14:57 PM | February 26, 2013 | Clay Boswell
TPC Group’s (Houston) board has approved capital for the engineering of on-purpose butadiene capacity, the company said on Monday. TPC expects engineering design optimization for the project to be complete by the end of the third quarter of 2013, with start-up in 2016.
Butadiene is typically obtained as a coproduct of naphtha-based ethylene production. With the development of shale gas in the United States, however, cost-advantaged ethane has become the feedstock of choice for the region’s ethylene producers, and butadiene supplies have tightened significantly. TPC says it can address the imbalance by likewise shifting butadiene production to ethane using its on-purpose Oxo-D technology.
According to a recent study by IHS Chemical, North American butadiene production fell almost 30% between 2007 and 2012, to 1.5 million m.t.
"The commitment we make to our customers is backed by the security of having multiple production units and multiple sources of feedstock supply, including our plans to add our own on-purpose butadiene production unit targeted for start-up in 2016," says president and CEO Michael McDonnell.
In December shareholders approved the sale of TPC to First Reserve and SK Capital in a deal valued at almost $900 million.