BASF Mulls Over Methane-to-Methanol-to-Propylene Project

Methanol remains one of the cornerstones of the modern chemical industry, participating in multiple complex feedback relationships, both upward and downward, along relevant supply chains involving various companies, many of which are vertically integrated.

The vivid example of such vertically integrated company is BASF with its outstanding technological, commercial and logistical expertise in methanol business. This company could hardly be considered a large methanol player as the capacity of its German plant in Ludwigshafen is equal to 480 000 tons per year. This could not be compared to production potential of such methanol-oriented companies as Methanex Corporation, Saudi Methanol Company, Methanol Holdings Trinidad, Zagros Petrochemical and Petronas Methanol (Labuan). Germany is also not among top methanol manufacturers.

Methanol: structure of the global capacity by country (2016)

However, BASF with its technological prowess has significant know-how in the methanol industry and vast experience in vertical integration. One of the most interesting examples of such integration on behalf of BASF is an idea to realise a major methane-to-methanol-to-propylene (MMTP) project on the US Gulf Coast. Envisaging the potential shortage of propylene in company’s North American operations and based on the reasoning that MMTP could be a more economically viable method than the propane dehydrogenation (PDH) route, BASF is eager to start this project. However, currently the plans were put on hold due to multiple factors. The economics of price relationship between oil and methane, high labour and plant construction costs in the USA and other factors are able to overshadow the competitiveness of this project. However, the plan is not abandoned. In case BASF decides to give it a go, the plant may become operational in 2019.

More relevant information on the methanol market can be found in the in-demand research study “Methanol: 2017 World Market Outlook and Forecast up to 2027”.