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China Ningbo Haiyue's PDH plant to start up in July; receives first propane cargo

Highlights

China's Ningbo Haiyue New Material Co is expected to start up its propane dehydrogenation plant this month and received its first 45,000 mt propane cargo last week, while three other PDH facilities are due to be launched by late 2014, industry sources said Tuesday.

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Haiyue's plant in eastern Ningbo city, Zhejiang province, with annual propane demand of 720,000 mt and propylene production capacity of 600,000 mt, will be the second PDH facility to go into operation in China after Tianjin Bohai Chemical Industries started up its plant last September, sources said.

Haiyue's propane cargo was shipped in by South Korea's SK Gas on board the 54,526 mt Qatar Shipping-owned VLGC Lubara and arrived at Ningbo port on June 22 from the Middle East, said sources and as reported on its website. Ningbo Haiyue is a unit of Shanghai-listed Zhejiang Haiyue Co. Ltd.


Another company Yantai Wanhua Polyurethanes, a unit of Shanghai-listed Wanhua Chemical Group Co. Ltd., expects to commission in December China's single-biggest PDH plant with annual demand of 900,000 mt propane and 600,000 mt butane, a source familiar with the matter said. Its annual production capacity is 750,000 mt.

But the company will not be taking its first cargo until its giant storage cavern with a 1 million cubic meter capacity near the PDH plant in Yantai, Shandong province, is ready in October or November, the source said. He declined to give details of the plant's import contract, but other sources said it will be taking mainly Middle Eastern cargoes.

The two other PDH plants expected to come on stream by Q3 are owned by Zhejiang Shaoxing Sanyuan Petrochemical and Zhejiang Satellite Petrochemical, with each having annual propane demand of 540,000 mt and production capacity of 450,000 mt, sources said.

Oriental Energy, which is building a PDH plant in eastern Jiangsu province with annual propane demand of 792,000 mt and production capacity of 660,000 mt, had planned to start the first phase of its facility in the second half of the year, a company source said in April. But other sources said the entire plant is now expected to start operations in early 2015.

Oriental Energy had signed a 10-year contract to charter four 50,000 dwt VLGC newbuilds from Pacific Gas, a wholly owned subsidiary of Shandong Shipping Corp., the company had said.

Yantai Wanhua is not acquiring its own VLGC fleet or time charters, choosing to import LPG via trading firms on a CFR basis, one source said.

SURGING LPG IMPORTS Reflecting the rising demand from PDH plants, China's net LPG imports rose 4% month on month to 615,026 mt in May, after jumping threefold in April, with imports at 729,838 mt and exports at 114,812 mt, latest General Administration of Customs data showed.

China imported 527,446 mt of propane in May and exported 48,687 mt, making net propane imports 478,759 mt, up 23% from April.

Butane imports totaled 202,392 mt in May and exports 66,125 mt, making net butane imports 136,267 mt, down 32% from April.

Net LPG imports in May rose 164% year on year, with propane net imports up 250% and butane net imports rising 42% over the period. It net LPG imports over the first five months of this year totaled 1.931 million mt, up 269% year on year, the customs data showed.

China's LPG apparent demand in May rose almost 20% year on year to 2.79 million mt.

--Ramthan Hussain, ramthan.hussain@platts.com
--Edited by Wendy Wells, wendy.wells@platts.com