BASF’s investigation of a propane dehydrogenation (PDH) plant in the United States signals an acceleration of the significant impact of the shale gas revolution on the United States chemicals industry. The German chemical companies are famous for keeping production in Germany. BASF has a massive production complex in Ludwigshafen, Bayer
in Leverkusen. They traditionally used coal as a feedstock, and have become increasingly reliant on Russian natural gas in recent years. Not a good situation.
The enormous windfall of natural gas from the fracking process in the U.S. changes the global economics of production of chemicals made from natural gas, notably olefins and their polymers, polyethylene and polypropylene. Plastics and chemicals made from propane and propylene will have an economic advantage over materials made from fossil fuels—particularly German coal or Russian natural gas.
Nine companies are building capacity to make propane directly from natural gas in PDH plants in the United States. The most recent to announce is Ascend Performance Materials, which is improving its already global-leading nylon 6,6 production position with a PDH plant that will have a capacity of more than one million metric tons per year in Texas. Ascend produces ADN (adiponitrile), a nylon precursor, using unique propylene-based technology rather than the more commonly used butadiene-based approach.
The BASF propylene project will be its “largest single-plant investment to date”.
BASF wants to beef up its backward integration into propylene and grow its propylene-based downstream activities, “leading to a stronger market position in North America”, the company said in a press release. Details on the potential investment, including the capacity of the plant, investment amount and exact location are currently under evaluation.
Propylene is used in the production of plastics, coatings, detergents and superabsorbent polymers for baby diapers.