Rising Demand for Propylene Spurs Investments in Propane Dehydrogenation Units

Researched by Industrial Info Resources (Sugar Land, Texas)--As propylene continues to play an indispensable role in the petrochemical industry, the demand for propylene is also witnessing an upsurge. The demand for this versatile chemical compound is driven by its extensive application in the plastics, chemicals and automotive sectors. Correspondingly, propane dehydrogenation (PDH) units are increasingly becoming important as they play a crucial role in enabling the production of propylene by converting propane into propylene and hydrogen.

Historically, a majority of propylene was produced as a by-product of naphtha-based ethylene crackers. A combination of factors, including a shift to ethane-based cracking, which has greatly reduced production of propylene, as well as increased demand for propylene, has led to a shift toward production of "on purpose" propylene, leading to significant investments in adding PDH units. The PDH process utilizes propane as its primary feedstock which, through controlled catalytic process, undergoes dehydrogenation to produce propylene.

The demand for propylene is rising as it is used intensively in the production of polypropylene, acrylonitrile and propylene oxide. These propylene derivatives are experiencing high demand in expanding industries such as automotive, construction and packaging. The burgeoning packaging industry as well as the shifting demand toward lightweight materials in automotive manufacturing is, thereby, significantly driving the demand for PDH units, especially in emerging economies like China and India.

Industrial Info is tracking more than 50 projects with investments worth US$25 billion geared toward PDH units. Around 54% of the total spending is attributed to grassroot projects, while around 42% is aimed at unit additions.

Subscribers to Industrial Info's Global Market Intelligence (GM) Chemical Processing Project Database can click here for a full list of projects.

Asia dominates the global PDH unit market, with investments worth US$21 billion, or a considerable share of 84%. The is led by China with investments worth US$12 billion. Iran and India follow with investments worth US$3 billion and US$2 billion.

Saudi Arabia closely follows with investments worth US$2 billion. While Saudi Arabia is traditionally a major crude oil exporter, under its Vision 2030 programme, the nation aims to diversify its economy. By strategically investing in PDH units, to convert their abundant gas and natural gas liquids (NGL) reserves into propylene, the nation aims to establish a stronger petrochemical industry.

Africa is investing almost US$2 billion in the market for PDH units, with a major share of this spending (about 70%) concentrated in Algeria.

Driven by booming shale gas production, North America is making significant investments in PDH units. The U.S. is investing US$1 billion in these units to convert propane, a readily available component of NGLs, extracted from shale gas, into propylene.

Around 50% of the total spending being tracked is in the planning phase, 20% in the engineering phase, and 27% is under construction.

Oriental Energy Company Limited (Nanjing), Sonatrach (Hydra, Algeria), GAIL India Limited (New Delhi, India) and Enterprise Products Partners LP (NYSE:EPD) (Houston, Texas) are some of the leading players in the global market.

Shandong Dongming Petrochemical Group Company Limited is planning to invest US$1.12 billion to construct a grassroot PDH plant in Jiangsu, China, to produce 796,400 metric tons per year of propylene from 1.5 million metric tons per year of propane. Click here to read the project report.

Advanced Petrochemical Company is planning to invest US$1 billion to construct a grassroot PDH Plant in Jubail, Saudi Arabia, to produce approximately 1,858.49 million pounds per year of PDH from propane. Subscribers can learn more from the project report.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).