PDH units set to start up in China, 2015 propane demand to see a rise

11-Feb-15

Propane demand for propylene production in China is expected to shoot up in 2015, with two new propane dehydrogenation (PDH) units due to come on stream this year and increase in capacity of existing plants as per sources in ICIS. China's propane demand from PDH units is estimated to reach 2.4 mln tons in 2015- more than double the 1.1 mln tons consumed in 2014. The two new PDH plants will boost China’s propylene capacity by 1.35 mln tons. Yangzijiang Petrochemical plans to start up its 600,000 tpa PDH unit at Zhangjiagang in Zhejiang province in H1-2015. The company has signed term contracts for propane supply to allow the plant to run at full capacity, market sources said. Wanhua Chemical is scheduled to commission its 750,000 tpa unit at Yantai in Shandong province in March, and has signed a term contract for propane supply and is expected to received its first refrigerated LPG cargo late next month, as per sources. Propylene consumption in China is expected to grow by around 3.1 mln tons to 25.1 mln tons in 2015.PDH plants in China have been running at reduced capacity to prevent an oversupply of propylene. At 70% average run rate, the four plants will require around 1.8m tonnes of propane this year, based on ICIS data. Of the four PDH unit operators, Ningbo Haiyue New Material has signed a new term contract for three propane cargoes every two months from Q2-2015, a company source said. Sanyuan Petrochemical has existing term propane contract that is not due to expire until 2016. This year, it will get a propane cargo each month, and the supply is sufficient to run its 450,000 tpa PDH unit at full capacity. Zhejiang Satellite Petrochemical will receive a half cargo of propane each month under a term contract in 2015. The company will need to buy spot propane should it decide to operate its 450,000 tpa PDH unit at full capacity. Tianjin-based Bohai Chemical, meanwhile, has secured two cargoes per month of propane for its 600,000 tpa PDH unit for 2015.