Well, it finally happened. After several years of assessing the possible development of a large, integrated propane dehydrogenation (PDH) plant and polypropylene (PP) upgrader unit, a joint venture of Canada’s Pembina Pipeline and Kuwait’s Petrochemical Industries Co. (PIC) earlier this week announced a final investment decision (FID) for the multibillion-dollar project in Alberta’s Industrial Heartland. The new PDH/PP complex won’t come online until 2023, but when it does, it will provide yet another new outlet for Western Canadian propane, which has been selling at a significant discount in recent years. Today, we discuss Pembina and PIC’s long-awaited PDH/PP project, Inter Pipeline’s development of a similar project nearby, Western Canadian propane export plans — and what they all mean for propane prices.
Even in tough times like these, companies need to look ahead, to consider what steps they would take--or investments they would make--if, for example, oil prices were to rise to X dollars per barrel, or the cost of drilling and completing a well were to fall by Y%. For methanol producers, these “what-ifs” might include what if methanol prices (holding steady the past few months at $249/metric ton, or MT) were to rebound to where they stood a year ago ($442/MW in May 2015)? Or what if we could add new capacity at a fraction of the cost of new-build? Today, we consider how building more methanol capacity might make sense in the right circumstances.
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.
Production growth, new processing infrastructure and increased use of rail are shifting traditional flow patterns in the propane industry. New production and processing is adjacent to historic centers of consumer demand in the Northeast and Mid-Continent – reducing seasonal risks of shortage. Rail distribution improves delivery flexibility. The supply chain has to be flexible enough to balance seasonal consumer demand with increased chemical processing and high export volumes. Today we describe improved regional interconnectivity.
Between 2015 and 2018 five new U.S. propane dehydrogenation (PDH) plants are expected online – producing over 9 billion pounds a year of propylene. Williams are building another new PDH plant in western Canada. Five of these plants will be located on the Texas Gulf Coast – the center of the world’s chemical industry. Once they are up and running they should have a profound impact on U.S. and international markets for propane and propylene. Today we describe plans to develop these new plants.
Starting at the end of 2015 six new North American propane dehydrogenation (PDH) plants are expected to come online. These new plants will have the capacity to convert up to 170 Mb/d of propane into much more valuable propylene. If all the plants are built, these new supplies of propylene should more than replace declining output from olefin crackers and refineries. These on-purpose PDH plants should also make propylene supply more directly responsive to feedstock prices. Today we describe how PDH plants are likely to impact the propane market.
Up until a few years ago, propylene production was mostly a derivative of the petroleum refining and olefin cracking industries. But that is changing big time. Nowadays propylene demand in Asia is booming, US propane supplies are abundant and propylene output from refineries and olefin crackers is declining. Time to get serious about making propylene on purpose! As a result three new propane dehydrogenation (PDH) plants are expected online at the US Gulf Coast in 2015 and 2016 that will produce 4.3 billion pounds/year. These plants will help close the gap between increasing world propylene demand and declining “by-product” production from olefin crackers and refineries. They will also help soak up growing US propane supplies. Today we examine the recent rapid growth in PDH plant projects.