Plant Set-ups: Lotte/GS Energy jv to invest US$689 mn in petchem project; PetroLogistics to build PDH plant on US Gulf Coast

South Korea’s Lotte Chemical Corp. is adding a chemical compounding plant in its petrochemical complex in Yeosu, South Jeolla Province, by the end of the year in a joint venture with GS Energy Corp. at a cost of US$678.7 million.

The Lotte-GS Energy Company will specialise in producing chemical compounds like bisphenol A (BPA) and C4 fraction.

Lotte Chemical would hold a 51% interest in the new entity, with GS Energy to own the rest. The two firms plan to build a plant capable of producing 200,000 tonnes/year of BPA and 210,000 tonnes/year of C4 fraction products.

BPA is used in making polycarbonate plastics whose applications range from electronic devices, medical equipment to auto headlamp cases. C4 fraction is a hydrocarbon compound used to produce butadiene, a material for making synthetic rubber, and tert-butyl alcohol, which goes into engineered marble.

The two companies expect the joint venture to help sharpen their competitive edge in their respective businesses. Lotte Chemical is seeking to attain BPA supplies from the joint company to make its polycarbonate products more price competitive. It is also reportedly mulling to expand its C4 fraction business. As for GS Energy, its refining unit GS Caltex would provide a steady source of supplies like propylene, benzene and C4 fraction, which are key materials needed for production at the new plant. It is also seeking to use the joint venture to bolster its petrochemical business.

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In other news, PetroLogistics ll LLC, a portfolio company of Quantum Energy Partners, has licensed Dow’s proprietary fluidized catalytic dehydrogenation (FCDh) technology and plans to construct a 500 kilotonne/year propane dehydrogenation (PDH) facility on the US Gulf Coast. The FCDh technology uses a reactor design based on fluidized catalytic cracking. The patented technology is said to represent a significant advancement in the production of propylene via PDH. Plants utilizing the FCDh technology are anticipated to have significantly lower capital cost and energy consumption, as well as improved reliability.

PetroLogistics and Dow have each built PDH plants in the US using other conventional PDH technologies. PetroLogistics built the first PDH plant in North America which commenced operations at its Houston Ship Channel site in 2010.

Concerning the new FCDh project, President, Nathan Ticatch said: “It has been ten years since we successfully constructed and operated the first PDH plant in North America for on-purpose propylene production. Since that time, developments related to the shale revolution have resulted in a significant decline in co-product propylene production from the sources that historically supplied the majority of US propylene: petroleum refineries and heavy feed ethylene crackers. As a result, future growth in propylene demand will need to be supplied largely via on-purpose propane dehydrogenation. However, new PDH projects have been slow in coming to market in the US primarily because of challenges relating to capital costs and efficiency of incumbent PDH technologies. We have been working with Dow for three years in evaluating the FCDh technology and we are confident that it addresses those challenges and represents a significant breakthrough in the PDH process.”

Houston-based PetroLogistics is currently engaged in the front end engineering design for its FCDh plant and has been evaluating two alternative sites on the Gulf Coast to locate the project.

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