Germany’s BASF mulls US Gulf methane-to-propylene complex

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SINGAPORE (ICIS)–BASF is evaluating investing in a world-scale methane-to-propylene complex in the US amid the shale gas production boom in the country, the German chemicals major said on Friday.

More than €1bn ($1.38bn) could be spent on the project which would start-up in 2019, a BASF spokesman said. The company’s largest single investment to date is the toluene diisocyanate complex being built in Ludwigshafen, Germany.

Building a chemical complex in the US Gulf coast will allow BASF to take advantage of low-cost feedstock gas available in the US, thus considerably improving its cost position, the company said.

“Details on the potential investment, including the capacity of the plant, investment amount and exact location are currently under evaluation,” it said.

BASF intends to strengthen its backward integration into propylene and grow its propylene-based downstream activities, leading to a stronger market position in North America, it added.

No decision has yet been made on the technology for the plant which is at the planning stage.

Propylene can be produced from methane via methanol using commercially-available proprietary process technology. It is being used in plants in coal-based propylene plants in China. There are also methanol to olefins technologies that produce both ethylene and propylene.

The company on Friday reported that its first-quarter 2014 net profit rose by 2.1% year on year to €1.48bn.

($1 = €0.72)