Several new propane dehydrogenation (PDH) plants are coming online along the U.S. Gulf Coast. Now developers in Alberta are making plans for the province to become the next hot spot for PDH plant development. Final Investment Decisions (FIDs) are due over the next year or so on two projects aimed at taking advantage of the increasing volumes of propane being produced in western Canada—propane so plentiful, in fact, that they are paying to have it hauled off. But what if propane prices rise due to increasing U.S. demand, more exports and lower U.S. production? What might such developments do to PDH economics? What could make Alberta different? Today, we consider the drivers behind two (maybe three) prospective PDH projects in Alberta, and look at how they may affect the propane market on both sides of the 49th parallel.
We try not to play favorites among the hydrocarbon markets we blog about, but it’s hard not to like the propane sector, with its dynamic pricing, its variety of uses (heating, BBQ grilling, petrochemical feedstocks), its huge export potential, and the sometime remarkable differences between how much it costs at Point A versus Point B. As we have explained, propane is a “purity” product extracted from natural gas along with the other NGLs or (in smaller volumes) produced at refineries. Propane has three carbon atoms and eight hydrogen atoms (C3H8). We’ve written about propane frequently, and about propylene, a very in-demand petchem intermediary feedstock that for a long time was produced primarily by refineries or as a byproduct from ethylene steam crackers but more recently is increasingly being made “on purpose” at propane dehydrogenization (PDH) plants. As their name suggests, PDH plants remove some hydrogen (specifically, two hydrogen atoms) from propane (again, C3H8) to make propylene (C3H6). In Son of a PDH Man, we explained that the propylene molecule is significantly more reactive than propane, making it an ideal chemical building block. Propylene is used in downstream petrochemical processes to make films, packaging and synthetic fibers. About two-thirds of propylene is used to make polypropylene--one of the best-selling plastics, second only to polyethylene. Polypropylene is used extensively in automobiles and in the manufacture of packaging films, bottle caps, fiber ropes as well as bicycle helmets and disposable diapers.
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About the song
“Stuck in the Middle With You” was written by Gerry Rafferty and Joe Egan and appears as the second song on Stealers Wheel’s debut album, Stealers Wheel. Released as the third single from the album in April 1973, the song went to #6 on the Billboard Hot 100 Singles chart and has sold over 1 million copies. The song became famous again when used in a notorious scene in Quentin Tarantino’s 1992 debut film, Reservoir Dogs. Personnel on the record were: Gerry Rafferty (lead vocal, guitar), Joe Egan (backing vocals, keyboards), Paul Palnick (lead guitar), Iain Campbell and Tony Williams (bass), Rod Coombes (drums) and Luther Grosvenor (lap steel guitar).
The album Stealers Wheel was recorded at Abbey Road Studios in London and was produced by Jerry Leiber and Mike Stoller. Released in October 1972, it went to #50 on the Billboard Top 200 Albums chart. It has been certified gold by the Recording Industry Association of America.
Stealers Wheel was a British folk-rock band originally formed in Paisley, Scotland, by former schoolmates Gerry Rafferty and Joe Egan in 1972. Eleven members passed through its ranks until the band broke up in 1975. It re-formed in 2008, but only briefly. They released three studio albums, three compilation albums and five singles. Gerry Rafferty went on to a successful career as a solo artist, releasing 10 studio albums and the hit single “Baker Street.” Joe Egan made two solo studio albums and currently runs a music publishing company in Scotland.
