Correction: In the ICIS news story headlined "Intrexon plans to capitalise on natgas/bio-based BD" dated 5 December 2017, please read “fluctuate between $700-3,000/tonne” in the second paragraph, “the company uses methane” in the fifth paragraph, and “within 18 months of breaking ground on construction” in the sixth paragraph. Please add “the US Gulf Coast” in the third paragraph. A corrected story follows.
HOUSTON (ICIS)--US-based Intrexon expects to find a consistent market for natural gas- and bio-based butadiene (BD), the company said.
“It is known that butadiene can fluctuate between $700-3,000/tonne,” said Yuko Amizaki, the company’s associate director of business development. “Our cost structure will be based on natural gas, rather than crude oil or coproducts of ethylene cracking, the supply of which can be unstable.”
Amizaki said the company is in the site selection phase for an on-purpose BD plant, and is considering a site near Alberta, Canada, the US Gulf, or in the Marcellus/Utica shale plays in the eastern US.
“The biggest factor for us is access to cheap, plentiful natural gas,” Amizaki said. “It’s definitely not hard to get a long-term contract for natural gas.”
Amizaki said the company is expecting to have its first commercial plant up and running within 18 months of breaking ground on construction.
“We are looking at around 40,000 tonnes/year for the plant,” Amizaki said.
Although US BD supply is expected to improve in the next several years, Amizaki said Intrexon’s cost structure should enable it to remain competitive.
The reason BD is expected to increase supply-wise is the startup of several new crackers, which will produce crude C4s available for processing into BD. However, the increase is expected to be small, as most new crackers in the US will use ethane feedstock, which produces little crude C4.
With demand growth for BD also expected to slow on factors such as declining driving activity in the US, domestic BD sales growth could require US producers to compete with imports of BD and crude C4.
Amizaki said that Intrexon’s cost and logistics advantages should enable the company to compete with all sellers in the US market.
“Fluctuation in BD prices can come from several factors; natural rubber, cracker issues, etc.,” Amizaki said. “As long as there is demand for BD, we feel confident.”
Photo: Tyres are made of styrene butadiene rubber (SBR), a major end use of BD. Source: Mood Board/REX/Shutterstock
Interview article by John Dietrich