08 May 2014 17:23 [Source: ICB]
The company’s largest single-plant investment would take place on the US Gulf Coast to make propylene from methane
BASF’s planned methane-to-propylene (MTP) plant is targeted for start-up in 2019, although it is still being evaluated, a senior executive said on 2 May.
While Germany-based BASF did not disclose capacity for the plant to be built on the US Gulf coast, it would be world-scale and could cover its propylene needs in North America.
“The exact capacity is part of the evaluation process. World-scale means that the plant will have a capacity of several 100, 000 tonnes per annum,” said Beate Ehle, president, Market and Business Development for BASF Corp, in an interview with ICIS.
“We aim to be able to cover our internal demand for propylene in North America,” she added.
BASF said that the proposed on-purpose propylene project would be its “largest single-plant investment to date”.
The company is aiming to take advantage of long-term low natural gas prices due to US shale gas production to considerably improve its cost position, Ehle noted.
“BASF intends to further strengthen its backward integration and grow its propylene-based downstream activities, leading to a stronger position in North America,” said Ehle.
“Due to abundant shale gas reserves in the US, natural gas will be price advantaged vis-a-vis other feedstock for the production of propylene, which would give the plant a strong cash cost position,” she added.
The project could have implications for BASF’s 60:40 joint venture cracker in Port Arthur, Texas, US with France-based Total.
BASF Total Petrochemicals in March 2014 added one ethylene furnace at the site to a total of 10, increasing the feedstock flexibility at the cracker to use more natural gas liquids (NGLs) ethane and propane rather than naphtha. That has pushed ethylene capacity to 1.04m tonnes/year where ICIS plants & projects database had recorded prior capacity at 934,000 tonnes/year. But that in turn has reduced its output of propylene.
“The advantage of lighter feedstocks comes at a price, as these feedstocks result in a lower production of higher olefins,” Ehle said. “That’s why we are looking into on-purpose production of propylene in order to balance BASF’s supply/demand position in North America.”
Ehle would not disclose details on the methane-to-propylene technology. However, several methanol-to-olefins (MTO) processes exist, and these could provide a route to propylene via methane.
Total Petrochemicals started up an MTO demonstration plant in Belgium back in 2010. It successfully produced polypropylene (PP) from the monomer.
UOP and Air Liquide’s Lurgi are among the many others that offer MTO technology.
Regardless of the technology BASF chooses for its plant, it would enter an increasingly crowded field for on-purpose propylene production in North America, although all the rest are going the propane-to-propylene route. Eight companies are planning a total of nine propane dehydrogenation (PDH) plants in North America.
SHALE GAS ASSETS
Separately, BASF has decided to acquire a concession for shale gas exploration and production in Argentina.
The concession would be for a “very large” shale gas field in the South American country, BASF CEO Kurt Bock told shareholders during the company’s annual meeting in Mannheim, Germany.
Bock deplored that Germany, with its high energy and electricity costs, is not tapping its own shale gas potential.
“High energy costs and untapped resources do not promote higher competitiveness. This is compounded by the fact that the chemical industry in Europe has not grown over the past years,” Bock said.
“Over the next five years, our investments in Europe, compared with our investments globally, will fall below 50% for the first time,” he added.
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