The Urethane Blog

Dow Completes Propylene Plant

US Dow completes PDH unit in Texas

20 November 2015 20:44 Source:ICIS News

HOUSTON (ICIS)–Dow Chemical has mechanically completed its propane dehydrogenation (PDH) unit in Freeport, Texas, the US-based producer said on Friday.

All utilities are in service, and Dow is finishing the commissioning of the plant, the company said.

Dow's plant has a capacity of 750,000 tonnes/year, and it is the first among a wave to start up. The plants use propane to make propylene.

Enterprise expects to complete its 750,000 tonne/year PDH plant in the fourth quarter of 2016 in Mont Belvieu, Texas. Formosa Plastics could start up its 725,000 ton/year (660,000 tonnes/year) in 2017.

Companies began announcing PDH plants earlier in the decade in response to the advent of shale gas, which encouraged crackers to favour ethane over heavier feeds. Lighter feeds produce less propylene.

However, the steep decline in energy prices has made PDH plants less attractive by decreasing the spread between propane and propylene. A narrower spread lowers the profitability of PDH plants.

Because of lower commodity prices, Sunoco Logistics is taking more time than expected to decide on whether it would build a PDH plant at its complex in Marcus Hook, Pennsylvania, said CEO Michael Hennigan during a third-quarter earnings conference call.

On the other hand, Hennigan said that more than 10 companies have expressed interest in more than 1m tons of offtake from a PDH plant. The unit Sunoco is considering would have a capacity of 650,000 tons/year. Hennigan did not specify whether the capacity was in metric tonnes or short tons.

"We're disappointed that the commodity environment is kind of slowing things down for a little bit, but we're bullish that that's going to turn around," he said. "We think we've already seen the bottom and we're going to start to correct and hopefully, we'll get that project to the finish line."

Williams and Ascend Performance Materials are still evaluating whether they will proceed with their announced PDH projects.

Williams would build its plant in Alberta, Canada, and Ascend would build its unit in Chocolate Bayou, Texas.

By Al Greenwood