has substantial fractionation capacity in Mount Belvieu, Texas, the major US hub for natural gas liquids (NGLs).

Enterprise is among the producers that have announced plans to build on-purpose propylene plants (see page 26).

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. 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.

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 from 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.

Additional reporting by Jeremy Pafford


Rich liquid plays may ensure US propane supplies
The US should have enough propane to supply export terminals and new on-purpose propylene plants as long as producers continue to target gas reserves that are rich in natural gas liquids (NGLs), an executive with Enterprise Products said on 26 March.

US exploration and production (E&P) companies have been concentrating on such plays because ­natural gas prices are so low. The resulting NGLs have made it profitable for producers to continue drilling. Meanwhile, that propane could have a lot of uses in the future.

Companies have announced plans to build up to eight propane dehydrogenation (PDH) plants.

In addition, companies are expanding their capacity to export propane. Enterprise is expanding its exporting capacity, and it has plans to build up to two PDH plants.

The first plant is sold out, and ­customer reception is very good for the second, said Jerry Cardillo, senior vice president for petrochemicals and marine for Enterprise Products.

Cardillo made his comments on the sidelines of the International Petrochemical Conference (IPC), held by the American Fuel & Petrochemical Manufacturers (AFPM).


By: Al Greenwood
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