Propylene/Polypropylene Projects Mark Progress in North America

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Researched by Industrial Info Resources (Sugar Land, Texas)--Contract announcements this week marked progress on two North American propylene/polypropylene projects, one in La Porte, Texas, and the other near Edmonton, Alberta. Industrial Info is tracking both projects, with a combined investment value of more than $3.1 billion.

In La Porte, Braskem (NYSE:BAK) (Sao Paulo, Brazil) announced it picked the Linde Group (Munich, Germany) as the lead engineering, procurement and construction (EPC) contractor for its world-scale North American polypropylene line. Braskem noted it has committed up to $675 million toward the design and construction of the production line, named Delta, which will be located next to Braskem's existing production facilities in La Porte. The line will have a yearly production capacity of 450,000 tons, or about 1 billion pounds.

Construction is expected to begin this year, with the final phase of main construction targeted for the first quarter of 2020. For related information, see Industrial Info's project report.

Seeking to take advantage of low-cost feedstocks as a result of the U.S. shale gas boom, Braskem is developing its U.S. chemical processing assets. Industrial Info is tracking $748.5 million in project activity by Braskem in the U.S.

"After decades without significant capacity additions in the U.S., the industry is seeing a strategic change in US polypropylene supply," said Christian Bruch, a member of Linde's executive board with responsibility for the company's engineering business. For related information, see June 23, 2017, article - Braskem Advances Polypropylene Project Growth Strategy in U.S.

Also this week, Honeywell International (NYSE:HON) (Morris Plains, New Jersey) announced Canada Kuwait Petrochemical Corporation (CKPC) picked Honeywell UOP's Oleflex technology to produce 550,000 metric tons per year of polymer-grade propylene at CKPC's proposed facility in Sturgeon County, Alberta. Honeywell said it also will provide the process design package, proprietary and non-proprietary equipment, on-site operator training, technical services for startup and continuing operation, and key catalysts and adsorbents for the project.

CKPC is a 50/50 joint venture between Pembina Pipeline Corporation (NYSE:PBA) (Calgary, Canada) and Petrochemical Industries Company of Kuwait. Now in the front-end engineering design (FEED) phase, the integrated propane dehydrogenation (PDH) and polypropylene upgrading facility project is awaiting a financial investment decision. It would consume 22,000 barrels per day of propane from Pembina's Redwater fractionation complex and other regional facilities, and produce more than 1.2 billion pounds per year of polypropylene, to be sold on North American and global markets.

If approved, the CKPC project would benefit from the award of C$300 million ($236 million) in royalty credits under Alberta's petrochemicals diversification program. Aimed at encouraging investments in the petrochemicals industry, specifically methane and propane upgrading, C$500 million (US$368 million) was earmarked for the initiative. For more information, see Industrial Info's project report and May 19, 2017, article - Alberta Gains Traction with Petrochemicals Incentives.

"Historically, propylene has been produced as a byproduct of making ethylene from petroleum, but with the influx of lighter feedstocks, the amount of propylene from these manufacturing processes is dramatically reduced," said John Gugel, vice president and general manager of Honeywell UOP's Process Technology and Equipment business, who added his company's technology is used to produce "on-purpose" propylene from abundant propane.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.