MOSCOW (MRC) - A Koch Industries Inc unit will take PetroLogistics LP (PDH.N) private in a deal worth USD2.1 billion, including debt, gaining control of a plant that can convert cheap U.S. shale gas into propylene, a key petrochemical used to make plastics, said Reuters.
PetroLogistics' propane dehydrogenation plant produces about 1.45 billion pounds of propylene per year. Propylene is also used to make paints, coatings, building materials, clothing, automotive parts and packaging, among other things.
The unit, Flint Hills Resources LLC, a refining, chemicals and biofuels company, will also buy all of the membership interests in PetroLogistics general partner PetroLogistics GP LLC.
A number of companies, including Dow Chemical Co (DOW.N), Enterprise Products Partners LP and BASF SE, are building plants in the United States to convert natural gas into propylene. Natural gas is about three times cheaper in the United States than in Europe, thanks to the shale boom, giving U.S. petrochemical companies a significant advantage over their oil-dependent European rivals. Propylene has traditionally been made from the oil distillate naphtha, but cheap shale is gaining importance as a feedstock.
Flint Hills Resources LLC operates as a refining, chemicals, and bio-fuels company. The company offers petrochemicals products such as ethanol, aromatics, intermediates and EPS, olefins, and polymers. The company is headquartered in Wichita, Kansas. Flint Hills Resources LLC operates as a subsidiary of Koch Industries, Inc. Koch, with annual revenue of USD115 billion, was the second-largest private company in the United States in 2013, according to Forbes.
PetroLogistics LP is a major producer of propylene and is the only independent dedicated propylene producer in the United States. PetroLogistics LP owns and operates the world’s largest propane dehydrogenation facility, based on production capacity, located in the vicinity of the Houston Ship Channel.
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