On-Purpose Propylene: The Rise of On-Purpose Propylene: How to Supply the World’s Hunger for Plastic
By 2020, on-purpose propylene technologies could account for 20 percent of the global propylene production: As petrochemical production shifts towards, ethane, new sources of propylene supply are needed.
Most plastic used today is produced from propylene – yet, up to now, this valuable substance has mostly been treated as a by-product of petrochemical and refinery operations. Yet, in times of low feedstock prices, on-purpose propylene plant projects become increasingly attractive: Analysts estimate that, by 2020, 20 percent of the world’s propylene could stem from dedicated on-purpose plants. No wonder, that engineering companies expect huge profits from propylene plant projects.
As the growing global economy needs more and more raw materials for plastics and polymers, traditional propylene production is unable to keep pace with the ever growing demand. Therefore, multi-feedstock on-purpose plant projects boom: While in 2003, only three percent of global propylene production was on-purse dedicated, this figure grew to 12 percent in 2013.
The Effects of Shale Gas on Propylene Production
Also shale gas became a major game changer for propylene: As the advent of cheap natural gas saw petrochemical production shift from naphtha to methane and new regulations in the US lead to a decline in automotive gasoline, whole value chains shift. This scenario could, however, change once propane is exported on a major scale.
By 2023, North America could become the major propylene supplier, accounting for 15 percent of global production. But, while most propylene is a by-product of steam-cracking, this method is only responsible for 26 percent of US production.
American and Middle Eastern producers will rely on cheap domestic propane from natural gas for on-purpose propylene production, while China is expected use imported propane. Yet, also coal-to-olefins technologies could become a significant source of on-purpose supply for China.