16 April 2013 22:24 [Source: ICIS news]
SAN FRANCISCO (ICIS)-- An executive from TPC said Tuesday that he expects the company’s 270,000 tonne/year US Gulf Coast on-demand butadiene (BD) plant to come on line in late 2016.
In the past, the company had estimated that it would start producing on-demand BD in 2017. But Mike Bloesch, vice president for strategic initiatives at TPC, said during his presentation to the International Institute for Synthetic Rubber Producers' Annual General Meeting that increased cooperation between the Texas Commission on Environmental Quality (TCEQ) and the US Environmental Protection Agency (EPA) has moved up the date.
“We’re really happy with the cooperation we are seeing between the EPA and the TCEQ,” Bloesch told ICIS News. “The real issue has been carbon permits. We expected it to take up to two years, but now our expectation is more like 12 or 14 months.”
Bloesch’s presentation to the rubber manufacturers group focused on why TPC thinks it is necessary to invest in on-demand BD, a project that he said will cost more than $300m (€231m).
Bloesch said that current projections estimate that the world could consume about 2.8m tonnes/year of on-purpose BD. Furthermore, current demand would have to drop by about 14% before the need for on-purpose BD was negated.
“We foresee a very strong market worldwide for on-purpose butadiene demand,” Bloesch said.
The projected worldwide BD shortage is also being compounded by the shale gas revolution in ?xml:namespace>
Bloesch said that North American ethylene production has increased by about 30%, while crude C4 production has dropped by about 20%.
“We do not expect that to recover,” Bloesch said. “Rather, we expect to see flat butadiene production despite increased ethylene production.”
Bloesch said that historically, crackers have gotten about 15 pounds of BD for every 100 pounds of ethylene. Now, with lighter shale gas, the yield is about two pounds of BD per 100 pounds of ethylene.
“That reduces the amount of butadiene by about 80%.,” Bloesch said. “Some crackers are still cracking naphtha, but that’s going to change.”
Bloesch noted that butadiene has not seen the worst of it in terms of lighter feedstocks.
Only about 10 pounds of isobutylene are yielded for every 100 pounds of feedstocks. That is why TPC has restarted the on-demand dehydrogenation plant for isobutylene.
“We feel that every new cracker will be built for these lighter feedstocks,” Bloesch said. “Shale gas exists globally, so we think that over time most economies are going to be driven to crack as much shale gas as they can.”
In deciding to create on-demand BD, Bloesch said TPC looked at
For a long time, North American producers were able to get by on about 200,000 tonnes of imports, but as the domestic feedstocks have gotten lighter, that figure has increased. This is why TPC decided that initial production of its on-demand BD facility will be about 270,000 tonnes/year.
“We feel that this is the amount of initial production to provide a sustainable solution to the industry,” Bloesch said.
While he would not give a direct answer as to how much on-demand BD would cost, Bloesch said it will “have to come to market at a reasonable cost to keep synthetic rubber production in
He confirmed that
“As we look at that production long term, the C4 feedstock is going to become the limiting factor,” he said.
He also emphasized that
($1 = €0.77)
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