Enterprise Products Partners LP plans to build one of the world’s largest propane dehydrogenation (PDH) units on the Texas Gulf Coast to take advantage of abundant supplies of propane thrown off by shale gas plays and to address periodic shortages of propylene in the region.

The facility would have capacity to consume up to 35,000 b/d of propane to produce up to 1.65 billion pounds per year (750,000 metric tons per year or 25,000 b/d) of polymer-grade propylene (PGP).

The facility would integrate with Enterprise’s existing natural gas liquids (NGL) and propylene facilities. Supported by long-term, fee-based contracts executed with companies that have investment-grade debt ratings, the PDH facility is expected to begin commercial operations in the third quarter of 2015.

“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,” said Jim Teague, COO of Enterprise’s general partner. “This has led to a rebirth of the U.S. petrochemical industry. By switching their feedstocks from more costly, imported crude oil derivatives to domestically produced ethane, the U.S. ethylene industry is now one of the lowest-cost producers of ethylene in the world.

“The impact of this change in feedstocks, however, has resulted in a decrease in the associated production of propylene. Since 2006, the supply of propylene as a co-product from the ethylene industry has decreased in the aggregate by approximately 5.8 billion pounds and has contributed to periodic shortages of propylene. Our PDH unit will utilize growing supplies of domestically produced propane to provide another source of competitively priced polymer-grade propylene.”

From a propane feedstock supply perspective, the PDH unit would be supported by Enterprise’s NGL fractionation and storage system on the Texas Gulf Coast. By 2015, with completion of expansions that have already been announced, Enterprise would have 708,000 b/d of NGL fractionation capacity, which would provide up to 177,000 b/d of propane supply.

“This project is a natural fit and integrates beautifully with our midstream system of assets,” Teague said. “With access to reliable supplies of propane, this new facility will give us feedstock flexibility in addition to providing our customers with unsurpassed reliability and optionality.”

In addition, the facility would be supported by the partnership’s 100 million bbl of NGL and petrochemical storage facilities in the Texas Gulf Coast region. In 2015 the PDH unit would also be complemented by Enterprise’s 5.3 billion pounds per year (2.4 million metric tons per year or 80,000 b/d) of propylene fractionation capacity, which fractionates refinery-grade propylene to produce PGP.

The integration of the PDH unit with Enterprise’s propylene fractionation facilities would provide operational reliability and flexibility for both processes. Enterprise also has PGP storage facilities and a 102-mile pipeline system, capable of delivering PGP to 18 downstream customers and to international markets through the partnership’s propylene export terminal in Seabrook, Texas.

Enterprise said it is working with local jurisdictions and the state of Texas to obtain the economic development approvals necessary to site the facility.

Others have announced plans for new facilities for the Gulf Coast that would take advantage of the shale gas bounty (see Shale Daily, June 13, 2011). In April, Dow Chemical Co. said it would build a world-scale ethylene production plant at its Dow Texas Operations in Freeport, TX (see Shale Daily, April 20).