Wave of PDH plants should balance US propylene supply: Gallogly

30 September 2013 21:38  [Source: ICIS news]

HOUSTON (ICIS)--The number of on-purpose propylene plants that would actually be built in the US should be just enough to create a balanced market for the monomer, the CEO of LyondellBasell said on Monday.

The US has become short of propylene because of the advent of shale gas, which has increased supplies of ethane and other natural gas liquids (NGLs).

Consequently, more ethylene plants are cracking ethane and other NGLs because they are cheaper than oil-based naphtha.

Lighter feeds, however, produce less propylene.

As a result, propylene has become more expensive than ethylene, the inverse of past trends, said Jim Gallogly, LyondellBasell CEO.

He made his comments on the sidelines of the opening ceremony of the Houston Technology Center, a new research and development (R&D) site.

Companies have since announced plans to build up to eight propane dehydrogenation (PDH) plants, which would produce propylene.

Some companies are discussing whether they would go forward with their plans because of concerns about propane prices, Gallogly said.

Propane prices could rise because the US is building terminals that can export the product.

However, there is not a lot of polypropylene (PP), propylene oxide (PO) or other propylene derivative plants that would come on line and use up any extra propylene, he said.

Consequently, Gallogly expects the US propylene market to be balanced.

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By: Al Greenwood
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