Independent refiner Tosco Corp., Stamford, Conn., and chemical giant Union Carbide Corp., Danbury, Conn., have signed a memorandum of understanding to create a 50-50 joint venture to produce and market polypropylene.
Tosco unit Tosco Refining Co. will license Union Carbide's Unipol PP process for a 775 million lb/year polypropylene (PP) plant it will build at its Bayway refinery in Linden, N.J. The plant, slated for start-up in first quarter 2000, will produce a full range of homopolymers and random and impact copolymers, says Union Carbide, which will market the new plant's output, along with that of its PP plants at Seadrift, Tex., and Norco, La. The three plants have a combined capacity of 1.6 billion lb/year.
Union Carbide Chairman and CEO William H. Joyce said, "Projected growth rates for polypropylene over the long term are strong, and the joint venture with Tosco will put us in an excellent position to meet the growing demand." He said Tosco's New Jersey plant would provide logistical and distribution advantages in the U.S. Northeast and Midwest.
"The announcement that Tosco and Union Carbide would form a joint venture polypropylene company was greeted by the refining and petrochemical industry with surprise," said Rob Harvan, director of chemical planning at Bonner & Moore Associates Inc., Houston. Nevertheless, he said, "It's our view that the decision is a remarkably pragmatic one for both partiesellipseUnion Carbide gains a low-cost source of propylene feedstock. It also gains a supply and distribution advantage to the Midwest automobile plastics and consumer products markets, as well as the Southeast fibers markets."
Harvan explained why Tosco decided to build a PP plant at the Bayway refinery: "Tosco refineries must conform to the rigorous NOx standards of Phase II RFG (reformulated gasoline) in the post-2000 time frame. This means lowering the olefins content in their gasoline from Bayway, of which at least 85% must be RFGellipseTo do this, Tosco must remove the propylene alkylate that it now includes in its gasoline formulations, replacing it with butane when it can, and/or amylene alkylate."
The JV will give Tosco an outlet for the propylene stream that is now being fed to its alkylation unit at the Linden refinery, Harvan noted: "Upgrading the propylene on site for use in polymerization will be less costly than shipping the material to a user."
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