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Shale Gas Prompts BASF to Consider Gulf Coast Plant

BASF Corp., the North American affiliate of BASF SE of Germany, is considering developing a world-scale methane-to-propylene complex on the U.S. Gulf Coast, the company said Friday.

The on-purpose production of propylene to supply the company's North American operations would allow BASF to take advantage of low natural gas prices from U.S. shale plays and considerably improve its cost position, the company said. The project would be BASF's largest single-plant investment to date.

"BASF intends to further strengthen its backward integration into propylene and grow its propylene-based downstream activities, leading to a stronger market position in North America," BASF said. "Propylene is one of the most important basic chemicals in the petrochemical industry and is used in the production of a wide range of higher-value chemicals. These chemicals are used to manufacture products such as coatings, detergents or superabsorbent polymers for baby diapers."

The availability of cheap and plentiful natural gas and natural gas liquids from shale formations in the United States has led to more than $100 billion of investment in the nation's chemical industry, the American Chemistry Council (ACC) said recently (see Shale Daily, Feb. 21).

According to the ACC, 148 projects valued at $100.2 billion have been announced as of February. That was up from a December tally of $91.2 billion (see Daily GPI, Dec. 30, 2013). The projects, which include new factories and the expansion of existing facilities, could lead to $81 billion/year of new output from the chemical industry and 637,000 permanent new jobs by the year 2023. ACC added that more than half of the investment was from firms based outside the United States.

Details about the BASF project, including the potential capacity of the plant, investment amount and exact location are under evaluation, the company said.

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