Wanhua Propane Dehydrogenation Unit Startup
China's Yantai Wanhua test runs Shandong PDH plant, eyes March startup
Singapore (Platts)–8Jan2015/415 am EST/915 GMT
Shandong-based Yantai Wanhua Polyurethanes is undergoing test runs at China's biggest propane dehydrogenation plant by feeding in pressurized LPG and aims to start initial production in March, a source familiar with the matter said Thursday, January 8.
"It may take a while to increase the operation rate [for commercial production]," the source said. "Maybe it will start at a very low level, it usually takes three months to reach 100% of production."
The plant has a propylene production capacity of 750,000 mt/year and can consume up to 900,000 mt of propane and 600,000 mt of butane annually.
Yantai Wanhua's facility will be the fifth PDH plant to begin operations in China, following the startup of the 600,000 mt/year Tianjin Bohai Chemical plant, the 600,000 mt/year Zhejiang Ningbo Haiyue facility, the 450,000 mt/year Zhejiang Satellite Petrochemical plant and the 450,000 mt/year Shaoxing Sanyuan Petrochemical unit over the past year and a half.
At a time of declining international propane prices as well as a weak propylene market, Chinese PDH plants were not rushing to buy large volumes of feedstocks in case the prices fall further, sources said.
"[Propane] prices are really low, but the oil price is too volatile and keeps decreasing, so I'm afraid prices may decrease again," another market source said. "And the downstream chemical market is also bad."
The market has been concerned about the impact that the startup of the five PDH plants in China would have on an oversupplied propylene market.
A sixth PDH plant — Oriental Energy's 660,000 mt/year facility in Jiangsu province — has been expected to startup around mid-2015, though this has not been confirmed.
The return to full operations late last month of the Tianjin Bohai plant from a prolonged shutdown due to compressor problems has also dampened the Chinese market, sending propylene prices down by about a third from late-September levels to Yuan 6,300/mt, or $870/mt on an import parity basis.
The CFR Japan price of propane has slid to the lowest level in more than 5 1/2 years at $423/mt Wednesday, while butane was assessed at $458, Platts data showed.
The low propylene price as well as the still falling propane had prompted Chinese petrochemical makers to be selective in their choice of feedstocks, sources said.
With the rise in LPG production from domestic refineries, the petrochemical firms are also looking at using more domestic feedstock.
"It depends on the economics. It also depends on whether you have some big refineries close to your plant. Transportation is an issue," a source said. "But if it's cheaper to import, of course we will import."
In the first 11 months last year, China produced 24.064 million mt of LPG, up 7% from a year ago, data from the National Bureau of Statistics showed.
Market sources said the increased volumes were mainly from new refineries and some existing plants following expansion last year.
Chinese PDH plants have already sealed term contracts for Middle Eastern and US propane for their facilities.
National Iranian Oil Co. said in November that it was set to renew an annual contract for LPG sales to private Chinese firm Jovo Energy for 2015 to be supplied to PDH plants.
An NIOC executive said that the operator of a PDH plant in Shandong had also approached the company for LPG feedstock for its new facility.
http://www.platts.com/latest-news/petrochemicals/singapore/chinas-yantai-wanhua-test-runs-shandong-pdh-plant-27998848« Previous Post Next Post »