The ready availability of low-cost propane, the expectation of renewed growth in global propylene demand and other factors are spurring development of another round of propane dehydrogenation plants in North America. Three PDH plants — two in Alberta and one in Texas — already are under construction and scheduled to come online in the 2021-23 period. Now, Enterprise Products Partners has committed to building a second PDH plant at its NGL/petchem complex in Mont Belvieu, TX, and PetroLogistics — which completed the U.S.’s first PDH plant in 2010 — has selected the technology it will use for a new facility it now plans to build along the Gulf Coast. Today, we discuss planned PDH capacity additions in the U.S. and Canada and what’s driving their development.
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As we said in our On Purpose blog a few months ago, propylene is a particularly useful chemical building block. About two-thirds of the propylene produced is used to make polypropylene (PP) — one of the best-selling plastics, second only to polyethylene — which is used to make (among other things) automotive parts, reusable shopping bags and plastic storage containers. Most of the rest is used to produce acrylonitrile, propylene oxide, oxo alcohols, cumene and isopropyl alcohol, which are used to make polyurethanes, polycarbonates and other materials that are part and parcel of a myriad of everyday products. Global demand for propylene has been increasing at an average of about 5.2 million metric tons per annum (MMtpa) — a 3.6% compound annual growth rate (CAGR) — while North American demand is growing at a more modest average of 390,000 metric tons per year (Mtpa), for a CAGR of 2.2%. The problem is that the traditional “co-product” sources of propylene supply (steam crackers and refineries) have not kept up with demand. This is largely due to two Shale Era-related changes. First, refineries have been shifting their crude slates to lighter oils. And second, the steam-cracker sector has been shifting from old-standby feedstocks like propane, normal butane and naphtha, each of which produce 40 pounds or more of propylene for every 100 pounds of ethylene (the primary product of steam crackers), to ethane, which typically produces only 4 pounds of propylene for every 100 pounds of ethylene.
To help fill the gap between propylene supply and demand, a number of PDH plants have been built this decade — not just in the U.S. and Canada, but in Europe and Asia. Earlier this year, in Things Can Only Get Better, we discussed the latest PDH project to reach a final investment decision (FID), namely, the plan by a joint venture of Canada’s Pembina Pipeline and Kuwait’s Petrochemical Industries Co. (PIC) to build a large PDH/PP complex in Alberta’s Industrial Heartland northeast of Edmonton. As we said then, the 550-Mtpa Pembina/PIC project, which is scheduled to begin operating in 2023, comes on the heels of a 525-Mtpa PDH/PP project by Inter Pipeline, also in the Industrial Heartland, that reached FID in 2017 and is slated to start up in late 2021. Each of the PDH plants will consume about 23 Mb/d of Western Canadian propane, which has been selling at a significant discount in recent years due largely to takeaway constraints.
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About the song
"Living in the Plastic Age" was written by Trevor Horn and Geoff Downes, and appears as the first song on side one of The Buggles' debut album, The Age of Plastic. It was released as a single in January 1980. Personnel on the song were: Geoff Downes (keyboards, synthesizers, percussion), Trevor Horn (lead vocals, bass, guitar), Richard Burgess (drums) and Dave Birch (guitars).
The Age of Plastic album was written just as the group's first single, "Video Killed the Radio Star," was rocketing up to the top of the charts in the UK and most of Europe while barely breaking into the Top 40 in the U.S. The single was released in September 1979. The Age of Plastic was recorded at Virgin's Town House, Sarm East Studio and Brick Lane in London, and produced by Horn and Downes (The Buggles). Inspired by Kraftwerk's pop-synth sound, Horn has said his lyrics were inspired by science fiction, particularly the works of J.G. Ballard. The album was recorded quickly and for a low budget, and released in January 1980. Four singles from the album charted in the UK.
The Buggles are an English new wave band formed in London in 1977 by Trevor Horn and Geoff Downes. The music video for “Video Killed the Radio Star” was the first video ever played on MTV. The Buggles, being a studio creation, never toured. Horn and Downes have appeared together occasionally, playing Buggles songs live. They released two studio albums, one compilation album and nine singles. After The Buggles, Trevor Horn has pursued a successful career as a record producer, with many hit records to his credit. He is currently a member of the band, The Producers. Geoff Downes formed the band Asia, and is still a member of that band today.
