Propylene shift

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Basic chemical production in the Middle East is enetering a phase of a rapid expansion.

Whilst ethylene retains the number one spot as the largest produced basic chemical, propylene is the industry’s number two. Propylene, also known as is propene, is considered the second simplest member of olefin products.

A colourless, flammable gaseous hydrocarbon, propylene has been cheaper than other polymer feedstocks because it is mainly produced as a by-product of steam cracking to make ethylene and fluid catalytic cracking (FCC) producing gasoline.

“Propylene is a very versatile building block and is the feedstock for a wide range of important monomers, polymers, intermediates, and chemicals,” says Alastair Hensman, senior consultant at Nexant ChemSystems.

“Propylene is not as advantaged as ethylene in general, but it does open some interesting derivative opportunities” adds Hensman. “It is better for producers in the Middle East to produce ethylene as it is more profitable to convert it to polyethylene and mono ethylene glycol (MEG) and then export it directly to Asia, than producing propylene.”

In the Middle East, propylene production is entering a phase of rapid expansion following a long period focused on ethylene production. The production of propylene in the region became a necessity as it helps governments to create more job opportunities than the ethylene production. “Despite this it can still be a good idea to do something different when everyone is developing ethylene based business in the region” says Hensman.

The cost of production of propylene in the region is not as competitive as ethylene. For ethylene producers the cost is fixed, and in many Middle Eastern countries the cost is less than US$200 per tonne as companies in the region receive ethane feedstock very cheaply, while the majority of propylene is sourced from liquid-fed steam crackers. These feedstocks are not as competitive as the pricing of these liquid is based on a formula of naphtha prices which is strongly linked with oil prices.

With many of the Middle East petrochemical projects based on ethane crackers only producing ethylene, additions to propylene capacity in this region have been minor. However, this will change from 2009 when the Middle East will become a more significant player in the global propylene market.

“The region has been traditionally focused on ethylene production, but propylene production is growing as more propane dehydrogenation plants and mixed feed steam crackers start up” says Paul Cherry, monomer management, LyondellBasell.

Larger steam crackers using heavier feedstocks are also under development in the region, and will contribute increasingly to propylene supply. Pure ethane-based crackers that were previously the norm will become less common as the region seeks to diversify and exploit propane and liquid feedstocks.

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