Williams' PDH facility in Canada will have the capability to initially produce up to approximately 1.1 billion lb annually of polymer-grade propylene, with the opportunity to double capacity with a future expansion. The company anticipates the facility will begin operations in the second quarter of 2016.
Williams plans to primarily use propane recovered from its expanding oil sands offgas processing operations along with local propane purchases as feedstock for the new PDH facility. It will convert the propane into propylene that will be transported to the U.S. Gulf Coast and sold to petrochemical producers. Plans are to sell the associated hydrogen byproduct in the Alberta market. Williams is also exploring development of new propylene markets for its production in Alberta.
The Redwater complex includes fractionation, storage and distribution facilities and is currently being expanded to produce approximately 5 million barrels of propane and 280 million lb of propylene annually from offgas, in addition to other NGLs and olefins. The addition of the new PDH facility will vastly increase Williams' production of polymer-grade propylene, the company stated. The company expects the new facility to produce one of the lowest-cost, PDH-sourced propylene feedstocks in North America.
Shale gas development
At the IHS World Petrochemical Conference (March 19-21; Houston, TX), Kelly Knopp, VP and general manager of marketing for Williams' NGL and petchem services, said while shale gas is found all over the world, the U.S. does have several advantages. For instance, privately owned mineral rights are well established.
"I know sometimes we feel like as an industry it's hard to get new pipelines built, but compared to rest of world, it's a somewhat efficient process," he said. "Most importantly, the drilling knowledge is here and easily moved around region to region to support companies. One of the key resources for fracking is water and we have ample water supply, these are the kinds of things that help the industry develop. Whereas the shale plays around the world have tremendous hurdles to overcome, which slows down plays in other countries."
Williams recently announced a joint venture that would develop a pipeline project to transport natural gas liquids from the Marcellus and Utica shale plays to the expanding petrochemical and export complex on the U.S. Gulf Coast, as well as the developing petrochemical market in the Northeast U.S.
The proposed "Bluegrass Pipeline" design would provide producers with 200,000 barrels per day of mixed NGLs take-away capacity in Ohio, West Virginia and Pennsylvania. The proposed pipeline could be increased to 400,000 barrels per day to meet market demand, primarily by adding additional liquids pumping capacity.
It would deliver mixed NGLs from these producing areas to proposed new fractionation and storage facilities, which would have connectivity to petrochemical facilities and product pipelines along the coasts of Louisiana and Texas. Williams and Boardwalk are also exploring development of a new export liquefied petroleum gas terminal and related facilities on the Gulf Coast to provide customers access to international markets.
"How the U.S. compares to the rest of the world is using lines that are existing pipelines for other uses—that's a tremendous timing advantage and cost advantage for the U.S.," he said. "What Williams is doing to participate is that we are focused on linking new sources of production to market, which is why we announced the Bluegrass product."