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Enterprise and LyondellBasell execute PDH 2 plant agreements

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LyondellBasell Industries N.V. and Enterprise Products Partners L.P. have announced that their respective affiliates have executed long-term contracts that support construction of Enterprise’s second propane dehydrogenation (PDH) plant, PDH 2. PDH 2 will have the capacity to consume up to 35 000 bpd of propane and produce up to 1.65 billion lb/yr of polymer grade propylene (PGP). PDH 2 will be located at Enterprise’s complex in the Mont Belvieu, Texas area. The facility is scheduled to begin service in the first half of 2023.

“For nearly 30 years, Enterprise has proven to be a capable, reliable partner for LyondellBasell,” said Bob Patel, CEO of LyondellBasell. “As we aim to meet the growing demand for our products, ensuring a long-term supply of feedstock is critical. These agreements allow us to leverage Enterprise’s construction expertise, operating experience and robust network as we continue to deliver an outstanding value proposition for our customers.”

“We are very pleased to enter into these agreements to further expand our already extensive relationship with LyondellBasell,” said A.J. “Jim” Teague, CEO of Enterprise’s general partner. “PGP is a primary petrochemical that can be converted into hundreds of products that improve the daily lives of people around the world. Demand growth for these propylene-based products is strong and PDH 2 will provide cost-advantaged supply assurance to our customers, enabling expansion of their downstream businesses to satisfy this global demand.”

Enterprise has licensed Honeywell UOP’s Oleflex propane process to produce PGP. Enterprise has over 25 years of experience with this technology. The company’s existing isobutane dehydrogenation (iBDH) plant, which uses the Oleflex butane process, commenced operations in 1993. The partnership is currently building a second iBDH facility utilising the same process, which is expected to be completed later this year and is on time and on budget.

Enterprise has negotiated terms for a fixed-cost engineering, procurement and construction contract with S&B Engineers and Constructors, Ltd. to build PDH 2. Enterprise’s experience with S&B dates back to 1995. S&B-led construction projects for Enterprise include nine NGL fractionators and certain deisobutanisers at Mont Belvieu, the Hobbs NGL fractionator, and the partnership’s ethane export facility on the Houston Ship Channel.

Teague added, “With the combination of LyondellBasell as an anchor customer, our use of UOP’s Oleflex technology and S&B providing engineering and construction services, I am highly confident of a successful project that will grow Enterprise’s cash flow per unit and enhance the value of our partnership.”

Enterprise began its fee-based midstream petrochemical service business with the development of its first propylene fractionator in 1978. PDH 2 is being developed with this same fee-based model. These anchor contracts are service-based under which Enterprise processes LyondellBasell-provided propane to PGP for a fixed fee. This fee-based model leverages Enterprise’s integrated value chain by providing sourcing and storage from Enterprise’s NGL storage facilities in Mont Belvieu, and delivers PGP into its open market storage hub and growing network of PGP pipeline infrastructure. Enterprise’s network of PGP assets includes more than 300 miles of delivery pipelines, 26 PGP connections, more than 5 million bbl of storage capacity, and an export terminal on the Houston Ship Channel. Enterprise is currently expanding PGP refrigeration facilities at the terminal, which will enable the company to load more than 5000 bph of PGP, as well as co-load PGP and LPG on very large gas carriers.

Enterprise’s Mont Belvieu NGL fractionation and storage system supporting PDH 2 currently has 760 000 bpd of NGL fractionation capacity, with another 300 000 bpd under construction. In addition, these complexes have more than 100 million bbl of NGL and petrochemical storage, providing unparalleled reliability and flexibility. The integration of the PDH 1 and PDH 2 plants with Enterprise’s propylene fractionation facilities provides operational flexibility for both processes, and a combined PGP supply of more than 9 billion lb/yr.

Construction of PDH 2 is expected to provide approximately 1500 to 2000 jobs, which will further support economic activity in the greater Mont Belvieu and Baytown area.

Read the article online at: https://www.tanksterminals.com/terminals/26092019/enterprise-and-lyondellbasell-execute-pdh-2-plant-agreements/

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