Petrologistics commences propylene production at Texas, plant to run at capacity within 30 days

27-Oct-10

Petrologistics has commenced production at its 544,000 tpa propylene plant in Houston, with production expected to run at capacity within 30 days, as per ICIS. The one of its kind facility in USA will produce chemical (CGP) and polymer-grade propylene (PGP) through propane dehydrogenation (PDH). The added capacity is expected to influence monomer prices in the short term, but the impact is yet to be determined. The spread is expected to reduce between refinery-grade propylene (RGP) and PGP, which was around 10 cents/lb (US$220/ton), up from a historical average of 4-5 cents/lb. RGP for October traded this week at 46 cents/lb, while PGP for October was offered earlier in the week at 55.25 cents/lb. The gap between the two grades began to widen in Q1, soaring past 20 cents/lb thereafter, as demand for PGP was strong while splitter capacity in the US remained maxed out.