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Dow to retrofit Louisiana cracker to add propylene output

Houston — Dow Chemical will retrofit one of its Louisiana crackers to give it the capability to produce propylene, the company said Tuesday.

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Dow will use its proprietary technology, with a reactor design based on fluid catalytic cracking, a mainstay in refineries for gasoline production, in retrofitting the 1 million mt a year, mixed-feed cracker in Plaquemine to enable production of more than 100,000 mt/year of on-purpose propylene with startup expected by the end of 2021.

The facility will maintain its current ethylene production capacity, Dow said. In 2016, Dow expanded the cracker's capacity by 250,000 mt/year in 2016 and added capability to crack ethane in addition to propane, butane and naphtha.

The additional propylene output will supply Dow's derivative units in Louisiana, the company said.

Last month petrochemical manufacturing, processing and logistics company PetroLogistics announced plans to build a new 500,000 mt/year propane dehydrogenation (PDH) plant on the US Gulf Coast -- the country's fourth -- using Dow's fluidized catalytic dehydrogenation (FCDh) technology. PetroLogistics President Nathan Ticatch said at the time that the technology was expected to ensure lower capital costs and energy consumption as well as offer greater operational reliability.

Dow said Tuesday the technology would shrink capital costs by 25% and reduce energy use and emissions by up to 20% compared with conventional PDH technologies.

In the early years of the US shale production boom, repeated announcements of new PDH plants emerged alongside major plans for new ethane-fed crackers and derivative resin facilities from 2011 through 2013 and beyond. Ethane-fed crackers produce mostly ethylene, the feedstock for plastic resins, but no propylene.

Cheap ethane is the preferred feedstock for eight new crackers starting up in 2017 through this year and more beyond 2020, so less cracking of propane, butane, naphtha and gasoil left a gap for PDH units to produce propylene.

"This reduction in propylene has created a supply/demand gap in the US that requires additional on-purpose propylene sources to meet the needs of downstream derivatives," Dow said.

But in 2014 and beyond, enthusiasm for new PDH plants waned due to a combination of a narrower spread between propane and propylene prices and high refinery rates, as refineries had traditionally been major sources of propylene as well as crackers that processed feedstocks other than ethane. Only two new PDH projects moved ahead -- Dow's 750,000 mt/year plant in Freeport, Texas, and Enterprise Products Partners' 750,000 mt/year plant in the US NGL hub in Mont Belvieu.

Both plants proved challenging. Dow's facility faced stops and starts for before it achieved stable operations in 2016, and Enterprise's plant began commercial production in mid-2017 after a year-long startup delay. PetroLogistics' Ticatch said Dow's FCDh technology was expected to address such startup issues.

PetroLogistics built the first US PDH plant in 2010 in Houston and sold the 658,000 mt/year facility to Flint Hills Resources in 2014 for $2.1 billion.

-- Kristen Hays, kristen.hays@spglobal.com

-- Edited by Jonathan Dart, newsdesk@spglobal.com