Joining the rush to take advantage of low natural gas prices, Houston’s Enterprise Products Partners announced plans to build a petrochemical plant along the Texas coast.
Enterprise, primarily a pipeline and storage company, plans to build propane dehydrogenation plant, also known as a PDH facilty, that will be able to produce about 25,000 barrels a day of propylene, which is used as a building block to make plastics, synthetic fibers and other items. Enterprise didn’t disclose a cost for the facility, which would be constructed by 2015.
Natural gas-derived chemical products like ethylene and propylene are in high demand because of growing consumption of items ranging from diapers to food packaging, prompting a series of recent plans for enormous investments in new Texas petrochemical plants.
Exxon Mobil Corp., Dow Chemical Co., Chevron Phillips Chemical and others have announced new plants to take advantage of low-cost feedstocks. Dow alone is investing $4 billion in new Gulf Coast facilities, including a $1.7 billion ethylene cracker to turn natural gas liquids into ethylene.
Enterprise opted to expand its petrochemical operations because of the boom in production of low-cost propane. Propane is a byproduct of natural gas known as one of several natural gas liquids. Oil and gas companies have ramped up production of natural gas liquids as part of the shale boom.
The propane produced from nearby shale plays and transported in pipelines can be used as a feedstock for Enterprise’s planned PDH facility, according to a statement from A.J. “Jim” Teague, executive vice president and chief operating officer of Enterprise’s general partner, Enterprise Products Holdings.
“The opportunity for this PDH project is directly attributable to the success producers have achieved in the growth of NGL-rich natural gas production through the development of the shale and non-conventional resource plays in the United States,” Teague said. “This has led to a rebirth of the U.S. petrochemical industry.”
Enterprise has not yet announced a site for the facility, which will be located along its pipeline network. The company has major chemical operations in Mont Belviu, Texas, but also has facilities elsewhere.
Through its overall expansions by 2015, Enterprise will be able to process 708,000 barrels a day of propylene, propane and butane though its other facilities. Those operations will provide up to 177,000 barrels a day of propane supply, the company said.
Enterprise also has a total of about 100 million barrels of NGL and petrochemical storage facilities along its Texas Gulf Coast network.
The PDH facility will produce polymer-grade propylene, which is in demand from manufacturers. Enterprise will also be able to make 80,000 barrels a day of polymer-grade propylene from other facilities that don’t use NGL feedstocks.
The company has a 102-mile pipeline network capable of delivering the product to 18 customers as well as a propylene export terminal in Seabrook, Texas.
“We are excited to announce the extension of our propane value chain with the addition of the PDH facility,” Teague said. “This project is a natural fit and integrates beautifully with our midstream system of assets.”